EX-99.1 2 c72482exv99w1.htm EXHIBIT 99.1 Filed by Bowne Pure Compliance
 

Exhibit 99.1
P.F. CHANG’S CHINA BISTRO, INC.
P.F. CHANG’S REPORTS FINAL FOURTH QUARTER EARNINGS
SCOTTSDALE, ARIZONA, (February 13, 2008) — P.F. Chang’s China Bistro, Inc. (NASDAQ: PFCB) today reported final consolidated income from continuing operations of $9.3 million for the fourth quarter ended December 30, 2007 compared to $9.0 million for the fourth quarter of the prior year. Net income for the fourth quarter of fiscal 2007 totaled $7.0 million compared to $8.8 million for the fourth quarter of the prior year. Net income for both years includes a loss from discontinued operations related to the Company’s previously announced decision to exit operation of its Taneko business, including a $3.1 million pretax asset impairment charge recognized during the fourth quarter of fiscal 2007.
Income from continuing operations per diluted share for the fourth quarter of fiscal 2007 was $0.37 compared to $0.35 for the fourth quarter of the prior year. Net income per diluted share was $0.28 compared to $0.34 in the prior year. The primary driver of the decline in net income per diluted share was the $0.08 asset impairment charge impact noted above.
                 
(000 except per share data)            
    4Q07     4Q06  
Revenues
   $ 291,933     $ 251,246  
Income from continuing operations
   $ 9,252     $ 9,036  
Net income
   $ 7,046     $ 8,765  
Income from continuing operations per diluted share
   $ 0.37     $ 0.35  
Net income per diluted share
   $ 0.28     $ 0.34  
Weighted average shares — diluted
     25,257       25,893  
Final fourth quarter consolidated results were higher than the Company’s updated earnings guidance provided on January 11, 2008 primarily due to a lower than anticipated effective tax rate. Additionally, revenues reflected above for the fourth quarter of both fiscal 2007 and 2006 have been updated compared to amounts previously reported to reflect Taneko as a discontinued operation.
2008 Expectations
The Company expects to open 17 new Bistro restaurants and 25 new Pei Wei restaurants during fiscal 2008. Consolidated revenues are expected to increase 13 to 14 percent and income from continuing operations per share is expected to range from $1.32 to $1.38 for fiscal 2008.
Additionally, beginning in 2008, the Company will no longer pre-release quarterly revenue results; however, revenue detail will be included in quarterly earnings releases. The Company will continue to provide detailed historical results in each earnings release, as well as any updates to earnings guidance, but will no longer provide a detailed forecast.

 

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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. A webcast of the call can be accessed through the company’s website at http://www.pfcb.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.
Note with respect to non-GAAP financial measures contained within Supplemental Financial Information
In addition to using GAAP results in evaluating the Company’s business, management measures restaurant operating income to assess the performance of its existing restaurant concepts. Restaurant operating income includes all ongoing costs related to operating the Company’s restaurants but excludes preopening expenses and partner investment expense. Because these costs are solely related to expansion of the Company’s business, they make an accurate assessment of the health of its ongoing operations more difficult and are therefore excluded. Additionally, general and administrative expenses are excluded in the concept level presentation as these costs do not directly relate to restaurant operations. As the Company’s expansion is funded entirely from its ongoing restaurant operations, restaurant operating income is a primary consideration when determining whether and when to open additional restaurants. The non-GAAP financial information presented herein should be considered in addition to, not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Please see the non-GAAP to GAAP reconciliation at the bottom of pages 5 through 7 of this press release for a reconciliation of restaurant operating income to the most directly comparable GAAP measure, income from operations.
Note with respect to forward looking statements
The statements contained in this press release that are not purely historical, including the Company’s estimates of its earnings, 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 locate acceptable restaurant sites; open new restaurants and operate its restaurants profitably; the company’s ability to hire, train and retain skilled management and other personnel; the company’s ability to access sufficient financing on acceptable terms; changes in consumer tastes and trends; customer acceptance of new concepts; national, regional and local economic and weather conditions; changes in costs related to food, utilities and labor; and other risks described in the company’s recent SEC filings.
             
