California Pizza Kitchen Reports Financial Results for the Third Quarter Ended September 30, 2001; Establishes New Fourth Quarter and Fiscal 2002 Guidance.

Business Editors

LOS ANGELES--(BUSINESS WIRE)--Oct. 23, 2001

California Pizza Kitchen, Inc. (Nasdaq:CPKI) today reported revenues and earnings for the third quarter and nine months ended September 30, 2001. The company also announced lowered guidance for the fourth quarter of 2001 and for the full fiscal year ended December 29, 2002.

Highlights for the third quarter relative to prior-period results include:

-- Total revenues of $64.3 million compared to $55.0 million in the third
quarter of 2000

-- Operating income before pre-opening of $5.9 million compared to operating
income before pre-opening of $5.4 million in the third quarter of 2000

-- Fully diluted net income per share of $0.18, compared to pro-forma fully
diluted net income per share of $0.19 for the third quarter of 2000

-- Comparable restaurant sales up 1.8%

During the third quarter, the Company opened four new full service restaurants (Westfarms Mall, Farmington, CT; The Shops at Willow Bend, Plano, TX; Brea Mall, Brea, CA; and International Plaza, Tampa, FL). In addition to the company-owned restaurants opened during the quarter, the Company's international franchisee opened one new full service restaurant during the quarter in Mandaluyong City, Philippines. Average weekly sales for the Company's full service restaurants was $54,946 for the third quarter of 2001 compared to $55,574 for the same quarter last year. Average weekly sales for the Company's full service restaurants prior to September 11, 2001 was $57,470 compared to $57,190 for the same period of the prior year and average weekly sales for the Company's new restaurants including the week of September 11, 2001 are just over $52,000.

The Company expects to open 6 additional full service restaurants prior to the end of the current fiscal year for a total of 16 new restaurants in 2001 versus an original target of 14 new restaurants.

"Prior to the events on September 11, 2001, our same store sales and store level cash flow margins were on track for the quarter, despite an already difficult economic environment," said Fred Hipp, President and CEO. "In fact, prior to September 11th, comparable restaurant sales were tracking at a positive 3.5% and restaurant level cash flow was above 20% of sales. Since September 11th, however, we have seen ongoing volatility in comparable restaurant sales, a trend that we believe will continue in the short-run," added Hipp.

Due to the uncertainty in the marketplace and the downturn in consumer spending resulting from the September 11th terrorist attacks, the Company is taking a more conservative approach for both the fourth quarter of fiscal 2001 and for the full year 2002. As a result, the Company expects negative one percent to flat comparable restaurant sales for the fourth quarter and fully diluted earnings per share are expected to be in the range of $0.14 to $0.16.

For fiscal 2002, the Company expects to open 16 to 18 new full service restaurants, with seven expected to open in the first half of the year. Based on this development plan, the Company expects total revenues to increase by more than 20% next year and fully diluted earnings per share to be in the range of $0.80 to $0.84. This is based on a flat to one percent increase in comparable restaurant sales.

Mr. Hipp concluded, "We believe that our revised outlook for the fourth quarter and fiscal 2002 incorporate a conservative approach in the aftermath of the terrorist attacks. While we feel comfortable with these short-term expectations, we will continue to manage our business with the singular goal of creating long-term shareholder value. Ultimately, our strong and under-penetrated brand combined with an expansion philosophy that continues to deliver a strong balance sheet will remain the drivers of our business."

California Pizza Kitchen, Inc., founded in 1985, is a leading casual dining chain in the premium pizza segment. 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, and sandwiches. The average guest check is approximately $10.85. The chain operates, licenses or franchises 128 restaurants of which 96 are company-owned and 32 operate under franchise or license agreements. The Company also has a strategic alliance with Kraft Pizza Company to manufacture and distribute a line of California Pizza Kitchen premium frozen pizzas.

California Pizza Kitchen can be found on the World Wide Web at www.cpk.com.

This press release includes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that forward-looking statements are not guarantees of future performance and, therefore, undue reliance should not be placed on them. Forward-looking statements can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Our actual results may 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 the execution of our expansion strategy, the continued availability of qualified employees, the maintenance of reasonable food and supply costs 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 Consolidated Financial and Operating Data
    (Dollars in thousands, except for per share and operating data)

                           Quarter Ended         Nine Months Ended
                     September 30, October 1, September 30, October 1,
                            2001       2000          2001       2000

Statement of Operations Data
Revenues
 Restaurant sales        $ 63,566   $ 54,328     $ 179,429 $  154,013
 Franchise and other
   revenues                   705        641         2,198      1,861
   Total revenues          64,271     54,969       181,627    155,874

Restaurant costs and expenses
 Cost of sales             15,841     13,402        44,330     38,149
 Labor                     22,920     19,301        64,692     55,109
 Direct operating
  and occupancy            12,670     10,588        35,725     30,388
   Total restaurant
    operating costs        51,431     43,291       144,747    123,646

 General and administrative 3,894      3,817        11,389     11,038
 Depreciation and
  amortization              3,085      2,418         8,698      7,040
 Pre-opening                  805        396         1,918        910
 Loss on impairment of
  property and equipment
  and store closures           --         --            --      1,839
 Non-recurring compensation
  charge                       --         --            --      1,949

Operating income            5,056      5,047        14,875      9,452
Other income (expense)
 Interest income (expense)    127       (139)          513     (1,640)
   Total other income
    (expense), net            127       (139)          513     (1,640)

