California Pizza Q4 Earnings Call Transcript

123jump.com Staff
28 Feb, 2010
New York City

The casual dining restaurant chain reported quarterly revenue increased 3.8% to $167.8 million but full service comparable restaurant sales fell 5.8%. Net quarterly loss widened 86% to $9.9 million. The company lost 41 cents a share compared to a loss of 22 cents a share a year-ago quarter.

California Pizza Kitchen, Inc. ((CPKI))
Q4 2009 Earnings Call Transcript
February 18, 2010 4:30 p.m. ET

Executives

Richard L. Rosenfield - Co-Chairman, Co-President & Co-Chief Executive Officer
Susan M. Collyns - Chief Operating Officer, Chief Financial Officer & Executive Vice President

Analysts

Rachel Schacter – Oppenheimer & Co.
Nicole Miller Regan - Piper Jaffray & Co.
Brad Ludington - KeyBanc Capital Markets Inc.
David Tarantino - Robert W. Baird & Company, Inc.
Larry Miller - RBC Capital Markets
Destin Tompkins - Morgan Keegan & Co., Inc.
Tony Brenner - Roth Capital Partners
Jonathan Raite - Presidio Research
Mitch Speiser - Buckingham Research Group
Stephen Anderson - MKM Partners
Tom Forte - Telsey Advisory Group
Conrad Lyon - Global Hunter Securities, LLC
Bryan Elliot - Raymond James & Associates
John Ivankoe – JPMorgan Chase & Co.

Presentation

Operator

Good afternoon. My name is Chastity and I will be your conference operator today. At this time, I would like to welcome everyone to the California Pizza Kitchen fourth quarter conference call. All lines have been placed on mute to prevent any background noise. After the speakers'' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. I would now like to turn today’s call over to Mr. Rick Rosenfield, Co-CEO and Co-President of California Pizza Kitchen. Please go ahead.

Richard L. Rosenfield

Hello. And thank you, operator and good afternoon, everyone. Welcome to our fourth quarter 2009 earnings call. I am Rick Rosenfield, Co-CEO of California Pizza Kitchen, and with me on the phone today is my Co-CEO, Larry Flax, and Sue Collyns, our Chief Financial Officer and Chief Operating Officer.

Before we begin, I need to remind everyone that part of our discussion this afternoon will include forward-looking statements. They are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. We refer all of you to our filings with the Securities and Exchange Commission for a more detailed discussion of the risks that may have a direct bearing on our operating results, performance, and financial conditions.

To begin, I’d like to briefly review our fourth quarter and full year before addressing our plans for 2010. As you are all aware, the events of late 2008 and the subsequent recession led to a defensive strategy for most of the year. We opened fewer stores. We focused on cost management and shifted resources toward leveraging existing operations. These actions resulted in cost of sales improvement, limited labor deleveraging and controlled G&A costs in both absolute dollars and as a percentage of sales. And on the bottom line, our ability to quickly react enabled us to consistently meet or exceed expectations over the past four quarters.

Despite the economic volatility of 2009, we never lost sight of the customer. In fact, our guest focus was recognized in December by Zocalo Research as CPK took the esteemed position of number one, the most recommended casual dining chain in America. And our guest satisfaction scores back this up as we exceeded not only industry average; we exceeded our internal prior-year results as well.

As we concluded the 14-week fourth quarter, our revenues increased to $168 million and the comparable sales decline of 5.8% was in line with our original expectations despite the negative Halloween and Christmas calendarships. For the period we saw widespread sales improvement across our dine-in, take-out and delivery channels and we believe we saw and continue to see signs of a sustained comp turnaround.

That said, we are only halfway through the first quarter and severe winter weather in many parts of the country is certainly having an adverse and choppy effect. Easier comparisons certainly came into play in the fourth quarter. But we have also seen several initiatives meaningfully contribute to our momentum.

In the fourth quarter we rolled out a newly redesigned wine list featuring over 30 distinctive wines. Most are priced under $10 per glass although we are also finding guest receptiveness for premium options. Upgrading our wine offering and bringing it more in line with our reputation for cravable food helped drive our check average and guest satisfaction during the period.

Our November menu rollout has also been a success with eight new items including a Tuscan White Bean Minestrone Soup, Cranberry Walnut Chicken Salad Sandwich, an Albacore Tuna Salad Sandwich, fish and stake tacos, honey-wheat with whole grain pizza crust, a Multigrain Penne, and a White Chocolate Strawberry Cheesecake.

As a follow up to this menu launched on February 4th we released a small cravings menu. It consists of seven items priced between $3.99 and $6.50 and the early results are encouraging. As always these additions will help ensure that every CPK dining experience is innovative, distinct, and value oriented.

Off-premise is also an important part of our full service business. By the end of the first quarter, we will have all our stores utilizing our CPK call center. This is more efficient for our restaurants and guests.

So far we have seen our check average rise approximately 15% to 20%. Our off-premise initiative also includes a new catering channel so that people can enjoy a CPK experience at their homes or businesses that’s beyond take-out or delivery.

We now have dedicated catering managers and a fully customizable catering menu to meet individual customer and corporate needs. All of these initiatives have already contributed to our full service business so we feel good about 2010.

In terms of development, we are on track to open a total of eight full service restaurants this year; five will be located in existing and proven retail space while three are new construction at highly successful malls. None of the locations are in California. Three are in new markets that we’re excited about entering – Delaware, which is incidentally our home state, Pittsburgh, and Jacksonville, Florida.

Now the opportunities available to us with regards to location and lease terms are among the best we’ve seen in quite some time. Yet, we have been highly selective going forward and allocating our capital to the very best opportunities.

Because of the brand we have created and nurtured over the past 25 years, our ancillary revenue growth continues to play a larger role in our financial statements and strategy. Full service restaurants will be the center piece of our expansion but increasingly will have the option to shift resources to opportunities that offer significant rates of return. These include domestic and international franchising and frozen pizza sales which collectively grew 9.1% in 2009 over 2008.

Let’s start with the frozen pizza business which represents almost two-thirds of our ancillary revenue stream and grew at 17.6% last year. As I am sure you are all aware, Nestle announced their intention to acquire Kraft Foods’ frozen pizza business in the US and Canada on January 5th and that includes the CPK license for frozen pizza.

