Jack In The Box Inc. Reports Fourth Quarter Fy 2014 Earnings

Issues Guidance For Fy 2015; Updates Long-term Goals; Declares Quarterly Cash Dividend

SAN DIEGO - (BUSINESS WIRE) - Nov. 18, 2014 - Jack in the Box Inc. (NASDAQ: JACK) today reported earnings from continuing operations of $17.4 million, or $0.44 per diluted share, for the fourth quarter ended September 28, 2014, compared with earnings from continuing operations of $24.1 million, or $0.54 per diluted share, for the fourth quarter of fiscal 2013.

Fiscal 2014 earnings from continuing operations totaled $94.8 million, or $2.26 per diluted share, compared with $82.6 million, or $1.84 per diluted share in fiscal 2013.

Operating earnings per share, a non-GAAP measure which the company defines as diluted earnings per share from continuing operations on a GAAP basis excluding restructuring charges and gains or losses from refranchising, were $0.54 in the fourth quarter of fiscal 2014 compared with $0.45 in the prior year quarter. For fiscal year 2014, operating earnings per share were $2.45 compared with $1.82 last year.

A reconciliation of non-GAAP measurements to GAAP results is provided below, with additional information included in the attachment to this release. Figures may not add due to rounding.

    12 Weeks Ended   52 Weeks Ended
    Sept. 28,   Sept. 29,   Sept. 28,   Sept. 29,
    2014     2013     2014     2013  

Diluted earnings per share from continuing operations – GAAP

 

$

0.44

 

$

0.54

   

$

2.26

 

$

1.84

 
Restructuring charges     -     0.03       0.13     0.05  
(Gains)/losses from refranchising     0.10     (0.13 )     0.05     (0.07 )
Operating earnings per share – Non-GAAP   $ 0.54   $ 0.45     $ 2.45   $ 1.82  
                             

 

Lenny Comma, chairman and chief executive officer, said, "Operating earnings per share for the fourth quarter increased 20 percent, driven by better than expected same-store sales growth at Qdoba Mexican Grill® and Jack in the Box®, margin expansion, and a 10 percent reduction in our diluted share count as we continued to use our growing free cash flow to return cash to shareholders. This performance capped a terrific year, with operating earnings per share up approximately 35 percent, the third consecutive year of growth in excess of 30 percent."

Increase (decrease) in same-store sales:

    12 Weeks Ended   12 Weeks Ended   52 Weeks Ended   52 Weeks Ended
   

Sept. 28, 2014

 

Sept. 29, 2013

 

Sept. 28, 2014

 

Sept. 29, 2013

Jack in the Box®:                
Company   3.1%   (0.2%)   2.0%   1.0%
Franchise   3.1%   (1.7%)   2.0%   0.1%
System   3.1%   (1.4%)   2.0%   0.3%
Qdoba®:                
Company   7.1%   1.3%   5.7%   0.5%
Franchise   8.4%   2.8%   6.3%   1.1%
System   7.7%   2.0%   6.0%   0.8%
                 

"Jack in the Box company same-store sales increased 3.1 percent for the quarter, above our expectations," Comma said. "The increase was driven primarily by growth in our breakfast and late-night dayparts."

Jack in the Box system same-store sales growth for the quarter exceeded that of the QSR sandwich segment by 3.3 percentage points for the comparable period, according to The NPD Group’s SalesTrack® Weekly for the 12-week time period ended September 28, 2014. Included in this segment are 16 of the top QSR sandwich and burger chains in the country.

"Qdoba’s same-store sales in the fourth quarter increased 7.1 percent for company restaurants and 7.7 percent system-wide, our third consecutive quarter of growth above 7 percent. The top-line momentum continued with the conclusion of our Mango Mojo campaign, followed by the return of our popular Queso Diablo as a permanent menu item. In addition, the performance of our Qdoba company restaurants reflected less discounting, as well as double-digit growth in catering sales," Comma said.

Consolidated restaurant operating margin increased 190 basis points to 18.0 percent of sales in the fourth quarter of 2014, compared with 16.1 percent of sales in the year-ago quarter. Restaurant operating margin for Jack in the Box restaurants increased 210 basis points to 17.8 percent of sales. The improvement was due primarily to lower food and packaging costs and the benefit of refranchising, which were partially offset by higher labor costs resulting from an increase in the California minimum wage during the quarter. The decrease in food and packaging costs as a percentage of sales resulted from the benefit of price increases and favorable product mix changes, which were partially offset by commodity inflation of approximately 3.2 percent in the quarter. Restaurant operating margin for Qdoba restaurants increased 130 basis points to 18.5 percent of sales. The benefits of sales leverage, price increases and less discounting at Qdoba were partially offset by commodity inflation of approximately 4.0 percent, higher incentive compensation for restaurant managers and beverage equipment rental costs.

