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This spreadsheet supports STUDENT analysis of the case,

"California Pizza Kitchen" (Case 33)

March 31, 2008


Copyright (C) 2008, by the University of Virginia Darden School Foundation.

Exhibit 2
California Pizza Kitchen, Inc.
Consolidated Balance Sheet (in thousands)

As of
12/31/2006

1/1/2006
Assets
Current assets
Cash and cash equivalents
Investments in marketable securities
Other receivables
Inventories
Current deferred tax asset, net
Prepaid income tax
Other prepaid expenses & other current assets
Total current assets
Property and equipment, net
Noncurrent deferred tax asset, net
Goodwill and other intangibles
Other assets
Total assets
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable
Accrued compensation and benefits
Accrued rent
Deferred rent credits
Other accrued liabilities
Accrued income tax
Total current liabilities

Other liabilities
Deferred rent credits, net of current portion
Shareholders' equity:
Common stock
Additional paid-in-capital
Accumulated deficit
Accumulated comprehensive loss
Total shareholders' equity
Total liabilities & Shareholders' Equity
Sources of data: Company Annual and Quarterly Reports.

11,272
11,408
4,109
3,776
8,437
1,428
5,492
45,922
213,408
4,513
5,967
4,444
274,254

7,054
13,068
13,253
4,056
9,294

8,187

7/1/2007

7,876
4,745
11,721

5,388
37,917

10,709
4,596
11,834
8,769
6,444
49,530

255,382
5,867
5,825
5,522
310,513

271,867
6,328
5,754
6,300
339,779

46,725

15,044
15,042
14,532
4,494
13,275
3,614
66,001

5,383
24,810

8,683
27,486

8,662
32,436

197
231,159
(34,013)
(7)
197,336

193
221,163
(13,013)

291
228,647
(3,050)

208,343

225,888

274,254

7,178

310,513

14,115
15,572
14,979
5,135
13,980
9,012
72,793

339,779

Exhibit 3
California Pizza Kitchen, Inc.
Consolidated Income Statements (in thousands, except per-share data)

Fiscal Year(1)
2004
2005

2003
Restaurant sales
Franchise and other revenues
Total revenues

Three Months Ended


7/2/2006
7/1/2007

2006

$ 356,260
3,627
359,887

$ 418,799
3,653
422,452

$ 474,738
4,861
479,599

$ 547,968
6,633
554,601

$ 134,604
1,564
136,168

$ 156,592
1,989
158,581

87,806
129,702
70,273
287,781

103,813
152,949
83,054
339,816

118,480
173,751
92,827
385,058

135,848
199,744
108,558
444,150

33,090
49,272
26,214
108,576

38,426
56,912
30,773
126,111

General and administrative


Depreciation and amortization
Pre-opening costs

21,488
20,714
4,147

28,794
23,975
737

36,298
25,440
4,051

43,320
29,489
6,964

11,035
7,070
800

12,206
9,022
852

Severance charges(2)
Loss on impairment of PP&E
Store closure costs
Legal settlement reserve
Operating income

1,221
18,984

5,552

2,700
1,333
25,097

1,160
152
600
26,840

317

571

(349)
(32)

(143)
428

Food, beverage and paper supplies


Labor
Direct operating and occupancy
Cost of Sales

Interest income
Other income
Equity in loss of unconsolidated JV
Total other income (expense)
Income before income tax provision
Income tax provision (benefit)
Net income

Net income per common share:


Basic
Diluted

$
$

Selected Operating Data:


Restaurants open at end of period

18-mo. comparable rest. sales growth(3)

0.30
0.29

$
$

168

Company-owned open at end of period(3)


Avg weekly full service rest. sales(3)

5,520
(82)
5,602 $

54,896
3.4%

0.93
0.92

739
1,105
(22)
1,822

28,662
9,172
19,490

$
$

1.01
0.99

171

137
$

25,525
7,709
17,816

57,509

62,383

8.0%

7.5%

29,971

8,687

9,622

718

287

91

718

287

91

8,974
2,961
6,013

9,713
3,393
6,320

$
$

1.08
1.06

$
$

0.20
0.20

$
$

0.22
0.21

205

157
$

768

30,689
9,689
21,000

188

141
$

707

193

176
$

65,406
5.9%

213

162
$

65,427

182
$

68,535

4.8%

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.

