SAN DIEGO--(BUSINESS WIRE)--Feb. 21, 2018--
Jack in the Box Inc. (NASDAQ: JACK) today reported financial results for
the first quarter ended January 21, 2018, which reflect the following
items:
-
Qdoba® results are included in discontinued operations for
all periods presented;
-
the impact of the Tax Cuts and Jobs Act (the "Tax Act"), including a
one-time, non-cash charge as well as a lower statutory federal tax
rate;
-
implementation of an accounting change related to the tax treatment of
stock-based compensation; and
-
the reclassification of all depreciation and amortization expense into
a separate line in the condensed consolidated statements of earnings.
Earnings from continuing operations were $12.9 million, or $0.43 per
diluted share, for the first quarter ended January 21, 2018, compared
with $34.5 million, or $1.06 per diluted share, for the first quarter of
fiscal 2017.
Operating Earnings Per Share(1), a non-GAAP measure, were
$1.23 in the first quarter of fiscal 2018 compared with $1.07 in the
prior year quarter.
A reconciliation of non-GAAP Operating Earnings Per Share to GAAP
results is provided below, with additional information included in the
attachment to this release. Figures may not add due to rounding.
____________________________
(1) Operating Earnings Per Share
represents diluted earnings per share from continuing operations on a
GAAP basis excluding gains or losses on the sale of company-operated
restaurants, restructuring charges, the one-time, non-cash impact of the
Tax Act, and the excess tax benefits from share-based compensation
arrangements which are now recorded as a component of income tax expense
versus equity previously. See "Reconciliation of Non-GAAP Measurements
to GAAP Results."
|
|
|
16 Weeks Ended
|
|
January 21, 2018
|
|
January 22, 2017
|
Diluted earnings per share from continuing operations – GAAP
|
$
|
0.43
|
|
|
$
|
1.06
|
|
Gains on the sale of company-operated restaurants
|
(0.21
|
)
|
|
(0.00
|
)
|
Restructuring charges
|
0.01
|
|
|
0.00
|
|
One-time, non-cash impact of the Tax Act
|
1.03
|
|
|
—
|
|
Excess tax benefits from share-based compensation arrangements
|
(0.03
|
)
|
|
—
|
|
Operating Earnings Per Share – non-GAAP
|
$
|
1.23
|
|
|
$
|
1.07
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA(2), a non-GAAP measure, was $85.4 million in
the first quarter of fiscal 2018 as compared with $90.6 million for the
prior year quarter.
The Tax Act, enacted into law on December 22, 2017, significantly
impacted the company’s effective tax rate for the quarter ended January
21, 2018. The Tax Act reduced the federal statutory rate from 35 percent
to 21 percent as of January 1, 2018. As a company with a fiscal year-end
of September 30, the tax rate reduction will be phased in, resulting in
a blended statutory federal tax rate of 24.5 percent for the fiscal year
ending September 30, 2018.
In addition, the Tax Act resulted in a one-time, non-cash increase to
the provision for income taxes of $30.6 million, or $1.03 per diluted
share, in the first quarter of fiscal 2018. This adjustment related
primarily to the revaluation of deferred tax assets and liabilities at
the new lower rates, and is based upon estimates and interpretations of
the Tax Act which may be refined as further guidance is issued.
In the first quarter of 2018, the company adopted Accounting Standards
Update No. 2016-09, Compensation-Stock Compensation: Improvements to
Employee Share-Based Payment Accounting (“ASU 2016-09”). As required by
the updated accounting standard, excess tax benefits or deficiencies are
now recorded to the provision for income taxes in the condensed
consolidated statement of earnings, on a prospective basis, instead of
additional paid-in capital in the condensed consolidated balance sheet.
The adoption resulted in a reduction to the provision for income taxes
of $0.8 million, or $0.03 per diluted share, for the first quarter of
fiscal 2018, but had no impact on cash paid for income taxes. Excess tax
benefits will vary in future periods, as such amounts are dependent on
the number of shares released related to employee stock compensation
arrangements and fluctuations in the company’s stock price.
____________________________
(2) Adjusted EBITDA represents net
earnings on a GAAP basis excluding losses (earnings) from discontinued
operations, income taxes, interest expense, net, gains or losses on the
sale of company-operated restaurants, impairment and other charges,
depreciation and amortization, and the amortization of franchise tenant
improvement allowances. See "Reconciliation of Non-GAAP Measurements to
GAAP Results."
Restructuring charges of $0.4 million, or approximately $0.01 per
diluted share, were recorded during the first quarter of fiscal 2018, as
compared with $0.2 million, or less than $0.01 per diluted share, in the
prior year quarter. Restructuring charges are included in "Impairment
and other charges, net" in the accompanying condensed consolidated
statements of earnings, which decreased in the first quarter to $2.3
million from $2.7 million in the year ago quarter.
Lenny Comma, chairman and chief executive officer, said, “Our first
quarter operating results for Jack in the Box® were in line
with our expectations. We remain focused on regaining momentum in a
highly competitive environment through several key initiatives,
including a greater emphasis on value, while continuing to introduce
innovative new products like the Ribeye Burger and our recently launched
Food Truck series of sandwiches.
"During the first quarter, we refranchised 22 Jack in the Box
restaurants. We currently have signed non-binding letters of intent with
franchisees to sell 58 additional restaurants, and continue to
anticipate the Jack in the Box franchise mix to reach approximately 95
percent by the end of the fiscal year.