Nestle incidentally is already the number one food company in the world. As Nestle’s USA CEO has stated Kraft Foods’ frozen pizza business is complementary to Nestle’s own frozen food portfolio and Nestle recognizes the strong contributions that the California Pizza Kitchen business has made to Kraft’s success in the premium frozen pizza segment.

We are looking forward to a smooth transition to Nestle and are hopeful that joining Nestle’s team will provide further distribution and new product opportunities in the US and abroad. However, it’s premature to discuss the possibilities until the transaction closes.

Also, under ancillary revenues for us is franchising and we are pleased that one of our franchise partners opened a full service restaurant in Cancun, Mexico during the fourth quarter. This represents our seventh location in Mexico since August 2007 and we believe the ultimate penetration in that market could be in excess of 40 stores.

We credit our partners for continuing their growth in a very difficult year and continue to see significant potential with our franchise partners around the world. On that note, the Gourmet Gulf Company has agreed to develop 19 restaurants throughout the Middle East over the next 10 years. Under the original agreement, Gourmet Gulf was to open a minimum of three California Pizza Kitchen over two years in the United Arab Emirates which includes our Dubai Mall restaurant which opened in January of 2009.

We are pleased with the work Gourmet Gulf Company has done to bring our innovative brand to the UAE and we look forward to further expansion throughout the Middle East under this new agreement. So that domestic franchising will also be important to us going forward and in the first quarter our franchise partner, Lackmann Culinary Services opened a casual fast location on the campus of Stony Brook University in Long Island, New York. This is our second CPK location on a college campus as we opened in nearby Hofstra University last summer.

Additionally, we are pleased to have announced today the signing of an agreement with the University of Southern California to open a casual fast franchise location on campus in the second half of this year. It is interesting that students at USC were surveyed about which restaurant concept they most wanted in their new facility and CPK topped the poll with an overwhelming 77% majority. More than 33,000 USC students will be able to order from a specialized selection of CPK’s most popular pizzas, pastas, salads and Panini sandwiches as they return for the fall semester.

We are enthusiastic that the expansion on university campus sites represents a national opportunity and a new channel for CPK. It’s interesting to reflect that the strength of our brand, leadership in the premium pizza segment and our widely acclaimed salad offerings are uniquely positioned to provide a competitive advantage in this alternative venue format.

So, to summarize my comments, 2009 was a year where we made significant progress rationalizing our cost structure and balance sheet. In 2010, however you will see us more on offense pushing hard on the full service initiatives I just mentioned.

Finally, as I commented earlier in my remarks, we will increasingly take advantage of the unique brand we built and pursue opportunities to generate high margin, low CapEx returns. The market opportunity we believe we have within frozen is a top priority in this area as is our domestic and international franchising business.

I’ll now turn the call over to Sue, our Chief Financial Officer and Chief Operating Officer to review our financials in more detail. Sue.

Susan M. Collyns

Thanks, Rick and good afternoon, everyone. Our total revenue for the 14-week fourth quarter increased 3.8% to $157.8 million from $161.8 million last year. This included a 3.8% increase in restaurant sales to $164.3 million, a 3.9% increase in international franchise revenue to high $163,000 and a 1.3% increase in domestic franchise revenue to $645,000.

This was offset by a modest decrease of less than 1% in royalties from our frozen pizza to $2.3 million. At our full service CPK restaurants, fourth quarter comp fell 5.8% and included approximately 1.2% of price, 1.4% of mix along with traffic of approximately negative 8.4%.

As Rick mentioned earlier, we believe the calendarships at Halloween and Christmas did cost us approximately $330,000 in lost revenue or impacted our comps by approximately 20 basis points.

Moving on to comps by month, October, November and December were down negative 6.1%, negative 6.4% and negative 5.1% and this compares to negative 7.3%, negative 5.7% and negative 8.5% respectively.

Our company wide full service CPK restaurants delivered a weekly sales average of $57,949 and that was down 5.1% from the previous year.

Our food, beverage and paper supplies for the quarter was 23.8% of sales and that was 150 basis points lower than the previous year and actually our best performance of 2009. About 50 basis points of the improvement was due to our good work in theoretical food cost management while the remainder was due to relative pricing favorability in grocery and pricing favorability in the dairy category.

Our cheese prices did improve by around 19% in the quarter and the price we paid averaged around $1.45 per pound compared to a $1.79 per pound last year.

For 2010, in terms of commodities we have locked in about 90% of all of our commodities for six months or longer periods and those items are combilocked in like produce do have caller agreements with ceiling and floors and so our exposure is limited.

We are estimating that inflationary pressures will be approximately 1% this year in this line item.

Moving on to labor. Our labor expense increased 130 basis points to 38.2% of sales and we attribute that to a reset of the FICO payroll tax. Remember that we had a 53 week year in 2009 and so that drives out the FICO payroll tax rate as well as higher medical insurance costs.

Our direct operating and occupancy cost was $35.3 million and that was 180 basis points better than the previous year. We benefited from continuing effective energy management, lower repairs and maintenance and reduced percentage rent payment.

Our G&A was $13.7 million and that was 10 basis points higher than last year and increased by $739,000 or 5.7% in line with the payroll charges associated with the 53rd week.

Our depreciation totaled $11.4 million compared to $7.8 million last year. And the increase of $1.4 million on a sequential basis, which I guess is the more relevant trend line to look at, is a result of accelerating depreciation on four locations.

We trued up $100,000 of pre-opening costs in the fourth quarter associated with the labor over crew compared to $800 that cost in the fourth quarter last year as we didn’t open any new company locations during the recent quarter.

Our non-cash and payment cost for 13 full service restaurants totaled $22.9 million which was in line with our previous estimates. But these charges will have a benefit of $3.2 million against those same assets in 2010 relative to 2009 on the depreciation line. However, taking into account the depreciation and capitalized maintenance with the 2009 new store openings, our 2010 depreciation expense is estimated approximately $38 million.

We incurred interest expense of $125,000 this quarter compared to $555,000 in the fourth quarter last year and we benefited from effective treasury management, lower debt levels, and more affordable interest rates.

Our net loss for the fourth quarter was $9.9 million or $0.41 per share and excluding impairment and tax benefits, our net income was $4.1 million or $0.17 per share. There is a reconciliation table in today’s earnings release which you will find at the back which may be helpful in understanding these numbers more clearly.

Specifically, we ended the quarter with $21.4 million of cash and $22.3 million of debt. In the fourth quarter we paid down $14.7 million of debt for the total amount paid down for the full year of $51.7 million.

