Exhibit 99.1
California Pizza Kitchen Announces
Financial Results for the First Quarter of 2006
LOS ANGELES--(BUSINESS WIRE)--May 9, 2006--California Pizza
Kitchen, Inc. (Nasdaq: CPKI) today reported revenues and net income
for the first quarter ended April 2, 2006. Highlights for the first
quarter of 2006 relative to the same quarter a year ago were as
follows:
-- Total revenues up approximately 17.6% to $129.7 million
-- Comparable restaurant sales increase of 6.4%
-- Net income of $4.6 million, or $0.23 per diluted share,
including the effects of stock-based compensation expense
-- Net income of $5.6 million, or $0.27 per diluted share,
excluding the effects of stock-based compensation expense
Rick Rosenfield and Larry Flax, co-CEOs of California Pizza
Kitchen, Inc., stated, "We were very pleased with our first quarter
comparable restaurant sales results as they not only exceeded our
original estimate but also lapped a demanding 9.3% comparison from the
year before. This was due to a strong combination of higher guest
counts, new menu item sales and solid gift card redemptions for the
period. Additionally, we were pleased with our operating margin
expansion for the period which remains a focal point for profitability
going forward. With the 2004 and 2005 transitional initiatives behind
us, we look forward to creating even greater sales leverage at all of
our restaurants as we focus on full service development."
Average weekly sales for the Company's 153 full service
restaurants increased 4.8% to $63,293 for the first quarter of 2006
compared to $60,382 for the same quarter last year.
Rosenfield and Flax continued, "Our core full service development
will continue to be the growth engine for California Pizza Kitchen.
However, in the second quarter we will begin giving significant
personal attention to our CPK ASAP fast-casual concept. With this
focus, we believe we can refine the concept in addition to improving
underlying unit economics replicating our success turning around our
full service Classes of 2002 and 2003. With CPK full service, CPK ASAP
and ultimately LA Food Show, we believe CPK has a powerful trio of
brands. Over the long run, we are confident that we can capitalize on
our positioning in each market segment and drive stockholder value."
During the first quarter of 2006 the Company opened two new full
service restaurants in Northridge, CA and Norfolk, VA.
For the second quarter of 2006, the Company expects to add two new
full service restaurants and one new ASAP. These openings, together
with comparable restaurant sales of 4.0% to 5.0%, are expected to
result in earnings per diluted share of $0.28 to $0.29 including
stock-based compensation expense and the impact of the October 6, 2005
lease accounting pronouncement.
The Company will hold a conference call today at approximately
5:00 pm EDT to discuss first quarter 2006 results. A webcast of the
conference call can be accessed at www.cpk.com.
California Pizza Kitchen, Inc., founded in 1985, is a leading
casual dining chain in the premium pizza segment. The Company's full
service restaurants feature an imaginative line of hearth-baked
pizzas, including the original BBQ Chicken Pizza, and a broad
selection of distinctive pastas, salads, soups and sandwiches. The
average guest check is approximately $12.83. As of May 9, 2006 the
Company operates, licenses or franchises 192 restaurants, of which 160
are company-owned and 32 operate under franchise or license
agreements. The Company also has a licensing arrangement with Kraft
Pizza Company, which manufactures and distributes a line of California
Pizza Kitchen premium frozen pizzas.
California Pizza Kitchen, Inc. can be found on the internet at
www.cpk.com.
This release includes certain "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include projections of earnings, revenue or
other financial items, statements of the plans, strategies and
objectives of management for future operations, statements concerning
proposed new products or developments, statements regarding future
economic conditions or performance, statements of belief and
statements of assumptions underlying any of the foregoing.
Forward-looking statements may include the words "may," "will,"
"estimate," "intend," "continue," "believe," "expect," "anticipate"
and similar words.
Investors are cautioned that forward-looking statements are not
guarantees of future performance and, therefore, undue reliance should
not be placed on them. Our actual results may and will likely differ
materially from the expectations referred to herein. Among the key
factors that may have a direct bearing on our operating results,
performance and financial condition are changing consumer preferences
and demands, the execution of our expansion strategy, the continued
availability of qualified employees and our management team, the
maintenance of reasonable food and supply costs, our relationships
with our distributors and numerous other matters discussed in the
Company's filings with the Securities and Exchange Commission.
California Pizza Kitchen undertakes no obligation to update or alter
its forward-looking statements whether as a result of new information,
future events or otherwise.
