SAN DIEGO--(BUSINESS WIRE)--May 15, 2019--
Jack in the Box Inc. (NASDAQ: JACK) today reported financial results for
the second quarter ended April 14, 2019.
The company completed the sale of Qdoba Restaurant Corporation ("Qdoba")
on March 21, 2018. Qdoba results are included in discontinued operations
for all periods presented.
Earnings from continuing operations were $25.1 million, or $0.96 per
diluted share, for the second quarter of fiscal 2019 compared with $25.0
million, or $0.85 per diluted share, for the second quarter of fiscal
2018.
Operating Earnings Per Share(1), a non-GAAP measure, were
$0.99 in the second quarter of fiscal 2019 compared with $0.80 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.
|
|
|
12 Weeks Ended |
|
|
28 Weeks Ended |
|
|
|
April 14,
2019
|
|
|
April 15,
2018
|
|
|
April 14,
2019
|
|
|
April 15,
2018
|
Diluted earnings per share from continuing operations - GAAP
|
|
|
$
|
0.96
|
|
|
$
|
0.85
|
|
|
|
$
|
2.15
|
|
|
|
$
|
1.27
|
|
Gains on the sale of company-operated restaurants
|
|
|
|
—
|
|
|
|
(0.13
|
)
|
|
|
|
(0.01
|
)
|
|
|
|
(0.34
|
)
|
Restructuring charges
|
|
|
|
0.03
|
|
|
|
0.06
|
|
|
|
|
0.20
|
|
|
|
|
0.07
|
|
Non-cash impact of the Tax Cuts and Jobs Act
|
|
|
|
—
|
|
|
|
0.02
|
|
|
|
|
—
|
|
|
|
|
1.05
|
|
Excess tax benefits from share-based compensation arrangements
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
—
|
|
|
|
|
(0.03
|
)
|
Operating Earnings Per Share – non-GAAP
|
|
|
$
|
0.99
|
|
|
$
|
0.80
|
|
|
|
$
|
2.34
|
|
|
|
$
|
2.02
|
|
___________________________
|
(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 non-cash impact of the Tax Cuts and Jobs Act in fiscal
year 2018, and the excess tax benefits from share-based compensation
arrangements which are now recorded as a component of income tax
expense versus equity prior to fiscal year 2018. See "Reconciliation
of Non-GAAP Measurements to GAAP Results."
|
Adjusted EBITDA(2), a non-GAAP measure, was $61.2 million in
the second quarter of fiscal 2019 compared with $60.3 million for the
prior year quarter.
Lenny Comma, chairman and chief executive officer, said, "Our greater
emphasis on bundled value in the second quarter resulted in a sequential
improvement in traffic and sales without sacrificing restaurant margins.
We’re pleased that this momentum has accelerated through the first four
weeks of our third quarter as same-store sales have increased by more
than two percent. Our guests are responding favorably to our promotional
line-up which leverages our strategy around compelling value bundles,
including both new product innovation as well as guest favorites,
without devaluing our core menu items.
"Our long-term goals are centered around meeting evolving consumer
needs, with emphasis on improving operations consistency and targeted
investments designed to maximize our returns. We remain focused on
balancing the interests of all our stakeholders, including our
franchisees, customers, employees and shareholders."
Increase/(decrease) in same-store sales:
|
|
|
12 Weeks Ended |
|
|
28 Weeks Ended |
|
|
|
April 14,
2019
|
|
|
April 15,
2018
|
|
|
April 14,
2019
|
|
|
April 15,
2018
|
Company
|
|
|
0.6%
|
|
|
0.9%
|
|
|
0.5%
|
|
|
0.5%
|
Franchise
|
|
|
0.1%
|
|
|
(0.2)%
|
|
|
0.0%
|
|
|
(0.3)%
|
System
|
|
|
0.2%
|
|
|
(0.1)%
|
|
|
0.0%
|
|
|
(0.2)%
|
Jack in the Box® system same-store sales increased 0.2
percent for the quarter. Company same-store sales increased 0.6 percent
in the second quarter driven by average check growth of 2.8 percent,
partially offset by a 2.2 percent decrease in transactions.
_____________________________
|
(2) Adjusted EBITDA represents net earnings on a GAAP basis
excluding earnings or losses from discontinued operations, income
taxes, interest expense, net, gains or losses on the sale of
company-operated restaurants, impairment and other charges, net,
depreciation and amortization, and the amortization of franchise
tenant improvement allowances. See "Reconciliation of Non-GAAP
Measurements to GAAP Results."
|
Restaurant-Level Margin(3), a non-GAAP measure, increased by
120 basis points to 27.6 percent of company restaurant sales in the
second quarter of fiscal 2019 from 26.4 percent a year ago. The increase
was due primarily to the benefit of refranchising and lower maintenance
and repairs expenses, partially offset by wage and commodity inflation.
Food and packaging costs, as a percentage of company restaurant sales,
decreased 30 basis points in the quarter as menu price increases and
favorable product mix offset higher ingredient costs. Commodity costs
increased 0.7 percent in the quarter as compared with the prior year.
Effective fiscal 2019, the company adopted the new US GAAP revenue
recognition standard (Topic 606) using the modified retrospective
method, and therefore no prior periods have been restated. The new
revenue standard resulted in an increase to franchise revenues and a
corresponding increase to franchise expenses primarily related to the
reclassification of marketing fees received from franchisees. In
addition, certain amounts previously netted in general and
administrative expenses are now reflected as franchise revenues and
expenses. Although the prior year results have not been restated for the
impact of this accounting change, a reconciliation to a recast statement
of earnings is included within the "Supplemental Information" section of
this release.
Also effective fiscal 2019, the company adopted the new US GAAP pension
standard (Topic 715) and began presenting certain pension cost
components in Other pension and post-retirement expenses, net in
its condensed consolidated statements of earnings. The prior year
condensed consolidated statement of earnings was adjusted to conform
with this new presentation.
Franchise-Level Margin(3), a non-GAAP measure,as
a percentage of total franchise revenues, was 41.7 percent in the second
quarter of fiscal 2019. This compared with 59.8 percent in the prior
year quarter, or 41.6 percent using recast 2018 figures as though Topic
606 had been applied retrospectively to the prior year.
_____________________________
|
(3) Restaurant-Level Margin and Franchise-Level Margin 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 expenses for the second quarter of fiscal 2019 decreased by $9.0
million and were 8.2 percent of revenues compared with 12.7 percent in
the prior year quarter, or 10.4 percent using recast 2018 figures.
