California Pizza Kitchen Announces Financial Results for the Second Quarter of 2006 and Raises Guidance for the Full Year.LOS ANGELES Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. -- California Pizza Kitchen California Pizza Kitchen (NASDAQ: CPKI, known within the food industry as CPK) is a casual dining restaurant chain that specializes in California-style pizza. The restaurant was started in 1985 by attorneys Rick Rosenfield and Larry Flax in Beverly Hills, California, , Inc. (Nasdaq: CPKI CPKI California Pizza Kitchen, Inc ) today reported revenues and net income for the second quarter ended July July: see month. 2, 2006. Highlights for the second quarter of 2006 relative to the same quarter a year ago were as follows: --Total revenues up approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 14.1% to $136.2 million --Comparable restaurant sales increase of 4.8% --Net income of $6.0 million, or $0.30 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, including the effects of stock-based compensation expense and the October October: see month. 6, 2005 lease accounting pronouncement --Net income of $7.1 million, or $0.36 per diluted share, excluding the effects of stock-based compensation expense and the October 6, 2005 lease accounting pronouncement Rick Rosenfield Rosenfield is a surname and may refer to:
This page or section lists people with the surname Rosenfield. and Larry Lar´ry n. 1. Same as Lorry, or Lorrie. Flax flax, common name for members of the Linaceae, a family of annual herbs, especially members of the genus Linum, and for the fiber obtained from such plants. The flax of commerce (several varieties of L. , co-CEOs of California Pizza Kitchen, Inc., stated, "We are very pleased with our second quarter results, which showcased many of our core strengths during a relatively difficult period for many in our industry. We credit CPK's commitment to menu innovation, customer service and value, which in combination drove strong comparable restaurant sales and solid profitability. In addition, we believe that the current environment highlights the staying power and lifestyle component of our brand which remains the core connection with our consumers, driving high satisfaction scores and more frequent visits. These trends are on the upswing Upswing An upward turn in a security's price after a period of falling prices. and we look to sustain our momentum for the remainder of 2006." Average weekly sales for the Company's 155 full service restaurants increased 4.5% to $65,427 for the second quarter of 2006 compared to $62,622 for the same quarter last year. Rosenfield and Flax continued, "CPK's growth is predicated on safeguarding our brands and choosing great sites where we can leverage costs between brands and prosper in the long term. We are achieving this goal with our full service restaurants, increasingly with our CPK/ASAP brand and ultimately with LA Food Show. The latter two will certainly evolve Evolve may refer to several terms:
Contraction of we will. we'll we will or we shall we'll will ~shall have the advantage of having brands and concepts in a broad range of locations. Across our entire brand portfolio, however, the common denominator common denominator n. 1. Mathematics A quantity into which all the denominators of a set of fractions may be divided without a remainder. 2. A commonly shared theme or trait. will always be the food. In that spirit, we'll continue to innovate in·no·vate v. in·no·vat·ed, in·no·vat·ing, in·no·vates v.tr. To begin or introduce (something new) for or as if for the first time. v.intr. To begin or introduce something new. and create unique items that each brand will call its own. We believe this is crucial to our market positioning and key to enhancing long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. stockholder value." In the second quarter of 2006, the Company added two new full service restaurants in Omaha, Nebraska “Omaha” redirects here. For other uses, see Omaha (disambiguation). Omaha is the largest city in the State of Nebraska, United States. It is the county seat of Douglas County.GR6 As of the 2000 census, the city had a population of 390,007. and Queens, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , as well as one CPK/ASAP in Culver City, California Culver City is a city in western Los Angeles County, California. As of the 2000 census, the city had a population of 38,816. The community is mostly surrounded by the city of Los Angeles but also has a border with unincorporated areas of Los Angeles County. . The Company's franchise partner, Golden Pillars, also opened a new full service restaurant in Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. , China. For the third quarter of 2006, the Company expects to add three new full service restaurants and one new CPK/ASAP. These openings, together with comparable restaurant sales of 4.0% to 5.0%, are expected to result in earnings per diluted share of $0.32-$0.33 including stock-based compensation expense and the impact of the October 6, 2005 lease accounting pronouncement. The Company also raised earnings guidance to between $1.12 and $1.14 per diluted share for the 2006 fiscal year. The Company will hold a conference call today at approximately 5:00 pm EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT to discuss second quarter 2006 results. A webcast of the conference call can be accessed at www.cpk.com. 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 BBQ barbecue Chicken Pizza pizza Food of Neapolitan origin. It consists of a flattened disk of bread dough, typically topped with olive oil, tomatoes, and mozzarella cheese, baked quickly, and served hot. Pizza is eaten throughout Italy, with regional variations in toppings. Pizza came to the U.S. , and a broad selection of distinctive pastas, salads, soups A list of different types of soup/stew. Broths (stocks, bouillons) Strained liquid from cooking things in water Consommés Clarified meat or fish broth
California Pizza Kitchen, Inc. can be found on the internet at www.cpk.com. This release includes certain "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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.