Selected Unaudited Consolidated Financial and Operating Data
(Dollars in thousands, except for per share and operating data)
Quarter Ended
April 2, April 3,
2006 2005
--------- ---------
Statement of Income:
Revenues:
Restaurant sales $128,518 $109,418
Franchise and other revenues 1,180 900
--------- ---------
Total revenues 129,698 110,318
Costs and expenses:
Food, beverage and paper supplies 32,168 26,957
Labor (1) 47,627 41,115
Direct operating and occupancy 25,294 21,976
--------- ---------
Cost of sales 105,089 90,048
General and administrative (2) 10,355 7,509
Depreciation and amortization 6,971 5,578
Pre-opening costs 633 1,101
--------- ---------
Total costs and expenses 123,048 104,236
Operating income 6,650 6,082
Other income (expense):
Interest income 224 195
Equity in net loss of unconsolidated joint
venture - (21)
--------- ---------
Total other income 224 174
--------- ---------
Income before income tax provision 6,874 6,256
Income tax provision 2,268 1,985
--------- ---------
Net income $4,606 $4,271
========= =========
Net income per common share:
Basic $0.23 $0.22
Diluted $0.23 $0.22
Shares used in computing net income per common
share (in thousands):
Basic 19,680 19,280
Diluted 20,290 19,596
Operating Data:
Restaurants open at end of period 190 175
Company-owned full service restaurants open at end
of period 153 141
Average weekly company-owned full service
restaurant sales $63,293 $60,382
18 month comparable company-owned restaurant sales
increase 6.4% 9.3%
- --------------------------------------------------
(1) Labor expense for the quarter ended April 2, 2006 includes
approximately $230,000 of stock-based compensation compared to
none in the quarter ended April 3, 2005.
(2) General and administrative expense for the quarter ended April 2,
2006 includes approximately $1.2 million of stock-based
compensation compared to none in the quarter ended April 3, 2005.
Quarter Ended
April 2, April 3,
2006 2005
-------- --------
Statement of Income Percentages (1):
Revenues:
Restaurant sales 99.1% 99.2%
Franchise and other revenues 0.9% 0.8%
-------- --------
Total revenues 100.0% 100.0%
Costs and expenses:
Food, beverage and paper supplies 25.0% 24.6%
Labor (2) 37.1% 37.6%
Direct operating and occupancy 19.7% 20.1%
-------- --------
Cost of sales 81.8% 82.3%
General and administrative (3) 8.0% 6.8%
Depreciation and amortization 5.4% 5.1%
Pre-opening costs 0.5% 1.0%
-------- --------
Total costs and expenses 94.9% 94.5%
Operating income 5.1% 5.5%
Other income (expense):
Interest income 0.2% 0.2%
Equity in net loss of unconsolidated joint
venture 0.0% 0.0%
-------- --------
Total other income 0.2% 0.2%
-------- --------
Income before income tax provision 5.3% 5.7%
Income tax provision 1.7% 1.8%
-------- --------
Net income 3.6% 3.9%
======== ========
(1) Percentages are expressed as a percentage of total revenues,
except for cost of sales which is expressed as a percentage of
restaurant sales.
(2) Labor percentage includes approximately 20 basis points of stock-
based compensation for the quarter ended April 2, 2006 compared to
none in the quarter ended April 3, 2005.
(3) General and administrative percentage includes approximately 90
basis points of stock-based compensation for the quarter ended
April 2, 2006 compared to none in the quarter ended April 3, 2005.
Selected Consolidated Balance Sheet Information
(Dollars in thousands)
Selected Consolidated Balance April 2, January 1,
Sheet Information 2006 2006
----------------------
Cash and cash equivalents $10,293 $11,272
Marketable securities 11,413 11,408
Total assets 275,198 274,254
Stockholders' equity 202,646 197,336
California Pizza Kitchen, Inc.
Units Summary
Total Total
Units at Units at
---------- --------
First Quarter 2006 January 1, April 2,
2006 Opened Acquired Closed 2006
- ----------------------------------------------------------------------
Company-owned full service
domestic 151 2 - - 153
Company-owned ASAP domestic 5 - - - 5
Company-owned LA Food Show 1 - - - 1
Franchised domestic 19 - - - 19
Franchised international 12 - - - 12
-----------------------------------------
Total 188 2 - - 190
=========================================
California Pizza Kitchen, Inc.
Supplemental Information
Cost of
Weekly (,000) (,000) Sales as a
# of Sales Restaurant Cost of Percentage
First Quarter 2006 Stores Average Sales Sales (1) of Sales
- ----------------------------------------------------------------------
Full Service Restaurants
Q1, 2006 153 63,293 125,492 102,325 81.5%
Q1, 2005 141 60,382 107,989 88,742 82.2%
Year over year change 4.8% 16.2% 15.3% 70 bps
ASAP Restaurants
Q1, 2006 5 31,309 2,035 1,849 90.9%
Q1, 2005 4 27,479 1,429 1,306 91.4%
Year over year change 13.9% 42.4% 41.6% 50 bps
LA Food Show
Q1, 2006 1 76,240 991 915 92.3%
Total restaurants
Q1, 2006 159 62,366 128,518 105,089 (2) 81.8%
Q1, 2005 145 59,452 109,418 90,048 82.3%
Year over year change 4.9% 17.5% 16.7% 50 bps
(1) Cost of sales includes food, beverage and paper supplies, labor,
and direct operating and occupancy costs.
(2) Cost of sales includes approximately $230,000, or 20 basis
points, of stock-based compensation in the first quarter of 2006
compared to none in the first quarter of 2005.
CONTACT: California Pizza Kitchen, Inc.
310-342-5000
Sarah Grover (media)
Sue Collyns (investors)