EX-99.1 3 p68811exv99w1.htm EX-99.1 exv99w1
 

Exhibit 99.1

(P.F.CHANG LOGO)

P.F. CHANG’S EARNS $0.28 PER SHARE
SETS 2004 EARNINGS TARGET AT $1.36

SCOTTSDALE, Arizona, February 11, 2004 – P.F. Chang’s China Bistro, Inc. (NASDAQ:PFCB) today reported earnings of $7.3 million for the fourth quarter ended December 28, 2003 compared to $6.5 million in the fourth quarter of the prior year. Earnings per share for the fourth quarter increased to $0.28 from $0.25 in the fourth quarter of the prior year.

                         
(000 except per share data)   4Q03   3Q03   4Q02
 
 
 
Revenues
   $ 151,316     $ 139,729     $ 115,889  
Net Income
   $ 7,349     $ 6,477     $ 6,484  
Diluted Earnings Per Share
   $ 0.28     $ 0.25     $ 0.25  
Shares Used in EPS calculation
     26,402       26,331       25,954  

2004 Expectations

The company anticipates opening 18 new Bistro units and 20 new Pei Wei units in 2004. Based on this development schedule, and assuming comparable store sales at the Bistro of approximately 3 percent, the company expects consolidated revenues of $723 million, net income of $37 million and earnings per share of $1.36. The company will have one additional week in fiscal 2004 (a 53-week year versus the typical 52-week year) which is reflected in the full-year estimates noted above. The company will release its first quarter 2004 revenue results on March 31, 2004 and its first quarter 2004 earnings results on April 21, 2004.

Partnership Accounting

On October 23, 2003, the company announced that it would contact the Securities and Exchange Commission to request voluntary review of the company’s accounting treatment of its partnership program. This request was made in response to an announcement from Outback Steakhouse, Inc. (NYSE:OSI) that, based on comments received from the SEC, Outback Steakhouse would restate its financial statements to reflect a compensation accounting model for its partnership program as compared to the partnership accounting

Page 1 of 11

 

model it previously used. The company is in continuing discussions with the SEC on this topic. Although the company continues to believe that its current accounting practices pertaining to the partnership structure are appropriate, the resolution of this issue could result in an adjustment to the accounting for the partnership program. Given the stage of discussions with the SEC, the exact nature and scope of such adjustments, if any, remain unclear and until there is clarity, the company intends to continue its reporting in a manner consistent with past practices. In the event adjustments are made, certain information contained in this unaudited release may need to be revised and/or restated. Rick Federico, CEO of the company, reiterated his previous statement, “The fundamentals of our business remain strong. Regardless of the outcome of our discussions with the SEC on the accounting treatment of our partnership structure, we do not foresee making any changes to our operational philosophy as we continue to develop our concepts, as it has been key to the success of our company thus far.”

The company is hosting a conference call today at 12:00 pm ET in which management will provide further details on the fourth quarter results as well as an outlook for future periods. A webcast of the call can be accessed through the company’s website at http://www.pfchangs.com.

P.F. Chang’s China Bistro, Inc. owns and operates two restaurant concepts in the Asian niche. P.F. Chang’s China Bistro features a blend of high-quality, traditional Chinese cuisine and American hospitality in a sophisticated, contemporary bistro setting. Pei Wei Asian Diner offers a modest menu of freshly prepared Asian cuisine in a relaxed, warm environment offering attentive counter service and take-out flexibility.

The statements contained in this press release that are not purely historical, including the company’s estimates of its revenues, earnings and comparable sales, as well as statements concerning the company’s development schedule and its discussions with the SEC concerning its partnership accounting practices, are forward looking statements. The accuracy of these forward-looking statements may be affected by certain risks and uncertainties, including, but not limited to, the company’s ability to operate its restaurants profitably; the company’s ability to hire, train and retain skilled management and other personnel; changes in consumer tastes and trends, and national, regional and local economic and weather conditions; changes in costs related to food, utilities and labor; the resolution of the company’s discussions with the SEC and other risks described in the company’s recent SEC filings. In addition, the supplemental sales information is provided to investors to help gauge the company’s performance and is not indicative of future results.

