P.F. Chang's Restates for Lease Accounting

    Business Editors

    SCOTTSDALE, Ariz.--(BUSINESS WIRE)--April 1, 2005--P.F. Chang's China Bistro Inc. (Nasdaq:PFCB) today announced that the company has restated its current and prior year financial statements to adjust its accounting for leases in order to conform with U.S. generally accepted accounting principles. The restatement adjustments had no impact on revenues, comparable store sales or net cash flows. The company's adjustments to lease accounting policies are more fully described in its Annual Report on Form 10-K filed today with the Securities and Exchange Commission, which includes restated historical financial information for certain periods. As previously reported by the company, financial information in previously filed Annual Reports on Form 10-K or Quarterly Reports on Form 10-Q and its press release issued Feb. 16, 2005, should no longer be relied upon.
    The restatement adjustments reduced net income by $780,000, $600,000 and $355,000 for the years ended Jan. 2, 2005, Dec. 28, 2003, and Dec. 29, 2002, respectively, which reduced diluted net earnings per share for the same periods by $0.03, $0.03 and $0.02, respectively, and resulted in a $2.2 million cumulative reduction in retained earnings as of Jan. 2, 2005. The restatement adjustments also increased total assets by $40.1 million as of Jan. 2, 2005, and increased total liabilities by $42.3 million as of the same period.
    The company will incorporate the aforementioned lease accounting changes into its 2005 forecast in its next earnings release, which is scheduled for April 27, 2005. The company anticipates that as a result of the lease accounting change, net earnings per share will be reduced by approximately $0.01 for the first quarter of fiscal 2005 from previously forecasted amounts.
    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 those concerning the company's proposed accounting changes, are forward-looking statements. The accuracy of these forward-looking statements may be affected by certain risks and uncertainties, including, but not limited to, changes to existing accounting rules or differing interpretations to our current accounting practices and other risks described in the company's recent SEC filings.

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CONTACT: P.F. Chang's China Bistro Inc., Scottsdale Laura Cherry, 602-957-8986 (Media) laurac@pfchangs.com Bert Vivian, 602-957-8986 (Investor) bertv@pfchangs.com

KEYWORD: ARIZONA INDUSTRY KEYWORD: RESTAURANTS FOODS/BEVERAGES RETAIL SOURCE: P.F. Chang's China Bistro Inc.

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