California Pizza Kitchen v3
California Pizza Kitchen v3
California Pizza Kitchen v3
As of
1/1/2006 12/31/2006 7/1/2007
Assets
Current assets
Cash and cash equivalents $ 11,272 $ 8,187 $ 7,178
Investments in marketable securities 11,408
Other receivables 4,109 7,876 10,709
Inventories 3,776 4,745 4,596
Current deferred tax asset, net 8,437 11,721 11,834
Prepaid income tax 1,428 8,769
Other prepaid expenses & other current assets 5,492 5,388 6,444
Total current assets 45,922 37,917 49,530
Shareholders' equity:
Common stock 197 193 291
Additional paid-in-capital 231,159 221,163 228,647
Accumulated deficit (34,013) (13,013) (3,050)
Accumulated comprehensive loss (7)
Total shareholders' equity 197,336 208,343 225,888
Notes:
(1)
For the Years Ended December 31, 2006, January 1, 2006 and January 2, 2005, December 28, 2003.
(2)
Severance charges represent payments to former President/CEO and former SVP/Senior Development Officer under terms of their separation agreements.
(3)
Data for company-owned restaurants.
Sources of data: Company Annual and Quarterly Reports and quarterly company earnings conference calls.
Exhibit 4
California Pizza Kitchen, Inc.
Selected Historical Comparable Store Sales (Calendarized)
CY06 CY07
CY03 CY04 CY05 Q1 Q2 Q3 Q4 Q1
California Pizza Kitchen 3.4% 9.3% 6.4% 4.8% 5.9% 5.6% 6.9% 4.7%
Applebee's International, Inc. 4.1% 4.8% 1.8% 2.6% -1.8% -2.3% -1.1% -4.0%
BJ's Restaurants, Inc. 3.3% 4.0% 4.6% 6.8% 5.9% 5.3% 5.5% 6.9%
Brinker International (1)
2.1% 1.9% 3.2% 2.7% -2.0% -2.1% -2.1% -4.4%
The Cheesecake Factory, Inc. 0.7% 3.9% 1.7% -1.3% -0.8% -1.6% 0.8% 0.4%
Chipotle Mexican Grill, Inc. 24.4% 13.3% 10.2% 19.7% 14.5% 11.6% 10.1% 8.3%
Darden Restaurants, Inc. -- Red Lobster 0.0% -3.9% 4.2% 1.6% 9.4% -2.1% 0.7% 4.6%
Darden Restaurants, Inc. -- Olive Garden 2.2% 4.7% 8.6% 5.7% 2.5% 2.9% 2.9% 1.0%
McCormick & Schmick's Seafood Restaurants, Inc. 1.1% 3.8% 3.0% 4.1% 2.8% 2.9% 2.0% 2.8%
Panera Bread Company 0.2% 2.7% 7.8% 9.0% 3.2% 2.8% 2.0% 0.0%
P.F. Chang's China Bistro 5.1% 3.0% 1.2% 1.3% -1.0% -0.5% -0.9% -2.5%
RARE -- Longhorn Steakhouse 4.6% 5.0% 2.8% 3.7% -0.4% -0.3% 1.5% -1.0%
Red Robin Gourmet Burgers 4.1% 7.5% 3.8% 4.8% 3.3% 0.8% 0.2% -0.5%
Ruth's Chris Steak House, Inc. 1.4% 11.6% 10.4% 6.8% 6.0% 4.3% 7.4% 1.9%
Sonic Corporation 1.6% 7.0% 5.4% 5.5% 4.3% 4.0% 3.4% 2.0%
Texas Roadhouse, Inc. 3.5% 7.6% 5.6% 6.4% 1.2% 2.3% 3.3% 0.9%
Note:
(1)
Brinker's comparable store sales is a blended rate for its various brands.
$80
3-Jul-06 3-Aug-06 3-Sep-06 3-Oct-06 3-Nov-06 3-Dec-06 3-Jan-07 3-Feb-07 3-Mar-07 3-Apr-07 3-May-07 3-Jun-07
Exhibit 7
California Pizza Kitchen, Inc.
