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Jack In The Box Inc. Reports First Quarter FY 2013 Earnings; Updates Guidance For FY 2013

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.

    16 Weeks Ended
January 20,2013   January 22,2012
Diluted earnings per share fromcontinuing operations – GAAP $ 0.54   $ 0.27
Plus: Restructuring charges 0.01
Less: Gains from refranchising   (0.01 )     (0.02 )
Operating earnings per share – Non-GAAP $ 0.54     $ 0.25  

                     
JACK IN THE BOX INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
(Unaudited)
 
Sixteen Weeks Ended
January 20,

2013

January 22,

2012

Revenues:
Company restaurant sales $ 360,094 $ 364,102
Franchise revenues   105,429     93,819  
  465,523     457,921  
Operating costs and expenses, net:
Company restaurant costs:
Food and packaging 116,101 122,107
Payroll and employee benefits 104,064 106,811
Occupancy and other   83,354     85,943  
Total company restaurant costs 303,519 314,861
Franchise costs 52,488 49,859
Selling, general and administrative expenses 67,336 65,717
Impairment and other charges, net 3,263 4,351
Gains on the sale of company-operated restaurants   (748 )   (1,122 )
  425,858     433,666  
Earnings from operations 39,665 24,255
Interest expense, net   5,365     6,057  
Earnings from continuing operations and before income taxes 34,300 18,198
Income taxes   10,356     6,248  
Earnings from continuing operations 23,944 11,950
Losses from discontinued operations, net of income tax benefit

 

(3,255 )

 

 
Net earnings $ 20,689   $ 11,950  
 
Net earnings per share - basic:
Earnings from continuing operations $ 0.56 $ 0.27
Losses from discontinued operations   (0.08 )    
Net earnings per share $ 0.48   $ 0.27  
Net earnings per share - diluted:
Earnings from continuing operations $ 0.54 $ 0.27
Losses from discontinued operations   (0.07 )    
Net earnings per share $ 0.47   $ 0.27  
 
Weighted-average shares outstanding:
Basic 42,997 43,863
Diluted 44,356 44,659
 

                     
JACK IN THE BOX INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
(Unaudited)
 
January 20,

2013

September 30,

2012

ASSETS
Current assets:
Cash and cash equivalents $ 9,542 $ 8,469
Accounts and other receivables, net 40,489 78,798
Inventories 8,235 7,752
Prepaid expenses 20,543 32,821
Deferred income taxes 26,931 26,932
Assets held for sale and leaseback 44,847 45,443
Assets of discontinued operations held for sale 30,591
Other current assets   671     375  
Total current assets   151,258     231,181  
Property and equipment, at cost 1,528,889 1,529,650
Less accumulated depreciation and amortization   (729,755 )   (708,858 )
Property and equipment, net   799,134     820,792  
Goodwill 147,283 140,622
Other assets, net   279,614     271,130  
$ 1,377,289   $ 1,463,725  
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities of long-term debt $ 20,976 $ 15,952
Accounts payable 38,231 94,713
Accrued liabilities   150,579     164,637  
Total current liabilities   209,786     275,302  
Long-term debt, net of current maturities 374,947 405,276
Other long-term liabilities 367,387 371,202
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, 76,427,051 and 75,827,894 issued, respectively

764 758
Capital in excess of par value 236,672 221,100
Retained earnings 1,141,360 1,120,671
Accumulated other comprehensive loss (132,168 ) (136,013 )
Treasury stock, at cost, 32,941,042 and 31,955,606 shares, respectively   (821,459 )   (794,571 )
Total stockholders’ equity   425,169     411,945  
$ 1,377,289   $ 1,463,725  
 

