Los Angeles, May 8 - California Pizza Kitchen, Inc. today reported revenues and net income for the first quarter ended March 30, 2008.
Highlights for the first quarter of 2008 relative to the same quarter a year ago were as follows:
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Total revenues grew approximately 10.3% to $164.7 million
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Comparable restaurant sales increased 0.4%
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Net income of $2.5 million, or $0.09 per diluted share
Rick Rosenfield and Larry Flax, co-CEOs of California Pizza Kitchen, Inc., stated, "Despite a challenging macro economic environment we were pleased to exceed the high end of our recently announced earnings guidance range. We credit our focus on execution, cost management and our new bonus incentive program which align operational and shareholder goals. We continue to believe consumers will be under pressure for some time, however we remain committed to executing against our business plan in 2008. We have several initiatives between now and the end of the year and we are excited about the combination of innovative menu items, remodels, marketing programs and technology initiatives that will help drive our business forward in a tough environment.”
Rosenfield and Flax concluded, “Our commitment to enhancing long-term shareholder value is framed by a multi-dimensional strategy that develops full service CPK restaurants and expands our highly profitable Kraft, international and domestic franchising revenue streams. We have complemented these initiatives with a capital allocation strategy highlighted by our accelerated share repurchase program which we view as an excellent investment as well as an effective method to return capital to shareholders.”
Average weekly sales for the Company's 188 full service restaurants were $65,489 in the first quarter of 2008 compared to $65,904 for the same quarter last year.
During the first quarter, the Company added five full service restaurants in Anaheim, California; Boca Raton, Florida; Philadelphia, Pennsylvania; Tukwila, Washington and Marietta, Georgia. In addition, the Company's international franchise partner Grupo Calpik, S.A. de C.V added one full service restaurant in the Santa Fe area of Mexico City, Mexico.
The Company also updated its previous earnings guidance for fiscal 2008 as follows:
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Comparable restaurant sales of negative 1.0% to 0.0%
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Opening approximately 12 full service restaurants
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Opening a minimum of six international full service franchise restaurants
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Opening a minimum of four domestic CPK/ASAP franchise restaurants
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Opening one LA Food Show restaurant
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Earnings of $0.59-$0.65 per diluted share, including approximately $0.02 accretion related to the accelerated stock repurchase
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 $13.90. As of May 8, 2008 the company operates, licenses or franchises 239 locations, of which 198 are company-owned and 41 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.
Selected Unaudited Consolidated Financial and Operating Data
(Dollars in thousands, except for per share and operating data)
Quarter Ended
March 30, April 1,
2008 2007
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Statement of Income:
Revenues:
Restaurant sales $162,768 $147,844
Royalties from Kraft licensing agreement 871 712
Domestic franchise revenues 659 523
International franchise revenues 419 287
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Total revenues 164,717 149,366
Costs and expenses:
Food, beverage and paper supplies 39,687 36,376
Labor (1) 62,099 56,199
Direct operating and occupancy 33,187 28,695
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Cost of sales 134,973 121,270
General and administrative (2) 13,061 12,790
Depreciation and amortization 10,951 8,541
Pre-opening costs 1,668 1,350
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Total costs and expenses 160,653 143,951
Operating income 4,064 5,415
Other (expense) income, net:
Interest expense (550) -
Interest income 49 86
--------- ---------
Total other (expense) income, net (501) 86
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Income before income tax provision 3,563 5,501
Income tax provision 1,106 1,904
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Net income $ 2,457 $ 3,597
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Net income per common share:
Basic $ 0.09 $ 0.12
Diluted $ 0.09 $ 0.12
Shares used in computing net income per common
share (in thousands) (3):
Basic 26,757 29,058
Diluted 26,817 30,005
Operating Data:
Locations open at end of period 237 210
Company-owned full service restaurants open at end
of period 188 168
Average weekly company-owned full service
restaurant sales $ 65,489 $ 65,904
18-month comparable company-owned restaurant sales
increase 0.4% 4.7%
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(1) Labor expense for the three months ended March 30, 2008 includes
approximately $210,000 of stock-based compensation, compared to
$219,000 in the three months ended April 1, 2007.
(2) General and administrative expense for the three months ended
March 30, 2008 includes approximately $1.4 million of stock-based
compensation, compared to $2.1 million in the three months ended
April 1, 2007.
(3) Includes effect of 3-for-2 stock split effective June 19, 2007.
Quarter Ended
March 30, April 1,
2008 2007
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Statement of Income Percentages (1):
Revenues:
Restaurant sales 98.8% 99.0%
Royalties from Kraft licensing agreement 0.5% 0.5%
Domestic franchise revenues 0.4% 0.3%
International franchise revenues 0.3% 0.2%
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Total revenues 100.0% 100.0%
Costs and expenses:
Food, beverage and paper supplies 24.4% 24.6%
Labor (2) 38.2% 38.0%
Direct operating and occupancy 20.3% 19.4%
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Cost of sales 82.9% 82.0%
General and administrative (3) 7.9% 8.6%
Depreciation and amortization 6.6% 5.7%
Pre-opening costs 1.0% 0.9%
Store closure costs 0.0% 0.0%
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Total costs and expenses 97.5% 96.4%
Operating income 2.5% 3.6%
Other (expense) income, net:
Interest expense -0.3% 0.0%
Interest income 0.0% 0.1%
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Total other (expense) income, net -0.3% 0.1%
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Income before income tax provision 2.2% 3.7%
Income tax provision 0.7% 1.3%
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Net income 1.5% 2.4%
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(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 10 basis points of stock-
based compensation in both the three months ended March 30, 2008 and
the three months ended April 1, 2007.
(3) General and administrative percentage includes approximately 90
basis points of stock-based compensation in the three months ended
March 30, 2008, compared to 140 basis points in the three months
ended April 1, 2007.
Selected Consolidated Balance Sheet Information
(Dollars in thousands)
Selected Consolidated Balance March 30, December 30,
Sheet Information 2008 2007
--------- ------------
Cash and cash equivalents $ 12,435 $ 10,795
Total assets 371,708 367,128
Total debt 70,000 21,000
Stockholders' equity 172,859 218,137
California Pizza Kitchen, Inc.
Units Summary
Total Total
Units at Units at
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December March 30,
First Quarter 2008 30, 2007 Opened Acquired Closed 2008
-------------------------- --------- ------ ---------------- ---------
Company-owned full service
domestic 183 5 - - 188
Company-owned ASAP
domestic 9 - - - 9
Company-owned LA Food Show 1 - - - 1
Franchised domestic 17 - - - 17
Franchised international 18 1 - - 19
Sports and entertainment
venues 3 - - - 3
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Total 231 6 - - 237
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