"We are working with our advisors to adjust our capital structure to
reflect a less capital-intensive business model, and we remain committed
to returning cash to shareholders."
|
|
|
Increase/(decrease) in Jack in the Box same-store sales:
|
|
|
|
16 Weeks Ended
|
|
|
January 21, 2018
|
|
January 22, 2017*
|
|
Company
|
0.2%
|
|
0.6%
|
|
Franchise
|
(0.3)%
|
|
3.9%
|
|
System
|
(0.2)%
|
|
3.1%
|
____________________________
*Note: Due to the transition from a
53-week year in fiscal 2016 to a 52-week year in fiscal 2017,
year-over-year fiscal period comparisons are offset by one week. The
change in same-store sales presented in the 2017 column uses comparable
calendar periods to balance the one-week shift from fiscal 2016 and to
provide a clearer year-over-year comparison.
Jack in the Box system same-store sales decreased 0.2 percent for the
quarter and lagged the QSR sandwich segment by 2.0 percentage points for
the comparable period, according to The NPD Group’s SalesTrack®
Weekly for the 16-week time period ended January 21, 2018. Included in
this segment are 16 of the top QSR sandwich and burger chains in the
country. Company same-store sales increased 0.2 percent in the first
quarter driven by average check growth of 2.6 percent, partially offset
by a 2.4 percent decrease in transactions.
In 2018, the company began presenting depreciation and amortization as a
separate line item in its condensed consolidated statements of earnings
to better align with similar presentation made by many of its peers and
to provide additional disclosure that is meaningful for investors. The
prior year condensed consolidated statement of earnings was adjusted to
conform with this new presentation. Depreciation and amortization was
previously presented within company restaurant costs, franchise
occupancy expenses, selling, general and administrative expenses, and
impairment and other charges, net, in the company's condensed
consolidated statements of earnings.
Restaurant Operating Margin(3), a non-GAAP measure, increased
to 22.2 percent of sales in the first quarter of fiscal 2018 from 21.6
percent of sales in the prior year quarter. Depreciation and
amortization related to company-operated restaurants as a percentage of
company restaurant sales was 3.8 percent in the first quarter of fiscal
2018 as compared to 4.2 percent in the first quarter of fiscal 2017.
Restaurant-Level EBITDA(3), a non-GAAP measure, increased by
20 basis points to 26.0 percent of company restaurant sales in the first
quarter of 2018. The increase was due primarily to the benefit of
refranchising, which was partially offset by an increase in food and
packaging costs as a percentage of sales resulting from commodity
inflation, higher repairs and maintenance costs, wage inflation and
higher costs for workers' compensation insurance. The increase in food
and packaging costs as a percentage of sales resulted from commodity
inflation of approximately 5.2 percent in the quarter, partially offset
by favorable product mix changes and menu price increases.
Franchise Margin(3), a non-GAAP measure, decreased to 52.6
percent of total franchise revenues in the first quarter of fiscal 2018
as compared with 52.9 percent of total franchise revenues in the first
quarter of fiscal 2017. Franchise depreciation and amortization
increased to 8.1 percent of total franchise revenues compared with 8.0
percent of total franchise revenues in the prior year quarter. Franchise
EBITDA(3), a non-GAAP measure,as a percentage of
total franchise revenues decreased to 60.9 percent in the first quarter
from 61.0 percent in the prior year quarter. The decrease was due
primarily to reduced royalties for certain restaurants sold to
franchisees in 2017, and a decrease in franchise-operated restaurant
same-store sales of 0.3 percent in the current quarter versus positive
same-store sales of 3.9 percent in the prior year quarter, partially
offset by an increase in franchise fees of $0.8 million from the
refranchising of 22 restaurants during the first quarter of 2018.
____________________________
(3) Restaurant Operating Margin,
Restaurant-Level EBITDA, Franchise Margin, and Franchise EBITDA are
non-GAAP measures. These non-GAAP measures are reconciled to earnings
from operations, the most comparable GAAP measure, in the attachment to
this release. See "Reconciliation of Non-GAAP Measurements to GAAP
Results."
SG&A expense for the first quarter decreased by $6.1 million and was
11.8 percent of revenues as compared to 11.5 percent in the prior year
quarter. Advertising costs, which are included in SG&A, were $8.9
million in the first quarter as compared to $12.0 million in the prior
year quarter. In addition to the $3.1 million decrease in advertising
costs, regional administration costs declined by $0.9 million, both of
which resulted primarily from refranchising. The decrease was also
attributable to mark-to-market adjustments on investments supporting the
company's non-qualified retirement plans resulting in a $1.2 million
year-over-year decrease in SG&A, a $0.6 million decrease in pension and
postretirement benefits and a $0.2 million decrease in incentive
compensation. As a percentage of system-wide sales, G&A excluding
advertising was 2.4 percent in the first quarter of 2018 as compared to
2.7 percent in the 2017 quarter.
Interest expense, net, increased by $2.4 million in the first quarter
due to increased leverage and a higher effective interest rate for 2018.
The company allocated $3.2 million and $2.5 million of interest expense
to Qdoba in the first quarters of 2018 and 2017, respectively.