Our fourth quarter CapEx was $3.9 million of net quota full year number to approximately $26 million and in terms of share repurchases we were not active during the fourth quarter although we do have $39.3 million still remaining on our $15 million buyback authorization.

Moving on to our 2010 outlook, there’s still a great deal of uncertainty in relation to the sales environment despite early signs of recovery. So please note that our actual results could be adversely affected by a number of macroeconomic factors, particularly unemployment nationally but more specifically in California where approximately 40% of our stores reside.

That being said and based on current trends, we are estimating first quarter comps between negative 3% and negative 4%. Development of one international store and one domestic franchise location should yield an EPS of approximately $0.05 to $0.07.

Weather has affected the first quarter to date revenue so far and we estimate that the impact on comps has been approximately 2% in the first quarter and that is translated to about a million dollars worth of lost sales so far. Excluding the weather we are seeing stabilization in our business across all channels and this is important - dining-in, take-out and delivery which we believe is driven in large part by the initiatives that we have put in place along with some improvement in the macro conditions.

We are seeing significant comp turnaround in Florida, Nevada and despite some chopping weather in California we are also seeing an improvement there as well.

Moving on to the full year for 2010, we expect our comps to be between negative 2% and flat. We anticipate opening eight new full service restaurants, eight international franchise full service restaurants, five domestic franchise restaurants and earnings are estimated in the $0.68 to $0.73 range.

As previously mentioned, we also plan to close up to three full service restaurants because the lease was expiring of our stores and not meeting sales ratios for which we have lease kick-out clauses. We closed one of those stores in the first period and will keep you advised if and when the others come to pass. It’s important to note here that although we lose the revenue with a composite group, they are breakeven stores and so there is really no negative EBITDA impact if we are to close them and the termination costs for lease reclosures are estimated to be around a million dollars and I think we previously announced that in our sales pre-announcement earlier in January.

Finally, our CapEx number is estimated to be approximately $40 million in 2010 and that excludes landlord’s contributions of approximately $5 million.

That concludes my financial update and I’d like to turn the call back to Rick for closing comments. Rick.

Richard L. Rosenfield

Thanks, Sue. We truly believe that we have the best brand in casual dining and appreciate that customers of all ages are so willing to recommend us to their friends, family and co-workers by either word of mouth or through emerging channels such as Facebook, Twitter and other forms of social media.

We believe our success in this area is a function of our brand integrity and the passion we have had for evolving the brand over a 25-year period. As we look at the next few years, the CPK brand will continue to drive full service development. We already have 200 plus restaurants around in the country.

Yes, in our view the brand remains at the early stages of its lifecycle. Our brand is also in its infancy as it relates to other opportunities to go beyond full service. We categorized these as ancillary revenues as they are important to our model because they carry high margins with low CapEx requirements.

The first segment within ancillary revenues is our frozen pizza business which we expect to expand in the future with new products and new markets. And the second is domestic and international franchising which due to its success to date has laid a great foundation for future growth.

Finally, we have an excellent balance sheet and we will generate significant cash from operations in the coming years. And as always, we will use this to our advantage and maximize long-term value for shareholders.

With that, I’d like to open the line for questions. Operator.

Question-and-Answer Session

Operator

Thank you. At this time, I would like to remind everyone in order to ask a question, please press star then the number one on your telephone keypad. We’ll pause for just a moment to compile the Q&A roster.

Your first question comes from the line of Matthew DiFrisco with Oppenheimer & Co.

Rachel Schacter – Oppenheimer & Co.

Hi, thanks. This is Rachel Schacter in for Matt DiFrisco. You mentioned your new small cravings menu. Can you just give us a little bit more color on that?

Susan M. Collyns

Well, we launched it on February 4th. There are seven key items and they range in price from $3.50 to I think around --

Richard L. Rosenfield

I think we commented, $6.99.

Susan M. Collyns

-- $6.99 and $3.99 to $6.50 and they are --

Richard L. Rosenfield

They are just popular. Yes, they are popular and it’s fun to go into a restaurant and see the excitement that they are creating among not only our customers but our staff are very excited to sell them. The early returns are quite promising.

Rachel Schacter – Oppenheimer & Co.

Okay, and have you seen an increase in your off-premise sales and store, the catering menu and the call center?

Susan M. Collyns

What we have seen is a reduction in the decline from where we were so we put into place a number of strategies to address dine-in, take-out and delivery or working with that delivery company specifically. We are seeing nice turnarounds in those market.

The take-out call center is doing extremely well, stores that are converted. I think we had around 50% of the chain as of the end of the year. We have over I think 130 as of today and we are seeing a nice uptick in the checkout reach as well as guest satisfaction scores when stores are converted over.

And dining in was also improving which we are happy to see and we think that’s largely in line with everything we are doing operationally as well as the wine program we have, the menu we rolled out in November. The catering program -- it seems to be driving traffic across all channels so we are quite pleased.

Rachel Schacter – Oppenheimer & Co.

Okay. Thanks very much.

Operator

Thank you. Our next question comes from the line of Nicole Miller with Piper Jaffray.

Nicole Miller Regan - Piper Jaffray & Co.

Good afternoon.

Richard L. Rosenfield

Hello, Nicole.

Nicole Miller Regan - Piper Jaffray & Co.

Hi. In thinking about price for 2010, what rolls off and what can pricing look like for the year by quarter in terms of pricing?

Susan M. Collyns

Sure, in terms of pricing, I think the full-year number just with last year’s carryover has to be about -- with less than half of -- I think about half of 1% in the first quarter and around the same in the second quarter. We hadn’t actually made our pricing decision for a June rollout. We would do that in the next month or so when we have our meeting, when we would start to call market research results together with our own internal results. So it is not off the table. We just hadn’t made a decision at this point.

Nicole Miller Regan - Piper Jaffray & Co.

And wasn''t that 90% of the commodities locked for this calendar year? Is cheese locked, and if so at what price, by quarter, if you have that?

Susan M. Collyns

Cheese is not locked at all for 2010 at this point.

Nicole Miller Regan - Piper Jaffray & Co.

Do you have any projections? Or basically, can you ballpark the price per pound in the $0.68 to $0.73 guidance?

Susan M. Collyns

No, I don’t have those in front of me now.

Nicole Miller Regan - Piper Jaffray & Co.

Okay. And the timing of new store development on the company side is it weighted towards the back end or will it be kind of evenly split?