SG&A expense for the fourth quarter increased by $2.2 million and was 15.0 percent of revenues as compared to 14.6 percent in the prior year quarter. Mark-to-market adjustments on investments supporting the company’s non-qualified retirement plans negatively impacted SG&A by $1.5 million in the fourth quarter of 2014 as compared to a positive impact of $2.0 million in the fourth quarter of 2013, resulting in a year-over-year increase in SG&A of $3.5 million. In addition, the increase reflects a $2.0 million increase in incentive and share-based compensation. These increases were partially offset by a $4.0 million reduction in pension expense.

The company is continuing its efforts to improve its cost structure and identify opportunities to reduce G&A as well as improve restaurant profitability across both brands. Restructuring charges of $0.3 million relating primarily to severance costs were recorded during the fourth quarter of 2014, as compared to $2.2 million, or approximately $0.03 per diluted share, during the fourth quarter of 2013. These charges are included in "Impairment and other charges, net" in the accompanying consolidated statements of earnings.

Losses on the sale of company-operated restaurants were $5.8 million in the fourth quarter, or approximately $0.10 per diluted share, related primarily to the sale of 23 Jack in the Box restaurants in two markets in the Southeast during the quarter and the expected sale of the remaining Jack in the Box market in the Southeast for which the company has received a signed letter of intent. This loss was partially offset by additional proceeds received as a result of the extension of underlying franchise and lease agreements for previously refranchised Jack in the Box restaurants of $0.6 million. This compares to a gain of $7.8 million, or approximately $0.13 per diluted share, in the prior year quarter.

The tax rate for the fourth quarter of 2014 was 32.7 percent versus 28.0 percent for the fourth quarter of 2013, and 35.3 percent in fiscal 2014 as compared to 32.8 percent in fiscal 2013. The tax rate for fiscal 2014 was slightly lower than the company’s most recent guidance due to the benefit of a change in the California tax law which was partially offset by the market performance of insurance investment products used to fund certain non-qualified retirement plans. Changes in the cash value of the insurance products are not deductible or taxable.

In the third quarter of 2013, 62 company-operated Qdoba restaurants were closed, and the results of operations, impairment charges, lease obligations and other exit costs for these restaurants are included in discontinued operations in the accompanying consolidated statements of earnings for all periods presented. Discontinued operations for the fourth quarter of fiscal 2014 include after-tax charges related to the Qdoba restaurant closures of approximately $0.03 per diluted share, as compared to $0.02 per diluted share for the fourth quarter of fiscal 2013. In addition, discontinued operations for the fourth quarter of fiscal 2013 included approximately $0.01 per diluted share related to the outsourcing of the company’s distribution business which was completed in fiscal 2013.

Capital Allocation

The company repurchased approximately 697,000 shares of its common stock in the fourth quarter of 2014 at an average price of $61.19 per share for an aggregate cost of $42.7 million. During fiscal year 2014, the company repurchased approximately 5,645,000 shares at an average price of $56.63 per share, for an aggregate cost of $319.7 million. This leaves $117.1 million remaining under two stock-buyback programs authorized by the company’s Board of Directors that expire in November 2015. In November 2014, the company’s Board of Directors authorized an additional $100 million stock-buyback program that expires in November 2016.

The company also announced today that on November 13, 2014, its Board of Directors declared a quarterly cash dividend of $0.20 per share on the company’s common stock. The dividend is payable on December 12, 2014, to shareholders of record at the close of business on December 1, 2014.

Guidance

The following guidance and underlying assumptions reflect the company’s current expectations for the first quarter and fiscal year ending September 27, 2015. Fiscal 2015 is a 52-week year, with 16 weeks in the first quarter, and 12 weeks in each of the second, third and fourth quarters.

First quarter fiscal year 2015 guidance

  • Same-store sales are expected to increase approximately 1.0 to 2.0 percent at Jack in the Box company restaurants versus a 2.1 percent increase in the year-ago quarter.
  • Same-store sales are expected to increase approximately 8.0 to 10.0 percent at Qdoba company restaurants versus a 2.0 percent increase in the year-ago quarter.