Qdoba Discontinued Operations
In the first quarter of fiscal 2018, the company entered into a
definitive agreement to sell Qdoba Restaurant Corporation ("Qdoba"), a
wholly owned subsidiary of the company, to certain funds managed by
affiliates of Apollo Global Management, LLC (together with its
consolidated subsidiaries, "Apollo"). The transaction is expected to
close by April 2018. As a result of the pending sale, operating results
for Qdoba are included in discontinued operations for all periods
presented. However, the company did not allocate any general and
administrative shared services expenses to discontinued operations.
Qdoba generated a net loss of $0.6 million for the current quarter vs.
net earnings of $1.4 million in the prior year quarter.
Capital Allocation
The company did not repurchase any shares of its common stock in the
first quarter of 2018. The company currently has approximately $181.0
million remaining under stock buyback programs authorized by the
company's Board of Directors that expire in November 2018.
The company also announced today that on February 19, 2018, its Board of
Directors declared a cash dividend of $0.40 per share on the company's
common stock. The dividend is payable on March 16, 2018, to shareholders
of record at the close of business on March 5, 2018.
Guidance
The following guidance and underlying assumptions reflect the company’s
current expectations for the second quarter ending April 15, 2018, and
fiscal year ending September 30, 2018. Fiscal 2018 and fiscal 2017 are
52-week years, with 16 weeks in the first quarter, and 12 weeks in each
of the second, third and fourth quarters.
Second quarter fiscal year 2018 guidance
-
Same-store sales of down 1.0 percent to up 1.0 percent at Jack in the
Box system restaurants versus a 0.8 percent decrease in the year-ago
quarter.
Fiscal year 2018 guidance
-
Same-store sales increase of approximately 1.0 to 2.0 percent at Jack
in the Box system restaurants.
-
Commodity cost inflation of approximately 3.0 percent for Jack in the
Box.
-
Restaurant Operating Margin of 22.0 to 23.0 percent and
Restaurant-Level EBITDA of approximately 26.0 to 27.0 percent,
depending on the timing of refranchising transactions and the margins
associated with the restaurants sold.
-
G&A as a percentage of system-wide sales of approximately 2.5 to 2.7
percent.
-
Approximately 25 new Jack in the Box restaurants opening system-wide,
the majority of which will be franchise locations.
-
Capital expenditures of approximately $30 to $35 million.
-
Tenant improvement allowances of approximately $25 million.
-
Tax rate of approximately 29.0 percent, excluding the one-time,
non-cash impact of the Tax Act and the impact of ASU 2016-09.
-
Adjusted EBITDA of approximately $260 to $270 million.
Conference Call
The company will host a conference call for financial analysts and
investors on Thursday, February 22, 2018, beginning at 8:30 a.m. PT
(11:30 a.m. ET). The conference call will be broadcast live over the
Internet via the Jack in the Box Inc. corporate website. To access the
live call through the Internet, log onto the Investors section of the
Jack in the Box Inc. website at http://investors.jackinthebox.com
at least 15 minutes prior to the event in order to download and install
any necessary audio software. A replay of the call will be available
through the Jack in the Box Inc. corporate website for 21 days,
beginning at approximately 11:30 a.m. PT on February 22, 2018.
About Jack in the Box Inc.
Jack in the Box Inc. (NASDAQ: JACK), based in San Diego, is a restaurant
company that operates and franchises Jack in the Box® restaurants,
one of the nation’s largest hamburger chains, with more than 2,200
restaurants in 21 states and Guam. Additionally, through a wholly owned
subsidiary, the company operates and franchises QDOBA MEXICAN EATS®,
a leader in fast-casual dining, with more than 700 restaurants in 47
states, the District of Columbia and Canada. For more information on
Jack in the Box and QDOBA, including franchising opportunities, visit www.jackinthebox.com
or www.qdoba.com.
Safe harbor statement
This press release contains forward-looking statements within the
meaning of the federal securities laws. Such statements are subject to
substantial risks and uncertainties. A variety of factors could cause
the company’s actual results to differ materially from those expressed
in the forward-looking statements, including the following: the success
of new products and marketing initiatives; the impact of competition,
unemployment, trends in consumer spending patterns and commodity costs;
the company's ability to reduce G&A the company's ability to execute its
refranchising strategy; the company’s ability to achieve and manage its
planned growth, which is affected by the availability of a sufficient
number of suitable new restaurant sites, the performance of new
restaurants, and risks relating to expansion into new markets;
litigation risks; the company's ability to enhance shareholder value,
including delay or failure in closing the pending sale of Qdoba;
food-safety incidents or negative publicity impacting the reputations of
the company's brands; and stock market volatility. These and other
factors are discussed in the company’s annual report on Form 10-K and
its periodic reports on Form 10-Q filed with the Securities and Exchange
Commission, which are available online at http://investors.jackinthebox.com
or in hard copy upon request. The company undertakes no obligation to
update or revise any forward-looking statement, whether as the result of
new information or otherwise.