Advertising costs, which are included in SG&A, were $3.9 million in the
second quarter compared with $7.3 million in the prior year quarter. The
$3.4 million decrease in advertising costs was due to a $1.9 million
decrease resulting from refranchising, and a decrease of $1.5 million
resulting from incremental spending in the prior year quarter. The $5.6
million decrease in G&A excluding advertising was primarily driven by:
-
mark-to-market adjustments on investments supporting the company's
non-qualified retirement plans resulting in a $3.8 million
year-over-year decrease in G&A;
-
a $1.1 million decrease related to technology fees and costs netted in
G&A in the prior year, which are now reflected as franchise revenues
and expenses in the condensed consolidated statement of earnings in
2019;
-
a $0.9 million decrease due primarily to workforce reductions related
to refranchising; and
-
a $0.8 million increase in transition services income as compared to
the prior year resulting from the sale of Qdoba, which was reflected
as a reduction to G&A.
-
These decreases were partially offset by a $1.0 million increase in
insurance costs; and
-
a $0.6 million increase in bonus.
As a percentage of system-wide sales, G&A, which excludes advertising,
was 1.7 percent in the second quarter of fiscal 2019 compared with 2.4
percent in the 2018 quarter, or 2.3 percent using recast 2018 figures.
Restructuring charges of $0.9 million, or approximately $0.03 per
diluted share, were recorded during the second quarter of fiscal 2019,
primarily related to severance costs and the company's evaluation of
strategic alternatives, compared with $2.6 million, or $0.06 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. Including these charges, Impairment and other
charges, net, decreased in the second quarter to $1.1 million from
$4.9 million in the year ago quarter.
Interest expense, net, increased by $2.9 million in the second quarter
due in part to a higher effective interest rate for 2019. In addition,
the increase resulted from the allocation of $1.6 million of interest
expense to Qdoba in the second quarter of 2018, which was included in
discontinued operations.
The Tax Cuts and Jobs Act (the "Tax Act"), enacted into law on December
22, 2017, reduced the statutory federal rate from 35 percent to 21
percent as of January 1, 2018. The tax rate reduction was phased in,
resulting in a blended statutory federal tax rate of 24.5 percent for
the fiscal year ended September 30, 2018. In addition, the Tax Act
resulted in a non-cash increase to the provision for income taxes of
$0.6 million, or $0.02 per diluted share, for the second quarter of
fiscal 2018 related primarily to the revaluation of deferred tax assets
and liabilities at the new lower rates. This revaluation was based upon
estimates and interpretations of the Tax Act which were refined as
further guidance was issued. The statutory federal tax rate for fiscal
year 2019 is 21.0 percent. The effective tax rate for the second quarter
of 2019 of 25.0 percent benefited from favorable mark-to-market
adjustments on investments supporting the company's non-qualified
retirement plans.
Qdoba Discontinued Operations
In the first quarter of fiscal 2018, the company entered into a
definitive agreement to sell Qdoba, a wholly owned subsidiary of the
company, to certain funds managed by affiliates of Apollo Global
Management, LLC. The transaction closed on March 21, 2018, and 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 prior
to the sale.
Capital Allocation
The company did not repurchase any shares of its common stock in the
second quarter of fiscal 2019. The company currently has approximately
$101.0 million remaining under stock-buyback programs authorized by its
Board of Directors that expire in November 2019.
The company also announced today that on May 9, 2019, its Board of
Directors declared a cash dividend of $0.40 per share on the company's
common stock. The dividend is payable on June 14, 2019, to shareholders
of record at the close of business on May 29, 2019.
Guidance
This release includes forward-looking guidance for certain non-GAAP
financial measures, including Restaurant-Level Margin and Adjusted
EBITDA. The company is unable without unreasonable effort to provide
reconciliations of these forward-looking non-GAAP measures.
Fiscal Year 2019 Guidance
The following guidance and underlying assumptions reflect the company’s
current expectations for the fiscal year ending September 29, 2019.
Fiscal 2019 and fiscal 2018 are 52-week years, with 16 weeks in the
first quarter, and 12 weeks in each of the second, third and fourth
quarters.
Updated from prior guidance:
-
System same-store sales of approximately flat to up 1.0 percent.
-
Tax rate of approximately 25.0 to 26.0 percent, subject to
fluctuations arising from the impact of excess tax benefits from
share-based compensation arrangements.
Consistent with prior guidance:
-
Commodity cost inflation of approximately 2.0 percent.
-
Restaurant-Level Margin of approximately 26.0 to 27.0 percent of
company restaurant sales.
-
SG&A as a percentage of revenues of approximately 8.5 to 9.0 percent,
which reflects the new revenue recognition standards.
-
G&A as a percentage of system-wide sales of approximately 1.8 to 2.0
percent, which reflects the new revenue recognition standards.
-
Approximately 25 to 35 new 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.
-
Adjusted EBITDA of approximately $260 to $270 million.
Conference Call
The company will host a conference call for financial analysts and
investors on Thursday, May 16, 2019, 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 May 16, 2019.
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. For more information on Jack in the
Box, including franchising opportunities, visit www.jackinthebox.com.
Safe Harbor Statement
This press release contains forward-looking statements within the
meaning of the federal securities laws. Forward-looking statements may
be identified by words such as “anticipate,” “believe,” “estimate,”
“expect,” “forecast,” “goals,” “guidance,” “intend,” “plan,” “project,”
“may,” “will,” “would” and similar expressions. These statements are
based on management’s current expectations, estimates, forecasts and
projections about our business and the industry in which we operate.
