SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) November 9, 1994
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FOODMAKER, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 1-9390 95-2698708
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(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
9330 BALBOA AVENUE, SAN DIEGO, CA 92123
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (619) 571-2121
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ITEM 5. OTHER EVENTS
Foodmaker, Inc. issued the following press release:
FOR IMMEDIATE RELEASE Contact: Chuck Duddles
November 9, 1994 (619) 571-2470
FOODMAKER ANNOUNCES FOURTH QUARTER RESULTS
SAN DIEGO -- Foodmaker, Inc., (NYSE: FM) the parent company of the
JACK IN THE BOX restaurant chain, today reported a loss, for the fourth
quarter of fiscal 1994, before extraordinary item, of $5.5 million, or 14
cents a share, compared to a loss, before extraordinary item, of $2.7
million, or 7 cents a share, for the fourth quarter of 1993. The net loss
for the quarter was $6.1 million, or 16 cents a share, and included a $600
thousand extraordinary charge, after tax, resulting from early repayment of
approximately $11.6 million of debt.
Included in fourth quarter results was an after tax loss of $1.4 million
or 4 cents a share from Family Restaurants, Inc., in which Foodmaker holds an
approximate 40 percent equity position. This loss was due to a provision for
divestiture restaurants that are not part of the strategic long-term plan for
Family Restaurants. Family Restaurants is the parent company of Chi-Chi's,
El Torito, Carrows and Coco's restaurant chains.
JACK IN THE BOX systemwide sales for the quarter, which include results
from both company-operated and franchised restaurants, were $246.4 million,
compared to $257.8 million for the same quarter in 1993. Fourth quarter 1993
had thirteen weeks compared to twelve weeks this year. Total revenues were
$227.2 million in the fourth quarter of 1994 compared to revenues of $207.9
million in the final quarter of 1993, excluding revenues from the Chi-Chi's
Mexican restaurant chain, which was sold in January. Of the increase, $22
million was due to the recognition of Distribution sales to Chi-Chi's this
year, which were eliminated in consolidation last year.
Comparable restaurant sales at JACK IN THE BOX were up 1.5% for the
quarter, compared to the same period in 1993 which included the introduction
of the popular Teriyaki Bowls.
In light of the company's cash balance and the increase in liquidity
resulting from the completion of a $52.5 million bank line of credit, the
company paid off $23.3 million of 13 1/2 percent Senior Secured Notes at the
end of the fourth quarter. Approximately $11.6 million of the notes were not
due until September 30, 1995, but the interest savings was greater than the
premium required to retire the debt early. An extraordinary charge of $600
thousand was recognized in the transaction. In addition, Foodmaker retired
$7.0 million of its 12 3/4 percent Senior Notes in November 1994.
Foodmaker ended the year with $36 million in cash, most of which
was attributable to the sale of Chi-Chi's Mexican restaurants.
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Tax Adjustment
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Given the company's recent losses combined with the sale of Chi-Chi's,
the rules under Statement of Financial Accounting Standards No. 109 require
Foodmaker to provide a non-cash valuation allowance for previously recognized
tax benefits resulting in an adjustment to the tax provision of $13.7 million
or 36 cents a share. This increase in the tax provision and reduction of
retained earnings will be reflected as of the second quarter of 1994. The
company will have these tax benefits available to offset future taxable
income.
This adjustment increases the second quarter loss before extraordinary
item to $22.9 million, or 59 cents a share, from a loss of $9.2 million or 24
cents a share, as previously reported. The net loss is therefore also
adjusted to $25.7 million, or 67 cents a share, from a loss of $11.9 million,
or 31 cents a share, as previously reported.
After recognizing this tax provision adjustment, the loss for the fiscal
year ended October 2, 1994, before extraordinary item is $36.3 million, or 94
cents a share, compared to a loss before extraordinary item of $44.1 million,
or $1.15 cents a share, for fiscal 1993. The net loss for the year is $39.6
million, or $1.03 a share, compared to a loss of $98.1 million, or $2.55 a
share, for 1993.
Overview
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The company has initiatives underway in virtually every area of
operations and all the signs are positive. Higher sales at new and renovated
restaurants, continued guest satisfaction and support for new Supreme Combo
Meals and the Ultimate Breakfast Sandwich, and test market excitement over
several new products in development all indicate an upward trend for
JACK IN THE BOX which should be reflected in 1995 results.
Exterior Image Enhancement Program/Public Service
As previously reported, JACK IN THE BOX units where the company's
exterior enhancement program has been completed are experiencing average
sales gains of two to four percent compared to non-enhanced restaurants.
Renovations, which include brighter lighting, larger signs, vibrant colors
and neon striping, have been completed at approximately 430 restaurants in
fiscal 1994. Remaining company-operated restaurants and most of the
franchised units are expected to be completed in fiscal 1995.
In addition, the company is rolling out system-wide a program of
providing free telephones inside restaurants to allow law enforcement
officers to have a quiet and undisturbed environment to conduct reporting and
related duties. Introduced in Phoenix at the suggestion of local law
enforcement, the program has proven extremely popular, and has the added
benefit of increased law enforcement visibility at restaurants.