Richard L. Rosenfield

It’s weighted towards the back end.

Nicole Miller Regan - Piper Jaffray & Co.

And --

Richard L. Rosenfield

They are almost all in the back end.

Nicole Miller Regan - Piper Jaffray & Co.

And just the last question, can you draw us a big picture about the strategy, certainly shifting to show the value of the brand with the small plates, how do the bounce-back promotion fit in the Thank You Card?

Susan M. Collyns

Well, in terms of the bounce back we did it in 2008 and we also did it in 2009. I think the Thank You Card program is effective as we were hoping it would be in those years. Although the incremental comp in 2008 was around 2.4% and last year the incremental comp was only 1.4% so given that we did see that decreasing return. We don’t find to do it again this year because we do have the other programs to put into place - the wine, the new menu, the small cravings, the catering and the call center and we think those organic strategies will actually drive the type of activity that we think we yield a better revenue number and a better margin number without needing to discount the debt.

Nicole Miller Regan - Piper Jaffray & Co.

Thanks, and congrats on the comp improvement that you''re seeing.

Richard L. Rosenfield

Thanks, Nicole.

Susan M. Collyns

Thank you.

Operator

Your next question comes from the line of Brad Ludington with KeyBanc Capital.

Brad Ludington - KeyBanc Capital Markets Inc.

Good afternoon.

Richard L. Rosenfield

Hello Brad.

Brad Ludington - KeyBanc Capital Markets Inc.

I wanted to start off with something on the guidance, it was -- I mean, it''s little bit surprising on the EPS impact, or the level of EPS guidance in the first quarter, and some for the year. Is there any of the lease termination costs, or any additional impairment costs built into that guidance?

Susan M. Collyns

There are some lease termination costs that are built into guidance for the first quarter. I think I mentioned that we did close one store in the month of January. But really it comes from the result, that you know, anticipating comps down 3% to 4%, if you just take last year’s first quarter number and you do that generally 1% of comp in a quarter is around $1.5 million in revenue. So depending upon, if you multiply that by 3 for 3% comp down or 4 for 4% comp that’s going to drag your revenue number down even after you have backed for new store openings in 2009 and then running off a 40% flow through will end up -- reconciling it you like from Q1’s EPS or what around I think $0.11 or $.012, the shortfall in sales is approximately anywhere from 5% to 7% which is how we got to that 5% EPS number.

Brad Ludington - KeyBanc Capital Markets Inc.

Okay. And then, you know, touching on the small cravings menu again, are you seeing some positive results across the system, or is there any regional variability in how it''s being received?

Susan M. Collyns

Well, the results are early. I think the general consensus is that they received a tremendous enthusiasm not just from guests but also from the service because it is increasing their overall suggested percent. It’s being increasing the kids’ percentage that they have been getting. And we have also seen a rise in checkout reach so the seven items, I have got them in front of me now – the Asparagus and Arugula Salad, we have a Buffalo Chicken, the Sweet Corn Tamale Ravioli, Crispy Artichoke Hearts, we have a Mediterranean Plate, a Wedge Salad and a White Corn Guacamole and Chips. There’s favorite amongst it but I think guests are enjoying all seven at this point.

Brad Ludington - KeyBanc Capital Markets Inc.

Okay. And then finally, I''m sorry if you said this and I missed it, but how should we expect G&A to trend year-over-year?

Susan M. Collyns

I think, remember 2009 was a 53-week year, right. So, I mentioned in Q4 the delta as a result of the 53rd week was over $700,000. G&A number I think for 2010 is probably going to be up around 2% over the 2009 run rate. Most people didn’t take salary increases last year and we did load in a salary increase for people this year.

Brad Ludington - KeyBanc Capital Markets Inc.

Okay, thank you very much.

Operator

Thank you. Our next question comes from the line of David Tarantino with Robert W. Baird.

David Tarantino - Robert W. Baird & Company, Inc.

Hi, good afternoon. Just a clarification question on the commentary related to Q1 trends. Could you give us an idea of where the comps are quarter-to-date, including that weather impact?

Richard L. Rosenfield

Hi, David. I think Sue commented in her prepared remarks, she gave you where we were, which I think was negative 4-ish of which I think 1.8% was weather. So, those of you who know me, I look at this every day and have on for a number of years and it is really choppy because of the weather but our instincts are, again on any given day when we factor out weather we think comps are flat out right now across the board that at any given day runs from negative 1% to 1.5% to flat 2% to even positive 1% to 1.5%. So, all in all, our instincts are that again unaffected by weather we think it’s sort of flattish at this moment.

Susan M. Collyns

For January it was negative 4.3%, David and as I estimated the impact of the weather it was around 2%, so excluding the weather you are talking around d negative 2%, 3%.

David Tarantino - Robert W. Baird & Company, Inc.

Okay. That''s helpful. And then in terms of the outlook for the balance of the year, in terms of the earnings growth that you’re expecting, excluding the benefits from the extra week in 2009, it looks like you are expecting growth, yet Q1 is expected to be down. Is the difference sort of in the last three quarters relative to the first quarter in terms of the growth rates, is that all related to comps or is there something in the cost picture that causes the earnings to get better as you move through the year?

Susan M. Collyns

Well, I think obviously we have more stores. We have eight stores compared to five stores and you saw some extra pre-openings, you’ve got some expansion in G&A as I mentioned and they are the biggest drivers there as well as marginal cost of goods increased with perhaps the 1% inflationary number in there. So those are the biggest drivers on the cost side of the ledger and then of course it begins and ends with revenue thereby because last year was a 53-week year so by the time you take off that number and also adjust for maybe the negative 2% comp or you could take the flat comp, it doesn’t really matter, the math will be the same and then you add back on the revenue for the 2009 stores but now have a full year they have approximately an extra 20 weeks in this. And then for 2010 stores I think we have budgeted 140, 150 weeks for those stores at an average WSA run rate that we are experiencing now. So that’s how I think you get to the right revenue number and I think in some of the forecasts that were out there perhaps some people didn’t quite take off enough for that 53rd week in 2009and that’s where a slight miscalculation occurred.

David Tarantino - Robert W. Baird & Company, Inc.

Okay. That''s helpful. And then last question is on the frozen pizza business, the growth rates are flattened out in the fourth quarter. Was that due to a slowdown in the sell-through of that business, or was there some timing of shipments or timing of promotions that might have caused that?

