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Jack In The Box Inc. Reports Fourth Quarter FY 2012 Earnings; Issues Guidance For FY 2013; Updates Long-term Goals

Stocks in this article: JACK

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
September 30,2012   October 2,2011 September 30,2012   October 2,2011
Diluted earnings per share from
continuing operations – GAAP $ 0.39 $ 0.50 $ 1.40 $ 1.63
Plus: Restructuring charges 0.04 0.23
Less: Gains from refranchising   (0.16 )   (0.30 )   (0.44 )   (0.78 )
Operating earnings per share - Non-GAAP $ 0.27   $ 0.20   $ 1.20   $ 0.85  
 

 
JACK IN THE BOX INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
(Unaudited)
                   
Quarter Fiscal Year
September 30, October 2, September 30, October 2,
2012 2011 2012 2011
 
Revenues:
Company restaurant sales $ 278,933 $ 296,088 $ 1,219,214 $ 1,380,273
Franchise revenues   78,707     70,872     325,812     282,066  
  357,640     366,960     1,545,026     1,662,339  
Operating costs and expenses, net:
Company restaurant costs:
Food and packaging 90,840 101,064 400,012 460,790
Payroll and employee benefits 79,266 85,226 354,141 414,463
Occupancy and other   66,765     69,864     281,516     329,766  
Total company restaurant costs 236,871 256,154 1,035,669 1,205,019
Franchise costs 39,619 34,879 166,078 136,148
Selling, general and administrative expenses 54,223 53,632 227,003 224,653
Impairment and other charges, net 8,326 2,477 32,932 12,583
Gains on the sale of company-operated restaurants   (10,212 )   (22,185 )   (29,145 )   (61,125 )
  328,827     324,957     1,432,537     1,517,278  
 
Earnings from operations 28,813 42,003 112,489 145,061
 
Interest expense, net   3,912     4,283     18,874     16,855  
 
Earnings from continuing operations and before income taxes 24,901 37,720 93,615 128,206
 
Income taxes   7,103     14,525     30,643     46,475  
 
Earnings from continuing operations 17,798 23,195 62,972 81,731
 
Losses from discontinued operations   (5,321 )   (543 )   (5,321 )   (1,131 )
Net earnings $ 12,477   $ 22,652   $ 57,651   $ 80,600  
 
Net earnings per share - basic:
Earnings from continuing operations $ 0.40 $ 0.51 $ 1.43 $ 1.66
Losses from discontinued operations   (0.12 )   (0.01 )   (0.12 )   (0.02 )
Net earnings per share $ 0.28   $ 0.50   $ 1.31   $ 1.63  
 
Net earnings per share - diluted:
Earnings from continuing operations $ 0.39 $ 0.50 $ 1.40 $ 1.63
Losses from discontinued operations   (0.12 )   (0.01 )   (0.12 )   (0.02 )
Net earnings per share $ 0.27   $ 0.49   $ 1.28   $ 1.61  
 
Weighted-average shares outstanding:
Basic 44,069 45,524 43,999 49,302
Diluted 45,411 46,262 44,948 50,085
 

         
JACK IN THE BOX INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share data)
(Unaudited)
 
September 30, October 2,
2012 2011
 
ASSETS
Current assets:
Cash and cash equivalents $ 8,469 $ 11,424
Accounts and other receivables, net 78,798 86,213
Inventories 7,752 7,529
Prepaid expenses 32,821 18,737
Deferred income taxes

26,932

45,520

Assets held for sale and leaseback

45,443 51,793
Assets of discontinued operations held for sale 30,591 35,443
Other current assets   375     1,793  
Total current assets  

231,181

    258,452  
 
Property and equipment, at cost:
Land 109,295 105,314
Buildings 1,054,967 1,023,858
Restaurant and other equipment 328,031 337,708
Construction in progress   37,357     44,660  
1,529,650 1,511,540
Less accumulated depreciation and amortization   (708,858 )   (660,155 )
Property and equipment, net   820,792     851,385  
 
Intangible assets, net 17,206 17,495
Goodwill 140,622 105,872
Other assets, net  

253,924

    199,118  
$ 1,463,725   $ 1,432,322  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
Current liabilities:
Current maturities of long-term debt $ 15,952 $ 21,148
Accounts payable 94,713 94,348
Accrued liabilities   164,637     167,487  
Total current liabilities   275,302     282,983  
 
Long-term debt, net of current maturities 405,276 447,350
 
Other long-term liabilities 371,202 290,723
 
Deferred income taxes - 5,310
 
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, 75,827,894 and 74,992,487 issued, respectively