These estimates and assumptions involve known and unknown risks,
uncertainties, and other factors that are in some cases beyond our
control. Factors that may cause our actual results to differ materially
from any forward-looking statements include, but are not limited to: the
success of new products, marketing initiatives and restaurant remodels
and drive-thru enhancements; the impact of competition, unemployment,
trends in consumer spending patterns and commodity costs; the company's
ability to reduce G&A and operate efficiently; 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, risks relating to expansion into new
markets and successful franchisee development; litigation risks; risks
associated with disagreements with franchisees; supply chain disruption;
food-safety incidents or negative publicity impacting the reputation of
the company's brand; the company’s ability to obtain additional
financing and increase its debt leverage; 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)
|
|
|
|
|
|
|
|
|
|
|
12 Weeks Ended |
|
|
28 Weeks Ended |
|
|
|
April 14, 2019
|
|
April 15, 2018
|
|
|
April 14, 2019 |
|
April 15, 2018 |
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Company restaurant sales
|
|
|
$
|
76,682
|
|
|
$
|
113,938
|
|
|
|
$
|
179,514
|
|
|
$
|
283,575
|
|
Franchise rental revenues
|
|
|
61,646
|
|
|
57,843
|
|
|
|
145,536
|
|
|
135,060
|
|
Franchise royalties and other
|
|
|
38,410
|
|
|
37,991
|
|
|
|
90,660
|
|
|
85,600
|
|
Franchise contributions for advertising and other services(1) |
|
|
38,989
|
|
|
—
|
|
|
|
90,803
|
|
|
—
|
|
|
|
|
215,727
|
|
|
209,772
|
|
|
|
506,513
|
|
|
504,235
|
|
Operating costs and expenses, net:
|
|
|
|
|
|
|
|
|
|
|
Company restaurant costs (excluding depreciation and amortization):
|
|
|
|
|
|
|
|
|
|
|
Food and packaging
|
|
|
21,676
|
|
|
32,638
|
|
|
|
51,292
|
|
|
81,502
|
|
Payroll and employee benefits
|
|
|
22,768
|
|
|
33,096
|
|
|
|
53,042
|
|
|
82,036
|
|
Occupancy and other
|
|
|
11,100
|
|
|
18,143
|
|
|
|
27,113
|
|
|
45,893
|
|
Total company restaurant costs
|
|
|
55,544
|
|
|
83,877
|
|
|
|
131,447
|
|
|
209,431
|
|
Franchise occupancy expenses
|
|
|
38,618
|
|
|
36,065
|
|
|
|
89,331
|
|
|
82,586
|
|
Franchise support and other costs
|
|
|
2,797
|
|
|
2,583
|
|
|
|
5,642
|
|
|
5,065
|
|
Franchise advertising and other services expenses(1) |
|
|
40,245
|
|
|
—
|
|
|
|
94,515
|
|
|
—
|
|
Selling, general and administrative expenses(2) |
|
|
17,585
|
|
|
26,594
|
|
|
|
41,668
|
|
|
60,655
|
|
Depreciation and amortization
|
|
|
12,690
|
|
|
13,955
|
|
|
|
29,859
|
|
|
33,112
|
|
Impairment and other charges, net
|
|
|
1,125
|
|
|
4,927
|
|
|
|
8,823
|
|
|
7,184
|
|
Gains on the sale of company-operated restaurants
|
|
|
—
|
|
|
(5,472
|
)
|
|
|
(219
|
)
|
|
(14,412
|
)
|
|
|
|
168,604
|
|
|
162,529
|
|
|
|
401,066
|
|
|
383,621
|
|
Earnings from operations
|
|
|
47,123
|
|
|
47,243
|
|
|
|
105,447
|
|
|
120,614
|
|
Other pension and post-retirement expenses, net(2) |
|
|
343
|
|
|
423
|
|
|
|
799
|
|
|
987
|
|
Interest expense, net
|
|
|
13,276
|
|
|
10,413
|
|
|
|
30,650
|
|
|
23,193
|
|
Earnings from continuing operations and before income taxes
|
|
|
33,504
|
|
|
36,407
|
|
|
|
73,998
|
|
|
96,434
|
|
Income taxes
|
|
|
8,374
|
|
|
11,426
|
|
|
|
17,747
|
|
|
58,564
|
|
Earnings from continuing operations
|
|
|
25,130
|
|
|
24,981
|
|
|
|
56,251
|
|
|
37,870
|
|
(Losses) earnings from discontinued operations, net of taxes
|
|
|
(41
|
)
|
|
22,624
|
|
|
|
2,936
|
|
|
21,925
|
|
Net earnings
|
|
|
$
|
25,089
|
|
|
$
|
47,605
|
|
|
|
$
|
59,187
|
|
|
$
|
59,795
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share - basic:
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
|
$
|
0.97
|
|
|
$
|
0.86
|
|
|
|
$
|
2.17
|
|
|
$
|
1.29
|
|
(Losses) earnings from discontinued operations
|
|
|
—
|
|
|
0.78
|
|
|
|
0.11
|
|
|
0.75
|
|
Net earnings per share (3) |
|
|
$
|
0.97
|
|
|
$
|
1.64
|
|
|
|
$
|
2.28
|
|
|
$
|
2.04
|
|
Net earnings per share - diluted:
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
|
$
|
0.96
|
|
|
$
|
0.85
|
|
|
|
$
|
2.15
|
|
|
$
|
1.27
|
|
(Losses) earnings from discontinued operations
|
|
|
—
|
|
|
0.77
|
|
|
|
0.11
|
|
|
0.74
|
|
Net earnings per share (3) |
|
|
$
|
0.96
|
|
|
$
|
1.62
|
|
|
|
$
|
2.26
|
|
|
$
|
2.01
|
|
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
25,943
|
|
|
29,040
|
|
|
|
25,922
|
|
|
29,332
|
|
Diluted
|
|
|
26,145
|
|
|
29,356
|
|
|
|
26,137
|
|
|
29,705
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
|
|
$
|
0.40
|
|
|
$
|
0.40
|
|
|
|
$
|
0.80
|
|
|
$
|
0.80
|
|
___________________________
(1)
|
|
In 2019, the company began presenting franchise advertising and
other services revenue and costs on separate line items in
accordance with the new Revenue Recognition standards. The prior
year condensed consolidated statement of earnings was not adjusted
as the standard was adopted on a modified retrospective basis.
|
(2)
|
|
In 2019, the company began presenting all components of defined
benefit expense, except service cost in Other pension and
post-retirement expense, net in its condensed consolidated
statements of earnings in accordance with ASU 2017-07. The prior
year condensed consolidated statement of earnings was adjusted to
conform with this new presentation.