|
JACK IN THE BOX INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS |
(In thousands, except per share data) |
(Unaudited) |
|
|
|
16 Weeks Ended |
|
|
January 21, |
|
January 22, |
|
|
2018 |
|
2017 |
Revenues:
|
|
|
|
|
Company restaurant sales
|
|
$
|
169,637
|
|
|
$
|
238,571
|
|
Franchise rental revenues
|
|
|
77,217
|
|
|
|
71,436
|
|
Franchise royalties and other
|
|
|
47,609
|
|
|
|
43,174
|
|
|
|
|
294,463
|
|
|
|
353,181
|
|
Operating costs and expenses, net:
|
|
|
|
|
Company restaurant costs(1):
|
|
|
|
|
Food and packaging
|
|
|
48,864
|
|
|
|
67,989
|
|
Payroll and employee benefits
|
|
|
48,940
|
|
|
|
70,183
|
|
Occupancy and other
|
|
|
27,750
|
|
|
|
38,941
|
|
Total company restaurant costs(1) |
|
|
125,554
|
|
|
|
177,113
|
|
Franchise occupancy expenses(1) |
|
|
46,521
|
|
|
|
42,190
|
|
Franchise support and other costs
|
|
|
2,482
|
|
|
|
2,537
|
|
Selling, general and administrative expenses(1) |
|
|
34,625
|
|
|
|
40,772
|
|
Depreciation and amortization(1) |
|
|
19,157
|
|
|
|
21,263
|
|
Impairment and other charges, net(1) |
|
|
2,257
|
|
|
|
2,654
|
|
Gains on the sale of company-operated restaurants
|
|
|
(8,940
|
)
|
|
|
(137
|
)
|
|
|
|
221,656
|
|
|
|
286,392
|
|
Earnings from operations
|
|
|
72,807
|
|
|
|
66,789
|
|
Interest expense, net
|
|
|
12,780
|
|
|
|
10,409
|
|
Earnings from continuing operations and before income taxes
|
|
|
60,027
|
|
|
|
56,380
|
|
Income taxes
|
|
|
47,138
|
|
|
|
21,831
|
|
Earnings from continuing operations
|
|
|
12,889
|
|
|
|
34,549
|
|
(Losses) earnings from discontinued operations, net of taxes
|
|
|
(699
|
)
|
|
|
1,381
|
|
Net earnings
|
|
$
|
12,190
|
|
|
$
|
35,930
|
|
|
|
|
|
|
Net earnings per share - basic:
|
|
|
|
|
Earnings from continuing operations
|
|
$
|
0.44
|
|
|
$
|
1.07
|
|
(Losses) earnings from discontinued operations
|
|
|
(0.02
|
)
|
|
|
0.04
|
|
Net earnings per share (2) - basic
|
|
$
|
0.41
|
|
|
$
|
1.12
|
|
Net earnings per share - diluted:
|
|
|
|
|
Earnings from continuing operations
|
|
$
|
0.43
|
|
|
$
|
1.06
|
|
(Losses) earnings from discontinued operations
|
|
|
(0.02
|
)
|
|
|
0.04
|
|
Net earnings per share (2) - diluted
|
|
$
|
0.41
|
|
|
$
|
1.11
|
|
Weighted-average shares outstanding:
|
|
|
|
|
Basic
|
|
|
29,551
|
|
|
|
32,168
|
|
Diluted
|
|
|
29,853
|
|
|
|
32,442
|
|
|
|
|
|
|
Dividends declared per common share
|
|
$
|
0.40
|
|
|
$
|
0.40
|
|
____________________________
|
(1)
|
|
|
In 2018, the company began presenting depreciation and amortization
as a separate line item in its condensed consolidated statements of
earnings to better align with similar presentation made by many of
its peers and to provide additional disclosure that is meaningful
for investors. The prior year condensed consolidated statement of
earnings was adjusted to conform with this new presentation.
|
(2)
|
|
|
Earnings per share may not add due to rounding.
|
|
|
|
|
|
JACK IN THE BOX INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(In thousands, except share and per share data) |
(Unaudited) |
|
|
|
January 21, |
|
October 1, |
|
|
2018 |
|
2017 |
ASSETS |
|
|
|
|
Current assets:
|
|
|
|
|
Cash
|
|
$
|
3,789
|
|
|
$
|
4,467
|
|
Accounts and other receivables, net
|
|
|
36,303
|
|
|
|
59,609
|
|
Inventories
|
|
|
3,335
|
|
|
|
3,445
|
|
Prepaid expenses
|
|
|
16,423
|
|
|
|
27,532
|
|
Current assets held for sale
|
|
|
332,308
|
|
|
|
42,732
|
|
Other current assets
|
|
|
5,950
|
|
|
|
1,493
|
|
Total current assets
|
|
|
398,108
|
|
|
|
139,278
|
|
Property and equipment:
|
|
|
|
|
Property and equipment, at cost
|
|
|
1,250,596
|
|
|
|
1,262,117
|
|
Less accumulated depreciation and amortization
|
|
|
(787,427
|
)
|
|
|
(777,841
|
)
|
Property and equipment, net
|
|
|
463,169