758 750
Capital in excess of par value 221,100 202,684
Retained earnings 1,120,671 1,063,020
Accumulated other comprehensive loss (136,013 ) (95,940 )
Treasury stock, at cost, 31,955,606 and 30,746,099 shares, respectively   (794,571 )   (764,558 )

Total stockholders’ equity

 

411,945

    405,956  
$ 1,463,725   $ 1,432,322  
 

         
JACK IN THE BOX INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
 
Fiscal Year
2012 2011
 
Cash flows from operating activities:
Net earnings $ 57,651 $ 80,600
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 97,958 96,147
Deferred finance cost amortization 2,695 2,554
Deferred income taxes (6,615 ) (12,832 )
Share-based compensation expense 6,883 8,062
Pension and postretirement expense 33,526 23,845
Losses (gains) on cash surrender value of company-owned life insurance (12,137 ) 1,094
Gains on the sale of company-operated restaurants (29,145 ) (61,125 )
Gains on the acquisition of franchise-operated restaurants - (426 )
Losses on the disposition of property and equipment 6,281 7,650
Impairment charges and other 9,403 1,367
Changes in assets and liabilities, excluding acquisitions and dispositions:
Accounts and other receivables 3,497 (26,116 )
Inventories 4,334 (1,540 )
Prepaid expenses and other current assets (12,849 ) 19,163
Accounts payable (3,264 ) 1,498
Accrued liabilities 247 2,446
Pension and postretirement contributions (20,318 ) (4,790 )
Other   (1,417 )   (13,337 )
Cash flows provided by operating activities   136,730     124,260  
Cash flows from investing activities:
Purchases of property and equipment (80,200 ) (129,312 )
Purchases of assets intended for sale and leaseback (35,927 ) (31,798 )

Proceeds from sale and leaseback of assets

27,844 28,536
Proceeds from the sale of company-operated restaurants 47,115 119,275
Collections on notes receivable 12,230 20,848
Disbursements for loans to franchisees (3,977 ) (14,473 )
Acquisition of franchise-operated restaurants (48,945 ) (31,077 )
Other   344     2,199  

Cash flows used in investing activities

  (81,516 )   (35,802 )
Cash flows from financing activities:
Borrowings on revolving credit facilities 576,380 721,160
Repayments of borrowings on revolving credit facilities (602,540 ) (605,000 )
Principal repayments on debt (21,110 ) (13,760 )
Debt issuance costs (741 ) (989 )
Proceeds from issuance of common stock 10,167 5,530
Repurchases of common stock (30,013 ) (193,099 )
Excess tax benefits from share-based compensation arrangements 1,115 1,290
Change in book overdraft   8,573     (2,773 )
Cash flows used in financing activities   (58,169 )   (87,641 )
 
Net increase (decrease) in cash and cash equivalents (2,955 ) 817
Cash and cash equivalents at beginning of year   11,424     10,607  

Cash and cash equivalents at end of year

$ 8,469   $ 11,424  
 

                   
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 30, October 2, September 30, October 2,
2012 2011 2012 2011
Revenues:
Company restaurant sales 78.0 % 80.7 % 78.9 % 83.0 %
Franchise revenues 22.0 % 19.3 % 21.1 % 17.0 %
Total revenues 100.0 % 100.0 % 100.0 % 100.0 %
 
Operating costs and expenses, net:
Company restaurant costs:
Food and packaging (1) 32.6 % 34.1 % 32.8 % 33.4 %
Payroll and employee benefits (1) 28.4 % 28.8 % 29.0 % 30.0 %
Occupancy and other (1) 23.9 % 23.6 % 23.1 % 23.9 %
Total company restaurant costs (1) 84.9 % 86.5 % 84.9 % 87.3 %
Franchise costs (1) 50.3 % 49.2 % 51.0 % 48.3 %
Selling, general and administrative expenses 15.2 % 14.6 % 14.7 % 13.5 %
Impairment and other charges, net 2.3 % 0.7 % 2.1 % 0.8 %
Gains on the sale of company-operated restaurants

(2.9)

%

(6.0)

%

(1.9)

%

(3.7)

%

Earnings from operations 8.1 % 11.4 % 7.3 % 8.7 %
 
Income tax rate (2) 28.5 % 38.5 % 32.7 % 36.3 %
 
(1) As a percentage of the related sales and/or revenues
(2) As a percentage of earnings from continuing operations and before income taxes.
 
 




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