California Culinary Academy Reports 13 Percent Revenue Growth for the First Six Months of Fiscal Year 1999.

SAN FRANCISCO--(BUSINESS WIRE)--Feb. 9, 1999--California Culinary Academy Inc. (Nasdaq:COOK) Tuesday announced its unaudited results from operations for the second quarter and six months of fiscal 1999, ended Dec. 31, 1998.

For the second quarter ended Dec. 31, 1998, the company reported revenues of $4,552,000 compared with revenue of $4,182,000 for the same quarter a year ago, reflecting an increase of 8.8 percent. Net income for the quarter was $108,000 or 2 cents per diluted share, compared with a net loss of $132,000 or 4 cents per diluted share for the same quarter a year ago.

For the six months ended Dec. 31, 1998, the company reported revenues of $9,205,000 as compared with revenues of $8,117,000 for the same period of the prior year, reflecting an increase of 13.4 percent.

The net income for the first six months was $539,000 or 12 cents per diluted share compared with a net loss of $293,000 or 9 cents per basic and diluted share for the same period of the prior year.

Revenue from culinary arts education increased 10.7 percent and restaurant, catering and other revenue increased 2.4 percent for the second quarter compared with the same period last year. For the six months, culinary arts education revenue increased 18.3 percent while restaurant, catering and other revenues decreased by 6.4 percent.

The increase of culinary arts revenue for the three-month and six-month periods are due to tuition increases implemented during the past 15 months, increased enrollment in the College of Food division and improved occupancy in the student housing division.

The increases were partially offset by a temporary decrease in enrollment levels at the San Francisco core campus due to a restructuring of the AOS degree program that temporarily increased the number of graduating students.

The decrease in restaurant, catering and other revenue resulted from a reduction in catering sales during the December holiday season, which is the only time of the year the main campus is closed for two weeks.

Net income for the three- and six-month periods was consistent with management's expectations. The improvement in the operating results in comparison with last year resulted from the increase in revenues and decreases in outside services, advertising and promotion, legal and other expenses.

The improvements in operating results were after increases in occupancy and compensation and benefits expenses due to the opening of a second residential facility and a new, expanded campus in San Diego.

Keith Keogh, president and chief executive officer of the company, stated: "The growth in revenues and net income is the direct result of investments made in new products such as the College of Food division and student housing in fiscal years 1997 and 1998, and the restructuring of the management team in May of 1998."

Keogh further indicated that management feels that revenues will continue to increase with the planned new Colleges of Food campuses in Orange County, Calif., and San Francisco to open in the third and fourth quarters of fiscal year 1999, respectively, and the opening of the second regional campus in New Orleans in the fall of calendar year 1999.

Currently operating out of its core campus in San Francisco and two College of Food campuses in Salinas, Calif., and San Diego, the California Culinary Academy is one of the largest culinary schools in the United States and an internationally known leader and innovator in culinary arts education.

The company offers two fully accredited professional programs as well as programs in continuing education and vocational and consumer training. The company also provides contract training and consulting services for product development and operations in the public and private sectors. Information on the company can be found on the Internet at http://www.baychef.com.

This news release contains certain forward-looking statements, including statements concerning the company's expected operating results for the remainder of fiscal 1999, and the opening of new campuses in Orange County, San Francisco and New Orleans. Such statements are subject to risks and uncertainties that could cause the company's actual results to differ materially. Such risks and uncertainties include but are not limited to the company's ability to maintain and increase its student enrollment, its ability to continue to meet the requirements for participation in Title IV financial aid programs administered by the U.S. Department of Education, competitive conditions and other factors described in the company's annual report on Form 10-KSB, and other reports filed by the company with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. The company disclaims any intent or obligation to update these statements. -0-

                   CALIFORNIA CULINARY ACADEMY INC.
                    Selected Financial Information

INCOME STATEMENT DATA:

                          Three Months Ended       Six Months Ended
                                 Dec. 31               Dec. 31
                           1998        1997        1998       1997
Revenues:
  Culinary arts
   education           $3,469,000  $3,160,000  $7,442,000  $6,438,000
  Restaurants &
   catering               912,000     908,000   1,420,000   1,464,000
  Student housing         109,000      71,000     262,000      76,000
  Retail, media
   & other                 62,000      43,000      81,000     139,000
    Total revenues      4,552,000   4,182,000   9,205,000   8,117,000
Cost of sales           1,079,000     850,000   1,863,000   1,688,000
Gross Margin            3,473,000   3,332,000   7,342,000   6,429,000

Operating expenses
  Occupancy               604,000     514,000   1,155,000     958,000
  Compensation
   & benefits           1,773,000   1,684,000   3,602,000   3,305,000
  Outside services        127,000     181,000     237,000     385,000
  Advertising
   & promotion            124,000     209,000     273,000     394,000
  Legal & other           747,000     899,000   1,558,000   1,755,000
                        3,375,000   3,487,000   6,825,000   6,797,000

Operating income (loss)    98,000    (155,000)    517,000    (368,000)
  Interest income
   (expense)               40,000     (11,000)     82,000       5,000
Income (loss)
 before taxes             138,000    (166,000)    599,000    (363,000)
  Income tax provision
   (benefit)               30,000     (34,000)     60,000     (70,000)
Net income (loss)      $  108,000  $ (132,000) $  539,000  $ (293,000)
Net income (loss)
 per share:
  Basic                $     0.03  $    (0.04) $     0.14  $    (0.09)
  Diluted              $     0.02  $    (0.04) $     0.12  $    (0.09)
Weighted average
 common shares
 outstanding            3,815,431   3,635,683   3,815,431   3,580,716
Fully diluted common
 shares outstanding     4,417,551   3,635,683   4,417,551   3,580,716