Selected Unaudited Consolidated Financial and Operating Data
(Dollars in thousands, except for per share and operating data)
Quarter Ended Six Months Ended
July 2, July 3, July 2, July 3,
2006 2005 2006 2005
--------- --------- --------- ---------
Statement of Income:
Revenues:
Restaurant sales $134,604 $118,416 $263,122 $227,834
Franchise and other
revenues 1,564 1,030 2,744 1,930
--------- --------- --------- ---------
Total revenues 136,168 119,446 265,866 229,764
Costs and expenses:
Food, beverage and paper
supplies 33,090 29,749 65,258 56,706
Labor (1) 49,272 43,712 96,899 84,827
Direct operating and
occupancy 26,214 22,896 51,508 44,872
--------- --------- --------- ---------
Cost of sales 108,576 96,357 213,665 186,405
General and administrative
(2) 11,035 7,769 21,390 15,279
Depreciation and
amortization 7,070 6,573 14,041 12,151
Pre-opening costs 800 946 1,433 2,046
--------- --------- --------- ---------
Total costs and expenses 127,481 111,645 250,529 215,881
Operating income 8,687 7,801 15,337 13,883
Other income (expense):
Interest income 287 200 512 395
Other income - 1,106 - 1,106
Equity in net loss of
unconsolidated joint
venture - (1) - (22)
--------- --------- --------- ---------
Total other income 287 1,305 512 1,479
--------- --------- --------- ---------
Income before income tax
provision 8,974 9,106 15,849 15,362
Income tax provision 2,961 2,912 5,230 4,897
--------- --------- --------- ---------
Net income $6,013 $6,194 $10,619 $10,465
========= ========= ========= =========
Net income per common share:
Basic $0.31 $0.32 $0.54 $0.54
Diluted $0.30 $0.32 $0.53 $0.54
Shares used in computing net
income per common share (in
thousands):
Basic 19,609 19,311 19,645 19,296
Diluted 20,066 19,557 20,132 19,511
Operating Data:
Restaurants open at end of
period 193 181 193 181
Company-owned full service
restaurants open at end of
period 155 144 155 144
Average weekly company-owned
full service restaurant
sales $65,427 $62,622 $64,365 $61,522
18 month comparable company-
owned restaurant sales
increase 4.8% 8.6% 5.6% 8.9%
---------------------------------------------------------------------
(1) Labor expense for the three and six months ended July 2, 2006
includes approximately $274,000 and $505,000 of stock-based
compensation, respectively, compared to none in the three and six
months ended July 3, 2005, respectively.
(2) General and administrative expense for the three and six months
ended July 2, 2006 includes approximately $1.2 million and $2.5
million of stock-based compensation, respectively, compared to
none in the three and six months ended July 3, 2005,
respectively.
Six Months
Quarter Ended Ended
July 2, July 3, July 2, July 3,
2006 2005 2006 2005
------- ------- ------- -------
Statement of Income Percentages (1):
Revenues:
Restaurant sales 98.9% 99.1% 99.0% 99.2%
Franchise and other revenues 1.1% 0.9% 1.0% 0.8%
------- ------- ------- -------
Total revenues 100.0% 100.0% 100.0% 100.0%
Costs and expenses:
Food, beverage and paper supplies 24.6% 25.1% 24.8% 24.9%
Labor (2) 36.6% 36.9% 36.8% 37.2%
Direct operating and occupancy 19.5% 19.3% 19.6% 19.7%
------- ------- ------- -------
Cost of sales 80.7% 81.4% 81.2% 81.8%
General and administrative (3) 8.1% 6.5% 8.0% 6.6%
Depreciation and amortization 5.2% 5.5% 5.3% 5.3%
Pre-opening costs 0.6% 0.8% 0.5% 0.9%
------- ------- ------- -------
Total costs and expenses 93.6% 93.5% 94.2% 94.0%
Operating income 6.4% 6.5% 5.8% 6.0%
Other income (expense):
Interest income 0.2% 0.2% 0.2% 0.2%
Other income 0.0% 0.9% 0.0% 0.5%
Equity in net loss of unconsolidated
joint venture 0.0% 0.0% 0.0% 0.0%
------- ------- ------- -------
Total other income 0.2% 1.1% 0.2% 0.6%
------- ------- ------- -------
Income before income tax provision 6.6% 7.6% 6.0% 6.7%
Income tax provision 2.2% 2.4% 2.0% 2.1%
------- ------- ------- -------
Net income 4.4% 5.2% 4.0% 4.6%
======= ======= ======= =======
(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 20 basis points of
stock-based compensation in each of the three and six months
ended July 2, 2006 compared to none in each of the three and
six months ended July 3, 2005.