             
Contact:   P.F. Chang’s China Bistro, Inc.   (602) 957-8986    
    Media:   Laura Cherry   laurac@pfchangs.com
    Investor:   Kristina Cashman   kristinac@pfchangs.com

Page 2 of 11

 

P.F. Chang’s China Bistro, Inc.
Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)

                         
    13 Weeks Ended   13 Weeks Ended   13 Weeks Ended
   
 
 
    Dec 28   Sep 28   Dec 29
    2003   2003   2002
   
 
 
Revenues
   $ 151,316     $ 139,729     $ 115,889  
Cost of sales
     41,872       38,460       30,787  
Labor
     46,819       43,726       36,545  
Operating
     25,292       23,316       19,525  
Occupancy
     7,812       7,711       6,688  
 
    
     
     
 
Restaurant operating profit
     29,521       26,516       22,344  
General & administrative
     7,744       6,897       4,870  
Depreciation & amortization
     5,510       4,827       3,876  
Preopening expenses
     2,867       2,627       1,896  
 
    
     
     
 
Income from operations
     13,400       12,165       11,702  
Interest (expense) income and other income
     76       (69 )     36  
Minority interests
     (2,341 )     (2,305 )     (1,832 )
 
    
     
     
 
Income before provision for income taxes
     11,135       9,791       9,906  
Provision for income taxes
     (3,786 )     (3,314 )     (3,422 )
 
    
     
     
 
Net income
   $ 7,349     $ 6,477     $ 6,484  
 
    
     
     
 
Basic net income per share
   $ 0.29     $ 0.25     $ 0.26  
Diluted net income per share
   $ 0.28     $ 0.25     $ 0.25  
Shares used in calculation of basic EPS
     25,491       25,414       24,994  
Shares used in calculation of diluted EPS
     26,402       26,331       25,954  
                         
    Percentage of Revenues
   
    Dec 28   Sep 28   Dec 29
    2003   2003   2002
   
 
 
Revenues
     100.0 %     100.0 %     100.0 %
Cost of sales
     27.7 %     27.5 %     26.6 %
Labor
     30.9 %     31.3 %     31.5 %
Operating
     16.7 %     16.7 %     16.8 %
Occupancy
     5.2 %     5.5 %     5.8 %
 
    
     
     
 
Restaurant operating profit
     19.5 %     19.0 %     19.3 %
General & administrative
     5.1 %     4.9 %     4.2 %
Depreciation & amortization
     3.6 %     3.5 %     3.3 %
Preopening expenses
     1.9 %     1.9 %     1.6 %
 
    
     
     
 
Income from operations
     8.9 %     8.7 %     10.1 %
Interest (expense) income and other income
     0.1 %     0.0 %     0.0 %
Minority interests
     -1.5 %     -1.6 %     -1.6 %
 
    
     
     
 
Income before provision for income taxes
     7.4 %     7.0 %     8.5 %
Provision for income taxes
     -2.5 %     -2.4 %     -3.0 %
 
    
     
     
 
Net income
     4.9 %     4.6 %     5.6 %
 
    
     
     
 

Certain percentage amounts do not sum to total due to rounding.

Page 3 of 11

 

P.F. Chang’s China Bistro, Inc.
Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)

                 
    52 Weeks Ended   52 Weeks Ended
   
 
    Dec 28   Dec 29
    2003   2002
   
 
Revenues
   $ 559,245     $ 422,091  
Cost of sales
     152,788       112,571  
Labor
     174,989       133,536  
Operating
     92,988       70,775  
Occupancy
     30,559       25,457  
 
    
     
 
Restaurant operating profit
     107,921       79,752  
General & administrative
     28,768       20,590  
Depreciation & amortization
     19,271       14,371  
Preopening expenses
     8,654       6,334  
 
    
     
 
Income from operations
     51,228       38,457  
Interest (expense) income and other income
     45       41  
Minority interests
     (9,326 )     (6,435 )
 
    
     
 
Income before provision for income taxes
     41,947       32,063  
Provision for income taxes
     (14,247 )     (11,171 )
 
    
     
 
Net income
   $ 27,700     $ 20,892  
 
    
     
 
Basic net income per share
   $ 1.09     $ 0.85  
Diluted net income per share
   $ 1.06     $ 0.81  
Shares used in calculation of basic EPS
     25,345       24,688  
Shares used in calculation of diluted EPS
     26,250       25,924  
                 
