California Culinary Academy Reports Revenues Up 11 Percent In First Quarter And Provides Preliminary Outlook For Fiscal 1998.

SAN FRANCISCO--(BUSINESS WIRE)--Nov. 17, 1997--California Culinary Academy (Nasdaq:COOK), one of the three largest providers of fully accredited culinary arts education and professional training in the United States, Monday reported that revenues for the first quarter increased 11.5 percent from the prior year period.

For the year ahead, the company projects revenues to increase 12-17 percent for a range of $17 million-$18 million yielding earnings in the 12-14 cent range reflecting as much as 250 percent growth in profitability.

Management's forecast is particularly significant when considering that until this year, the company has been capacity constrained and therefore unable to increase enrollment or grow revenue more than 3 percent per year. Through several phases of streamlining the enrollment process, cost cutting, and more efficient use of resources, the new management team had led a 116 percent turnaround in profitability during fiscal 1997.

Continuing that favorable trend, the current forecast calls for earnings to more than double in fiscal 1998 which portrays two consecutive years of significant growth. In terms of EPS, this growth trend is best exhibited as follows: $(0.32) in fiscal 1996, $0.04 in 1997 and now $0.12-$0.14 forecast in fiscal 1998.

For the first quarter ended Sept. 30, 1997, revenues increased $405,000 to $3,934,000 compared with $3,529,000 reported for the three-month period ended Sept. 30, 1996. Due to a one-time charge and extraordinary ramp-up expenses related to student housing operations recently initiated, the company reported a net loss of $161,000 for the quarter, or $0.05 per share, compared with net income of $46,000, or $0.01 per share, for the same period a year ago.

The increase in revenues for the quarter was a direct result of stepped-up marketing efforts and aggressive admissions which generated increased core enrollment. The company also benefited from additional revenue days gained when introducing special weekend vocational skill programs in July this year. Food and beverage operations contributed incremental revenues after increasing its range of offerings and extended food service on Sundays.

The net loss for the quarter was primarily due to a one-time charge of $95,000 related to an early settlement of a two-year labor dispute. Start-up costs associated with operating the new student housing properties acquired in August also contributed to the loss. The company expects increasing positive income streams from student housing in subsequent quarters as students from the Academy take occupancy there.

"During the quarter we completed two crucial steps in achieving more aggressive corporate growth. First, we acquired two real estate properties. One now being utilized for student housing and the other as future housing inventory. This completed our range of offerings to out-of-town students and enables us to better compete with our two largest competitors in the Northeast.

"Secondly, our College of Foods secured a food-service training contract with a California state institution, a new development we expect to replicate in both the public and private sectors in months to come," said Keith Keogh, president of California Culinary Academy.

"Beginning in the second quarter, we expect to see increased revenues from the modified enrollment model implemented midway through last fiscal year which provides additional revenue days from the conversion of traditional holiday breaks to a rotating schedule therefore enabling a 350-day educational calendar. Through a widely followed three-hour radio show airing weekly in San Francisco, our weekend vocational skill programs are filling classroom space previously under utilized," Keogh added.

Regarding continued growth into the third and fourth quarters, Keogh commented: "With the opening of our new extension campus at San Diego State University in February and increased enrollment at our Salinas campus, our plan for external growth will be well under way. Running parallel to the external effort, enrollment at our core facility will benefit from the new student dormitories which will attract out-of-town applicants who previously might not have enrolled due to the lack of nearby housing."

Providing a preliminary outlook of the company's anticipated performance ahead, Keogh stated, "For fiscal 1998, we are projecting revenues ranging between $17-$18 million and earnings in the range of 12-14 cents per share. Based on a newly created capacity for approximately 300 more students at the core facility, boosted marketing and admissions efforts aimed at filling the newly created enrollment slots, improved utilization of classroom space, the addition of our San Diego extension campus, growing incremental contributions from the food service division and tenant revenue from student housing operations, we are extremely confident in achieving these estimates for the year."

The California Culinary Academy is one of the largest culinary schools in the United States and a nationally known leader and innovator in culinary arts education. The Academy offers two fully accredited professional programs as well as a series of continuing educational programs and vocational training. In addition, the Academy provides contract training and consulting services to food service operations in the public and private sectors. Information on the company can be found on the Internet at http://www.baychef.com . NOTE: Statements in this news release that relate to future plans, financial results or projections, events or expected performance in future periods are forward-looking statements and fall within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results and performance for such periods may differ materially.

Such forward-looking statements involve risks and uncertainties, including risks of changing market conditions in the overall economy and the food industry, consumer demand, the success of the company's business strategies and other factors detailed from time to time in the company's annual and other reports filed with the Securities and Exchange Commission. -0-

                    California Culinary Academy Inc.
                     Selected Financial Information

INCOME STATEMENT DATA:              Three Months Ended
                                         Sept. 30:
                                1997                  1996

Revenues:
Culinary arts education    $ 3,282,000            $ 3,010,000
Restaurants and catering       556,000                379,000
Retail, media and other         96,000                140,000
                             3,934,000              3,529,000

Cost of sales                  838,000                702,000
Gross Margin                 3,096,000              2,827,000

Operating Expenses:
Occupancy                      444,000                445,000
Related occupancy costs        456,000                458,000
Compensation & benefits      1,621,000              1,331,000
Outside services               204,000                122,000
Advertising & promotion        186,000                265,000
Legal, travel, reserves
& other                        399,000                124,000
                             3,310,000              2,745,000

Interest expense
(income), net                  (17,000)                 6,000

Income before taxes           (197,000)                76,000
Provision for income
taxes                          (36,000)                30,000

Net income (loss)             (161,000)                46,000
Earnings per share              $(0.05)                 $0.01

Weighted average common
shares outstanding            3,525,000             3,229,000



                    California Culinary Academy Inc.
                     Selected Financial Information

BALANCE SHEET DATA:
                              Sept.30,              Sept.30,
                                1997                  1996

Current Assets:
Cash and cash
equivalents                $ 1,880,000            $ 3,284,000
Accounts receivable, net     3,849,000              2,993,000
Inventories                    269,000                214,000
Prepaid expenses and
 other assets                  434,000                259,000
Deferred tax asset             224,000                114,000
Total Current Assets         6,656,000              6,684,000
Property and equipment,
 net                         5,035,000              4,680,000
Other Assets                   648,000              1,089,000
Total Assets               $12,339,000            $12,633,000

Current Liabilities:
Accounts payable           $   397,000            $   626,000
Accrued liabilities            642,000                286,000
Deferred revenue             3,942,000              3,833,000
Student prepayments            658,000                339,000
Current portion of
 long-term liabilities          67,000                881,000
Other current liabilities       61,000                 11,000
Total Current Liabilities    5,767,000              5,976,000
Notes Payable and
 Long-term Liabilities         131,000                708,000
Total Stockholders'
 Equity                      6,441,000              5,949,000
Total Liabilities and
 Stockholders' Equity      $12,339,000            $12,633,000

CONTACT: California Culinary Academy, San Francisco

Keith Keogh, 415/771-3536

or

Coffin Communications Group, Sherman Oaks, Calif.

Steven Johnson, 818/789-0100