5.4%

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.

19.7% 14.5%

24.4%

13.3%

10.2%

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.

Source of data: KeyBanc Capital Markets equity research.

Exhibit 5
California Pizza Kitchen, Inc.
Selected Forecasts for California Pizza Kitchen

Firm
Oppenheimer and Co. Inc.
CIBC World Markets
KeyBanc Capital Markets
RBC Capital Markets
Morgan Keegan & Co., Inc.
MKM Partners

Date of Price
2007E
Report Target Revenues
EPS
4/9/2007 $ 40 $
4/12/2007
37
5/11/2007
NA
5/11/2007
37
5/11/2007
NA
5/11/2007
39

Source of data: Selected firms' equity research.

652.9 $ 1.33
647.5
1.29
NA
1.28
650.7
1.31
644.2
1.33
647.5
1.34

2008E
Revenues EPS
NA
755.1
NA
753.1
742.1
754.3

NA
1.57
1.55
1.59
1.58
1.69

2009E
Revenues EPS
NA
NA
NA
NA
NA
NA
878.2 1.90
NA
NA
NA
NA

Exhibit 6
California Pizza Kitchen, Inc.
Stock Price Comparison

Value of $100 invested in CPK and S&P SmallCap 600 Restaurants Index
$140

$130

$120

$110

$100
CPK

$90

S&P SmallCap 600 Restaurants

Date

CPK S&P SmallCap 600 Restaurants

3-Jul-06

100

100

5-Jul-06

99

99

6-Jul-06

97

98

7-Jul-06

96

97

10-Jul-06

101

98

11-Jul-06

100

97

12-Jul-06

103

95

13-Jul-06

98

92

14-Jul-06

97

92

17-Jul-06

98

92

18-Jul-06

96

92

19-Jul-06

99

94

20-Jul-06

94

91

21-Jul-06

95

90

24-Jul-06

97

93

25-Jul-06

98

95

26-Jul-06

96

92

27-Jul-06

95

90

28-Jul-06

95

91

31-Jul-06

97

91

1-Aug-06

94

90

2-Aug-06

93

91

3-Aug-06

95

92

4-Aug-06

95

93

7-Aug-06

96

92

8-Aug-06

100

92

9-Aug-06

95

90

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

Month Share Price


California Pizza Kitchen

Dec. $

Applebee's International, Inc.

Dec.

BJ's Restaurants, Inc.

Dec.

Brinker International(1)

Net Profit

Earnings

Dividends

Margin

Margin

Per Share

Per Share

1,338

15.9%

6.5%

1.17

0.20

6.49

0.80

20.05

239

9.6%

4.1%

0.41

0.00

7.78

1.05

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

Current

Current

Total

Shr.

Debt/

Interest

T. Capital

Return On

Assets

Liabilities

Debt

Equity

Capital

Coverage

Turnover

Capital Equity

BJ's Restaurants, Inc.


Brinker International(1)
Buffalo Wild Wings, Incorporated

66

0.00

7.20

Beta

24.28

38

Per Share

3.8% $

0.71

Book Value

10.7%

Applebee's International, Inc.

EBITDA

555

California Pizza Kitchen

22.10

Revenue

0.85

208

0.0%

NMF

2.7

10.1% 10.1%

105

187

175

487

26.5%

11.7

2.0

14.0% 18.0%

96

36

203

0.0%

NMF

1.2

242

497

502

1,076

31.8%

14.4

2.6

13.2% 18.0%

4.9%

4.9%

75

26

116

0.0%

NMF

2.4

14.0% 14.0%

The Cheesecake Factory, Inc.

203

163

712

0.0%

NMF

1.8

11.4% 11.4%

Chipotle Mexican Grill, Inc.

179

61

474

0.0%

NMF

1.7

Darden Restaurants, Inc.(2)

378

1,026

645

1,230

34.4%

10.9

3.1

Frisch's Restaurants, Inc.

