Exhibit 99.1
California Pizza Kitchen Announces Financial Results for the
Fourth Quarter and Fiscal Year Ended December 31, 2006
Reiterates 2007 Guidance of $1.31 to $1.33 Per Diluted Share
LOS ANGELES--(BUSINESS WIRE)--Feb. 15, 2007--California Pizza
Kitchen, Inc. (Nasdaq:CPKI) today reported revenues and net income for
the fourth quarter and fiscal year ended December 31, 2006.
Highlights for the fourth quarter of 2006 relative to the same
quarter a year ago were as follows:
-- Total revenues up approximately 16.4% to $146.0 million
-- Comparable restaurant sales increase of 6.9%
-- Net income of $3.7 million, or $0.19 per diluted share,
including the effects of stock-based compensation expense and
the October 6, 2005 lease accounting pronouncement
Highlights for the fiscal year ended 2006 relative to the fiscal
year ended 2005 were as follows:
-- Total revenues up approximately 15.6% to $554.6 million
-- Comparable restaurant sales increase of 5.9%
-- Net income of $21.0 million, or $1.06 per diluted share,
including the effects of stock-based compensation expense and
the October 6, 2005 lease accounting pronouncement
Rick Rosenfield and Larry Flax, co-CEOs of California Pizza
Kitchen, Inc., stated, "Fiscal year 2006 marked another period of
significant financial and strategic progress for California Pizza
Kitchen. Despite a mixed economy, our full service comparable
restaurant sales ranked among the best in the industry and we
experienced record store volumes at our new restaurants. We credit the
lifestyle component of our brand, a sustainable culture of service and
our dedication to guest satisfaction and menu innovation. In
combination, these efforts allow us to form lasting relationships with
our core customers while adding thousands of new guests each year."
Average weekly sales for the Company's 166 full service
restaurants increased 4.9% to a record-setting $65,858 for the fourth
quarter of 2006 compared to $62,801 for the same quarter last year.
In the fourth quarter of 2006, the Company added nine full service
restaurants and two CPK/ASAP restaurants. Full service restaurant
openings included Foxwoods Resort Casino in Mashantucket, Connecticut;
Boulder, Colorado; Hunt Valley, Maryland; Glendale, Wisconsin; Vista,
California; Chula Vista, California; Estero, Florida; West Covina,
California; and Honolulu, Hawaii. CPK/ASAP new openings included
Elmhurst, New York and Sherman Oaks, California.
Rosenfield and Flax continued, "In 2007, our domestic full service
restaurants will continue to be our focus while we refine the ASAP
brand over the next 12 to 18 months. In the meantime, our overall
business continues to gather momentum and high-margin brand extensions
have emerged as a significant opportunity. Specifically, as our
announcement today illustrates, we've extended our domestic franchise
agreement with HMSHost and strengthened our international footprint
with a long-term franchise plan in Mexico and a letter of intent for
South Korea. It's our agreement with Kraft that's currently the
cornerstone of our licensing success as 2006 pretax income increased
by approximately 82% to $3.7 million. We're excited to be developing
other products with Kraft in the future which will continue to
leverage our brand equity. In combination, these initiatives make CPK
unique and add increasing value as we execute our development plan."
The Company also updated guidance for fiscal 2007 based on the
following assumptions:
-- Restaurant revenue growth of approximately 18.0% to 20.0%
-- Comparable restaurant sales growth of approximately 4.5% to
5.5%
-- 16 to 18 new full service restaurants
-- Four franchised locations
-- Four new ASAP restaurants
-- One new LA Food Show restaurant
-- Earnings per diluted share of $1.31-$1.33
For the first quarter of 2007, the Company expects to add two full
service restaurants, one international location in Japan and has
already opened two CPK/ASAP restaurants. These openings, together with
a comparable restaurant sales increase of 3.0% to 4.0%, are expected
to result in first quarter earnings per diluted share of $0.17-$0.19.