|
(3)
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
April 14, 2019 |
|
|
September 30, 2018 |
ASSETS |
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
Cash
|
|
|
$
|
1,590
|
|
|
|
$
|
2,705
|
|
Accounts and other receivables, net
|
|
|
70,174
|
|
|
|
57,422
|
|
Inventories
|
|
|
1,949
|
|
|
|
1,858
|
|
Prepaid expenses
|
|
|
13,464
|
|
|
|
14,443
|
|
Current assets held for sale
|
|
|
12,915
|
|
|
|
13,947
|
|
Other current assets
|
|
|
5,244
|
|
|
|
4,598
|
|
Total current assets
|
|
|
105,336
|
|
|
|
94,973
|
|
Property and equipment:
|
|
|
|
|
|
|
Property and equipment, at cost
|
|
|
1,188,081
|
|
|
|
1,190,031
|
|
Less accumulated depreciation and amortization
|
|
|
(789,478
|
)
|
|
|
(770,362
|
)
|
Property and equipment, net
|
|
|
398,603
|
|
|
|
419,669
|
|
Other assets:
|
|
|
|
|
|
|
Intangible assets, net
|
|
|
486
|
|
|
|
600
|
|
Goodwill
|
|
|
46,747
|
|
|
|
46,749
|
|
Deferred tax assets
|
|
|
73,567
|
|
|
|
62,140
|
|
Other assets, net
|
|
|
207,388
|
|
|
|
199,266
|
|
Total other assets
|
|
|
328,188
|
|
|
|
308,755
|
|
|
|
|
$
|
832,127
|
|
|
|
$
|
823,397
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
Current maturities of long-term debt
|
|
|
$
|
42,591
|
|
|
|
$
|
31,828
|
|
Accounts payable
|
|
|
25,144
|
|
|
|
44,970
|
|
Accrued liabilities
|
|
|
114,393
|
|
|
|
106,922
|
|
Total current liabilities
|
|
|
182,128
|
|
|
|
183,720
|
|
Long-term liabilities:
|
|
|
|
|
|
|
Long-term debt, net of current maturities
|
|
|
1,014,864
|
|
|
|
1,037,927
|
|
Other long-term liabilities
|
|
|
227,649
|
|
|
|
193,449
|
|
Total long-term liabilities
|
|
|
1,242,513
|
|
|
|
1,231,376
|
|
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,
82,138,993 and 82,061,661 issued, respectively
|
|
|
821
|
|
|
|
821
|
|
Capital in excess of par value
|
|
|
475,871
|
|
|
|
470,826
|
|
Retained earnings
|
|
|
1,562,475
|
|
|
|
1,561,353
|
|
Accumulated other comprehensive loss
|
|
|
(101,242
|
)
|
|
|
(94,260
|
)
|
Treasury stock, at cost, 56,325,632 shares
|
|
|
(2,530,439
|
)
|
|
|
(2,530,439
|
)
|
Total stockholders’ deficit
|
|
|
(592,514
|
)
|
|
|
(591,699
|
)
|
|
|
|
$
|
832,127
|
|
|
|
$
|
823,397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JACK IN THE BOX INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
|
|
|
|
|
|
|
|
28 Weeks Ended |
|
|
|
April 14, 2019 |
|
|
April 15, 2018 |
Cash flows from operating activities: |
|
|
|
|
|
|
Net earnings
|
|
|
$
|
59,187
|
|
|
|
$
|
59,795
|
|
Earnings from discontinued operations
|
|
|
2,936
|
|
|
|
21,925
|
|
Earnings from continuing operations
|
|
|
56,251
|
|
|
|
37,870
|
|
Adjustments to reconcile net earnings to net cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
29,859
|
|
|
|
33,112
|
|
Amortization of franchise tenant improvement allowances and other
|
|
|
1,137
|
|
|
|
265
|
|
Deferred finance cost amortization
|
|
|
1,224
|
|
|
|
1,725
|
|
Excess tax benefits from share-based compensation arrangements
|
|
|
(47
|
)
|
|
|
(816
|
)
|
Deferred income taxes
|
|
|
3,955
|
|
|
|
34,726
|
|
Share-based compensation expense
|
|
|
4,708
|
|
|
|
6,148
|
|
Pension and postretirement expense
|
|
|
799
|
|
|
|
1,252
|
|
Gains on cash surrender value of company-owned life insurance
|
|
|
(1,336
|
)
|
|
|
(312
|
)
|
Gains on the sale of company-operated restaurants
|
|
|
(219
|
)
|
|
|
(14,412
|
)
|
(Gains) losses on the disposition of property and equipment, net
|
|
|
(138
|
)
|
|
|
481
|
|
Impairment charges and other
|
|
|
896
|
|
|
|
1,502
|
|
Changes in assets and liabilities, excluding dispositions:
|
|
|
|
|
|
|
Accounts and other receivables
|
|
|
(11,658
|
)
|
|
|
(13,876
|
)
|
Inventories
|
|
|
(91
|
)
|
|
|
886
|
|
Prepaid expenses and other current assets
|
|
|
3,701
|
|
|
|
(5,458
|
)
|
Accounts payable
|
|
|
(3,904
|
)
|
|
|
(3,742
|
)
|
Accrued liabilities
|
|
|
(6,532
|
)
|
|
|
(35,959
|
)
|
Pension and postretirement contributions
|
|
|
(3,671
|
)
|
|
|
(3,077
|
)
|
Franchise tenant improvement allowance disbursements
|
|
|
(6,697
|
)
|
|
|
(3,487
|
)
|
Other
|
|
|
(7,421
|
)
|
|
|
(7,551
|
)
|
Cash flows provided by operating activities
|
|
|
60,816
|
|
|
|
29,277
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
(18,191
|
)
|
|
|
(18,347
|
)
|
Purchases of assets intended for sale and leaseback
|
|
|
—
|
|
|
|
(5,491
|
)
|
Proceeds from the sale and leaseback of assets
|
|
|
1,944
|
|
|
|
4,949
|
|
Proceeds from the sale of company-operated restaurants
|
|
|
133
|
|
|
|
16,844
|
|
Collections on notes receivable
|
|
|
6,491
|
|
|
|
9,722
|
|
Proceeds from the sale of property and equipment
|
|
|
1,479
|
|
|
|
600
|
|
Other
|
|
|
—
|
|
|
|
2,969
|
|
Cash flows (used in) provided by investing activities
|
|
|
(8,144
|
)
|
|
|
11,246
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
Borrowings on revolving credit facilities
|
|
|
189,736
|
|
|
|
283,200
|
|
Repayments of borrowings on revolving credit facilities
|
|
|
(180,800
|
)
|
|
|
(199,100
|
)
|
Principal repayments on debt
|
|
|
(21,757
|
)
|
|
|
(282,626
|
)
|
Debt issuance costs
|
|
|
(3,615
|
)
|
|
|
(1,367
|
)
|
Dividends paid on common stock
|
|
|
(20,615
|
)
|
|
|
(23,370
|
)
|
Proceeds from issuance of common stock
|
|
|
243
|
|
|
|
39
|
|
Repurchases of common stock