    Dec 28   Dec 29
    2003   2002
   
 
Revenues
     100.0 %     100.0 %
Cost of sales
     27.3 %     26.7 %
Labor
     31.3 %     31.6 %
Operating
     16.6 %     16.8 %
Occupancy
     5.5 %     6.0 %
 
    
     
 
Restaurant operating profit
     19.3 %     18.9 %
General & administrative
     5.1 %     4.9 %
Depreciation & amortization
     3.4 %     3.4 %
Preopening expenses
     1.5 %     1.5 %
 
    
     
 
Income from operations
     9.2 %     9.1 %
Interest income and other income
     0.0 %     0.0 %
Minority interests
     -1.7 %     -1.5 %
 
    
     
 
Income before provision for income taxes
     7.5 %     7.6 %
Provision for income taxes
     -2.5 %     -2.6 %
 
    
     
 
Net income
     5.0 %     4.9 %
 
    
     
 

Certain percentage amounts do not sum to total due to rounding.

Page 4 of 11

 

P.F. Chang’s China Bistro, Inc.
Supplemental Financial Information
(In thousands, except per share amounts)
(Unaudited)

                         
    13 Weeks Ended Dec 28, 2003
   
    Total   Bistro   Pei Wei
   
 
 
Revenues
   $ 151,316     $ 134,658     $ 16,658  
Cost of sales
     41,872       37,035       4,837  
Labor
     46,819       41,274       5,545  
Operating
     25,292       22,605       2,687  
Occupancy
     7,812       6,664       1,148  
 
    
     
     
 
Restaurant operating profit
     29,521       27,080       2,441  
General & administrative
     7,744       6,578       1,166  
Depreciation & amortization
     5,510       4,835       675  
Preopening expenses
     2,867       2,393       474  
 
    
     
     
 
Income from operations
     13,400       13,274       133  
Interest (expense) income and other income
     76       76       —  
Minority interests
     (2,341 )     (2,193 )     (148 )
 
    
     
     
 
Income before provision for income taxes
     11,135       11,157       (22 )
 
            
     
 
Provision for income taxes
     (3,786 )                
 
    
                 
Net income
   $ 7,349                  
 
    
                 
Basic net income per share
   $ 0.29                  
Diluted net income per share
   $ 0.28                  
Shares used in calculation of basic EPS
     25,491                  
Shares used in calculation of diluted EPS
     26,402                  
                         
    Percentage of Revenues
   
    Total   Bistro   Pei Wei
   
 
 
Revenues
     100.0 %     100.0 %     100.0 %
Cost of sales
     27.7 %     27.5 %     29.0 %
Labor
     30.9 %     30.7 %     33.3 %
Operating
     16.7 %     16.8 %     16.1 %
Occupancy
     5.2 %     5.0 %     6.9 %
 
    
     
     
 
Restaurant operating profit
     19.5 %     20.0 %     14.7 %
General & administrative
     5.1 %     4.9 %     7.0 %
Depreciation & amortization
     3.6 %     3.6 %     4.1 %
Preopening expenses
     1.9 %     1.8 %     2.8 %
 
    
     
     
 
Income from operations
     8.9 %     9.9 %     0.8 %
Interest (expense) income and other income
     0.0 %     0.0 %     0.0 %
Minority interests
     -1.5 %     -1.6 %     -0.9 %
 
    
     
     
 
Income before provision for income taxes
     7.4 %     8.3 %     -0.1 %
 
            
     
 
Provision for income taxes
     -2.5 %                
 
    
                 
Net income
     4.9 %                
 
    
                 

Certain percentage amounts do not sum to total due to rounding.