Fiscal year 2015 guidance

  • Same-store sales are expected to increase approximately 1.5 to 2.5 percent at Jack in the Box company restaurants.
  • Same-store sales are expected to increase approximately 6.0 to 8.0 percent at Qdoba company restaurants.
  • Overall commodity costs are expected to increase by approximately 3 percent for the full year, with higher inflation in the first two quarters.
  • Restaurant operating margin for the full year is expected to be approximately 18.8 to 19.6 percent, depending on same-store sales and commodity inflation.
  • SG&A as a percentage of revenue is expected to be approximately 13.5 to 14.0 percent as compared to 13.9 percent in fiscal 2014, and reflects $5.0 million of higher pension expense in fiscal 2015. G&A as a percentage of system-wide sales is expected to decline to approximately 3.7 percent in fiscal 2015 from 3.8 percent in fiscal 2014.
  • Impairment and other charges as a percentage of revenue are expected to be approximately 60 basis points.
  • Approximately 10 to 15 new Jack in the Box restaurants are expected to open system-wide.
  • Approximately 50 to 60 new Qdoba restaurants are expected to open, of which approximately half are expected to be company locations.
  • Capital expenditures are expected to be $90 to $100 million.
  • The tax rate is expected to be approximately 37 to 38 percent.
  • Operating earnings per share, which the company defines as diluted earnings per share from continuing operations on a GAAP basis excluding restructuring charges and gains or losses from refranchising, are expected to range from $2.73 to $2.88 in fiscal 2015 as compared to operating earnings per share of $2.45in fiscal 2014.

Long-term goals (2016 to 2018)

The company today provided long-term goals for fiscal 2016 to 2018. The company expects:

  • Annual same-store sales growth of 2 to 3 percent at Jack in the Box company restaurants and in the mid-single-digit range at Qdoba company restaurants.
  • Restaurant operating margin of 19.0 to 20.0 percent.
  • G&A of 3.5 to 3.8 percent of consolidated system-wide sales.
  • Jack in the Box system new unit growth of approximately 1 to 2 percent per year.
  • Qdoba company new unit growth of approximately 40 to 70 restaurants per year and franchise unit growth of 30 to 40 restaurants per year.
  • Continued return of cash to shareholders through a combination of share repurchases and dividends.
  • Annual operating earnings per share growth in the mid-teens.

Conference call

The company will host a conference call for financial analysts and investors on Wednesday, November 19, 2014, 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 November 19.

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 Grill®, a leader in fast-casual dining, with more than 600 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 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; 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
RECONCILIATION OF NON-GAAP MEASUREMENTS TO GAAP RESULTS
(Unaudited)
 

Operating earnings per share, a non-GAAP measure, is defined by the company as diluted earnings per share from continuing operations on a GAAP basis excluding restructuring charges and gains or losses from refranchising. Management believes this non-GAAP financial measure provides important supplemental information to assist investors in analyzing the performance of the company’s core business. In addition, the company uses operating earnings per share in establishing performance goals for purposes of executive compensation. The company encourages investors to rely upon its GAAP numbers but includes this non-GAAP financial measure as a supplemental metric to assist investors. This non-GAAP financial measure should not be considered as a substitute for, or superior to, financial measures calculated in accordance with GAAP. In addition, this non-GAAP financial measure 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.

 

 

  12 Weeks Ended   52 Weeks Ended
    Sept. 28,   Sept. 29,   Sept. 28,   Sept. 29,
    2014     2013     2014     2013  

Diluted earnings per share from continuing operations – GAAP

 

$

0.44

 

$

0.54

   

$

2.26

 

$

1.84

 
Restructuring charges     -     0.03       0.13     0.05  
(Gains)/losses from refranchising     0.10     (0.13 )     0.05     (0.07 )
Operating earnings per share – Non-GAAP   $ 0.54   $ 0.45     $ 2.45   $ 1.82  

 

 
JACK IN THE BOX INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data)
(Unaudited)
 
