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California Pizza Kitchen Announces Financial Results for the First Quarter of 2010

2010-05-10

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California Pizza Kitchen Highlights for the first quarter of 2010 relative to the first quarter of 2009 were as follows; Total revenues decreased 2.7% to $156.7 million, Full service comparable restaurant sales decreased 2.7%, Net income of $2.5 million, or $0.10 per diluted share.

Rick Rosenfield and Larry Flax, co-CEOs of California Pizza Kitchen, stated “We were pleased that first quarter sales performance exceeded our expectations, while earnings were at the high-end of our previously guided range. Restaurant operations improved across dine-in, take-out, and delivery channels for the quarter and we credit our call center, expansion of our wine selections and our catering programs, along with the February rollout of our new and successful Small Cravings menu.”

Average weekly sales for the Company's 196 full service restaurants were $59,082 in the first quarter of 2010 compared to $61,308 in the same quarter last year.

During the first quarter, the Company’s franchise partners opened a second full service restaurant in Dubai, UAE as well as a quick-serve location at Stony Brook University in Long Island, New York.

The Company outlined its financial guidance for the second quarter of 2010 based on the following assumptions:

Comparable restaurant sales between negative 2.5% and negative 0.5%
Opening one international full service franchised restaurant
Opening three domestic franchised restaurants
Earnings estimated in the range of $0.24-$0.26 per diluted share


Selected Unaudited Consolidated Financial and Operating Data
(Dollars in thousands, except for per share and operating data)


	Quarter Ended
	April 4,			March 29,
	2010			2009

Statement of Income:

Revenues:
Restaurant sales (1)	$	154,429		$	158,728
Royalties from licensing agreement		1,044			1,151
Domestic franchise revenues		672			623
International franchise revenues		549			566
Total revenues		156,694			161,068

Costs and expenses:
Food, beverage and paper supplies		36,387			37,983
Labor		58,812			61,102
Direct operating and occupancy		35,083			34,796
Cost of sales		130,282			133,881

General and administrative		13,030			12,991
Pre-opening costs		302			729

Operating income before depreciation and amortization and store closure costs (2)		13,080			13,467

Depreciation and amortization		9,135			9,353
Store closure costs		466			-
Total costs and expenses		153,215			156,954

Operating income		3,479			4,114

Interest expense, net		(36	)		(309	)

Income before income tax provision		3,443			3,805
Income tax provision		943			1,213
Net income	$	2,500		$	2,592

Net income per common share:
Basic	$	0.10		$	0.11
Diluted	$	0.10		$	0.11

Shares used in computing net income per common share (in thousands):

Basic		24,233			23,917
Diluted		24,418			23,923

Operating Data:
Locations open at end of period		253			252
Company-owned full service restaurants open at end of period		196			194
Average weekly company-owned full service restaurant sales	$	59,082		$	61,308
18-month comparable company-owned restaurant sales decrease		-2.7	%		-5.9	%



1) Restaurant sales includes $1.4 million in revenue from unredeemed gift cards.

(2) This is a non-GAAP measure and is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similar measures presented by other companies. We believe this measure provides additional information to facilitate the comparison of our past and present financial results and provides an additional means for investors to evaluate business performance. However, use of this measure should not be construed as an indication that our future results will be unaffected by excluded items.

	Quarter Ended
	April 4,		March 29,
	2010		2009

Statement of Income Percentages (1):

Revenues:
Restaurant sales	98.5	%	98.5	%
Royalties from licensing agreement	0.7	%	0.7	%
Domestic franchise revenues	0.4	%	0.4	%
International franchise revenues	0.4	%	0.4	%
Total revenues	100.0	%	100.0	%

Costs and expenses:
Food, beverage and paper supplies	23.6	%	23.9	%
Labor	38.1	%	38.5	%
Direct operating and occupancy	22.7	%	21.9	%
Cost of sales	84.4	%	84.3	%

General and administrative	8.3	%	8.1	%
Pre-opening costs	0.2	%	0.5	%


Operating income before depreciation and amortization and store closure costs	8.3	%	8.4	%

Depreciation and amortization	5.8	%	5.8	%
Store closure costs	0.3	%	0.0	%
Total costs and expenses	97.8	%	97.4	%

Operating income	2.2	%	2.6	%

Interest expense, net	0.0	%	-0.2	%

Income before income tax provision	2.2	%	2.4	%
Income tax provision	0.6	%	0.8	%
Net income	1.6	%	1.6	%


Selected Consolidated Balance Sheet Information
(Dollars in thousands)


Selected Consolidated Balance	April 4,		January 3,
Sheet Information	2010		2010

Cash and cash equivalents	$	7,426	$	21,424
Total assets		332,180		350,258
Total debt		10,000		22,300
Stockholders' equity		194,569		189,250


California Pizza Kitchen, Inc.
Units Summary


	Total Units at			Total Units at
First Quarter 2010	January 3, 2010	Opened	Closed	April 4, 2010
Company-owned full service domestic	196	1	1	196
Company-owned ASAP domestic	7	-	-	7
Company-owned LA Food Show	2	-	-	2
Franchised domestic	16	1	1	16
Franchised international	28	1	1	28
Campus, sports & entertainment venues (seasonal)	4	-	-	4
Total	253	3	3	253