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CPK swings to loss on slow sales, charges

LOS ANGELES California Pizza Kitchen Inc. cited slow sales and heavy impairment charges as it booked a $5.3 million loss in its fourth quarter.

Facing "unprecedented economic times," the parent of the 254-unit casual pizza chain predicted that negative sales trends would continue in its current fiscal year and said it would slow expansion to only five new company-owned stores.

For the fourth quarter ended Dec. 28, CPK reported a net loss of $5.3 million, or 22 cents per share, compared with a profit of $3.5 million, or 12 cents a share, in the year-earlier quarter.

Excluding the impact of more than $13 million of impairment charges and other one-time items, CPK said it would have earned $3.1 million, or 13 cents a share, in the fourth quarter. That topped the average analyst prediction of 9 cents a share, according to Thomson Financial.

Fourth-quarter revenue dipped slightly to $161.8 million, down 0.7 percent from a year ago. Same-store sales fell 7.2 percent in the fourth quarter, CPK reported.

"We are managing our business during unprecedented economic times and are confident of CPKÕs strong market position and strategy," Rick Rosenfield and Larry Flax, CPK's co-chief executives, said in a statement. "Our price point is well placed within the casual-dining segment and our innovative menu and attentive service levels continue to deliver high guest satisfaction scores."

For the full year, CPK reported net income of $8.7 million, or 34 cents a share, compared with profit of $14.8 million, or 50 cents a share, in the year before.

Annual revenue rose nearly 7 percent to $677.1 million. Same-store sales fell 2 percent, CPK reported.

For the current fiscal year, CPK predicted same-store sales would fall between 5.5 percent and 6.5 percent. In addition to the five new corporate stores, the companyÕs franchisees were expected to open another 10 units in 2009.

CPK also said it would grow its relationship with Kraft by adding to its line of grocery-store products. Earlier this year, the company said it would debut its first non-pizza retail offering this year with a line of CPK Flatbread Melts sandwiches.

Contact Molly Gise at [email protected].

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