California Pizza Kitchen Announces Financial Results for the First Quarter of 2010
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 | ||||||
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Operating income before depreciation and amortization and store closure costs (2) |
13,080 | 13,467 | ||||||
| Depreciation and amortization | 9,135 | 9,353 | ||||||
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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 | ||||||
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Company-owned full service restaurants open at end of period |
196 | 194 | ||||||
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Average weekly company-owned full service restaurant sales |
$ | 59,082 | $ | 61,308 | ||||
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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. | |
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(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.
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| 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 | % | ||
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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 | % | ||
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| 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 | |||||