|
|
|
(14,362
|
)
|
|
|
(100,000
|
)
|
Change in book overdraft
|
|
|
—
|
|
|
|
1,397
|
|
Payroll tax payments for equity award issuances
|
|
|
(2,617
|
)
|
|
|
(4,268
|
)
|
Cash flows used in financing activities
|
|
|
(53,787
|
)
|
|
|
(326,095
|
)
|
Cash flows used in continuing operations
|
|
|
(1,115
|
)
|
|
|
(285,572
|
)
|
Net cash provided by operating activities of discontinued operations
|
|
|
—
|
|
|
|
5,503
|
|
Net cash provided by investing activities of discontinued operations
|
|
|
—
|
|
|
|
273,653
|
|
Net cash used in financing activities of discontinued operations
|
|
|
—
|
|
|
|
(78
|
)
|
Net cash provided by discontinued operations
|
|
|
—
|
|
|
|
279,078
|
|
Effect of exchange rate changes on cash
|
|
|
—
|
|
|
|
6
|
|
Cash at beginning of period
|
|
|
2,705
|
|
|
|
7,642
|
|
Cash at end of period
|
|
|
$
|
1,590
|
|
|
|
$
|
1,154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
12 Weeks Ended |
|
|
28 Weeks Ended |
|
|
|
April 14, 2019 |
|
April 15, 2018 |
|
|
April 14, 2019 |
|
April 15, 2018 |
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Company restaurant sales
|
|
|
35.5
|
%
|
|
54.3
|
%
|
|
|
35.4
|
%
|
|
56.2
|
%
|
Franchise rental revenues
|
|
|
28.6
|
%
|
|
27.6
|
%
|
|
|
28.7
|
%
|
|
26.8
|
%
|
Franchise royalties and other
|
|
|
17.8
|
%
|
|
18.1
|
%
|
|
|
17.9
|
%
|
|
17.0
|
%
|
Franchise contributions for advertising and other services
|
|
|
18.1
|
%
|
|
—
|
%
|
|
|
17.9
|
%
|
|
—
|
%
|
Total revenues
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
100.0
|
%
|
|
100.0
|
%
|
Operating costs and expenses, net:
|
|
|
|
|
|
|
|
|
|
|
Company restaurant costs:
|
|
|
|
|
|
|
|
|
|
|
Food and packaging (1)
|
|
|
28.3
|
%
|
|
28.6
|
%
|
|
|
28.6
|
%
|
|
28.7
|
%
|
Payroll and employee benefits (1)
|
|
|
29.7
|
%
|
|
29.0
|
%
|
|
|
29.5
|
%
|
|
28.9
|
%
|
Occupancy and other (1)
|
|
|
14.5
|
%
|
|
15.9
|
%
|
|
|
15.1
|
%
|
|
16.2
|
%
|
Total company restaurant costs (1)
|
|
|
72.4
|
%
|
|
73.6
|
%
|
|
|
73.2
|
%
|
|
73.9
|
%
|
Franchise occupancy expenses (2)
|
|
|
62.6
|
%
|
|
62.3
|
%
|
|
|
61.4
|
%
|
|
61.1
|
%
|
Franchise support and other costs (3)
|
|
|
7.3
|
%
|
|
6.8
|
%
|
|
|
6.2
|
%
|
|
5.9
|
%
|
Franchise advertising and other services expenses (4)
|
|
|
103.2
|
%
|
|
—
|
%
|
|
|
104.1
|
%
|
|
—
|
%
|
Selling, general and administrative expenses
|
|
|
8.2
|
%
|
|
12.7
|
%
|
|
|
8.2
|
%
|
|
12.0
|
%
|
Depreciation and amortization
|
|
|
5.9
|
%
|
|
6.7
|
%
|
|
|
5.9
|
%
|
|
6.6
|
%
|
Impairment and other charges, net
|
|
|
0.5
|
%
|
|
2.3
|
%
|
|
|
1.7
|
%
|
|
1.4
|
%
|
Gains on the sale of company-operated restaurants
|
|
|
—
|
%
|
|
(2.6
|
)%
|
|
|
—
|
%
|
|
(2.9
|
)%
|
Earnings from operations
|
|
|
21.8
|
%
|
|
22.5
|
%
|
|
|
20.8
|
%
|
|
23.9
|
%
|
Income tax rate (5)
|
|
|
25.0
|
%
|
|
31.4
|
%
|
|
|
24.0
|
%
|
|
60.7
|
%
|
____________________________
(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 franchise contributions for advertising and other
services.
|
(5)
|
|
As a percentage of earnings from continuing operations and before
income taxes.
|
|
|
|
|
|
|
Jack in the Box system sales (dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
12 Weeks Ended |
|
|
28 Weeks Ended |
|
|
|
April 14, 2019 |
|
April 15, 2018 |
|
|
April 14, 2019 |
|
April 15, 2018 |
Company-owned restaurant sales
|
|
|
$
|
76,682
|
|
|
$
|
113,938
|
|
|
|
$
|
179,514
|
|
|
$
|
283,575
|
Franchised restaurant sales (1)
|
|
|
721,350
|
|
|
685,514
|
|
|
|
1,681,310
|
|
|
1,584,576
|
System sales (1)
|
|
|
$
|
798,032
|
|
|
$
|
799,452
|
|
|
|
$
|
1,860,824
|
|
|
$
|
1,868,151
|
____________________________
(1)
|
|
Franchised restaurant sales represent sales at franchised
restaurants and are revenues of our franchisees. System sales
include company and franchised restaurant sales. We do not record
franchised sales as revenues; however, our royalty revenues,
marketing fees and percentage rent revenues are calculated based on
a percentage of franchised sales. We believe franchised and system
restaurant sales information is useful to investors as they have a
direct effect on the company's profitability.
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
|
2018 |
|
|
|
Company |
|
Franchise |
|
Total |
|
|
Company |
|
Franchise |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of year
|
|
|
137
|
|
|
2,100
|
|
|
2,237
|
|
|
|
276
|
|
|
1,975
|
|
|
2,251
|
|
New
|
|
|
—
|
|
|
11
|
|
|
11
|
|
|
|
1
|
|
|
8
|
|
|
9
|
|
Refranchised
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
(85
|
)
|
|
85
|
|
|
—
|
|
Closed
|
|
|
—
|
|
|
(8
|
)
|
|
(8
|
)
|
|
|
(4
|
)
|
|
(11
|
)
|
|
(15
|
)
|
End of period
|
|
|
137
|
|
|
2,103
|
|
|
2,240
|
|
|
|
188
|
|
|
2,057
|
|
|
2,245
|
|
% of system
|
|
|
6
|
%
|
|
94
|
%
|
|
100
|
%
|
|
|
8
|
%
|
|
92
|
%
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL INFORMATION
(Unaudited)
Recast 2018 Condensed Consolidated Statement of Earnings
The company applied the modified retrospective method upon adoption of
the new revenue recognition standard. The recast condensed consolidated
statement of earnings reflects adjustments for the implementation of the
new revenue recognition standard as if the full retrospective method was
applied upon adoption.