|
|
|
|
484,276
|
|
Other Assets:
|
|
|
|
|
Intangible assets, net
|
|
|
1,348
|
|
|
|
1,413
|
|
Goodwill
|
|
|
51,050
|
|
|
|
51,412
|
|
Non-current assets held for sale
|
|
|
—
|
|
|
|
280,796
|
|
Other assets, net
|
|
|
243,894
|
|
|
|
277,570
|
|
Total other assets
|
|
|
296,292
|
|
|
|
611,191
|
|
|
|
$
|
1,157,569
|
|
|
$
|
1,234,745
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
|
|
|
|
Current liabilities:
|
|
|
|
|
Current maturities of long-term debt
|
|
$
|
68,564
|
|
|
$
|
64,225
|
|
Accounts payable
|
|
|
27,142
|
|
|
|
28,366
|
|
Accrued liabilities
|
|
|
102,866
|
|
|
|
135,054
|
|
Current liabilities held for sale
|
|
|
61,521
|
|
|
|
34,345
|
|
Total current liabilities
|
|
|
260,093
|
|
|
|
261,990
|
|
Long-term liabilities:
|
|
|
|
|
Long-term debt, net of current maturities
|
|
|
1,036,642
|
|
|
|
1,079,982
|
|
Non-current liabilities held for sale
|
|
|
—
|
|
|
|
32,078
|
|
Other long-term liabilities
|
|
|
235,394
|
|
|
|
248,825
|
|
Total long-term liabilities
|
|
|
1,272,036
|
|
|
|
1,360,885
|
|
Stockholders’ deficit:
|
|
|
|
|
Preferred stock $0.01 par value, 15,000,000 shares authorized,
none issued
|
|
|
—
|
|
|
|
—
|
|
Common stock $0.01 par value, 175,000,000 shares authorized,
81,943,562 and 81,843,483 issued, respectively
|
|
|
819
|
|
|
|
818
|
|
Capital in excess of par value
|
|
|
457,772
|
|
|
|
453,432
|
|
Retained earnings
|
|
|
1,485,130
|
|
|
|
1,485,820
|
|
Accumulated other comprehensive loss
|
|
|
(127,842
|
)
|
|
|
(137,761
|
)
|
Treasury stock, at cost, 52,411,407 shares
|
|
|
(2,190,439
|
)
|
|
|
(2,190,439
|
)
|
Total stockholders’ deficit
|
|
|
(374,560
|
)
|
|
|
(388,130
|
)
|
|
|
$
|
1,157,569
|
|
|
$
|
1,234,745
|
|
|
|
|
|
|
|
JACK IN THE BOX INC. AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
(In thousands) |
(Unaudited) |
|
|
|
16 Weeks Ended |
|
|
January 21, |
|
January 22, |
|
|
2018 |
|
2017 |
Cash flows from operating activities:
|
|
|
|
|
Net earnings
|
|
$
|
12,190
|
|
|
$
|
35,930
|
|
(Losses) earnings from discontinued operations
|
|
|
(699
|
)
|
|
|
1,381
|
|
Income from continuing operations
|
|
|
12,889
|
|
|
|
34,549
|
|
Adjustments to reconcile net earnings to net cash provided by
operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
19,157
|
|
|
|
21,263
|
|
Amortization of franchise tenant improvement allowances
|
|
|
147
|
|
|
|
25
|
|
Deferred finance cost amortization
|
|
|
1,031
|
|
|
|
1,123
|
|
Excess tax benefits from share-based compensation arrangements
|
|
|
(802
|
)
|
|
|
(3,981
|
)
|
Deferred income taxes
|
|
|
33,542
|
|
|
|
2,285
|
|
Share-based compensation expense
|
|
|
2,937
|
|
|
|
3,687
|
|
Pension and postretirement expense
|
|
|
715
|
|
|
|
1,297
|
|
(Gains) losses on cash surrender value of company-owned life
insurance
|
|
|
(2,163
|
)
|
|
|
326
|
|
Gains on the sale of company-operated restaurants
|
|
|
(8,940
|
)
|
|
|
(137
|
)
|
Losses on the disposition of property and equipment, net
|
|
|
183
|
|
|
|
530
|
|
Impairment charges and other
|
|
|
805
|
|
|
|
467
|
|
Changes in assets and liabilities, excluding dispositions:
|
|
|
|
|
Accounts and other receivables
|
|
|
26,539
|
|
|
|
25,208
|
|
Inventories
|
|
|
110
|
|
|
|
(111
|
)
|
Prepaid expenses and other current assets
|
|
|
7,419
|
|
|
|
27,481
|
|
Accounts payable
|
|
|
(371
|
)
|
|
|
(3,458
|
)
|
Accrued liabilities
|
|
|
(32,667
|
)
|
|
|
(37,940
|
)
|
Pension and postretirement contributions
|
|
|
(1,710
|
)
|
|
|
(1,440
|
)
|
Franchise tenant improvement allowance disbursements
|
|
|
(1,761
|
)
|
|
|
—
|
|
Other
|
|
|
(3,330
|
)
|
|
|
(1,376
|
)
|
Cash flows provided by operating activities
|
|
|
53,730
|
|
|
|
69,798
|
|
Cash flows from investing activities:
|
|
|
|
|
Purchases of property and equipment
