LOS ANGELES California Pizza Kitchen Inc. said Wednesday its board of directors approved a three-for-two stock split to be distributed as a 50-percent stock dividend to shareholders of record as of June 11.
California Pizza Kitchen stakeholders will receive on June 18 one additional share for every two shares of common stock held and cash will be distributed in lieu of fractional shares, the company said. The stock split will increase the number of shares outstanding from about 19.4 million to about 29.1 million, it added.
Rick Rosenfield and Larry Flax, co-chief executives of the company that operates or franchises 213 namesake casual-dining restaurants said the stock split – the first since becoming a public company – will increase liquidity of the company's stock. Companies usually undertake stock splits when share prices have increased to a high value. A split lowers the price by increasing the number of shares outstanding. Both Yum! Brands Inc. and Buffalo Wild Wings recently announced stock splits.
At CPK, the company said its split "reflects a positive outlook on numerous fronts as full-service restaurant development continues to exhibit strong performance and franchising efforts and Kraft relationship have become material contributors to our bottom-line."
In addition to its restaurant operations, California Pizza Kitchen has a licensing agreement with Kraft Pizza Co., which manufactures and distributes a line of California Pizza Kitchen frozen pizzas.