Below is a reconciliation of the recast condensed consolidated statement
of earningsfor the 12 weeks ended and 28 weeks ended April
15, 2018 to the condensed consolidated statement of earnings that was
previously reported for those periods (in thousands).
|
|
|
12 Weeks Ended |
|
|
|
April 15, 2018 |
|
|
|
As reported |
|
|
Franchise Fees |
|
|
Marketing and Sourcing Fees
|
|
|
Technology Support Fees
|
|
|
Recast |
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company restaurant sales
|
|
|
$
|
113,938
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
113,938
|
|
Franchise rental revenues
|
|
|
57,843
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
57,843
|
|
Franchise royalties and other
|
|
|
37,991
|
|
|
|
(1,551
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
36,440
|
|
Franchise contributions for advertising and other services
|
|
|
—
|
|
|
|
—
|
|
|
|
35,052
|
|
|
|
2,082
|
|
|
|
37,134
|
|
|
|
|
209,772
|
|
|
|
(1,551
|
)
|
|
|
35,052
|
|
|
|
2,082
|
|
|
|
245,355
|
|
Operating costs and expenses, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company restaurant costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food and packaging
|
|
|
32,638
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
32,638
|
|
Payroll and employee benefits
|
|
|
33,096
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
33,096
|
|
Occupancy and other
|
|
|
18,143
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
18,143
|
|
Total company restaurant costs
|
|
|
83,877
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
83,877
|
|
Franchise occupancy expenses
|
|
|
36,065
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
36,065
|
|
Franchise support and other costs
|
|
|
2,583
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2,583
|
|
Franchise advertising and other services
expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
35,052
|
|
|
|
3,175
|
|
|
|
38,227
|
|
Selling, general and administrative expenses
|
|
|
26,594
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,093
|
)
|
|
|
25,501
|
|
Depreciation and amortization
|
|
|
13,955
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
13,955
|
|
Impairment and other charges, net
|
|
|
4,927
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
4,927
|
|
Gains on the sale of company-operated restaurants
|
|
|
(5,472
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(5,472
|
)
|
|
|
|
162,529
|
|
|
|
—
|
|
|
|
35,052
|
|
|
|
2,082
|
|
|
|
199,663
|
|
Earnings from operations
|
|
|
47,243
|
|
|
|
(1,551
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
45,692
|
|
Other pension and post-retirement expenses, net
|
|
|
423
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
423
|
|
Interest expense, net
|
|
|
10,413
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
10,413
|
|
Earnings from continuing operations and before
income taxes
|
|
|
36,407
|
|
|
|
(1,551
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
34,856
|
|
Income taxes
|
|
|
11,426
|
|
|
|
(445
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
10,981
|
|
Earnings from continuing operations
|
|
|
$
|
24,981
|
|
|
|
$
|
(1,106
|
)
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
23,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share - basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
|
$
|
0.86
|
|
|
|
$
|
(0.04
|
)
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
0.82
|
|
Net earnings per share - diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
|
$
|
0.85
|
|
|
|
$
|
(0.04
|
)
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
0.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL INFORMATION (Unaudited)
|
|
Recast 2018 Condensed Consolidated Statement of Earnings
|
|
|
|
|
|
|
|
28 Weeks Ended |
|
|
|
April 15, 2018 |
|
|
|
As reported |
|
|
Franchise Fees |
|
|
Marketing and Sourcing Fees
|
|
|
Technology Support Fees
|
|
|
Recast |
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company restaurant sales
|
|
|
$
|
283,575
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
283,575
|
|
Franchise rental revenues
|
|
|
135,060
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
135,060
|
|
Franchise royalties and other
|
|
|
85,600
|
|
|
|
(1,368
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
84,232
|
|
Franchise contributions for advertising and other services
|
|
|
—
|
|
|
|
—
|
|
|
|
81,048
|
|
|
|
4,875
|
|
|
|
85,923
|
|
|
|
|
504,235
|
|
|
|
(1,368
|
)
|
|
|
81,048
|
|
|
|
4,875
|
|
|
|
588,790
|
|
Operating costs and expenses, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company restaurant costs:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food and packaging
|
|
|
81,502
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
81,502
|
|
Payroll and employee benefits
|
|
|
82,036
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
82,036
|
|
Occupancy and other
|
|
|
45,893
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
45,893
|
|
Total company restaurant costs
|
|
|
209,431
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
209,431
|
|
Franchise occupancy expenses
|
|
|
82,586
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
82,586
|
|
Franchise support and other costs
|
|
|
5,065
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
5,065
|
|
Franchise advertising and other services expenses
|
|
|
—
|
|
|
|
—
|
|
|
|
81,048
|
|
|
|
7,438
|
|
|
|
88,486
|
|
Selling, general and administrative expenses
|
|
|
60,655
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(2,563
|
)
|
|
|
58,092
|
|
Depreciation and amortization
|
|
|
33,112
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
33,112
|
|
Impairment and other charges, net
|
|
|
7,184
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
7,184
|
|
Gains on the sale of company-operated restaurants
|
|
|
(14,412
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(14,412
|
)
|
|
|
|
383,621
|
|
|
|
—
|
|
|
|
81,048
|
|
|
|
4,875
|
|
|
|
469,544
|
|
Earnings from operations
|
|
|
120,614
|
|
|
|
(1,368
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
119,246
|
|
Other pension and post-retirement expenses, net
|
|
|
987
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
987
|
|
Interest expense, net
|
|
|
23,193
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
23,193
|
|
Earnings from continuing operations and before income taxes
|
|
|
96,434
|
|
|
|
(1,368
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
95,066
|
|
Income taxes
|
|
|
58,564
|
|
|
|
(393
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
58,171
|
|
Earnings from continuing operations
|
|
|
$
|
37,870
|
|
|
|
$
|
(975
|
)
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
36,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share - basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
|
$
|
1.29
|
|
|
|
$
|
(0.03
|
)
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
1.26
|
|
Net earnings per share - diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
|
$
|
1.27
|
|
|
|
$
|
(0.03
|
)
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
1.24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JACK IN THE BOX INC. AND SUBSIDIARIES
RECONCILIATION OF
NON-GAAP MEASUREMENTS TO GAAP RESULTS
(Unaudited)
To supplement the consolidated financial statements, which are presented
in accordance with GAAP, the company uses the following non-GAAP
measures: Operating Earnings Per Share, Adjusted EBITDA,
Restaurant-Level Margin and Franchise-Level Margin. 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.