Contact: P.F. Chang’s China Bistro, Inc.   (480) 888-3000
 
            
 
  Media:   Laura Cherry   laura.cherry@pfcb.com
 
  Investor:   Mark Mumford   mark.mumford@pfcb.com

 

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P.F. Chang’s China Bistro, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
                 
    13 Weeks Ended  
    December 30,     December 31,  
    2007     2006  
Revenues
   $ 291,933     $ 251,246  
Costs and expenses:
                
Cost of sales
     80,450       68,580  
Labor
     97,100       81,248  
Operating
     46,913       38,814  
Occupancy
     16,727       13,819  
General & administrative
     17,604       14,796  
Depreciation & amortization
     16,005       12,289  
Preopening expense
     4,209       4,357  
Partner investment expense
     (72 )     1,759  
 
            
Total costs and expenses
     278,936       235,662  
 
            
Income from operations
     12,997       15,584  
Interest and other income (expense), net
     (612 )     (89 )
Minority interest
     (593 )     (2,113 )
 
            
Income before provision for income taxes
     11,792       13,382  
Provision for income taxes
     (2,540 )     (4,346 )
 
            
Income from continuing operations
     9,252       9,036  
Loss from discontinued operations, net of tax
     (2,206 )     (271 )
 
            
Net income
   $ 7,046     $ 8,765  
 
            
 
                
Basic net income per share:
                
Income from continuing operations
   $ 0.37     $ 0.36  
Loss from discontinued operations, net of tax
     (0.09 )     (0.01 )
 
            
Net income
   $ 0.28     $ 0.35  
 
            
 
                
Diluted net income per share:
                
Income from continuing operations
   $ 0.37     $ 0.35  
Loss from discontinued operations, net of tax
     (0.09 )     (0.01 )
 
            
Net income
   $ 0.28     $ 0.34  
 
            
 
                
Weighted average shares used in computation - basic
     24,923       25,269  
Weighted average shares used in computation - diluted
     25,257       25,893  

 

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P.F. Chang’s China Bistro, Inc.
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
                 
    52 Weeks Ended  
    December 30,     December 31,  
    2007     2006  
Revenues
   $ 1,092,722     $ 936,864  
Costs and expenses:
                
Cost of sales
     299,713       256,259  
Labor
     368,059       309,774  
Operating
     173,993       146,247  
Occupancy
     63,111       52,408  
General & administrative
     66,968       56,030  
Depreciation & amortization
     56,832       44,793  
Preopening expense
     14,983       12,286  
Partner investment expense
     (2,012 )     4,371  
 
            
Total costs and expenses
     1,041,647       882,168  
 
            
Income from operations
     51,075       54,696  
Interest and other income (expense), net
     (100 )     1,315  
Minority interest
     (4,169 )     (8,116 )
 
            
Income before provision for income taxes
     46,806       47,895  
Provision for income taxes
     (11,563 )     (13,712 )
 
            
Income from continuing operations
     35,243       34,183  
Loss from discontinued operations, net of tax
     (3,180 )     (930 )
 
            
Net income
   $ 32,063     $ 33,253  
 
            
 
                
Basic net income per share:
                
Income from continuing operations
   $ 1.38     $ 1.31  
Loss from discontinued operations, net of tax
     (0.12 )     (0.04 )
 
            
Net income
   $ 1.26     $ 1.28  
 
            
 
                
Diluted net income per share:
                
Income from continuing operations
   $ 1.36     $ 1.28  
Loss from discontinued operations, net of tax
     (0.12 )     (0.03 )
 
            
Net income
   $ 1.24     $ 1.24  
 
            
 
                
Weighted average shares used in computation - basic
     25,473       26,075  
Weighted average shares used in computation - diluted
     25,899       26,737  

 

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P.F. Chang’s China Bistro, Inc.
Supplemental Financial Information
                                                                                         