|
|
|
(10,793
|
)
|
|
|
(8,581
|
)
|
Purchases of assets intended for sale and leaseback
|
|
|
(1,411
|
)
|
|
|
(1,717
|
)
|
Proceeds from the sale and leaseback of assets
|
|
|
4,949
|
|
|
|
2,466
|
|
Proceeds from the sale of company-operated restaurants
|
|
|
5,591
|
|
|
|
138
|
|
Collections on notes receivable
|
|
|
9,410
|
|
|
|
264
|
|
Proceeds from the sale of property and equipment
|
|
|
589
|
|
|
|
87
|
|
Funding of intercompany operations
|
|
|
(13,122
|
)
|
|
|
(5,805
|
)
|
Other
|
|
|
2,969
|
|
|
|
(35
|
)
|
Cash flows used in investing activities
|
|
|
(1,818
|
)
|
|
|
(13,183
|
)
|
Cash flows from financing activities:
|
|
|
|
|
Borrowings on revolving credit facilities
|
|
|
106,200
|
|
|
|
231,000
|
|
Repayments of borrowings on revolving credit facilities
|
|
|
(130,800
|
)
|
|
|
(167,000
|
)
|
Principal repayments on debt
|
|
|
(14,208
|
)
|
|
|
(14,398
|
)
|
Dividends paid on common stock
|
|
|
(11,736
|
)
|
|
|
(12,963
|
)
|
Proceeds from issuance of common stock
|
|
|
—
|
|
|
|
4,756
|
|
Repurchases of common stock
|
|
|
—
|
|
|
|
(115,354
|
)
|
Excess tax benefits from share-based compensation arrangements
|
|
|
—
|
|
|
|
3,981
|
|
Change in book overdraft
|
|
|
(129
|
)
|
|
|
7,804
|
|
Tax payments for equity award issuances
|
|
|
(4,244
|
)
|
|
|
(5,706
|
)
|
Cash flows used in financing activities
|
|
|
(54,917
|
)
|
|
|
(67,880
|
)
|
Cash flows used in continuing operations
|
|
|
(3,005
|
)
|
|
|
(11,265
|
)
|
Net cash provided by operating activities of discontinued operations
|
|
|
16,785
|
|
|
|
12,668
|
|
Net cash used in investing activities of discontinued operations
|
|
|
(13,648
|
)
|
|
|
(12,304
|
)
|
Net cash used in financing activities of discontinued operations
|
|
|
(43
|
)
|
|
|
(40
|
)
|
Net cash provided by discontinued operations
|
|
|
3,094
|
|
|
|
324
|
|
Cash at beginning of period
|
|
|
4,467
|
|
|
|
13,906
|
|
Cash at end of period
|
|
$
|
3,789
|
|
|
$
|
2,641
|
|
|
|
|
|
|
JACK IN THE BOX INC. AND SUBSIDIARIES
SUPPLEMENTAL
INFORMATION
The following table presents certain income and expense items included
in our condensed consolidated statements of earnings as a percentage of
total revenues, unless otherwise indicated. Percentages may not add due
to rounding.
|
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS DATA |
(Unaudited) |
|
|
|
16 Weeks Ended |
|
|
January 21, |
|
January 22, |
|
|
2018 |
|
2017 |
Revenues:
|
|
|
|
|
Company restaurant sales
|
|
57.6
|
%
|
|
67.5
|
%
|
Franchise rental revenues
|
|
26.2
|
%
|
|
20.2
|
%
|
Franchise royalties and other
|
|
16.2
|
%
|
|
12.2
|
%
|
Total revenues
|
|
100.0
|
%
|
|
100.0
|
%
|
Operating costs and expenses, net:
|
|
|
|
|
Company restaurant costs:
|
|
|
|
|
Food and packaging (1)
|
|
28.8
|
%
|
|
28.5
|
%
|
Payroll and employee benefits (1)
|
|
28.8
|
%
|
|
29.4
|
%
|
Occupancy and other (1)
|
|
16.4
|
%
|
|
16.3
|
%
|
Total company restaurant costs (1)
|
|
74.0
|
%
|
|
74.2
|
%
|
Franchise occupancy expenses (2)
|
|
60.2
|
%
|
|
59.1
|
%
|
Franchise support and other costs (3)
|
|
5.2
|
%
|
|
5.9
|
%
|
Selling, general and administrative expenses
|
|
11.8
|
%
|
|
11.5
|
%
|
Depreciation and amortization
|
|
6.5
|
%
|
|
6.0
|
%
|
Impairment and other charges, net
|
|
0.8
|
%
|
|
0.8
|
%
|
Gains on the sale of company-operated restaurants
|
|
(3.0
|
)%
|
|
—
|
%
|
Earnings from operations
|
|
24.7
|
%
|
|
18.9
|
%
|
Income tax rate (4)
|
|
78.5
|
%
|
|
38.7
|
%
|
____________________________
|
(1)
|
|
|
As a percentage of company restaurant sales.
|
(2)
|
|
|
As a percentage of franchise rental revenues.
|
(3)
|
|
|
As a percentage of franchise royalties and other.
|
(4)
|
|
|
As a percentage of earnings from continuing operations and before
income taxes.