(3) General and administrative percentage includes approximately 90
basis points of stock-based compensation in each of the three and
six months ended July 2, 2006 compared to none in each of the
three and six months ended July 3, 2005.
Selected Consolidated Balance Sheet Information
(Dollars in thousands)
Selected Consolidated Balance Sheet Information July 2, January 1,
2006 2006
--------------------
Cash and cash equivalents $8,718 $11,272
Marketable securities 14,000 11,408
Total assets 289,911 274,254
Stockholders' equity 206,068 197,336
California Pizza Kitchen, Inc.
Units Summary
Total Total
Units at Units at
--------- --------
April 2, July 2,
Second Quarter 2006 2006 Opened Acquired Closed 2006
---------------------------- --------- ------ -------- ------ -------
Company-owned full service
domestic 153 2 - - 155
Company-owned ASAP domestic 5 1 - - 6
Company-owned LA Food Show 1 - - - 1
Franchised domestic 18 - - - 18
Franchised international 12 1 - - 13
----------------------------------------
Total 189 4 - - 193
========================================
California Pizza Kitchen, Inc.
Supplemental Information
Cost of
Sales
Weekly (,000) (,000) as a
# of Sales Restaurant Cost of Percentage
Second Quarter 2006 Stores Average Sales Sales (1) of Sales
--------------------------------------------------------------------
Full Service
Restaurants
Q2, 2006 155 65,427 130,966 105,459 80.5%
Q2, 2005 144 62,622 115,950 94,073 81.1%
Year over year
change 4.5% 13.0% 12.1% 60 bps
ASAP Restaurants
Q2, 2006 6 37,489 2,656 2,218 83.5%
Q2, 2005 5 30,506 1,795 1,595 88.9%
Year over year
change 22.9% 48.0% 39.1% 540 bps
LA Food Show
Q2, 2006 1 75,508 982 899 91.5%
Q2, 2005 1 67,127 671 689 102.7%
Year over year
change 12.5% 46.3% 30.5% 1,120 bps
Total restaurants
Q2, 2006 162 64,540 134,604 108,576(2) 80.7%
Q2, 2005 150 61,661 118,416 96,357 81.4%
Year over year
change 4.7% 13.7% 12.7% 70 bps
(1) Cost of sales includes food, beverage and paper supplies, labor,
and direct operating and occupancy costs.
(2) Cost of sales includes approximately $274,000, or 20 basis
points, of stock-based compensation in the second quarter of 2006
compared to none in the second quarter of 2005.
California Pizza Kitchen, Inc.
Supplemental Information
Cost of
(,000) Sales
# Weekly (,000) Cost as a
of Sales Restaurant of Percentage
Fiscal Year 2006 Stores Average Sales Sales (1) of Sales
--------------------------------------------------------- ----------
Full Service
Restaurants
YTD, 2006 155 64,365 256,457 207,784 81.0%
YTD, 2005 144 61,522 223,939 182,814 81.6%
Year over year
change 4.6% 14.5% 13.7% 60 bps
ASAP Restaurants
YTD, 2006 6 34,532 4,692 4,066 86.7%
YTD, 2005 5 29,086 3,224 2,902 90.0%
Year over year
change 18.7% 45.5% 40.1% 330 bps
LA Food Show
YTD, 2006 1 75,874 1,973 1,815 92.0%
YTD, 2005 1 67,127 671 689 102.7%
Year over year change 13.0% 194.0% 163.4% 1,070 bps
Total restaurants
YTD, 2006 162 63,460 263,122 213,665(2) 81.2%
YTD, 2005 150 60,580 227,834 186,405 81.8%
Year over year change 4.8% 15.5% 14.6% 60 bps
(1) Cost of sales includes food, beverage and paper supplies,
labor, and direct operating and occupancy costs.
(2) Cost of sales includes approximately $505,000, or 20 basis points,
of stock-based compensation in the six months ended July 2, 2006
compared to none in the six months ended July 3, 2005.
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