Comparative Restaurant Financial Data, 2006 Fiscal Year (in millions, except per-share data)
Fiscal Year End 7/2/2007 EBITDA Net Profit Earnings Dividends Book Value
Month Share Price Revenue Margin Margin Per Share Per Share Per Share Beta
California Pizza Kitchen Dec. $ 22.10 $ 555 10.7% 3.8% $ 0.71 $ 0.00 $ 7.20 0.85
Applebee's International, Inc. Dec. 24.28 1,338 15.9% 6.5% 1.17 0.20 6.49 0.80
BJ's Restaurants, Inc. Dec. 20.05 239 9.6% 4.1% 0.41 0.00 7.78 1.05
Brinker International(1) June 29.37 4,151 12.0% 4.7% 1.49 0.20 8.59 0.90
Buffalo Wild Wings, Incorporated Dec. 41.78 278 13.3% 5.8% 0.93 0.00 6.61 1.10
The Cheesecake Factory, Inc. Dec. 24.57 1,315 12.2% 6.2% 1.02 0.00 9.09 1.00
Chipotle Mexican Grill, Inc. Dec. 86.00 823 13.0% 5.0% 1.28 0.00 14.56 NA
Darden Restaurants, Inc.(2) May 44.14 5,721 13.2% 5.9% 2.16 0.40 8.37 1.00
Frisch's Restaurants, Inc. May 30.54 291 31.6% 3.1% 1.78 0.44 19.84 0.60
McCormick & Schmick's Dec. 25.66 308 9.7% 4.3% 0.92 0.00 11.20 1.10
Panera Bread Company Dec. 46.02 829 16.3% 7.2% 1.87 0.00 12.53 1.25
P.F. Chang's China Bistro Dec. 35.37 938 10.5% 3.6% 1.24 0.00 11.41 1.10
RARE Hospitality International Inc.(3) Dec. 26.76 987 11.6% 5.1% 1.45 0.00 11.17 0.57
Red Robin Gourmet Burgers Dec. 40.19 619 13.7% 4.9% 1.82 0.00 14.68 1.05
Ruth's Chris Steak House, Inc. Dec. 16.80 272 15.6% 8.7% 1.01 0.00 2.93 NA
Sonic Corporation Aug. 22.00 693 24.9% 11.4% 0.88 0.00 4.66 0.90
Texas Roadhouse, Inc. Dec. 12.81 597 12.5% 5.7% 0.44 0.00 4.30 0.90
Avg
Applebee's International, Inc. 105 187 175 487 26.5% 11.7 2.0 14.0% 18.0%
BJ's Restaurants, Inc. 96 36 0 203 0.0% NMF 1.2 4.9% 4.9%
Brinker International(1) 242 497 502 1,076 31.8% 14.4 2.6 13.2% 18.0%
Buffalo Wild Wings, Incorporated 75 26 0 116 0.0% NMF 2.4 14.0% 14.0%
The Cheesecake Factory, Inc. 203 163 0 712 0.0% NMF 1.8 11.4% 11.4%
Chipotle Mexican Grill, Inc. 179 61 0 474 0.0% NMF 1.7 8.8% 8.7%
Darden Restaurants, Inc.(2) 378 1,026 645 1,230 34.4% 10.9 3.1 20.6% 27.5%
Frisch's Restaurants, Inc. 12 31 43 101 30.1% 5.9 2.0 7.9% 9.1%
McCormick & Schmick's 30 40 0 160 0.2% NMF 1.9 8.3% 8.3%
Panera Bread Company 128 110 0 398 0.0% NMF 2.1 15.1% 15.1%
P.F. Chang's China Bistro 65 104 19 290 6.2% NMF 3.0 11.1% 11.5%
RARE Hospitality International Inc.(3) 125 134 166 360 31.6% 29.2 1.9 9.8% 13.9%
Red Robin Gourmet Burgers 29 70 114 244 31.9% 7.7 1.7 9.3% 12.5%
Ruth's Chris Steak House, Inc. 26 59 68 68 50.0% 12.8 2.0 18.6% 34.9%
Sonic Corporation 43 78 159 392 28.9% 15.0 1.3 15.3% 20.1%
Texas Roadhouse, Inc. 53 78 36 319 10.2% 19.9 1.7 9.7% 10.7%
avg of leverre 23.5% 12.3%
Notes: Avg === 17.6%
(1)
Brinker's restaurant brands include Chili's Grill & Bar, Romano's Macaroni Grill, On The Border and Maggiano's.