Richard L. Rosenfield

It was principally a timing of promotion where Costco had a major promotion in Q4 of 08 and it got shifted to Q3 of 09.

Susan M. Collyns

So that’s what accounts, in Q3 we saw a pretty big, 35% pop in the roll through rate for frozen and that didn’t occur of course in the fourth quarter because we had already left that promotion. But Costco did actually achieve our full-year estimate for 2009 and (inaudible) performance overall was up 17.6% in a particularly highly competitive environment.

David Tarantino - Robert W. Baird & Company, Inc.

And just a quick follow-up on that. What do you have baked into the guidance for this year, Sue, in terms of the Kraft growth?

Susan M. Collyns

We’ve actually been having a lot of conversations with our partners at Kraft. The truth is the transitions associated with the potential Nestle purchase, transitions are always challenging but in reality they are also generally disruptive despite the best of intentions by everyone and although we think we will be still working with the same team of professionals that we always have they are forecasting the frozen category at a very modest increase this year and as a result we are in the expanding that royalty number by about 3%over the prior year and I think that will be largely as a result of the transition. So that said, we are very happy to be with Nestle should that come to pass. They are the number one food company in the world if that transition goes through. In the long term we feel that product pipeline and the distribution opportunity will be very positive but for 2010 it’s definitely expected to be a lively year in terms of frozen royalty growth.

Richard L. Rosenfield

I just like to add to what Sue said. We have said for some time that it’s a very challenging, competitive environment and we created the crispy thin crust category and everybody flooded into it. So, it’s just competitively challenging.

To continue to grow on the other hand, we feel extremely optimistic about our ability to grow the business with Kraft and then with Nestle and looking forward to that. So from a long-term perspective we feel extremely positive for growth.

David Tarantino - Robert W. Baird & Company, Inc.

Very helpful. Thank you.

Operator

Thank you. Our next question comes from the line of Larry Miller with RBC.

Larry Miller - RBC Capital Markets

Thanks. I just want to confirm, 2009, just to follow-up on the Kraft business, was that $8 million? Is that about right, $7.7 million? Is that what you had in the -- for the full year 2009?

Susan M. Collyns

I think $7 million, $7.4 million was the 2009 number and the 2010 estimate is approximately $8 million.

Larry Miller - RBC Capital Markets

And what was it at retail in 2009?

Susan M. Collyns

I think it was around $213 million.

Richard L. Rosenfield

I think that’s a good ballpark.

Larry Miller - RBC Capital Markets

And as you think about 2010, you know, maybe retail at 3% or whatever it is you''re forecasting, what will the advertising look like on that business in 2010? Is there any change to the plan?

Susan M. Collyns

I think it’s a continued aggressive plan that we had in 2009 but we hadn’t got into the specific with our partners Kraft at this point.

Larry Miller - RBC Capital Markets

Okay, but is 2010 potentially a TV year? Is there any media change in that?

Richard L. Rosenfield

We don’t really answer to that frankly.

Larry Miller - RBC Capital Markets

Okay. That''s fair enough. And then I just had a couple of quickies on costs. Can you update us on how much you think you took out of the business in terms of costs in 2009, and what you think that run rate might look in 2010, if there''s any additional savings?

Susan M. Collyns

We ended up saving approximately over $12 million in costs principally driven by the actual theoretical work in food costs and commodities swinging in our favor. I think that was $7 million of the $12 million. This year of course we will benefit from not quite laughing in the first quarter, many of those mischiefs we put into place but I think we have budgeted approximately $2 million worth of savings in the 2010 results.

Larry Miller - RBC Capital Markets

Okay, good. No additional programs, as far as you can see?

Susan M. Collyns

There are programs that we are working on but I haven’t built them into the budget yet. They are largely technology-related upgrades that will help streamline things in the back of the half but I nevertheless can’t build those until they actually happen. They are still under development.

Larry Miller - RBC Capital Markets

That''s fair enough. Then can you just help me understand how D&A is up in 2010, $38 million year-over-year, yet you wrote off some stores and you''ve made some changes to the terms of the depreciation? What am I missing?

Susan M. Collyns

I think as a starting point, you know if you take the depreciation at the end of 2009 which was around $40 million and then you take off that $3.2 million benefit from the 13 stores we wrote off, that’s the first and second line and then the third line I think you have to take into consideration is adding back on depreciation for those new additions as part of that $26 million CapEx spend we made in 2009. So you are going to have depreciation as a result of that and that’s really what gets you back up to $38 million.

Larry Miller - RBC Capital Markets

Okay, I got you. And then just one housekeeping thing. The 53rd week, what did that add in terms of earnings in the fourth quarter?

Susan M. Collyns

$0.11.

Larry Miller - RBC Capital Markets

$0.11, okay. Thanks, guys. Good luck.

Richard L. Rosenfield

Sure, thank you.

Operator

Thank you. Our next question comes from the line of Destin Tompkins with Morgan Keegan.

Destin Tompkins - Morgan Keegan & Co., Inc.

Thank you. I wanted to have one follow-up on the small cravings menu. I think you mentioned that there was some average check benefit. I know it''s early at this point, but I wondered if maybe in tests you could speak to the cost of sales trends that you''re seeing from the small cravings menu, and if there''s any opportunity to -- or if you''ve seen anything in tests where maybe you''ve seen an improvement in traffic as a result of this menu?

Susan M. Collyns

Driving traffic is ultimately the goal and I think it’s too early to indicate what we think is really coming from the small cravings. The trick is we have obviously been analyzing this virtually every day but there is a lot of noise in the numbers. It is in front of me two weeks. One of those weeks was an awful weather week with the Super Bowl as well and last week of course we had the benefit of Valentine’s Day which helped results. So, there’s a lot of noise in the numbers and I think we look forward to sharing the specific details and the real trends with you at the end of the first quarter.

Destin Tompkins - Morgan Keegan & Co., Inc.

Okay. And on the balance sheet, is it still the plan to completely pay down the revolver by the end of Q1? And, if so, when do you think you could begin some share repurchases?

Susan M. Collyns

Well, on a net basis we are pretty much debt free as of the end of the year and I think we will pretty much pay off the debt absent the buybacks in the first quarter and our goal is to maximize shareholder value and over the last four years we’ve repurchased over 7.2 million shares at an average price of $14.99 and even though we haven’t flagged repurchases in the past we do have $39 million available to us for repurchase with the current authorization and so, we are evaluating that and as we come out of Blackout next week we will continue to evaluate that.