Operating Earnings Per Share
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
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 prior to fiscal year 2018.
Operating Earnings Per Share should be considered as a supplement to,
not as a substitute for, analysis of results as reported under U.S. GAAP
or other similarly titled measures of other companies. Management
believes Operating Earnings Per Share provides investors with a
meaningful supplement of the company’s operating performance and
period-over-period changes without regard to potential distortions.
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.
|
|
12 Weeks Ended |
|
28 Weeks Ended |
|
|
April 14, 2019
|
|
April 15, 2018
|
|
April 14, 2019
|
|
April 15, 2018
|
Diluted earnings per share from continuing operations – GAAP
|
|
$
|
0.96
|
|
|
$
|
0.85
|
|
|
$
|
2.15
|
|
|
$
|
1.27
|
|
Gains on the sale of company-operated restaurants
|
|
—
|
|
|
(0.13
|
)
|
|
(0.01
|
)
|
|
(0.34
|
)
|
Restructuring charges
|
|
0.03
|
|
|
0.06
|
|
|
0.20
|
|
|
0.07
|
|
Non-cash impact of the Tax Cuts and Jobs Act
|
|
—
|
|
|
0.02
|
|
|
—
|
|
|
1.05
|
|
Excess tax benefits from share-based compensation
arrangements
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.03
|
)
|
Operating Earnings Per Share – non-GAAP
|
|
$
|
0.99
|
|
|
$
|
0.80
|
|
|
$
|
2.34
|
|
|
$
|
2.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
Adjusted EBITDA represents net earnings on a GAAP basis excluding
earnings or losses from discontinued operations, income taxes, interest
expense, net, gains or losses on the sale of company-operated
restaurants, impairment and other charges, net, depreciation and
amortization, and the amortization of franchise tenant improvement
allowances. Adjusted EBITDA should be considered as a supplement to, not
as a substitute for, analysis of results as reported under U.S. GAAP or
other similarly titled measures of other companies. Management believes
Adjusted EBITDA is useful to 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.
Below is a reconciliation of non-GAAP Adjusted EBITDA to the most
directly comparable GAAP measure, net earnings (in thousands).
|
|
|
12 Weeks Ended |
|
|
28 Weeks Ended |
|
|
|
April 14, 2019
|
|
April 15, 2018
|
|
|
April 14, 2019
|
|
April 15, 2018
|
Net earnings - GAAP
|
|
|
$
|
25,089
|
|
|
$
|
47,605
|
|
|
|
$
|
59,187
|
|
|
$
|
59,795
|
|
Losses (earnings) from discontinued
operations, net of taxes
|
|
|
41
|
|
|
(22,624
|
)
|
|
|
(2,936
|
)
|
|
(21,925
|
)
|
Income taxes
|
|
|
8,374
|
|
|
11,426
|
|
|
|
17,747
|
|
|
58,564
|
|
Interest expense, net
|
|
|
13,276
|
|
|
10,413
|
|
|
|
30,650
|
|
|
23,193
|
|
Gains on the sale of company-operated
restaurants
|
|
|
—
|
|
|
(5,472
|
)
|
|
|
(219
|
)
|
|
(14,412
|
)
|
Impairment and other charges, net
|
|
|
1,125
|
|
|
4,927
|
|
|
|
8,823
|
|
|
7,184
|
|
Depreciation and amortization
|
|
|
12,690
|
|
|
13,955
|
|
|
|
29,859
|
|
|
33,112
|
|
Amortization of franchise tenant
improvement allowances and other
|
|
|
607
|
|
|
118
|
|
|
|
1,137
|
|
|
265
|
|
Adjusted EBITDA – non-GAAP
|
|
|
$
|
61,202
|
|
|
$
|
60,348
|
|
|
|
$
|
144,248
|
|
|
$
|
145,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant-Level Margin
Restaurant-Level Margin is defined as company restaurant sales less
restaurant operating costs (food and packaging, labor, and occupancy
costs) and is neither required by, nor presented in accordance with
GAAP. Restaurant-Level Margin excludes revenues and expenses of our
franchise operations and certain costs, such as selling, general, and
administrative expenses, depreciation and amortization, impairment and
other charges, net, gains or losses on the sale of company-operated
restaurants, and other costs that are considered normal operating costs.
As such, Restaurant-Level Margin is not indicative of the overall
results of the company and does not accrue directly to the benefit of
shareholders because of the exclusion of corporate-level expenses.
Restaurant-Level Margin should be considered as a supplement to, not as
a substitute for, analysis of results as reported under GAAP or other
similarly titled measures of other companies. The company is presenting
Restaurant-Level Margin because it believes that it provides 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 utilizes Restaurant-Level Margin as a key
performance indicator to evaluate the profitability of company-owned
restaurants.