California Pizza Kitchen, Inc., founded in 1985, is a leading
casual dining chain. 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, appetizers and sandwiches. The average guest check is
approximately $13.07. As of February 15, 2007 the Company operates,
licenses or franchises 207 restaurants, of which 178 are company-owned
and 29 operate under franchise or license agreements. The Company also
has a licensing agreement 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 Year Ended
December January December January
31, 1, 31, 1,
2006 2006 2006 2006
--------- --------- --------- ---------
Statement of Income:
Revenues:
Restaurant sales $143,972 $123,807 $547,968 $474,738
Franchise and other revenues 1,999 1,559 6,633 4,861
--------- --------- --------- ---------
Total revenues 145,971 125,366 554,601 479,599
Costs and expenses:
Food, beverage and paper
supplies 35,686 31,274 135,848 118,480
Labor (1) 52,103 44,798 199,744 173,751
Direct operating and
occupancy 29,460 24,122 108,558 92,827
--------- --------- --------- ---------
Cost of sales 117,249 100,194 444,150 385,058
General and administrative
(2) 10,670 12,388 43,320 36,298
Depreciation and
amortization 8,061 6,875 29,489 25,440
Pre-opening costs 4,419 993 6,964 4,051
Loss on impairment of
property and equipment - - - 1,160
Store closure costs 707 (618) 707 152
Legal settlement reserve - 600 - 600
--------- --------- --------- ---------
Total costs and expenses 141,106 120,432 524,630 452,759
Operating income 4,865 4,934 29,971 26,840
Other income (expense):
Interest income 52 163 718 739
Other income - - - 1,105
Equity in net loss of
unconsolidated joint
venture - - - (22)
--------- --------- --------- ---------
Total other income 52 163 718 1,822
--------- --------- --------- ---------
Income before income tax
provision 4,917 5,097 30,689 28,662
Income tax provision 1,186 1,619 9,689 9,172
--------- --------- --------- ---------
Net income $3,731 $3,478 $21,000 $19,490
========= ========= ========= =========
Net income per common share:
Basic $0.20 $0.18 $1.08 $1.01
Diluted $0.19 $0.17 $1.06 $0.99
Shares used in computing net
income per common share (in
thousands):
Basic 19,061 19,503 19,412 19,379
Diluted 19,638 20,088 19,878 19,738
Operating Data:
Restaurants open at end of
period 205 188 205 188
Company-owned full service
restaurants open at end of
period 166 151 166 151
Average weekly company-owned
full service restaurant sales $65,858 $62,801 $65,406 $62,383
18 month comparable company-
owned restaurant sales
increase 6.9% 5.3% 5.9% 7.5%
- ----------------------------------------
(1) Labor expense for the three and twelve months ended December 31,
2006 includes approximately $210,000 and $917,000 of stock-based
compensation, respectively, compared to none in the three and twelve
months ended January 1, 2006, respectively.
(2) General and administrative expense for the three and twelve months
ended December 31, 2006 includes approximately $1.1 million and $5.0
million of stock-based compensation, respectively, compared to $3.6
million in each of the three and twelve months ended January 1, 2006,
respectively.
Quarter Ended Year Ended
December 31, January 1, December 31, January 1,
2006 2006 2006 2006
------------ ---------- ------------ ----------
Statement of Income
Percentages (1):
Revenues:
Restaurant sales 98.6% 98.8% 98.8% 99.0%
Franchise and other
revenues 1.4% 1.2% 1.2% 1.0%
------------ ---------- ------------ ----------
Total revenues 100.0% 100.0% 100.0% 100.0%
Costs and expenses:
Food, beverage and
paper supplies 24.8% 25.3% 24.8% 25.0%
Labor (2) 36.2% 36.2% 36.5% 36.6%
Direct operating and
occupancy 20.5% 19.5% 19.8% 19.6%
------------ ---------- ------------ ----------
Cost of sales 81.4% 80.9% 81.1% 81.1%
General and
administrative (3) 7.3% 9.9% 7.8% 7.6%
Depreciation and
amortization 5.5% 5.5% 5.3% 5.3%
Pre-opening costs 3.0% 0.8% 1.3% 0.8%
Loss on impairment
of property and
equipment 0.0% 0.0% 0.0% 0.2%
Store closure costs 0.5% -0.5% 0.1% 0.0%
Legal settlement
reserve 0.0% 0.5% 0.0% 0.1%
------------ ---------- ------------ ----------
Total costs and
expenses 96.7% 96.1% 94.6% 94.4%
Operating income 3.3% 3.9% 5.4% 5.6%
Other income
(expense):
Interest income 0.0% 0.1% 0.1% 0.2%
Other income 0.0% 0.0% 0.0% 0.2%
Equity in net loss
of unconsolidated
joint venture 0.0% 0.0% 0.0% 0.0%
------------ ---------- ------------ ----------
Total other income 0.0% 0.1% 0.1% 0.4%
------------ ---------- ------------ ----------
Income before income
tax provision 3.4% 4.1% 5.5% 6.0%
Income tax provision 0.8% 1.3% 1.7% 1.9%
------------ ---------- ------------ ----------
Net income 2.6% 2.8% 3.8% 4.1%
============ ========== ============ ==========
(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 in each of the three and twelve months ended
December 31, 2006, respectively, compared to none in each of the
three and twelve months ended January 1, 2006.