Page 5 of 11

 

P.F. Chang’s China Bistro, Inc.
Supplemental Financial Information
(In thousands, except per share amounts)
(Unaudited)

                                 
    52 Weeks Ended December 28, 2003
   
    Total   Bistro   Pei Wei        
   
 
 
       
Revenues
   $ 559,245     $ 505,062     $ 54,183  
Cost of sales
     152,788       136,983       15,805  
Labor
     174,989       157,145       17,844  
Operating
     92,988       84,497       8,491  
Occupancy
     30,559       26,945       3,614  
 
    
     
     
 
Restaurant operating profit
     107,921       99,492       8,429  
General & administrative
     28,768       24,807       3,961  
Depreciation & amortization
     19,271       17,182       2,089  
Preopening expenses
     8,654       6,961       1,693  
 
    
     
     
 
Income from operations
     51,228       50,542       686  
Interest income and other income
     45       40       5  
Minority interests
     (9,326 )     (8,714 )     (612 )
 
    
     
     
 
Income before provision for income taxes
     41,947       41,868       79  
 
            
     
 
Provision for income taxes
     (14,247 )                
 
    
                 
Net income
   $ 27,700                  
 
    
                 
Basic net income per share
   $ 1.09                  
Diluted net income per share
   $ 1.06                  
Shares used in calculation of basic EPS
     25,345                  
Shares used in calculation of diluted EPS
     26,250                  
                         
    Percentage of Revenues
   
    Total   Bistro   Pei Wei
   
 
 
Revenues
     100.0 %     100.0 %     100.0 %
Cost of sales
     27.3 %     27.1 %     29.2 %
Labor
     31.3 %     31.1 %     32.9 %
Operating
     16.6 %     16.7 %     15.7 %
Occupancy
     5.5 %     5.3 %     6.7 %
 
    
     
     
 
Restaurant operating profit
     19.3 %     19.7 %     15.6 %
General & administrative
     5.1 %     4.9 %     7.3 %
Depreciation & amortization
     3.4 %     3.4 %     3.9 %
Preopening expenses
     1.5 %     1.4 %     3.1 %
 
    
     
     
 
Income from operations
     9.2 %     10.0 %     1.3 %
Interest income and other income
     0.0 %     0.0 %     0.0 %
Minority interests
     -1.7 %     -1.7 %     -1.1 %
 
    
     
     
 
Income before provision for income taxes
     7.5 %     8.3 %     0.1 %
 
            
     
 
Provision for income taxes
     -2.5 %                
 
    
                 
Net income
     5.0 %                
 
    
                 

Certain percentage amounts do not sum to total due to rounding.

Page 6 of 11

 

P.F. Chang’s China Bistro
Supplemental Sales Information
Year of Unit Opening (1)

                                                                                 
    Pre-1996   1996   1997   1998   1999   2000   2001   2002   2003   Total
   
 
 
 
 
 
 
 
 
 
Units
     4       3       6       10       13       16       13       14       18       97  
Sales (000)
1Q03
     6,434       5,908       9,060       15,753       18,800       23,236       18,815       17,983       4,751       120,740  
2Q03
     6,238       5,955       9,180       15,545       19,037       23,754       18,576       17,214       8,420       123,919  
3Q03
     6,190       5,970       8,914       15,428       18,804       23,842       18,108       16,850       11,639       125,745  
4Q03
     6,062       5,559       9,159       15,418       18,608       23,715       18,529       17,217       20,391       134,658  
2003
     24,924       23,392       36,313       62,144       75,249       94,547       74,028       69,264       45,201       505,062  
Average Weekly Sales (AWS)
1Q03
     123,738       151,474       116,157       121,175       111,239       111,713       111,331       98,808       143,980       113,906  
2Q03
     119,958       152,695       117,695       119,575       112,647       114,202       109,915       94,582       125,666       113,271  
3Q03
     119,044       153,083       114,272       118,677       111,269       114,625       107,148       92,579       115,241       111,476  
4Q03
     116,570       142,538       117,424       118,600       110,104       114,012       109,642       94,602       110,220       111,104  
2003
     119,828       149,947       116,387       119,507       111,315       113,638       109,509       95,143       117,101       112,386  
Year-Over-Year Change in AWS
1Q03
     0.2 %     3.7 %     6.0 %     5.1 %     5.0 %     11.0 %     5.4 %     -1.7 %     —       4.4 %
2Q03
     -0.4 %     1.9 %     7.3 %     1.4 %     5.3 %     10.4 %     5.1 %     -6.1 %     —       3.1 %
3Q03
     0.4 %     1.1 %     6.7 %     -0.6 %     4.4 %     10.4 %     4.9 %     -3.7 %     —       2.7 %
4Q03
     0.5 %     -3.1 %     5.0 %     -0.1 %     2.9 %     7.1 %     6.1 %     3.2 %     —       3.0 %
2003
     0.2 %     0.9 %     6.2 %     1.4 %     4.4 %     9.7 %     5.4 %     0.4 %     —       3.3 %
Year-Over-Year Change Comp Store Sales (2)
Units
     4       3       6       10       13       16       13       6       —       71  
1Q03
     0.2 %     3.7 %     6.0 %     5.1 %     5.0 %     11.0 %     6.6 %     —       —       6.4 %
2Q03
     -0.4 %     1.9 %     7.3 %     1.4 %     5.3 %     10.4 %     5.2 %     5.4 %     —       5.4 %
3Q03
     0.4 %     1.1 %     6.7 %     -0.6 %     4.4 %     10.4 %     4.9 %     7.4 %     —       4.8 %
4Q03
     0.5 %     -3.1 %     5.0 %     -0.1 %     2.9 %     7.1 %     6.1 %     6.3 %     —       3.8 %
2003
     0.2 %     0.9 %     6.2 %     1.4 %     4.4 %     9.7 %     5.6 %     6.6 %     —       5.1 %