(2)
Darden's restaurant brands include Red Lobster and The Olive Garden.
(3)
RARE's restaurant brands include LongHorn Steakhouse, The Capital Grille and Bugaboo Creek Steak House.
Sources of data: Value Line Investment Survey, 2007; Standard & Poor's Stock Report, 2007 and company Annual Reports and websites.
Exhibit 7
California Pizza Kitchen, Inc.
Comparative Restaurant Financial Data, 2006 Fiscal Year (in millions, except per-share data)
Fiscal Year End 7/2/2007 EBITDA Net Profit Earnings Dividends Book Value
Month Share Price Revenue Margin Margin Per Share Per Share Per Share Beta
California Pizza Kitchen Dec. $ 22.10 $ 555 10.7% 3.8% $ 0.71 $ 0.00 $ 7.20 0.85
Applebee's International, Inc. Dec. 24.28 1,338 15.9% 6.5% 1.17 0.20 6.49 0.80
BJ's Restaurants, Inc. Dec. 20.05 239 9.6% 4.1% 0.41 0.00 7.78 1.05
Brinker International(1) June 29.37 4,151 12.0% 4.7% 1.49 0.20 8.59 0.90
Buffalo Wild Wings, Incorporated Dec. 41.78 278 13.3% 5.8% 0.93 0.00 6.61 1.10
The Cheesecake Factory, Inc. Dec. 24.57 1,315 12.2% 6.2% 1.02 0.00 9.09 1.00
Chipotle Mexican Grill, Inc. Dec. 86.00 823 13.0% 5.0% 1.28 0.00 14.56 NA
Darden Restaurants, Inc.(2) May 44.14 5,721 13.2% 5.9% 2.16 0.40 8.37 1.00
Frisch's Restaurants, Inc. May 30.54 291 31.6% 3.1% 1.78 0.44 19.84 0.60
McCormick & Schmick's Dec. 25.66 308 9.7% 4.3% 0.92 0.00 11.20 1.10
Panera Bread Company Dec. 46.02 829 16.3% 7.2% 1.87 0.00 12.53 1.25
P.F. Chang's China Bistro Dec. 35.37 938 10.5% 3.6% 1.24 0.00 11.41 1.10
RARE Hospitality International Inc.(3) Dec. 26.76 987 11.6% 5.1% 1.45 0.00 11.17 0.57
Red Robin Gourmet Burgers Dec. 40.19 619 13.7% 4.9% 1.82 0.00 14.68 1.05
Ruth's Chris Steak House, Inc. Dec. 16.80 272 15.6% 8.7% 1.01 0.00 2.93 NA
Sonic Corporation Aug. 22.00 693 24.9% 11.4% 0.88 0.00 4.66 0.90
Texas Roadhouse, Inc. Dec. 12.81 597 12.5% 5.7% 0.44 0.00 4.30 0.90
Avg
Notes:
(1)
Brinker's restaurant brands include Chili's Grill & Bar, Romano's Macaroni Grill, On The Border and Maggiano's.
(2)
Darden's restaurant brands include Red Lobster and The Olive Garden.
(3)
RARE's restaurant brands include LongHorn Steakhouse, The Capital Grille and Bugaboo Creek Steak House.
Sources of data: Value Line Investment Survey, 2007; Standard & Poor's Stock Report, 2007 and company Annual Reports and websites.
Exhibit 8
California Pizza Kitchen, Inc.