(3) General and administrative percentage includes approximately 80
and 90 basis points of stock-based compensation in the three and
twelve months ended December 31, 2006, respectively, compared to 290
and 80 basis points in the three and twelve months ended January 1,
2006, respectively.
Selected Consolidated Balance Sheet Information
(Dollars in thousands)
Selected Consolidated Balance Sheet December 31, January 1,
Information 2006 2006
------------ ----------
Cash and cash equivalents $8,187 $11,272
Marketable securities - 11,408
Total assets 310,513 274,254
Stockholders' equity 208,343 197,336
California Pizza Kitchen, Inc.
Units Summary
Total Units at Total Units at
-------------- --------------
Fourth Quarter October 1, December 31,
2006 2006 Opened Acquired Closed 2006
--------------- -------------- ------ -------- ------ --------------
Company-owned
full service
domestic 158 9 1 166
Company-owned
ASAP domestic 7 2 9
Company-owned LA
Food Show 1 1
Franchised
domestic 17 1 16
Franchised
international 14 1 13
----------------------------------------------------
Total 197 11 - 3 205
====================================================
California Pizza Kitchen, Inc.
Supplemental Information
Cost of
(,000) Sales
Weekly (,000) Cost of as a
Fourth Quarter # of Sales Restaurant Sales Percentage
2006 Stores Average Sales (1) of Sales
---------------------------------------------------------------------
Full Service
Restaurants
Q4, 2006 167 (2) 65,858 139,478 113,147 81.1%
Q4, 2005 151 62,801 120,964 97,674 80.7%
Year over year
change 4.9% 15.3% 15.8% (40) bps
ASAP Restaurants
Q4, 2006 9 33,895 3,467 3,179 91.7%
Q4, 2005 5 30,282 1,947 1,699 87.3%
Year over year
change 11.9% 78.1% 87.1% (440) bps
LA Food Show
Q4, 2006 1 79,024 1,027 923 89.9%
Q4, 2005 1 68,958 896 821 91.6%
Year over year
change 14.6% 14.6% 12.4% 170 bps
Total
restaurants
Q4, 2006 177 64,471 143,972 117,249 (3) 81.4%
Q4, 2005 157 61,798 123,807 100,194 80.9%
Year over year
change 4.3% 16.3% 17.0% (50) bps
(1) Cost of sales includes food, beverage and paper supplies,
labor, and direct operating and occupancy costs.
(2) Includes one store which closed on December 24, 2006.
(3) Cost of sales includes approximately $210,000, or 20 basis points,
of stock-based compensation in the fourth quarter of 2006 compared to
none in the fourth quarter of 2005.
California Pizza Kitchen, Inc.
Supplemental Information
Cost of
(,000) Sales
Weekly (,000) Cost of as a
Fiscal Year # of Sales Restaurant Sales Percentage
2006 Stores Average Sales (1) of Sales
---------------------------------------------------------------------
Full Service
Restaurants
YTD, 2006 167 (2) 65,406 532,527 430,419 80.8%
YTD, 2005 151 62,383 465,190 376,419 80.9%
Year over
year change 4.8% 14.5% 14.3% 10 bps
ASAP
Restaurants
YTD, 2006 9 35,081 11,436 10,095 88.3%
YTD, 2005 5 29,592 7,106 6,302 88.7%
Year over
year change 18.5% 60.9% 60.2% 40 bps
LA Food Show
YTD, 2006 1 77,011 4,005 3,636 90.8%
YTD, 2005 1 67,834 2,442 2,337 95.7%
Year over
year change 13.5% 64.0% 55.6% 490 bps
Total
restaurants
YTD, 2006 177 64,317 547,968 444,150 (3) 81.1%
YTD, 2005 157 61,390 474,738 385,058 81.1%
Year over
year change 4.8% 15.4% 15.3% - bps
(1) Cost of sales includes food, beverage and paper supplies,
labor, and direct operating and occupancy costs.
(2) Includes one store which closed on December 24, 2006.
(3) Cost of sales includes approximately $917,000, or 20 basis points,
of stock-based compensation in the twelve months ended December 31,
2006 compared to none in the twelve months ended January 1, 2006.
CONTACT: California Pizza Kitchen, Inc.
Sarah Grover (media) / Sue Collyns (investors)
310-342-5000