Below is a reconciliation of non-GAAP Restaurant-Level Margin to the
most directly comparable GAAP measure, earnings from operations (in
thousands):
|
|
|
12 Weeks Ended |
|
|
28 Weeks Ended |
|
|
|
April 14, 2019
|
|
April 15, 2018
|
|
|
April 14, 2019
|
|
April 15, 2018
|
Earnings from operations - GAAP
|
|
|
$
|
47,123
|
|
|
$
|
47,243
|
|
|
|
$
|
105,447
|
|
|
$
|
120,614
|
|
Franchise rental revenues
|
|
|
(61,646
|
)
|
|
(57,843
|
)
|
|
|
(145,536
|
)
|
|
(135,060
|
)
|
Franchise royalties and other
|
|
|
(38,410
|
)
|
|
(37,991
|
)
|
|
|
(90,660
|
)
|
|
(85,600
|
)
|
Franchise contributions for advertising and other
services
|
|
|
(38,989
|
)
|
|
—
|
|
|
|
(90,803
|
)
|
|
—
|
|
Franchise occupancy expenses
|
|
|
38,618
|
|
|
36,065
|
|
|
|
89,331
|
|
|
82,586
|
|
Franchise support and other costs
|
|
|
2,797
|
|
|
2,583
|
|
|
|
5,642
|
|
|
5,065
|
|
Franchise advertising and other services expenses
|
|
|
40,245
|
|
|
—
|
|
|
|
94,515
|
|
|
—
|
|
Selling, general and administrative expenses
|
|
|
17,585
|
|
|
26,594
|
|
|
|
41,668
|
|
|
60,655
|
|
Impairment and other charges, net
|
|
|
1,125
|
|
|
4,927
|
|
|
|
8,823
|
|
|
7,184
|
|
Gains on the sale of company-operated restaurants
|
|
|
—
|
|
|
(5,472
|
)
|
|
|
(219
|
)
|
|
(14,412
|
)
|
Depreciation and amortization
|
|
|
12,690
|
|
|
13,955
|
|
|
|
29,859
|
|
|
33,112
|
|
Restaurant-Level Margin - Non-GAAP
|
|
|
$
|
21,138
|
|
|
$
|
30,061
|
|
|
|
$
|
48,067
|
|
|
$
|
74,144
|
|
|
|
|
|
|
|
|
|
|
|
|
Company restaurant sales
|
|
|
$
|
76,682
|
|
|
$
|
113,938
|
|
|
|
$
|
179,514
|
|
|
$
|
283,575
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurant-Level Margin % - Non-GAAP
|
|
|
27.6
|
%
|
|
26.4
|
%
|
|
|
26.8
|
%
|
|
26.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchise-Level Margin
Franchise-Level Margin is defined as franchise revenues less franchise
operating costs (occupancy expenses, advertising contributions, and
franchise support and other costs) and is neither required by, nor
presented in accordance with GAAP. Franchise-Level Margin excludes
revenue and expenses of our company-operated restaurants and certain
costs, such as selling, general, and administrative
expenses, depreciation and amortization, impairment and other charges,
net, amortization of tenant improvement allowances, and other costs that
are considered normal operating costs. As such, Franchise-Level Margin
is not indicative of the overall results of the company and does not
accrue directly to the benefit of shareholders because of the exclusion
of corporate-level expenses. Franchise-Level Margin should be considered
as a supplement to, not as a substitute for, analysis of results as
reported under GAAP or other similarly titled measures of other
companies. The company is presenting Franchise-Level Margin because it
believes that it provides 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 utilizes Franchise-Level
Margin as a key performance indicator to evaluate the profitability of
our franchise operations.
Below is a reconciliation of non-GAAP Franchise-Level Margin to the most
directly comparable GAAP measure, earnings from operations (in
thousands):
|
|
|
12 Weeks Ended |
|
|
28 Weeks Ended |
|
|
|
April 14, 2019
|
|
April 15, 2018
|
|
April 15, 2018 Recast (1)
|
|
|
April 14, 2019
|
|
April 15, 2018
|
|
April 15, 2018 Recast (1)
|
Earnings from operations - GAAP
|
|
|
$
|
47,123
|
|
|
$
|
47,243
|
|
|
$
|
45,692
|
|
|
|
$
|
105,447
|
|
|
$
|
120,614
|
|
|
$
|
119,246
|
|
Company restaurant sales
|
|
|
(76,682
|
)
|
|
(113,938
|
)
|
|
(113,938
|
)
|
|
|
(179,514
|
)
|
|
(283,575
|
)
|
|
(283,575
|
)
|
Food and packaging
|
|
|
21,676
|
|
|
32,638
|
|
|
32,638
|
|
|
|
51,292
|
|
|
81,502
|
|
|
81,502
|
|
Payroll and employee benefits
|
|
|
22,768
|
|
|
33,096
|
|
|
33,096
|
|
|
|
53,042
|
|
|
82,036
|
|
|
82,036
|
|
Occupancy and other
|
|
|
11,100
|
|
|
18,143
|
|
|
18,143
|
|
|
|
27,113
|
|
|
45,893
|
|
|
45,893
|
|
Selling, general and administrative expenses
|
|
|
17,585
|
|
|
26,594
|
|
|
25,501
|
|
|
|
41,668
|
|
|
60,655
|
|
|
58,092
|
|
Impairment and other charges, net
|
|
|
1,125
|
|
|
4,927
|
|
|
4,927
|
|
|
|
8,823
|
|
|
7,184
|
|
|
7,184
|
|
Gains on the sale of company-operated restaurants
|
|
|
—
|
|
|
(5,472
|
)
|
|
(5,472
|
)
|
|
|
(219
|
)
|
|
(14,412
|
)
|
|
(14,412
|
)
|
Depreciation and amortization
|
|
|
12,690
|
|
|
13,955
|
|
|
13,955
|
|
|
|
29,859
|
|
|
33,112
|
|
|
33,112
|
|
Amortization of franchise tenant improvement allowances and other
|
|
|
607
|
|
|
118
|
|
|
118
|
|
|
|
1,137
|
|
|
265
|
|
|
265
|
|
Franchise-Level Margin - Non-GAAP
|
|
|
$
|
57,992
|
|
|
$
|
57,304
|
|
|
$
|
54,660
|
|
|
|
$
|
138,648
|
|
|
$
|
133,274
|
|
|
$
|
129,343
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchise rental revenues
|
|
|
$
|
61,646
|
|
|
$
|
57,843
|
|
|
$
|
57,843
|
|
|
|
$
|
145,536
|
|
|
$
|
135,060
|
|
|
$
|
135,060
|
|
Franchise royalties and other
|
|
|
38,410
|
|
|
37,991
|
|
|
36,440
|
|
|
|
90,660
|
|
|
85,600
|
|
|
84,232
|
|
Franchise contributions for advertising and other services
|
|
|
38,989
|
|
|
—
|
|
|
37,134
|
|
|
|
90,803
|
|
|
—
|
|
|
85,923
|
|
Total franchise revenues
|
|
|
$
|
139,045
|
|
|
$
|
95,834
|
|
|
$
|
131,417
|
|
|
|
$
|
326,999
|
|
|
$
|
220,660
|
|
|
$
|
305,215
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Franchise-Level Margin % - Non-GAAP
|
|
|
41.7
|
%
|
|
59.8
|
%
|
|
41.6
|
%
|
|
|
42.4
|
%
|
|
60.4
|
%
|
|
42.4
|
%
|
____________________________
(1)
|
|
Recast results for the impact of Topic 606 as shown in the
"Supplemental Information" section of this release.
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190515005916/en/
Source: Jack in the Box Inc.
Investor Contact:
Carol DiRaimo, (858) 571-2407
Media Contact:
Brian Luscomb, (858) 571-2291