    Quarter   Fiscal Year
    September 28,   September 29,   September 28,   September 29,
    2014   2013   2014   2013
Revenues:                
Company restaurant sales   $ 259,912     $ 255,215     $ 1,120,912     $ 1,143,780  
Franchise revenues     84,775       82,766       363,219       346,087  
      344,687       337,981       1,484,131       1,489,867  
Operating costs and expenses, net:                
Company restaurant costs:                
Food and packaging     83,219       83,426       357,338       372,685  
Payroll and employee benefits     71,329       70,378       308,494       320,384  
Occupancy and other     58,483       60,215       247,861       255,586  
Total company restaurant costs     213,031       214,019       913,693       948,655  
Franchise costs     42,816       41,303       182,886       173,567  
Selling, general and administrative expenses     51,550       49,394       206,788       220,641  
Impairment and other charges, net     2,275       4,385       14,908       13,439  
(Gains) losses on the sale of company-operated restaurants     5,790       (7,819 )     3,548       (4,640 )
      315,462       301,282       1,321,823       1,351,662  
Earnings from operations     29,225       36,699       162,308       138,205  
Interest expense, net     3,290       3,190       15,678       15,251  
Earnings from continuing operations and before income taxes     25,935       33,509       146,630       122,954  
Income taxes     8,492       9,392       51,786       40,346  
Earnings from continuing operations     17,443       24,117       94,844       82,608  
Losses from discontinued operations, net of income tax benefit     (1,283 )     (1,289 )     (5,894 )     (31,456 )
Net earnings   $ 16,160     $ 22,828     $ 88,950     $ 51,152  
                 
Net earnings per share - basic:                
Earnings from continuing operations   $ 0.45     $ 0.56     $ 2.33     $ 1.91  
Losses from discontinued operations     (0.03 )     (0.03 )     (0.14 )     (0.73 )
Net earnings per share (1)   $ 0.41     $ 0.53     $ 2.18     $ 1.18  
Net earnings per share - diluted:                
Earnings from continuing operations   $ 0.44     $ 0.54     $ 2.26     $ 1.84  
Losses from discontinued operations     (0.03 )     (0.03 )     (0.14 )     (0.70 )
Net earnings per share (1)   $ 0.40     $ 0.51     $ 2.12     $ 1.14  
                 
Weighted-average shares outstanding:                
Basic     38,982       43,069       40,781       43,351  
Diluted     39,918       44,532       41,973       44,899  
                 
Cash dividends declared per common share   $ 0.20     $ -     $ 0.40     $ -  
                 
(1) Earnings per share may not add due to rounding

 

 
JACK IN THE BOX INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data)
(Unaudited)
 
    September 28,   September 29,
    2014   2013
ASSETS        
Current assets:        
Cash and cash equivalents   $ 10,578     $ 9,644  
Accounts and other receivables, net     50,014       41,749  
Inventories     7,481       7,181  
Prepaid expenses     36,314       19,970  
Deferred income taxes     36,810       26,685  
Assets held for sale     4,766       11,875  
Other current assets     597       108  
Total current assets     146,560       117,212  
Property and equipment, at cost:        
Land     113,622       112,673  
Buildings     1,090,360       1,068,405  
Restaurant and other equipment     291,443       305,769  
Construction in progress     24,522       30,066  
      1,519,947       1,516,913  
Less accumulated depreciation and amortization     (797,818 )     (746,054 )
Property and equipment, net     722,129       770,859  
Intangible assets, net     15,604       16,390  
Goodwill     149,074       148,988  
Other assets, net    

237,298

      265,760  
    $

1,270,665

    $ 1,319,209  
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Current liabilities:        
Current maturities of long-term debt   $ 10,871     $ 20,889  
Accounts payable     31,810       36,899  
Accrued liabilities     163,626       153,886  
Total current liabilities     206,307       211,674  
Long-term debt, net of current maturities     497,012       349,393  
Other long-term liabilities    

309,435

      286,124  
Stockholders’ equity:        
Preferred stock $0.01 par value, 15,000,000 shares authorized, none issued            
Common stock $0.01 par value, 175,000,000 shares authorized, 80,127,387 and 78,515,171 issued, respectively     801       785  
Capital in excess of par value     356,727       296,764  
Retained earnings     1,244,897       1,171,823  
Accumulated other comprehensive loss     (90,132 )     (62,662 )
Treasury stock, at cost, 41,571,752 and 35,926,269 shares, respectively     (1,254,382 )     (934,692 )
Total stockholders’ equity     257,911       472,018  
    $

1,270,665

    $ 1,319,209  

 

 
JACK IN THE BOX INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)
(Unaudited)
 