                     
JACK IN THE BOX INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
 
Sixteen Weeks Ended
January 20,

2013

January 22,

2012

Cash flows from operating activities:
Net earnings $ 20,689 $ 11,950
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 30,016 29,534
Deferred finance cost amortization 729 788
Deferred income taxes (1,370 ) (1,203 )
Share-based compensation expense 4,062 2,022
Pension and postretirement expense 9,584 8,212
Gains on cash surrender value of company-owned life insurance (2,836 ) (6,742 )
Gains on the sale of company-operated restaurants (748 ) (1,122 )
(Gains) losses on the disposition of property and equipment (832 ) 1,083
Impairment charges and other 4,458 1,199
Loss on early retirement of debt 939
Changes in assets and liabilities, excluding acquisitions and dispositions:
Accounts and other receivables 38,766 8,630
Inventories 26,361 (6,462 )
Prepaid expenses and other current assets 11,980 (1,412 )
Accounts payable (33,966 ) 2,222
Accrued liabilities (9,141 ) (21,849 )
Pension and postretirement contributions (5,525 ) (996 )
Other   (3,201 )   1,938  
Cash flows provided by operating activities   89,965     27,792  
Cash flows from investing activities:
Purchases of property and equipment (21,394 ) (26,945 )
Purchases of assets intended for sale and leaseback (13,357 ) (11,046 )
Proceeds from sale and leaseback of assets 13,513 3,143
Proceeds from the sale of company-operated restaurants 833 1,249
Collections on notes receivable 1,848 3,539
Disbursements for loans to franchisees (2,604 )
Acquisitions of franchise-operated restaurants (7,800 ) (6,195 )
Other   2,042     14  
Cash flows used in investing activities   (24,315 )   (38,845 )
Cash flows from financing activities:
Borrowings on revolving credit facilities 385,148 222,020
Repayments of borrowings on revolving credit facilities (445,148 ) (191,295 )
Proceeds from issuance of debt 200,000
Principal repayments on debt (165,305 ) (5,380 )
Debt issuance costs (4,386 )
Proceeds from issuance of common stock 10,733 785
Repurchases of common stock (26,888 ) (6,901 )
Excess tax benefits from share-based compensation arrangements 675 191
Change in book overdraft   (19,406 )   (6,147 )
Cash flows provided by (used in) financing activities   (64,577 )   13,273  
Net increase in cash and cash equivalents 1,073 2,220
Cash and cash equivalents at beginning of period   8,469     11,424  
Cash and cash equivalents at end of period $ 9,542   $ 13,644  
 

 
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
 
Sixteen Weeks Ended
January 20,

2013

January 22,

2012

Revenues:
Company restaurant sales

77.4

%

79.5

%

Franchise revenues

22.6

%

20.5

%

Total revenues

100.0

%

100.0

%

Operating costs and expenses, net:
Company restaurant costs:

Food and packaging(1)

32.2

%

33.5

%

Payroll and employee benefits(1)

28.9

%

29.3

%

Occupancy and other(1)

23.1

%

23.6

%

Total company restaurant costs(1)

84.3

%

86.5

%

Franchise costs(1)

49.8

%

53.1

%

Selling, general and administrative expenses

14.5

%

14.4

%

Impairment and other charges, net

0.7

%

1.0

%

Gains on the sale of company-operated restaurants (0.2 )% (0.2 )%
Earnings from operations

8.5

%

5.3

%

Income tax rate(2)

30.2

%

34.3

%

(1)

   

As a percentage of the related sales and/or revenues.

(2)

As a percentage of earnings from continuing operations and before income taxes.

 
 

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)
 
      Sixteen Weeks Ended
January 20, 2013 January 22, 2012
Jack in the Box:      
Company restaurant sales $ 267,176 $ 294,353
Company restaurant costs:
Food and packaging 87,798

32.9

%

101,591

34.5

%

Payroll and employee benefits 77,002

28.8

%

86,569

29.4

%

Occupancy and other   56,588

21.2

%

 

65,291

22.2

%

Total company restaurant costs $ 221,388

82.9

%

$

253,451

86.1

%

Qdoba:
Company restaurant sales $ 92,918 $ 69,749
Company restaurant costs:
Food and packaging 28,303

30.5

%

20,516

29.4

%

Payroll and employee benefits 27,062

29.1

%

20,242

29.0

%

Occupancy and other   26,766

28.8

%

 

20,652

29.6

%

Total company restaurant costs $ 82,131

88.4

%

$

61,410

88.0

%

 

 

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:

                                   
January 20, 2013 January 22, 2012
Company Franchise Total Company Franchise Total
Jack in the Box:
Beginning of year 547 1,703 2,250 629 1,592 2,221
New 3 6 9 5 11 16
Acquired from franchisees 1 (1 )
Closed   (4 ) (4 )   (1 ) (1 )
End of period 551   1,704   2,255   634   1,602   2,236  
% of Jack in the Box system 24 % 76 % 100 % 28 % 72 % 100 %
% of consolidated system 63 % 85 % 78 % 71 % 83 % 79 %
Qdoba:
Beginning of year 316 311 627 245 338 583
New 3 14 17 6 9 15
Acquired from franchisees 6 (6 ) 11 (11 )
Closed   (8 ) (8 )   (1 ) (1 )
End of period 325   311   636   262   335   597  
% of Qdoba system 51 % 49 % 100 % 44 % 56 % 100 %
% of consolidated system 37 % 15 % 22 % 29 % 17 % 21 %
Consolidated:            
Total system 876   2,015   2,891   896   1,937   2,833  
% of consolidated system 30 % 70 % 100 % 32 % 68 % 100 %




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