    2005     1Q06     2Q06     3Q06     4Q06     2006     1Q07     2Q07     3Q07     4Q07     2007  
Units
     208       214       225       239       259       259       269       283       299       316       316  
Sales weeks
     9,497       2,751       2,840       3,003       3,254       11,848       3,425       3,588       3,776       4,060       14,849  
AWS
     85,201       83,102       79,571       76,931       77,211       79,074       76,988       74,365       71,579       71,905       73,589  
 
                                                                                        
Revenues
     809,153       228,613       225,981       231,024       251,246       936,864       263,684       266,823       270,282       291,933       1,092,722  
 
                                                                                        
Operating costs
                                                                                        
Cost of sales
     224,634       63,440       61,285       62,954       68,580       256,259       72,632       72,766       73,865       80,450       299,713  
Labor
     266,243       76,937       75,380       76,209       81,248       309,774       88,863       90,307       91,789       97,100       368,059  
Operating
     122,247       34,841       36,210       36,382       38,814       146,247       41,066       42,198       43,816       46,913       173,993  
Occupancy
     42,793       12,493       12,725       13,371       13,819       52,408       14,853       15,561       15,970       16,727       63,111  
Minority interest
     8,227       2,022       2,033       1,948       2,113       8,116       1,647       1,121       808       593       4,169  
Depreciation & amortization
     36,950       10,355       10,565       11,584       12,289       44,793       12,578       13,500       14,749       16,005       56,832  
Restaurant operating income
     108,059       28,525       27,783       28,576       34,383       119,267       32,045       31,370       29,285       34,145       126,845  
 
                                                                                        
Development costs
                                                                                        
Preopening expenses
     9,245       1,669       2,701       3,559       4,357       12,286       2,539       3,296       4,939       4,209       14,983  
Partner investment expense
     4,800       200       925       1,487       1,759       4,371       (1,401 )     (468 )     (71 )     (72 )     (2,012 )
 
                                                                                        
Other expenses
                                                                                        
General and administrative
     41,117       13,035       13,820       14,379       14,796       56,030       16,494       15,684       17,186       17,604       66,968  
Interest and other (income) expense, net
     (1,841 )     (492 )     (568 )     (344 )     89       (1,315 )     (343 )     (179 )     10       612       100  
Provision for income taxes
     16,942       4,151       2,611       2,604       4,346       13,712       3,998       3,407       1,618       2,540       11,563  
Income from continuing operations
     37,796       9,962       8,294       6,891       9,036       34,183       10,758       9,630       5,603       9,252       35,243  
Loss from discontinued operations, net of tax
     —       (149 )     (205 )     (305 )     (271 )     (930 )     (293 )     (353 )     (328 )     (2,206 )     (3,180 )
Net income
     37,796       9,813       8,089       6,586       8,765       33,253       10,465       9,277       5,275       7,046       32,063  
 
                                                                                        
Income from continuing operations per FDS
   $ 1.40     $ 0.37     $ 0.30     $ 0.26     $ 0.35     $ 1.28     $ 0.41     $ 0.37     $ 0.21     $ 0.37     $ 1.36  
 
                                                                                        
Fully diluted shares (FDS)
     27,000       27,239       27,258       26,558       25,893       26,737       26,046       26,129       26,105       25,257       25,899  
 
                                                                                        
Revenues
     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %
Cost of sales
     27.8 %     27.7 %     27.1 %     27.2 %     27.3 %     27.4 %     27.5 %     27.3 %     27.3 %     27.6 %     27.4 %
Labor
     32.9 %     33.7 %     33.4 %     33.0 %     32.3 %     33.1 %     33.7 %     33.8 %     34.0 %     33.3 %     33.7 %
Operating
     15.1 %     15.2 %     16.0 %     15.7 %     15.4 %     15.6 %     15.6 %     15.8 %     16.2 %     16.1 %     15.9 %
Occupancy
     5.3 %     5.5 %     5.6 %     5.8 %     5.5 %     5.6 %     5.6 %     5.8 %     5.9 %     5.7 %     5.8 %
Minority interest
     1.0 %     0.9 %     0.9 %     0.8 %     0.8 %     0.9 %     0.6 %     0.4 %     0.3 %     0.2 %     0.4 %
Depreciation & amortization
     4.6 %     4.5 %     4.7 %     5.0 %     4.9 %     4.8 %     4.8 %     5.1 %     5.5 %     5.5 %     5.2 %
 