    Fiscal Year
    September 28,   September 29,
    2014   2013
Cash flows from operating activities:        
Net earnings   $ 88,950     $ 51,152  
Adjustments to reconcile net earnings to net cash provided by operating activities:        
Depreciation and amortization     91,384       96,219  
Deferred finance cost amortization     2,175       2,277  
Deferred income taxes     4,152       (18,604 )
Share-based compensation expense     10,358       11,392  
Pension and postretirement expense     13,760       31,147  
Gains on cash surrender value of company-owned life insurance     (6,049 )     (8,998 )
(Gains) losses on the sale of company-operated restaurants     3,548       (4,640 )
Losses on the disposition of property and equipment     2,889       3,344  
Impairment charges and other     9,225       28,230  
Loss on early retirement of debt     789       939  
Changes in assets and liabilities, excluding acquisitions and dispositions:        
Accounts and other receivables     19,589       33,994  
Inventories     (300 )     27,415  
Prepaid expenses and other current assets     (16,831 )     13,117  
Accounts payable     (627 )     (26,945 )
Accrued liabilities     20,358       (10,560 )
Pension and postretirement contributions     (25,349 )     (23,886 )
Other     (16,999 )     (6,721 )
Cash flows provided by operating activities     201,022       198,872  
Cash flows from investing activities:        
Purchases of property and equipment     (60,525 )     (84,690 )
Purchases of assets intended for sale and leaseback     (2,801 )     (26,058 )
Proceeds from sale and leaseback of assets     5,698       47,431  
Proceeds from the sale of company-operated restaurants     10,536       30,619  
Collections on notes receivable     2,974       6,448  
Acquisition of franchise-operated restaurants     (1,750 )     (12,064 )
Other     2,889       4,375  
Cash flows used in investing activities     (42,979 )     (33,939 )
Cash flows from financing activities:        
Borrowings on revolving credit facilities     652,000       646,000  
Repayments of borrowings on revolving credit facilities     (521,000 )     (721,000 )
Proceeds from issuance of debt     200,000       200,000  
Principal repayments on debt     (193,399 )     (175,946 )
Debt issuance costs     (3,607 )     (4,392 )
Dividends paid on common stock     (15,808 )      
Proceeds from issuance of common stock     31,748       61,993  
Repurchases of common stock     (323,866 )     (132,833 )
Excess tax benefits from share-based compensation arrangements     17,664       2,094  
Change in book overdraft     (848 )     (39,678 )
Cash flows used in financing activities     (157,116 )     (163,762 )
Effect of exchange rate changes on cash and cash equivalents     7       4  
Net increase in cash and cash equivalents     934       1,175  
Cash and cash equivalents at beginning of period     9,644       8,469  
Cash and cash equivalents at end of period   $ 10,578     $ 9,644  

 

 
JACK IN THE BOX INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(Unaudited)
                 
The following table presents certain income and expense items included in our consolidated statements of earnings as a percentage of total revenues, unless otherwise indicated. Percentages may not add due to rounding.
                 
CONSOLIDATED STATEMENTS OF EARNINGS DATA
 
    Quarter   Fiscal Year
    September 28,   September 29,   September 28,   September 29,
    2014   2013   2014   2013
Revenues:                
Company restaurant sales   75.4 %   75.5 %   75.5 %   76.8 %
Franchise revenues   24.6 %   24.5 %   24.5 %   23.2 %
Total revenues   100.0 %   100.0 %   100.0 %   100.0 %
Operating costs and expenses, net:                
Company restaurant costs:                
Food and packaging (1)   32.0 %   32.7 %   31.9 %   32.6 %
Payroll and employee benefits (1)   27.4 %   27.6 %   27.5 %   28.0 %
Occupancy and other (1)   22.5 %   23.6 %   22.1 %   22.3 %
Total company restaurant costs (1)   82.0 %   83.9 %   81.5 %   82.9 %
Franchise costs (1)   50.5 %   49.9 %   50.4 %   50.2 %
Selling, general and administrative expenses   15.0 %   14.6 %   13.9 %   14.8 %
Impairment and other charges, net   0.7 %   1.3 %   1.0 %   0.9 %
(Gains) losses on the sale of company-operated restaurants   1.7 %   (2.3 )%   0.2 %   (0.3 )%
Earnings from operations   8.5 %   10.9 %   10.9 %   9.3 %
Income tax rate (2)   32.7 %   28.0 %   35.3 %   32.8 %
                 
(1) As a percentage of the related sales and/or revenues.
(2) As a percentage of earnings from continuing operations and before income taxes.
 

 

The following table presents Jack in the Box and Qdoba company restaurant sales, costs and costs as a percentage of the related sales. Percentages may not add due to rounding.
                                 
