Calif. Culinary Academy planning public offering

Nation's Restaurant News, July 12, 1993

SAN FRANCISCO -- Hungry for cash to expand, pay down debt and protect the school's accreditation and ability to funnel federal financial aid to students, the California Culinary Academy is planning an initial public offering.

The owners of the innovative but cash-strapped 16-year-old chefs' school in San Francisco intend to offer 1 million shares of common stock in the IPO being handled by Paulson Investment Co. Inc. Academy officials said they assume that the shares initially will sell for about $7.50 and that the sale of a million units will net about $6.1 million after expenses.

According to a CCA prospectus, for the six months ended Feb. 28 the academy reported revenues of $5.4 million, up 15 percent from the figure for a similar period a year earlier, and net income of $430,000, an increase of nearly 51 percent over 1992 levels. For the year ended Aug. 31, 1992, revenues rose by 22 percent, to $9.7 million, and net income grew nearly 18 times, to $752,000.

Despite such financial feats, the balance sheet showed a "working capital deficiency" of $3.8 million as of Feb. 28. Debt incurred by the current owners after they purchased the school from the Wesson Corp. in 1987 and lease obligations contributed to the deficit.