Income before income
 tax provision              5,183      4,908        15,388      7,812
Income tax provision       (1,814)    (1,718)       (5,386)    (2,734)
Net income                  3,369      3,190        10,002      5,078
Redeemable preferred
 stock accretion               --       (582)           --     (3,512)
Net income attributable
 to common shareholders  $  3,369    $ 2,608      $ 10,002    $ 1,566
Net income per common share
   Basic                   $ 0.18     $ 0.17        $ 0.55     $ 0.13
   Diluted                 $ 0.18     $ 0.17        $ 0.54     $ 0.12
Shares used in computing net income
per common share (in thousands)
   Basic                   18,383     15,129        18,272     12,307
   Diluted                 18,625     15,473        18,613     12,578

Pro Forma Data (1) (2)
Net income attributable to
 common shareholders      $ 3,369    $ 3,488      $ 10,002    $ 6,644
Net income per common share
   Basic                   $ 0.18     $ 0.20        $ 0.55     $ 0.37
   Diluted                 $ 0.18     $ 0.19        $ 0.54     $ 0.37
Shares used in computing net income
 per common share (in thousands)
   Basic                   18,383     17,887        18,272     17,801
   Diluted                 18,625     18,231        18,613     18,071

Operating Data
System-wide restaurants open
 at end of period             125        108           125        108
Company-owned restaurants open
 at end of period              93         77            93         77
Average weekly company-owned
 full service restaurant
 sales                   $ 54,946   $ 55,574      $ 54,664   $ 53,886
Comparable company-owned
 restaurant sales increase    1.8%       9.0%          3.7%       7.8%


                          Quarter Ended          Nine Months Ended
                    September 30, October 1, September 30,  October 1,
                            2001       2000          2001        2000

Statement of Operations Data (3)
Revenues
 Restaurant sales            98.9%      98.8%         98.8%      98.8%
 Franchise and other
  revenues                    1.1        1.2           1.2        1.2
   Total revenues           100.0      100.0         100.0      100.0

Restaurant costs and expenses
 Cost of sales               24.9       24.7          24.7       24.8
 Labor                       36.1       35.5          36.1       35.8
 Direct operating and
  occupancy                  19.9       19.5          19.9       19.7
   Total restaurant
    operating costs          80.9       79.7          80.7       80.3

 General and administrative   6.1        6.9           6.3        7.1
 Depreciation and
  amortization                4.8        4.4           4.8        4.5
 Pre-opening                  1.3        0.7           1.1        0.6
 Loss on impairment
  of property and equipment
  and store closures           --         --            --        1.2
 Non-recurring compensation
 charge                        --         --            --        1.3

Operating income              7.9        9.2           8.2        6.1
Other income (expense)
 Interest income (expense)    0.2       (0.3)          0.3       (1.0)
   Total other income
    (expense), net            0.2       (0.3)          0.3       (1.0)

Income before income
 tax provision                8.1        8.9           8.5        5.1
Income tax provision         (2.8)      (3.1)         (3.0)      (1.8)
Net income                    5.2        5.8           5.5        3.3
Redeemable preferred
 stock accretion               --       (1.1)           --       (2.3)
Net income (loss) attributable
 to common shareholders      5.2%        4.7%          5.5%       1.0%


            Selected Consolidated Balance Sheet Information
                        (Dollars in thousands)

Selected Consolidated Balance Sheet         September 30, December 31,
Information                                        2001         2000

Cash and cash equivalents                        $ 11,382    $ 12,649
Total assets                                      132,935     116,977
Total debt, including current portion                  12          47
Shareholders' equity                              109,451      92,318


(1) Pro forma net income attributable to common shareholders for the
    quarter ended October 1, 2000 is the result of the elimination of
    $151,000 of interest expense, net of taxes, related to the
    repayment of bank debt upon the closing of our initial public
    offering, the elimination of compensation expense of $146,000, net
    of taxes, due to the amendment of our co-founders' employment
    agreements and the elimination of $582,000 in preferred stock
    accretion upon the conversion of our preferred stock. Pro forma
    net income attributable to common shareholders for the nine months
    ended October 1, 2000 is the result of the elimination of
    $1,127,000 of interest expense, net of taxes, related to the
    repayment of bank debt upon the closing of our initial public
    offering, the elimination of compensation expense of $439,000, net
    of taxes, due to the amendment of our co-founders' employment
    agreements, the elimination of $1.2 million, net of taxes, related
    to the write-down of one of our properties in accordance with FAS
    121, the elimination of $1.3 million, net of taxes, related to the
    non-recurring compensation charge for performance based stock
    options and the elimination of $3.5 million in preferred stock
    accretion upon the conversion of our preferred stock.

(2) Pro forma share information gives effect, as of the beginning of
    each period, to the sale of 5,300,000 shares of common stock by us
    in our initial public offering, the conversion of all outstanding
    shares of our preferred stock into 1,580,938 shares of common
    stock and our repurchase of 1,000 shares from our majority
    shareholder, both pursuant to a plan of recapitalization, and the
    issuance of 110,696 shares of our common stock upon the exercise
    of options held by our Chief Executive Officer and President.

(3) Percentages are expressed as a percentage of total revenues,
    except for restaurant costs and expenses, which are expressed as a
    percentage of restaurant sales.