                                                                  
Restaurant operating income
     13.4 %     12.5 %     12.3 %     12.4 %     13.7 %     12.7 %     12.2 %     11.8 %     10.8 %     11.7 %     11.6 %
 
                                                                  
Preopening expenses
     1.1 %     0.7 %     1.2 %     1.5 %     1.7 %     1.3 %     1.0 %     1.2 %     1.8 %     1.4 %     1.4 %
Partner investment expense
     0.6 %     0.1 %     0.4 %     0.6 %     0.7 %     0.5 %     (0.5 %)     (0.2 %)     (0.0 %)     (0.0 %)     (0.2 %)
General and administrative
     5.1 %     5.7 %     6.1 %     6.2 %     5.9 %     6.0 %     6.3 %     5.9 %     6.4 %     6.0 %     6.1 %
Interest and other (income) expense, net
     -0.2 %     -0.2 %     -0.3 %     -0.1 %     0.0 %     (0.1 %)     (0.1 %)     (0.1 %)     0.0 %     0.2 %     0.0 %
Provision for income taxes
     2.1 %     1.8 %     1.2 %     1.1 %     1.7 %     1.5 %     1.5 %     1.3 %     0.6 %     0.9 %     1.1 %
 
                                                                  
Income from continuing operations
     4.7 %     4.4 %     3.7 %     3.0 %     3.6 %     3.6 %     4.1 %     3.6 %     2.1 %     3.2 %     3.2 %
 
                                                                  
Loss from discontinued operations, net of tax
     0.0 %     (0.1 %)     (0.1 %)     (0.1 %)     (0.1 %)     (0.1 %)     (0.1 %)     (0.1 %)     (0.1 %)     (0.8 %)     (0.3 %)
 
                                                                  
Net income
     4.7 %     4.3 %     3.6 %     2.9 %     3.5 %     3.5 %     4.0 %     3.5 %     2.0 %     2.4 %     2.9 %
 
                                                                  
 
                                                                                        
Reconciliation of Non-GAAP Financial Information to GAAP measures:
                                                                                        
Restaurant operating income
     108,059       28,525       27,783       28,576       34,383       119,267       32,045       31,370       29,285       34,145       126,845  
Add: Minority interest
     8,227       2,022       2,033       1,948       2,113       8,116       1,647       1,121       808       593       4,169  
Less: General and administrative
     (41,117 )     (13,035 )     (13,820 )     (14,379 )     (14,796 )     (56,030 )     (16,494 )     (15,684 )     (17,186 )     (17,604 )     (66,968 )
Less: Preopening expenses
     (9,245 )     (1,669 )     (2,701 )     (3,559 )     (4,357 )     (12,286 )     (2,539 )     (3,296 )     (4,939 )     (4,209 )     (14,983 )
Less: Partner investment expense
     (4,800 )     (200 )     (925 )     (1,487 )     (1,759 )     (4,371 )     1,401       468       71       72       2,012  
 
                                                                  
Income from operations
     61,124       15,643       12,370       11,099       15,584       54,696       16,060       13,979       8,039       12,997       51,075  
 
                                                                  
Note: Consolidated results include the impact of Shared Services and Other as well as the Bistro and Pei Wei concepts

 

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Concept: P.F. Chang’s China Bistro
Supplemental Financial Information
                                                                                         