Destin Tompkins - Morgan Keegan & Co., Inc.

Okay, great. Thank you.

Susan M. Collyns

You are welcome.

Operator

Thank you. Our next question comes from the line of Tony Brenner with Roth Capital Partners.

Tony Brenner - Roth Capital Partners

Thank you. I''ve got a question regarding your guidance, in particular your same-store sales guidance. You''ve indicated that for the first quarter, comps should be down 3% to 4%, and about 2% of that decline is attributable to the bad weather that we''ve seen in the first quarter, implying that the run rate is about minus 1% to 2%, and that''s essentially what you''re forecasting for the full year. And I''m wondering if the first signs of a comp turnaround that you''re talking about are assumed to just hit a wall at the end of the first quarter, or are you just being conservative? It seems incongruous that the numbers shouldn''t be better than that for the full year?

Susan M. Collyns

We are laughing negative 6.6% in February, negative 8.8% so it is fair to say that we are more optimistic but February and March won’t be quite as bad as January and then in the second and third and fourth quarters where we are laughing significant numbers as well, I think until we get through that 15 million person unemployment number that I think crested in the middle of 2009 and I think it is very hard to predict what the results will be but we put our best estimate out there today and we will keep you apprised if things change.

Tony Brenner - Roth Capital Partners

I guess I don''t understand then why you''re talking about a turnaround in comps, if you''re not really willing to forecast a turnaround in comps?

Susan M. Collyns

I think we have forecasted, I mean last year of course for the full year we came in at negative 6.6%, this year we are saying negative 2% to flat so by definition I think that’s an improvement and the only thing that’s really outstanding is what the extra results would be as the year progresses.

Tony Brenner - Roth Capital Partners

Okay, my lips to God''s ears.

Susan M. Collyns

Thanks, Tony.

Operator

Thank you. Our next question comes from the line of Jonathan Raite with Presidio Research.

Jonathan Raite - Presidio Research

Hi. I wanted to follow-up on the D&A question. How much accelerated D&A did you have in the fourth quarter?

Susan M. Collyns

In the fourth quarter we had approximately $1.4 million of accelerated depreciation and that related to a store that we did close in the fourth quarter, actually two stores we closed in the fourth quarter and two stores that is likely to -- one we will engage or remodel significantly in 2010 and another one we thought for consideration for closure in 2010 as well.

Jonathan Raite - Presidio Research

Okay. Isn''t the base that we should be looking at for 2009 D&A then somewhere around $38.8 million, $39 million if we strip out the accelerated D&A?

Susan M. Collyns

Yes, but then of course we have that depreciation pick up from the 13 stores we wrote off so I think I gave guidance around $38 million in the prepared remarks you might have missed out.

Jonathan Raite - Presidio Research

No, I did get that. But I''m just saying if your base is at $38.8 million ex the accelerated D&A, and you get the $3.2 million benefit, I''m just trying to reconcile that to the $38 million; shouldn''t it be lower than that?

Susan M. Collyns

Well, maybe we can discuss your numbers offline and better understand that I am missing something right now.

Jonathan Raite - Presidio Research

I''m just taking apples-to-apples here, by subtracting out the $1.4 accelerated D&A in the fourth quarter, and then you get the $3.2 million benefit in 2010, and I''m trying to reconcile that to your $38 million guidance.

Susan M. Collyns

But I think depending upon ultimately what the trend in 2010, that’s the swing factor there. Some stores are also at the end of their depreciable life so that peels off and I think there are a number of things that we have taken into consideration that would ultimately lead to one number or another but $38 million is our best estimate at this point in time.

Jonathan Raite - Presidio Research

Okay, and the licensing stream, I think last time we spoke it seemed like you were looking for a little better growth on this 4% that you''re talking about. You said $8 million, right, for 2010? Which would be about 4% growth, right?

Susan M. Collyns

That’s right.

Jonathan Raite - Presidio Research

So what''s going on there? Is there some -- is that conservatism there, or is there something that kind of makes you a little cautious on the growth on the licensing side?

Susan M. Collyns

Well, I think we are enthusiastic about our international and our growth at eight stores as well as our franchise stores growing at 5, and then situation with Kraft really relates to the competitive environment. Rick, do you want to add to that?

Richard L. Rosenfield

I think it’s just the comments that I made. Kraft and us are (inaudible) in this environment because there is so much competition and that it is just going to be harder for us to grow with the product line we have.

We do have new pizza products coming out with great flavors. But I think the real expansion is going to come from expanding the line and expanding our categories.

Jonathan Raite - Presidio Research

Okay. All right, thank you.

Operator

Your next question comes from the line of Mitch Speiser with Buckingham Research.

Mitch Speiser - Buckingham Research Group

Thanks very much. First on the comps components, I think you mentioned the mix was up 1.4%. Can you give us a sense of what drove that?

Susan M. Collyns

I don’t have those details in front of me. I’d have to get back to you Mitch.

Mitch Speiser - Buckingham Research Group

Just in light of -- it seems like check declines from most of your peers; that seemed to -- definitely unusual. Okay. I''ll follow up with that. Next, on Kraft, that -- the first quarter trend, is there any sense of what you have baked into your guidance for Kraft revenue in the first quarter?

Susan M. Collyns

I think straight lining -- with the exception of last year we had the flip in promotions. I think the marketing is going to be pretty consistent this year with what we had. So I think if you took that 3.5% increase and divided equally over the previous year you got to have a good starting position mathematically.

Mitch Speiser - Buckingham Research Group

Okay, thanks. And moving along, one reason for the fourth quarter slight disappointment versus beginning of the quarter guidance was new store productivity was a bit soft. And I think, Rick, you mentioned these stores were in California, Michigan, Florida, so I guess no surprise those were weak. Can you maybe discuss -- I think those were the 2008 stores. You did open some stores in 2009. How did they fare? Were they in line with your expectations or did they contribute to the disappointment in the fourth quarter results?

Susan M. Collyns

I think every market right now is specifically weak and that was no exception so new stores that were opened in 2009. So how many stores do we have in California in 2009? I don’t have that in front of me. I do know in 2010 we are going to have any stores in California and in fact five out of the eight are on the East Coast so we have roughly two-thirds on the East Coast and the others are in states that seem to be enjoying a turnaround right now. So, we are certainly hopeful that the new stores will be closed to our anticipated ROI.

Richard L. Rosenfield

Yes, two out of the nine stores are in California.

