CALIFORNIA PIZZA KITCHEN, INC., AND SUBSIDIARIES

Consolidated Statements of Operations

Years ended January $2,2011,$ January $3,2010,$ and December $28,2008$

$($amounts in thousands, except for per share data$)$

$201020092008$

Revenues:

Restaurant sales $ $647,166$ $ $668,265$ $ $690,176$

Royalties from licensing agreement $6,9228,5397,380$

Domestic franchise revenues $4,1403,7243,797$

International franchise revenues $2,6432,3182,361$

Total revenues $660,871682,846703,714$

Costs and expenses:

Food, beverage and paper supplies $151,212156,661168,006$

Labor $242,973249,990249,916$

Direct operating and occupancy $151,220144,405142,799$

Cost of sales $545,405551,056560,721$

General and administrative $54,33154,39155,242$

Depreciation and amortization $39,48642,66142,779$

Pre$-$opening costs $3,5092,0834,718$

Loss on impairment of property and equipment $19,13923,34113,736$

Store closure costs $1,9647951,289$

Litigation, settlement and other costs $8,8391,689816$

Total costs and expenses $672,673676,016679,301$

Operating $($loss$)/$income $(11,802)6,83024,413$

Interest expense, net $(18)(1,028)(1,564)$

$($Loss$)/$income before income tax $($benefit$)/$provision $(11,820)5,80222,849$

Income tax $($benefit$)/$provision $(10,138)(2,299)5,027$

Net $($loss$)/$income $ $(1,682)$ $ $8,101$ $ $17,822$

Net $($loss$)/$income per common share:

Basic $ $(0\mathrm{.}06)$ $ $0\mathrm{.}31$ $ $0\mathrm{.}45$

Diluted $ $(0\mathrm{.}06)$ $ $0\mathrm{.}31$ $ $0\mathrm{.}45$

Weighted average shares used in

calculating net $($loss$)/$income per common share:

Basic $24\mathrm{.}72824\mathrm{.}30425\mathrm{.}433$

Diluted $24\mathrm{.}72824\mathrm{.}38325\mathrm{.}451$

CALIFORNIA PIZZA KITCHEN, INC., AND SUBSIDIARIES

Consolidated Balance Sheets

January $2,2011,$ and January $32010$

$($in thousands, except for share data$)$

$2010$

$2009$

Assets

Current assets:

Cash and cash equivalents $ $53,230$ $ $53,424$

Other receivables $22,53423,481$

Inventories $9,7379,317$

Current deferred tax asset, net $10,2259,076$

Prepaid rent $6618,717$

Other prepaid expenses $9,7984,511$

Total current assets $106,185108,526$

Property and equipment, net $298,326301,496$

Noncurrent deferred tax asset, net $24,27727,187$

Goodwill $8,3828,382$

Other intangibles, net $7,3337,210$

Other assets $10,4739,069$

Total assets $ $454,976$ $ $461,870$

Liabilities and stockholders$$ equity

Current liabilities:

Accounts payable $ $27,715$ $ $15,503$

Accrued compensation and benefits $25,92925,857$

Accrued rent $29,00023,063$

Deferred rent credits $8,0787,665$

Other accrued liabilities $42,49039,715$

Gift card liability $26,17731,040$

Store closure reserve $861,206$

Total current liabilities $159,475144,049$

Long$-$term debt $---23,900$

Other liabilities $24,65018,044$

Deferred rent credits, net of current portion $38,10537,406$

Income taxes payable, net of current portion $71911,605$

Commitments and contingencies $--$

Stockholders$$ equity:

Common stock$$$$0\mathrm{.}01$ par value, $80,000,000$ shares

authorized, $26,179,797$ and $25,795,800$ shares

issued and outstanding at January $2,2011,$ and

January $3,2010,$ respectively $262258$

Additional paid$-$in capital $195,563190,000$

Retained earnings $36,20236,608$

Total stockholders$$ equity $232,027226,866$

Total liabilities and stockholders$$ equity $