CPK reports net loss as 11 units are written down

Nation's Restaurant News, Nov 10, 2003

Los ANGELES -- California Pizza Kitchen Inc. said net income excluding special charges fell 3.9 percent on an 18-percent rise in revenues during the third quarter ended Sept. 28.

CPK reported net income of $4.4 million, or 23 cents per diluted share, for the quarter, compared with $4.6 million, or 25 cents a share, for the previous year's quarter. Including asset impairment and other charges in both years, the company reported a net loss of $4.8 million, versus a profit of $3 million. Revenues for the quarter were $93.1 million.

The company, which has 166 restaurants in its system, said it had booked a $13 million asset impairment charge in the current quarter because sales at 11 newer restaurants were lower than expected. It said cash flows from operations at those units would not be sufficient for the company to recover the net book value. The 11 restaurants generated an average weekly sales volume of about $32,250.

The average weekly sales volume for all company-owned restaurants was $55,492 in the third quarter, compared with $56,670 in the same period a year ago.