    2005     1Q06     2Q06     3Q06     4Q06     2006     1Q07     2Q07     3Q07     4Q07     2007  
Units
     131       133       137       142       152       152       153       157       162       172       172  
Sales weeks
     6,266       1,720       1,751       1,796       1,920       7,187       1,979       2,028       2,078       2,204       8,289  
AWS
     107,757       108,677       104,914       102,930       104,713       105,265       104,592       102,615       100,325       102,514       102,486  
Revenues
     675,204       186,924       183,705       184,914       201,091       756,634       207,028       208,174       208,544       225,997       849,743  
 
                                                                                        
Operating costs
                                                                                        
Cost of sales
     187,073       51,771       49,810       50,131       54,855       206,567       56,781       56,696       56,943       62,158       232,578  
Labor
     221,126       62,652       60,753       59,959       63,733       247,097       69,312       69,827       69,946       73,834       282,919  
Operating
     100,199       27,897       28,653       28,306       30,609       115,465       31,684       32,194       32,981       35,004       131,863  
Occupancy
     34,700       9,859       9,928       10,307       10,589       40,683       11,217       11,598       11,739       12,505       47,059  
Minority interest
     7,118       1,733       1,753       1,717       1,790       6,993       1,333       837       599       582       3,351  
Depreciation & amortization
     30,093       8,096       8,220       8,831       9,304       34,451       9,483       10,054       10,861       11,896       42,294  
Restaurant operating income
     94,895       24,916       24,588       25,663       30,211       105,378       27,218       26,968       25,475       30,018       109,679  
 
                                                                                        
Revenues
     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %
Cost of sales
     27.7 %     27.7 %     27.1 %     27.1 %     27.3 %     27.3 %     27.4 %     27.2 %     27.3 %     27.5 %     27.4 %
Labor
     32.7 %     33.5 %     33.1 %     32.4 %     31.7 %     32.7 %     33.5 %     33.5 %     33.5 %     32.7 %     33.3 %
Operating
     14.8 %     14.9 %     15.6 %     15.3 %     15.2 %     15.3 %     15.3 %     15.5 %     15.8 %     15.5 %     15.5 %
Occupancy
     5.1 %     5.3 %     5.4 %     5.6 %     5.3 %     5.4 %     5.4 %     5.6 %     5.6 %     5.5 %     5.5 %
Minority interest
     1.1 %     0.9 %     1.0 %     0.9 %     0.9 %     0.9 %     0.6 %     0.4 %     0.3 %     0.3 %     0.4 %
Depreciation & amortization
     4.5 %     4.3 %     4.5 %     4.8 %     4.6 %     4.6 %     4.6 %     4.8 %     5.2 %     5.3 %     5.0 %
 
                                                                  
Restaurant operating income
     14.1 %     13.3 %     13.4 %     13.9 %     15.0 %     13.9 %     13.1 %     13.0 %     12.2 %     13.3 %     12.9 %
 
                                                                  
 
                                                                                        
 
                                                                                        
Reconciliation of Non-GAAP Financial Information to GAAP measures:
                                                                                        
Restaurant operating income
     94,895       24,916       24,588       25,663       30,211       105,378       27,218       26,968       25,475       30,018       109,679  
Add: Minority interest
     7,118       1,733       1,753       1,717       1,790       6,993       1,333       837       599       582       3,351  
Less: General and administrative
     (15,512 )     (5,117 )     (5,319 )     (4,773 )     (5,294 )     (20,503 )     (5,927 )     (5,907 )     (5,990 )     (5,944 )     (23,768 )
Less: Preopening expenses
     (6,028 )     (1,066 )     (1,575 )     (2,355 )     (3,008 )     (8,004 )     (1,256 )     (1,790 )     (2,974 )     (2,992 )     (9,012 )
Less: Partner investment expense
     (3,526 )     (426 )     (570 )     (956 )     (1,523 )     (3,475 )     1,926       753       433       246       3,358  
 
                                                                  
Income from operations
     76,947       20,040       18,877       19,296       22,176       80,389       23,294       20,861       17,543       21,910       83,608  
 
                                                                  

 

Page 6 of 7

 

