CPK Profit Up in Quarter but Down 48% for Year

California Pizza Kitchen Inc. posted a 4% jump in fourth-quarter profit, but its full-year earnings tumbled 48% largely because of write-downs of underperforming restaurants.

The Westchester-based operator of 168 casual dining spots reported quarterly net income of $4.4 million, or 23 cents a share, compared with $4.2 million, or 22 cents a share, in the same period a year before.

The results, released after the stock market closed, marked the company’s return to profitability. In the third quarter CPK suffered a $4.8-million loss, its first quarterly loss since going public in 2000.

“We are making substantial progress,” said Co-Chief Executive Rick Rosenfield, who with co-founder Larry Flax returned to run the company after criticizing a former executive for expanding too quickly.

Revenue for the fourth quarter rose 18% to $96.1 million, from $81.5 million. Most of the sales increase was from five restaurants opened in the quarter.

Although the company’s total sales in the quarter climbed, average weekly sales for its restaurants dipped 1.1% to $54,495, compared with $55,106 a year ago. California Pizza Kitchen has struggled in recent quarters with slow sales at a number of newly opened restaurants in more sparsely populated communities.

Last quarter, CPK said it planned to close five underperforming stores. However, on Thursday, the company said it would close no more than two of its locations and was renegotiating many leases to make the restaurants more profitable.

“The vast majority of stores are economically successful, but clearly there was a breakdown in the site selection process that caused stores to underperform pretty significantly,” said analyst Bryan C. Elliot with Raymond James & Associates. Raymond James does not own CPK’s stock or have an investment banking relationship with the chain.

For the full year, CPK reported a profit of $8.0 million, or 42 cents a share, down from $15.3 million, or 81 cents a share, in 2002. Sales increased 18% to $359.9 million, up from $306.3 million in 2002.

The firm forecast earnings of 17 cents to 19 cents a share for the first quarter, below last year’s level, but maintained its outlook of 95 cents to $1 for fiscal 2004 because of higher food costs.

Shares of CPK, which trade on Nasdaq, declined 31 cents to $18.10.