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)–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.