Mitch Speiser - Buckingham Research Group

Two of the five in 2009 were -- okay. Got it. So it really is more the economy you''re saying, not maybe the site selection or simply maybe just a mistake in putting up the store?

Richard L. Rosenfield

Well, I think what happens; all of our peers would say the same. The challenge is that when this economy turns out, all of us had pretty much the same issues. You tend to build --- we were all building new stores in new high-growth markets and those are the first markets that got hit by the whole meltdown and therefore, the growth in some of those markets didn’t occur so those are our softer -- those tend to be the softer stores. I think that’s what we’ve experienced and as I said I know that our peers made the same comments.

Mitch Speiser - Buckingham Research Group

Okay. Thank you.

Richard L. Rosenfield

On the other hand, this is just a comment is, we feel good about the stores in 2008 and 2009 and as the economy recovers we expect to have these stores grow.

Mitch Speiser - Buckingham Research Group

Okay. And if I could ask a separate question, you''ve got two L.A. food shows, those haven''t been talked about much. Can you just give us a sense, are you happy with those? Is there any chance of any restructurings going on, or maybe how are they faring in general?

Richard L. Rosenfield

Well, they haven’t met our hurdles and the new one we opened in Beverly Hills has some challenges not only about the economy but about site specific directly around it. We had plan no for what it was, whether it is they were going to tear down the whole block across the street and turn it into a construction so that’s going to continue for another year I think. So that’s a challenge in terms of customer satisfaction and how we feel about it. We feel positive about those stores.

On the other hand, we are putting our money into what we think is the highest returns right now and those are things that you have heard us talk about and that’s what we are thinking about for the future.

Mitch Speiser - Buckingham Research Group

Okay, got it. I think my last question is just in general, California Pizza Kitchen is known to be very kid-friendly. Is there any data that you have to show how maybe parties with kids are doing? Are you seeing that trend different than the overall trend?

Richard L. Rosenfield

I don’t really. We haven’t really drove down with that data but you are right, kids are a big component to us. It’s something that we have always prided ourselves on and marketed too.

Mitch Speiser - Buckingham Research Group

Any anecdotal thoughts on that? Is it a part of your thought process for comps in 2010 that families improve at a better or lesser rate than the average?

Richard L. Rosenfield

I have to say we haven’t modeled that.

Mitch Speiser - Buckingham Research Group

Okay, got it. And I''m sorry, just one more question if I can slip it in. I think with the comps guidance of down 3% to 4%, you said 2 percentage points of weather, but that''s weather up-to-date, so that''s half the quarter; so is it safe to say that the down 3% to 4% maybe includes 1 percentage point of weather? Or it includes 2 percentage points of weather, just to get your underlying guidance?

Susan M. Collyns

Right. Well, basically 1.5%, so $1.5 million equals 1% comp so by definition for the focus, if there was normal weather between now and the end of the quarter it would be less than 1% comp. So we would have to just wait and see how the month of February and March unfold.

Richard L. Rosenfield

Just as a point of emphasis I am sure you asked about the weather but again for somebody who looks at sales everyday, weather has really been a factor. In fact, those of you that have known me over the years before the recession took priority my common people would ask what keeps me up at night. I would sort of kidding on the square saying, weather in winter particularly on a weekend. That’s what happened to us this year. We got -- as everybody -- they’ve got killed on the weekends and then something that is even more unusual we got swattered with rain in California in the weekends so far and so --

I would be very happy to see spring and in spring we have -- hopefully flowers will bloom and we feel a lot better about where everything is going.

I will make just one comment about comps and a follow up on what Sue said and what Tony was asking, yes, yes we are conservative that there is so much noise and weather is still a factor it’s hard to call up as to where it is going. We feel very good about the turnaround as Sue said. We feel great that Florida and Arizona have made a substantial improvement and California is making an improvement so it is hard to know where the rest of the year will shake out, particularly with what’s going on in the – no matter what’s going on in the economy but our best estimate at this point is flat to negative 2%. It could be better than that, hopefully it will be.

Mitch Speiser - Buckingham Research Group

Great, and just not to belabor your first quarter guidance, but just that down 3% to 4%, does that include you think 2 points of weather or 1 point of weather? Just to get a sense of -- are you thinking more down 2% to 3% underlying, or down 1% to 2% underlying? Or am I nitpicking?

Susan M. Collyns

I think I have decided you to refer to the overall range for the quarter, negative 3% to negative 4%, if that’s okay.

Mitch Speiser - Buckingham Research Group

Fair enough. Thank you.

Susan M. Collyns

Sure, you are welcome.

Operator

Thank you. Our next question comes from the line of Steve Anderson with MKM Partners.

Stephen Anderson - MKM Partners

I wanted to go through the three anticipated store closures you have for fiscal 2010. Are those full service or are those ASAP locations?

Susan M. Collyns

They are full service.

Stephen Anderson - MKM Partners

Okay. And are you still planning to convert the remaining ASAP to full service? What''s your timetable for that?

Richard L. Rosenfield

Well, we didn’t say we are going to -- we said we would convert some of them in our capability in being converted just because of size. We did convert one in Honolulu which opened yesterday as a full service and anecdotally great comments from our customer about us turning it into a full service restaurant. One day is not a trend make but it is off to a good first day.

Stephen Anderson - MKM Partners

Okay. Thank you.

Operator

Thank you. Our next question comes from the line of Tom Forte with Telsey Advisory Group.

Tom Forte - Telsey Advisory Group

Great, thank you. I have a couple of questions on trends, and then also on some of your promotions. First, earlier in the call I think you indicated you were seeing a 15% to 20% rise in average check. Can you remind me what that was from?

Susan M. Collyns

What we are referencing, Tom was the initial increase in check average. The stores that convert from take-out to being generated at the store directly to moving them to the CPK call center and because we have trained specialists say who have all the guest details and who are focused on that particular area we are seeing a nice uplift in some suggestive sales which is driving that checkout region.

Tom Forte - Telsey Advisory Group

Great, and then two more. Can you talk about the gift cards you''re selling through Costco, if you are happy with the sales there, and what kind of traffic lift you could have later in the year as a result?

Susan M. Collyns

It’s a good question, hard to know what the answer will be. It was obviously a new relationship that we developed with them. I think what I would like to say without giving away specifics is that the Costco redemption so far has been very solid, consistent so it is very hard to know exactly what would be incremental and what would be the comp lift for the quarter or for the year at this point. The fact is the gift cards are only a part of that business.