|
|
|
|
|
The following table summarizes the year-to-date changes in the number
and mix of Jack in the Box company and franchise restaurants:
|
SUPPLEMENTAL RESTAURANT ACTIVITY INFORMATION |
(Unaudited) |
|
|
|
2018 |
|
2017 |
|
|
Company |
|
Franchise |
|
Total |
|
Company |
|
Franchise |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of year
|
|
276
|
|
|
1,975
|
|
|
2,251
|
|
|
417
|
|
|
1,838
|
|
|
2,255
|
|
New
|
|
1
|
|
|
5
|
|
|
6
|
|
|
2
|
|
|
7
|
|
|
9
|
|
Refranchised
|
|
(22
|
)
|
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Closed
|
|
—
|
|
|
(7
|
)
|
|
(7
|
)
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
End of period
|
|
255
|
|
|
1,995
|
|
|
2,250
|
|
|
419
|
|
|
1,842
|
|
|
2,261
|
|
% of system
|
|
11
|
%
|
|
89
|
%
|
|
100
|
%
|
|
19
|
%
|
|
81
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JACK IN THE BOX INC. AND SUBSIDIARIES
RECONCILIATION OF
NON-GAAP MEASUREMENTS TO GAAP RESULTS
(Unaudited)
Within this release, the company makes reference to Operating Earnings
Per Share, Adjusted EBITDA, Restaurant Operating Margin,
Restaurant-Level EBITDA, Franchise Margin and Franchise EBITDA, which
are non-GAAP financial measures. Operating Earnings Per Share represents
diluted earnings per share from continuing operations on a GAAP basis
excluding gains or losses on the sale of company-operated restaurants,
restructuring charges, the one-time, non-cash impact of the Tax Act, and
the excess tax benefits from share-based compensation arrangements which
are now recorded as a component of income tax expense versus equity
previously. Adjusted EBITDA represents net earnings on a GAAP basis
excluding gains or losses from discontinued operations, income taxes,
interest expense, net, gains or losses on the sale of company-operated
restaurants, impairment and other charges, depreciation and
amortization, and the amortization of franchise tenant improvement
allowances. Restaurant-Level EBITDA and Franchise EBITDA represent
earnings from operations on a GAAP basis adjusted to exclude
depreciation and amortization allocated to company restaurant operations
and franchise operations, the amortization of franchise tenant
improvement allowances, and other operating expenses, such as general
and administrative expenses, which include the costs of functions such
as accounting, finance and human resources, and other costs such as
pension expense, share-based compensation, impairment and other charges,
net, and gains or losses on the sale of company-operated restaurants.
Restaurant Operating Margin and Franchise Margin are derived from
Restaurant-Level EBITDA and Franchise EBITDA, respectively, plus
depreciation and amortization and the amortization of franchise tenant
improvement allowances.
The company is presenting Operating Earnings Per Share, Adjusted EBITDA,
Restaurant Operating Margin, Restaurant-Level EBITDA, Franchise Margin
and Franchise EBITDA because it believes that they provide a meaningful
supplement to net earnings of the company's core business operating
results, as well as a comparison to those of other similar companies.
Management believes that these measurements, when viewed with the
company's results of operations in accordance with GAAP and the
accompanying reconciliations in the tables below, provide useful
information about operating performance and period-over-period changes,
and provide additional information that is useful for evaluating the
operating performance of the company's core business without regard to
potential distortions. Additionally, management believes that Adjusted
EBITDA, Restaurant-Level EBITDA and Franchise EBITDA permit investors to
gain an understanding of the factors and trends affecting the company's
ongoing cash earnings, from which capital investments are made and debt
is serviced.
However, Operating Earnings Per Share, Adjusted EBITDA, Restaurant
Operating Margin, Restaurant-Level EBITDA, Franchise Margin and
Franchise EBITDA are not measures of financial performance or liquidity
under GAAP and, accordingly, should not be considered as alternatives to
net earnings, earnings from operations or cash flow from operating
activities as indicators of operating performance or liquidity. The
company encourages investors to rely upon its GAAP numbers but includes
these non-GAAP financial measures as supplemental metrics to assist
investors. These non-GAAP financial measures should not be considered as
a substitute for, or superior to, financial measures calculated in
accordance with GAAP. In addition, these non-GAAP financial measures
used by the company may be calculated differently from, and therefore
may not be comparable to, similarly titled measures used by other
companies.
Below is a reconciliation of non-GAAP Operating Earnings Per Share to
the most directly comparable GAAP measure, diluted earnings per share
from continuing operations. Figures may not add due to rounding.
|
|
|
|
|
16 Weeks Ended
|
|
|
January 21, 2018
|
|
January 22, 2017
|
Diluted earnings per share from continuing operations – GAAP
|
|
$
|
0.43
|
|
|
$
|
1.06
|
|
Gains on the sale of company-operated restaurants
|
|
|
(0.21
|
)
|
|
|
(0.00
|
)
|
Restructuring charges
|
|
|
0.01
|
|
|
|
0.00
|
|
One-time, non-cash impact of the Tax Act
|
|
|
1.03
|
|
|
|
—
|
|
Excess tax benefits from share-based compensation arrangements
|
|
|
(0.03
|
)
|
|
|
—
|
|
Operating Earnings Per Share – non-GAAP
|
|
$
|
1.23
|
|
|
$
|
1.07
|
|
|
|
|
|
|
Below is a reconciliation of non-GAAP Adjusted EBITDA to the most
directly comparable GAAP measure, net earnings (in thousands).
|
|
|
|
|
16 Weeks Ended
|
|
|
January 21, 2018
|
|
January 22, 2017
|
|
|
|
|
|
Net earnings - GAAP
|
|
$
|
12,190
|
|
|
$
|
35,930
|
|
Losses (earnings) from discontinued operations, net of taxes
|
|
|
699
|
|
|
|
(1,381
|
)
|
Income taxes
|
|
|
47,138
|
|
|
|
21,831
|
|
Interest expense, net
|
|
|
12,780
|
|
|
|
10,409
|
|
Earnings from operations
|
|
|
72,807
|
|
|
|
66,789
|
|
Gains on the sale of company-operated restaurants
|
|
|
(8,940
|
)
|
|
|
(137
|
)
|
Impairment and other charges, net
|
|
|
2,257
|
|
|
|
2,654
|
|
Depreciation and amortization
|
|
|
19,157
|
|
|
|
21,263
|
|
Amortization of franchise tenant improvement allowances
|
|
|
147
|
|
|
|
25
|
|
Adjusted EBITDA – non-GAAP
|
|
$
|
85,428
|
|
|
$
|
90,594
|
|
|
|
|
|
|
Below is a reconciliation of non-GAAP Restaurant Operating Margin,
Restaurant-Level EBITDA, Franchise Margin and Franchise EBITDA to the
most directly comparable GAAP measure, earnings from operations (in
thousands).