SUPPLEMENTAL COMPANY-OPERATED RESTAURANTS STATEMENTS OF EARNINGS DATA
(Dollars in thousands)
 
    Quarter   Fiscal Year
    September 28, 2014   September 29, 2013   September 28, 2014   September 29, 2013
Jack in the Box:                                
Company restaurant sales   $ 177,255       $ 182,657       $ 782,461       $ 850,512    
Company restaurant costs:                                
Food and packaging     57,472   32.4 %     61,675   33.8 %     254,891   32.6 %     284,221   33.4 %
Payroll and employee benefits     49,687   28.0 %     51,020   27.9 %     218,000   27.9 %     241,149   28.4 %
Occupancy and other     38,468   21.7 %     41,226   22.6 %     164,433   21.0 %     182,493   21.5 %
Total company restaurant costs   $ 145,627   82.2 %   $ 153,921   84.3 %   $ 637,324   81.5 %   $ 707,863   83.2 %
Qdoba:                                
Company restaurant sales   $ 82,657       $ 72,558       $ 338,451       $ 293,268    
Company restaurant costs:                                
Food and packaging     25,747   31.1 %     21,751   30.0 %     102,447   30.3 %     88,464   30.2 %
Payroll and employee benefits     21,642   26.2 %     19,358   26.7 %     90,494   26.7 %     79,235   27.0 %
Occupancy and other     20,015   24.2 %     18,989   26.2 %     83,428   24.6 %     73,093   24.9 %
Total company restaurant costs   $ 67,404   81.5 %   $ 60,098   82.8 %   $ 276,369   81.7 %   $ 240,792   82.1 %
                                                 

 

  The following table presents the detail of our franchise revenues and costs (dollars in thousands):
   
JACK IN THE BOX INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(Unaudited)
                           
        Quarter     Fiscal Year
        September 28,

2014

    September 29,

2013

    September 28,

2014

    September 29,

2013

  Royalties   $ 32,992     $ 31,067     $ 140,986       $ 132,663  
  Rental income     50,453       48,580       217,182         207,513  
  Re-image contributions to franchisees           40       (22 )       (1,990 )
  Franchise fees and other     1,330       3,079       5,073         7,901  
  Total franchise revenues   $ 84,775     $

82,766

    $ 363,219       $ 346,087  
                           
  Rental expense   $ 31,576     $ 30,282     $ 135,190       $ 128,173  
  Depreciation and amortization     7,713       7,898       33,844         32,876  
  Other franchise support costs     3,527       3,123       13,852         12,518  
  Total franchise costs   $ 42,816     $ 41,303     $ 182,886       $ 173,567  

 

 
JACK IN THE BOX INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
(Unaudited)
                           
  The following table summarizes the changes in the number and mix of Jack in the Box and Qdoba company and franchise restaurants in each fiscal year:
   
      September 28, 2014   September 29, 2013
      Company   Franchise   Total   Company   Franchise   Total
  Jack in the Box:                        
  Beginning of year   465     1,786     2,251     547     1,703     2,250  
  New   1     11     12     6     11     17  
  Refranchised   (37 )   37         (78 )   78      
  Acquired from franchisees   4     (4 )       1     (1 )    
  Closed   (2 )   (11 )   (13 )   (11 )   (5 )   (16 )
  End of period   431     1,819     2,250     465     1,786     2,251  
  % of JIB system   19 %   81 %   100 %   21 %   79 %   100 %
  % of consolidated system   58 %   85 %   78 %   61 %   85 %   79 %
  Qdoba:                        
  Beginning of year   296     319     615     316     311     627  
  New   16     22     38     34     34     68  
  Refranchised               (3 )   3      
  Acquired from franchisees               13     (13 )    
  Closed   (2 )   (13 )   (15 )   (64 )   (16 )   (80 )
  End of period   310     328     638     296     319     615  
  % of Qdoba system   49 %   51 %   100 %   48 %   52 %   100 %
  % of consolidated system   42 %   15 %   22 %   39 %   15 %   21 %
  Consolidated:                        
  Total system   741     2,147     2,888     761     2,105     2,866  
  % of consolidated system   26 %   74 %   100 %   27 %   73 %   100

SOURCE Jack in the Box Inc.

Contacts:

Carol DiRaimo
Jack in the Box Inc.
Investor Contact:
(858) 571-2407

Brian Luscomb
Media Relations
Jack in the Box Inc
(858) 571-2291

###

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