What we think is being more impactful, certainly the new menu rollout, the success of the Tacos in particular, the small cravings look like they are off to a very strong start, the call center, the wine program continues to do very well and we’ve also just rolled out half wine glasses which was taking guests by storm and we have also put into place (inaudible) rooms for ease to drive new guests into the store and increase guest satisfaction and there are checkout reach as well.

We have had a lot of bolts in the air and a lot of initiatives that we think is going to drive revenue, gift cards is only a part of that but hard to know what the results will be.

Tom Forte - Telsey Advisory Group

Great. Last question, I know sometimes you talk about movies often can add 40, 50 basis points to comps. Was Avatar a comp booster in the fourth quarter?

Richard L. Rosenfield

We didn’t go to measure Avatar but I do remember very specifically we got a definite lift off of Avatar.

Tom Forte - Telsey Advisory Group

Great, thank you very much.

Richard L. Rosenfield

It showed up the day Avatar opened.

Susan M. Collyns

That really goes so far to say it drove comps for the quarter at all. I think I have seen a one or day pop which is what it is having but that was only partly offset by the negative impact of the Halloween and Christmas shift so there was a lot of other noise there.

Tom Forte - Telsey Advisory Group

Sure. Thank you.

Operator

Thank you. Our next question comes from the line of Conrad Lyon with Global Hunter.

Conrad Lyon - Global Hunter Securities, LLC

Hi. Talking about the average check increase, to me that''s real impressive. I''ve been calling and visiting some of your stores recently, and sending my friends as well, trying to help the sales, but I''ve been suggested by the persons either picking up the phone or in store to really try the small cravings actually in lieu of ordering another entree at a higher price point. So I just want to ask, is there an emphasis to move someone off of a higher price point item to a small craving to enhance loyalty perhaps, or is that just an one-off experience?

Richard L. Rosenfield

I think you got a one-off experience. We want to promote the small cravings but we would not train somebody to suggest a small craving in lieu of an entrée for sure.

Conrad Lyon - Global Hunter Securities, LLC

Okay, because it''s happened more than once, and not just to myself, but yes -- okay.

Richard L. Rosenfield

We appreciate the guidance and we will communicate that to our staff. We appreciate your good due diligence, that would be helpful to us.

Conrad Lyon - Global Hunter Securities, LLC

No problem. Thank you.

Operator

Thank you. Our next question comes from the line of Bryan Elliot from Raymond James.

Bryan Elliot - Raymond James & Associates

There''s a set up. I went into one of your stores, and they told me to go across the street. No, I was just kidding.

Richard L. Rosenfield

Then they know you.

Bryan Elliot - Raymond James & Associates

Well, that''s right. Last time we were in here, everybody else left. My question is bigger picture. As you look at where you''re seeing comp improvement, you identified some states and all of that, just fishing around for maybe some characteristics, it seems to me from a lot of the sales results we''ve gotten over the last couple of weeks that there''s sort of a separation, you know, sort of higher demographic, upper middle income, check average chain seem to be seeing some improvement, and those at the lower end of the check range in casual dining maybe are not yet. Would the dispersion of results sort of by store demographics and things that you''re seeing be consistent with that? That it looks like maybe it''s the higher-end consumer coming back that''s really driving the changes that you''re talking about?

Richard L. Rosenfield

I guess my instinct Bryan would be to say that’s right. In fact, if you think about where CPK is located, anyway we do skew much towards the higher demographic. And then as I mentioned earlier where we might be having some more difficulty is in areas of high growth that were most impacted by the economy and then you would say those wouldn’t be the higher income areas, right. Highest volume restaurants are always in highest income, highest density, office part and family business, right. So I think what you said instinctively that would be right. I am pretty comforted by, as I mentioned with the substantial improvement in some areas.

As I said, I think we look very good in the east too and the Mid-Atlantic where we were not affected by weather but you know how amazing the effect has been so far year to date.

Bryan Elliot - Raymond James & Associates

Yes. All right, great. Thank you.

Richard L. Rosenfield

Sure.

Operator

Thank you. Our next question comes from the line of Steven Reese with JPMorgan.

John Ivankoe – JPMorgan Chase & Co.

Hi. It''s actually John Ivankoe for Steve this afternoon. My question was on -- and I''m sorry if it was covered, was on the D&O line in the fourth quarter. I know, Sue, that you said 180 basis points was due to, I think, energy management, repair maintenance and reduced percentage rent payment. My question was, did the fourth -- did the extra week influence that in any way is the first question. And then secondly, how much of those cost savings that affected the fourth quarter will carry forward into fiscal 2010, especially as that line was up actually for the first three quarters of 2009?

Susan M. Collyns

Well, I think the starting point -- the fourth quarter, what goes into that line is controllables which primarily represent energy, repairs and maintenance, small wares and some other costs, advertising and occupancy costs. So those are the big categories and on a percentage basis more than 50% of that, in fact, I think probably around 75% of it is fixed. So that’s why I think you saw that point of leverage coming to 21.4% in the fourth quarter. I think that has helped. On a go-forward basis I think $35 million; $36 million a quarter is probably the right number to think about again depending upon sales because that line item does relate to sale. But that is a good starting point.

John Ivankoe – JPMorgan Chase & Co.

Okay, so that -- we should think -- that number should be thought about just in a straight dollar basis? In other words, there''s not -- there''s really not going to be seasonality based on, for example, your revenue in any of those given quarters?

Susan M. Collyns

There is some seasonality. I guess I was saying the comp part of the year is probably going to be weighted closer to that $35 million, $36 million number that I can trade with a higher WSA. We are going to see that pop up to maybe close to $37 million and fourth quarter again coming down I think Q4 adds from that particular weight tends to be the second lowest WSA for the year so that’s probably going to be a low number, lower than $37 million.

John Ivankoe – JPMorgan Chase & Co.

Okay. Thank you.

Operator

Thank you. To ask a question, once again please press star then the number one on your telephone keypad. There are no further questions at this time. I would like to turn the conference back over to Mr. Rosenfield for closing remarks.

Richard L. Rosenfield

Well, thank you, operator. That concludes our remarks and our call for today so we look forward to seeing you all at the end of the quarter. Bye-bye.

Operator

Thank you for joining today’s California Pizza Kitchen fourth quarter earnings conference call. You may now disconnect.