Concept: Pei Wei Asian Diner
Supplemental Financial Information
                                                                                         
    2005     1Q06     2Q06     3Q06     4Q06     2006     1Q07     2Q07     3Q07     4Q07     2007  
Units
     77       81       88       97       107       107       116       126       137       144       144  
Sales weeks
     3,231       1,031       1,089       1,207       1,334       4,661       1,446       1,560       1,698       1,856       6,560  
AWS
     41,457       40,435       38,822       38,201       37,598       38,668       39,177       37,592       36,359       35,523       37,037  
Revenues
     133,949       41,689       42,276       46,110       50,155       180,230       56,656       58,649       61,738       65,936       242,979  
 
                                                                                        
Operating costs
                                                                                        
Cost of sales
     37,561       11,669       11,475       12,823       13,725       49,692       15,851       16,070       16,922       18,292       67,135  
Labor
     45,117       14,285       14,627       16,250       17,515       62,677       19,551       20,480       21,843       23,266       85,140  
Operating
     22,048       6,944       7,557       8,076       8,205       30,782       9,382       10,004       10,835       11,909       42,130  
Occupancy
     8,093       2,634       2,797       3,064       3,230       11,725       3,636       3,963       4,231       4,222       16,052  
Minority interest
     1,109       289       280       231       323       1,123       314       284       209       11       818  
Depreciation & amortization
     5,977       1,979       2,064       2,454       2,708       9,205       2,823       3,164       3,417       3,718       13,122  
Restaurant operating income
     14,044       3,889       3,476       3,212       4,449       15,026       5,099       4,684       4,281       4,518       18,582  
 
                                                                                        
Revenues
     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %     100.0 %
Cost of sales
     28.0 %     28.0 %     27.1 %     27.8 %     27.4 %     27.6 %     28.0 %     27.4 %     27.4 %     27.7 %     27.6 %
Labor
     33.7 %     34.3 %     34.6 %     35.2 %     34.9 %     34.8 %     34.5 %     34.9 %     35.4 %     35.3 %     35.0 %
Operating
     16.5 %     16.7 %     17.9 %     17.5 %     16.4 %     17.1 %     16.6 %     17.1 %     17.5 %     18.1 %     17.3 %
Occupancy
     6.0 %     6.3 %     6.6 %     6.6 %     6.4 %     6.5 %     6.4 %     6.8 %     6.9 %     6.4 %     6.6 %
Minority interest
     0.8 %     0.7 %     0.7 %     0.5 %     0.6 %     0.6 %     0.6 %     0.5 %     0.3 %     0.0 %     0.3 %
Depreciation & amortization
     4.5 %     4.7 %     4.9 %     5.3 %     5.4 %     5.1 %     5.0 %     5.4 %     5.5 %     5.6 %     5.4 %
 
                                                                  
Restaurant operating income
     10.5 %     9.3 %     8.2 %     7.0 %     8.9 %     8.3 %     9.0 %     8.0 %     6.9 %     6.9 %     7.6 %
 
                                                                  
 
                                                                                        
 
                                                                                        
Reconciliation of Non-GAAP Financial Information to GAAP measures:
                                                                                        
Restaurant operating income
     14,044       3,889       3,476       3,212       4,449       15,026       5,099       4,684       4,281       4,518       18,582  
Add: Minority interest
     1,109       289       280       231       323       1,123       314       284       209       11       818  
Less: General and administrative
     (6,907 )     (2,299 )     (2,485 )     (2,276 )     (2,327 )     (9,387 )     (3,030 )     (2,878 )     (3,342 )     (3,049 )     (12,299 )
Less: Preopening expenses
     (3,217 )     (603 )     (1,126 )     (1,204 )     (1,350 )     (4,283 )     (1,283 )     (1,506 )     (1,965 )     (1,217 )     (5,971 )
Less: Partner investment expense
     (1,274 )     226       (355 )     (531 )     (236 )     (896 )     (525 )     (285 )     (362 )     (174 )     (1,346 )
 
                                                                  
Income from operations
     3,755       1,502       (210 )     (568 )     859       1,583       575       299       (1,179 )     89       (216 )
 
                                                                  

 

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