Interest Rates and Yields
2006: Jan. 4.20% 4.30% 4.35% 4.42% ...... 5.29% 6.24% 7.38% 4.68%
Feb. 4.41% 4.51% 4.64% 4.57% 4.54% 5.35% 6.27% 7.50% 4.82%
Mar. 4.51% 4.61% 4.74% 4.72% 4.73% 5.53% 6.41% 7.63% 4.99%
Apr. 4.59% 4.72% 4.89% 4.99% 5.06% 5.84% 6.68% 7.75% 5.15%
May. 4.72% 4.81% 4.97% 5.11% 5.20% 5.95% 6.75% 7.88% 5.23%
June 4.79% 4.95% 5.09% 5.11% 5.15% 5.89% 6.78% 7.13% 5.51%
July 4.96% 5.09% 5.07% 5.09% 5.13% 5.85% 6.76% 8.25% 5.49%
Aug. 4.98% 4.99% 4.85% 4.88% 5.00% 5.68% 6.59% 8.25% 5.40%
Sept. 4.82% 4.90% 4.69% 4.72% 4.85% 5.51% 6.43% 8.25% 5.37%
Oct. 4.89% 4.91% 4.72% 4.73% 4.85% 5.51% 6.42% 8.25% 5.37%
Nov. 4.95% 4.96% 4.64% 4.60% 4.69% 5.33% 6.20% 8.25% 5.37%
Dec. 4.85% 4.88% 4.58% 4.56% 4.68% 5.32% 6.22% 8.25% 5.36%
2007: Jan. 4.96% 4.94% 4.79% 4.76% 4.85% 5.40% 6.34% 8.25% 5.36%
Feb. 5.02% 4.97% 4.75% 4.72% 4.82% 5.39% 6.28% 8.25% 5.36%
Mar. 4.97% 4.90% 4.51% 4.56% 4.72% 5.30% 6.27% 8.25% 5.35%
Apr. 4.88% 4.87% 4.60% 4.69% 4.87% 5.47% 6.39% 8.25% 5.36%
May. 4.77% 4.80% 4.69% 4.75% 4.90% 5.47% 6.39% 8.25% 5.36%
June 4.63% 4.77% 5.00% 5.10% 5.20% 5.79% 6.70% 8.25% 5.36%
4.78%
Sources of data: Economic Report of the President and Fannie Mae website.
Exhibit 9
CALIFORNIA PIZZA KITCHEN
Pro Forma Tax Shield Effect of Recapitalization Scenarios
(Dollars in thousands, except share data; figures based on end of June 2007)
Debt/Total Capital
Actual 10% 20% 30%
Earnings before income taxes and interest(2) 30,054 30,054 30,054 30,054
Interest expense 0 1,391 2,783 4,174
Earnings before taxes 30,054 28,663 27,271 25,880
Income taxes 9,755 9,303 8,852 8,400
Net income 20,299 19,359 18,419 17,480
Book value:
Debt 0 22,589 45,178 67,766
Equity 225,888 203,299 180,710 158,122
Total capital 225,888 225,888 225,888 225,888
Market value:
Debt(3) 0 22,589 45,178 67,766
Equity(4) 643,773 628,516 613,259 598,002
Market value of capital 643,773 651,105 658,437 665,769
Notes:
(1)
Interest rate of CPK's credit facility with Bank of America: LIBOR + 0.80%.
(2)
EBIT includes interest income.
(3)
Market values of debt equal book values.
(4)
Actual market values of equity equals the share price ($22.10) multiplied by the current number of shares outstanding (29.13 million).
Debt/Total Capital
0% 10% 17.6% 20% 30%
Market value:
Debt 0 22,589 39,756 45,178 67,766
Equity 643,773 628,516 616,921 613,259 598,002
Market value of capital 643,773 651,105 656,677 658,437 665,769
D/E ratio 0.0000 0.0347 0.0605 0.0686 0.1018
0.8500 0.8699 0.8847 0.8894 0.9084
Cost of Equity 0.1114 0.1128 0.1138 0.1141 0.1155
WACC 0.1114 0.1103 0.1094 0.1092 0.1080
CF 20,299 19,359 18,645 18,419 17,480
PV = CF/WACC 182,299 175,524 170,362 168,728 161,888
Required capital expenditure 85,000 85,000 85,000 85,000 85,000
NPV 97,299 113,113 125,118 128,905 144,655