|
|
|
|
|
16 Weeks Ended
|
|
|
January 21,
|
|
|
|
January 22,
|
|
|
|
|
2018
|
|
|
|
2017
|
|
|
Earnings from operations (1) - GAAP
|
|
$
|
72,807
|
|
|
|
|
$
|
66,789
|
|
|
|
Other operating expenses, net:
|
|
|
|
|
|
|
|
|
Selling, general and administrative expenses
|
|
$
|
(34,625
|
)
|
|
|
|
$
|
(40,772
|
)
|
|
|
Impairment and other charges, net
|
|
|
(2,257
|
)
|
|
|
|
|
(2,654
|
)
|
|
|
Gains on the sale of company-operated restaurants
|
|
|
8,940
|
|
|
|
|
|
137
|
|
|
|
Total other operating expenses, net
|
|
$
|
(27,942
|
)
|
|
|
|
$
|
(43,289
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Franchise operations:
|
|
|
|
|
|
|
|
|
Franchise rental revenues
|
|
$
|
77,217
|
|
|
|
|
$
|
71,436
|
|
|
|
Franchise royalties and other
|
|
|
47,609
|
|
|
|
|
|
43,174
|
|
|
|
Total franchise revenues
|
|
|
124,826
|
|
|
|
|
|
114,610
|
|
|
|
Franchise occupancy expenses
|
|
|
(46,521
|
)
|
|
|
|
|
(42,190
|
)
|
|
|
Franchise support and other costs
|
|
|
(2,482
|
)
|
|
|
|
|
(2,537
|
)
|
|
|
Amortization of franchise tenant improvement allowances
|
|
|
147
|
|
|
|
|
|
25
|
|
|
|
Franchise EBITDA - non-GAAP(2) |
|
|
75,970
|
|
|
60.9
|
%
|
|
|
69,908
|
|
|
61.0
|
%
|
Depreciation and amortization(2) |
|
|
(10,108
|
)
|
|
8.1
|
%
|
|
|
(9,226
|
)
|
|
8.0
|
%
|
Amortization of franchise tenant improvement allowances(2) |
|
|
(147
|
)
|
|
0.1
|
%
|
|
|
(25
|
)
|
|
—
|
%
|
Franchise Margin - non-GAAP(2) |
|
$
|
65,715
|
|
|
52.6
|
%
|
|
$
|
60,657
|
|
|
52.9
|
%
|
|
|
|
|
|
|
|
|
|
Company restaurant operations:
|
|
|
|
|
|
|
|
|
Company restaurant sales
|
|
$
|
169,637
|
|
|
|
|
$
|
238,571
|
|
|
|
Food and packaging(3) |
|
|
(48,864
|
)
|
|
28.8
|
%
|
|
|
(67,989
|
)
|
|
28.5
|
%
|
Payroll and employee benefits(3) |
|
|
(48,940
|
)
|
|
28.8
|
%
|
|
|
(70,183
|
)
|
|
29.4
|
%
|
Occupancy and other(3) |
|
|
(27,750
|
)
|
|
16.4
|
%
|
|
|
(38,941
|
)
|
|
16.3
|
%
|
Restaurant-Level EBITDA - non-GAAP(3) |
|
|
44,083
|
|
|
26.0
|
%
|
|
|
61,458
|
|
|
25.8
|
%
|
Depreciation and amortization(3) |
|
|
(6,443
|
)
|
|
3.8
|
%
|
|
|
(9,910
|
)
|
|
4.2
|
%
|
Restaurant Operating Margin - non-GAAP(3) |
|
$
|
37,640
|
|
|
22.2
|
%
|
|
$
|
51,548
|
|
|
21.6
|
%
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization:
|
|
|
|
|
|
|
|
|
Company restaurant occupancy and other
|
|
$
|
(6,443
|
)
|
|
|
|
$
|
(9,910
|
)
|
|
|
Franchise occupancy expenses
|
|
|
(10,108
|
)
|
|
|
|
|
(9,226
|
)
|
|
|
Impairment and other charges, net
|
|
|
(8
|
)
|
|
|
|
|
(8
|
)
|
|
|
Selling, general and administrative expenses
|
|
|
(2,598
|
)
|
|
|
|
|
(2,119
|
)
|
|
|
Total depreciation and amortization
|
|
$
|
(19,157
|
)
|
|
|
|
$
|
(21,263
|
)
|
|
|
____________________________
|
(1)
|
|
|
Earnings from operations is the sum of total other operating
expenses, net, Franchise EBITDA, Restaurant-Level EBITDA, and
depreciation and amortization, plus the amortization of franchise
tenant improvement allowances.
|
(2)
|
|
|
Percentages are calculated based on a percentage of total franchise
revenues.
|
(3)
|
|
|
Percentages are calculated based on a percentage of company
restaurant sales.
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180221006351/en/
Source: Jack in the Box Inc.
Jack in the Box Inc.
Investor Contact:
Carol DiRaimo,
(858) 571-2407
or
Media Contact:
Brian Luscomb,
(858) 571-2291