(1)   Includes all restaurants opened in the period indicated.
(2)   A unit becomes comparable in the eighteenth month of operation.

Page 7 of 11

 

Pei Wei Asian Diner
Supplemental Sales Information
Year of Unit Opening (1)

                                                 
    2000   2001   2002   2003           Total
   
 
 
 
         
Units
     1       4       11       17               33  
Sales (000)
1Q03
     868       2,390       5,762       1,835               10,855  
2Q03
     841       2,241       5,722       3,882               12,686  
3Q03
     814       2,141       5,603       5,426               13,984  
4Q03
     822       2,134       5,591       8,111               16,658  
2003
     3,345       8,906       22,678       19,254               54,183  
Average Weekly Sales (AWS)
1Q03
     66,787       45,956       40,295       52,437               44,673  
2Q03
     64,652       43,092       40,017       53,176               45,144  
3Q03
     62,593       41,176       39,180       47,599               43,428  
4Q03
     63,295       41,039       39,098       40,553               40,830  
2003
     64,332       42,816       39,647       45,626               43,208  
Year-Over-Year Change in AWS
1Q03
     3.0 %     6.4 %     -15.1 %     —               -6.0 %
2Q03
     4.2 %     -0.3 %     11.3 %     —               3.4 %
3Q03
     6.2 %     -0.4 %     7.8 %     —               8.2 %
4Q03
     3.0 %     -6.0 %     6.5 %     —               2.1 %
2003
     4.1 %     -0.1 %     7.1 %     —               3.4 %
Year-Over-Year Change Comp Store Sales (2)
Units
     1       4       6       —               11  
1Q03
     3.0 %     -1.2 %     —       —               1.1 %
2Q03
     4.2 %     -2.5 %     2.1 %     —               -0.1 %
3Q03
     6.2 %     -0.4 %     0.8 %     —               1.2 %
4Q03
     3.0 %     -6.0 %     6.5 %     —               -0.2 %
2003
     4.1 %     -2.9 %     4.6 %     —               0.4 %

(1)   Includes all restaurants opened in the period indicated.
 
(2)   A unit becomes comparable in the eighteenth month of operation.

Page 8 of 11

 

P.F. Chang’s China Bistro, Inc.

Development Schedule

                                 
    P. F. Chang's China Bistro
   
    1Q04   2Q04   3Q04   4Q04
Units opened
     4                          
Units under construction
     2       2                  
Units in development
                     5       5  
 
    
     
     
     
 
Total new unit development
     6       2       5       5  
Existing units
     97       103       105       110  
 
    
     
     
     
 
Total units
     103       105       110       115  
 
    
     
     
     
 
                                 
    Pei Wei Asian Diner
   
    1Q04   2Q04   3Q04   4Q04
   
 
 
 
Units opened
     2                          
Units under construction
     3       5                  
Units in development
                     5       5  
 
    
     
     
     
 
Total new unit development
     5       5       5       5  
Existing units
     33       38       43       48  
 
    
     
     
     
 
Total units
     38       43       48       53  
 
    
     
     
     
 

Page 9 of 11