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New Products and Promotions
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Based on the success of such sandwiches as the Ultimate Cheeseburger and
the Colossus Burger, JACK IN THE BOX introduced a new breakfast sandwich, the
Ultimate Breakfast Sandwich, featuring a tasty combination of egg, cheese,
bacon and ham on a sesame seed bun. Initial sales results are promising,
with positive long term impact on the breakfast daypart expected. The
sandwich is the first major product added to the breakfast menu since 1991.
Supreme Combo Meals, introduced in August, are meeting sales
expectations and helping decrease customer waiting time through more
efficient ordering. Combo meals, offering six combinations of sandwiches,
french fries and drinks, have also featured add-on specials such as reduced
price tacos. On average, nearly one fourth of all meals ordered recently
have been Combo meals.
The Combo meals are heavily featured in a special cross promotion with
Paramount Pictures which began October 31, 1994. JACK IN THE BOX is the sole
quick service restaurant promotional partner for the expected Paramount movie
hit "Star Trek: Generations", which features the cast of both the old and new
Star Trek television series.
JACK IN THE BOX promotional items include a series of four Star Trek
drink cups, available in "Galaxy Size" Combo meal upgrades for 39 cents, as
well as an exclusive 1995 calendar available only at JACK IN THE BOX.
Special television ads featuring Star Trek promotions have begun airing.
Star Trek fans are among the most devout in the entertainment field, and
early sales results indicate a positive boost from collectors seeking
promotional items.
Marketing Strategy In Review
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While the core strategy of differentiating JACK IN THE BOX from its
competitors through a varied menu with adult appeal remains the basis of the
company's marketing strategy, the company elected in the fourth quarter to
select a new advertising agency to help review and enhance the company's
marketing efforts.
The Los Angeles office of Chiat-Day was selected after an extensive
review, and new advertising should begin around the first of the year.
Chain Expansion Ahead Of Plan
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At the end of the quarter, JACK IN THE BOX had 810 company-operated
restaurants and 414 franchised units, compared to 725 and 447, respectively,
at the close of fiscal 1993.
By the end of the fourth quarter, 54 new company operated and 8
franchised restaurants were opened in fiscal 1994. Continuing a year long
experience, new restaurants are performing above chain average and are
meeting expectations. More than 60 domestic restaurants are now under
various stages of development.
Headquartered in San Diego, Foodmaker operates and franchises over 1,220
JACK IN THE BOX restaurants, primarily in the western and southwestern United
States, Hong Kong and Mexico. JACK IN THE BOX expects to add additional units
in the Philippines as well as Hong Kong and Mexico in 1995.
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FOODMAKER, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
12 Weeks 13 Weeks 52 Weeks 53 Weeks
Ended Ended Ended Ended
Oct 2, Oct 3, Oct 2, Oct 3,
1994 1993 1994 1993
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Revenues:
Restaurant sales. . . . . . . . . .$172,690 $273,403 $ 843,038 $1,088,269
Distribution sales. . . . . . . . . 45,289 28,413 171,711 108,546
Franchise rents and royalties . . . 7,858 8,474 33,740 35,232
Other . . . . . . . . . . . . . . . 1,387 1,950 4,837 8,680
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227,224 312,240 1,053,326 1,240,727
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Costs and expenses:
Costs of revenues:
Restaurant cost of sales . . . . 49,230 78,819 244,560 307,940
Restaurant operating costs . . . 100,563 161,873 495,340 644,434
Cost of distribution sales . . . 43,589 27,858 165,789 104,817
Franchised restaurant costs. . . 5,191 5,723 22,822 67,727
Selling, general and administrative 23,446 27,587 100,764 124,422
Equity in loss of FRI . . . . . . . 1,231 - 2,108 -
Interest expense. . . . . . . . . . 12,180 14,390 55,201 57,586
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235,430 316,250 1,086,584 1,306,926
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Loss before income taxes,
extraordinary item and cumulative
effect of changes in accounting
principles. . . . . . . . . . . . . (8,206) (4,010) (33,258) (66,199)
Income taxes (benefit). . . . . . . . (2,684) (1,337) 3,010 (22,071)
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Loss before extraordinary item
and cumulative effect of
changes in accounting principles. . (5,522) (2,673) (36,268) (44,128)
Extraordinary item - loss on early
extinguishment of debt, net of taxes (564) - (3,302) -
Cumulative effect on prior years (to
September 27, 1992) of adopting
SFAS 106 and SFAS 109 . . . . . . . - - - (53,980)
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Net loss. . . . . . . . . . . . . . .$ (6,086) $ (2,673) $ (39,570) $ (98,108)
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Loss per share - primary
and fully diluted:
Loss before extraordinary item
and cumulative effect of
changes in accounting
principles . . . . . . . . . . .$ (.14) $ (.07) $ (.94) $ (1.15)
Extraordinary item. . . . . . . . . (.02) - (.09) -
Cumulative effect on prior years (to
September 27, 1992) of adopting
SFAS 106 and SFAS 109. . . . . . - - - (1.40)
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Net loss per share. . . . . . . . .$ (.16) $ (.07) $ (1.03) $ (2.55)
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Weighted average shares outstanding 38,633 38,223 38,531 38,486
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
By: /S/ CHARLES W. DUDDLES
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Charles W. Duddles
Executive Vice President,
Chief Administrative Officer
and Chief Financial Officer
Date: November 9, 1994
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