12

31

43

101

30.1%

5.9

2.0

7.9%

9.1%

McCormick & Schmick's

30

40

160

0.2%

NMF

1.9

8.3%

8.3%

128

110

398

0.0%

NMF

2.1

15.1% 15.1%

Panera Bread Company


P.F. Chang's China Bistro

8.8%

8.7%

20.6% 27.5%

65

104

19

290

6.2%

NMF

3.0

11.1% 11.5%

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%

RARE Hospitality International Inc.(3)

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

2000
2001
2002
2003
2004
2005

2006: Jan.
Feb.
Mar.
Apr.
May.
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
2007: Jan.
Feb.
Mar.
Apr.
May.
June

U.S. Treasury Securities


Bills
Notes & Bonds
3-month
6-month
3-year
10-year
5.85%
5.92%
6.22%
6.03%
3.45%
3.39%
4.09%
5.02%
1.62%
1.69%
3.10%
4.61%
1.02%
1.06%
2.10%
4.01%
1.38%
1.58%
2.78%
4.27%
3.16%
3.40%
3.93%
4.29%

4.20%
4.41%
4.51%
4.59%
4.72%
4.79%
4.96%
4.98%
4.82%
4.89%
4.95%
4.85%
4.96%
5.02%
4.97%
4.88%
4.77%
4.63%

4.30%
4.51%
4.61%
4.72%
4.81%
4.95%
5.09%
4.99%
4.90%
4.91%
4.96%
4.88%
4.94%
4.97%
4.90%
4.87%
4.80%
4.77%

4.35%
4.64%
4.74%
4.89%
4.97%
5.09%
5.07%
4.85%
4.69%
4.72%
4.64%
4.58%
4.79%
4.75%
4.51%
4.60%
4.69%
5.00%

4.42%
4.57%
4.72%
4.99%
5.11%
5.11%
5.09%
4.88%
4.72%
4.73%
4.60%
4.56%
4.76%
4.72%
4.56%
4.69%
4.75%
5.10%

Sources of data: Economic Report of the President and Fannie Mae website.

30-year
5.94%
5.49%
......
......
......
......

......
4.54%
4.73%
5.06%
5.20%
5.15%
5.13%
5.00%
4.85%
4.85%
4.69%
4.68%
4.85%
4.82%
4.72%
4.87%
4.90%
5.20%

Corporate bonds (Moody's)


Aaa 3
Baa
7.62%
8.36%
7.08%
7.95%
6.49%
7.80%
5.67%
6.77%
5.63%
6.39%
5.24%
6.06%

5.29%
5.35%
5.53%
5.84%
5.95%
5.89%
5.85%
5.68%
5.51%
5.51%
5.33%
5.32%
5.40%
5.39%
5.30%
5.47%
5.47%
5.79%

6.24%
6.27%
6.41%
6.68%
6.75%
6.78%
6.76%
6.59%
6.43%
6.42%
6.20%
6.22%
6.34%
6.28%
6.27%
6.39%
6.39%
6.70%

Average
Prime
Lending
9.23%
6.91%
4.67%
4.12%
4.34%
6.19%

Average
LIBOR
3-month
6.55%
3.63%
1.79%
1.22%
1.67%
3.63%

7.38%
7.50%
7.63%
7.75%
7.88%
7.13%
8.25%
8.25%
8.25%
8.25%
8.25%
8.25%
8.25%
8.25%
8.25%
8.25%
8.25%
8.25%

4.68%
4.82%
4.99%
5.15%
5.23%
5.51%
5.49%
5.40%
5.37%
5.37%
5.37%
5.36%
5.36%
5.36%
5.35%
5.36%
5.36%
5.36%

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
20%

Actual

10%

Interest rate (1)


Tax rate

6.16%
32.5%

6.16%
32.5%

6.16%
32.5%

6.16%
32.5%

Earnings before income taxes and interest(2)


Interest expense

30,054
0

30,054
1,391

30,054
2,783

30,054
4,174

Earnings before taxes


Income taxes
Net income

30,054
9,755
20,299

28,663
9,303
19,359

27,271
8,852
18,419

25,880
8,400
17,480

0
225,888
225,888

22,589
203,299
225,888

45,178
180,710
225,888

67,766
158,122
225,888

22,589

45,178

67,766

643,773
643,773

628,516
651,105

613,259
658,437

598,002
665,769

Book value:
Debt
Equity
Total capital

30%

Market value:
Debt(3)
(4)
Equity
Market value of capital

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).

Source: Case writer analysis based on CPK financial data.