Exhibit 99.1
Jack in the Box Inc. Reports Record Profit in First Quarter;
Updates Fiscal 2007 Forecast and Provides Guidance for Second Quarter
SAN DIEGO--(BUSINESS WIRE)--Feb. 21, 2007--Jack in the Box Inc.
(NYSE:JBX) today reported record earnings for the first quarter ended
Jan. 21, 2007, which increased to $37.4 million, or $1.03 per diluted
share, compared with $25.2 million, or 70 cents per diluted share, in
the same quarter a year ago.
First quarter earnings exceeded the high end of the range
previously forecast by the company and analysts' First Call consensus
estimate of 81 cents. The improvement was due primarily to the
following, in approximate amounts:
-- +17 cents from higher sales and restaurant operating margin at
Jack in the Box.
-- +4 cents from a lower tax rate.
-- +4 cents due to the rollout of new employee uniforms, which
was originally anticipated to be completed in the first
quarter and instead began in the second quarter.
-- -3 cents from financing costs related to retiring the
company's previous credit facility.
"The outstanding first-quarter performance reflects continued
execution of our strategic initiatives to profitably grow the company,
expand franchising and reinvent the Jack in the Box(R) brand," said
Linda A. Lang, chairman and chief executive officer.
First quarter financial highlights
Same-store sales at Jack in the Box company restaurants increased
5.6 percent in the first quarter, with an increase in both average
check and transactions, compared with a year-ago increase of 5.5
percent. System same-store sales at Qdoba Mexican Grill(R) increased
4.1 percent in the first quarter on top of a 7.9 percent increase in
the first quarter of 2006.
Restaurant operating margin improved to 18.4 percent of sales in
the first quarter compared with 16.4 percent a year ago, due primarily
to higher sales in 2007 and lower food costs - principally beef,
chicken, cheese and produce - as well as expense control, lower
utility costs and fixed-cost leverage on same-store sales growth.
SG&A expense rate in the first quarter decreased to 10.4 percent
of revenues compared with 11.0 percent last year, which included
approximately 30 basis points related to the settlement of a legal
matter.
Ten company and franchised Jack in the Box restaurants opened in
the first quarter, along with 2 new Quick Stuff(R) convenience stores,
compared with 4 new restaurants and 2 Quick Stuff sites opened in the
same quarter a year ago. Qdoba opened 29 company and franchised
restaurants in the first quarter compared with 23 locations opened in
the same quarter a year ago. At Jan. 21, the company's system total
comprised 2,088 company and franchised Jack in the Box restaurants,
including 57 with Quick Stuff convenience stores, and 344 company and
franchised Qdoba restaurants.
Gains on sale of company-operated restaurants were $7.2 million in
the first quarter from the sale of 15 Jack in the Box company
restaurants to franchisees. In the first quarter of fiscal 2006, gains
on sale of company-operated restaurants totaled $6.7 million from the
sale of 17 Jack in the Box company restaurants to franchisees. The
difference in average gains is related to the specific sales and cash
flows of restaurants sold. Beginning in the first quarter of fiscal
2007, and as noted in the attached consolidated statements of
earnings, the company is reporting gains as a discrete line item,
reclassified within operating costs and expenses rather than within
other revenues, as previously presented. Last year's gains on sale of
company-operated restaurants to franchisees have also been
reclassified to conform with the current year presentation.
The effective tax rate in the first quarter was 35.6 percent
versus 37.0 percent a year ago, with the decrease due primarily to the
retroactive reinstatement of the Work Opportunity Tax Credit (WOTC)
program.
Capital expenditures, including capital lease obligations, were
$40.1 million in the quarter compared with $40.3 million in fiscal
2006.
First quarter initiatives
Jack in the Box continues to execute its strategy to holistically
reinvent the Jack in the Box brand through major changes to its menu,
restaurant environment and guest service.
Menu additions in the first quarter included the following
products:
-- Sirloin Steak 'n' Cheddar Ciabatta Sandwich, which features
tender, marinated, 100-percent sirloin steak on toasted
ciabatta bread with cheddar cheese, red onions, tomatoes and
green leaf lettuce topped with a creamy peppercorn mayo.
-- Bacon Breakfast Jack(TM), which combines a fried egg, American
cheese and crispy bacon on a soft bun.
-- Mozzarella Cheese Sticks, which feature mozzarella cheese
coated in crunchy, herb-and-spice breading and served with a
side of zesty marinara sauce.
-- Chocolate Oreo(R) Cookie Shake, which blends bits of Oreo
cookies with real vanilla ice cream and bittersweet chocolate
syrup.
"While we continue to offer great product variety at a tremendous
value, Jack in the Box is also a leader in menu innovation and quality
with new products like our Steak 'n' Cheddar Ciabatta Sandwich and
Mozzarella Cheese Sticks," Lang said. "When combined with our
guest-service initiatives and restaurant re-image program, Jack in the
Box is a much more compelling brand than it was just a few years ago."
In the first quarter, Jack in the Box became the first major
quick-serve chain to install contactless credit card readers at all
company restaurants. With this new technology, guests at the service
counters and drive-thru windows can pay simply by holding their
MasterCard PayPass(TM), Visa Contactless, American Express or Discover
Network card in front of a small device, which processes the
transaction via radio frequency.
Jack in the Box expanded its reloadable Jack Ca$h(TM) card program
in the first quarter to include a retail component: The cards are now
available at grocery chains such as Safeway, Albertsons, Randalls and
Tom Thumb stores.
Also in the first quarter, the company continued re-imaging its
Jack in the Box restaurants with a comprehensive program that includes
a complete redesign of the dining room and common areas. Interior
finishes include ceramic tile floors, a mix of seating styles ranging
from booths and bars to high-top round tables, decorative pendant
lighting, and graphics and wall collages. The program also includes
music, uniforms, menu boards and packaging, along with new paint
schemes, landscaping and other exterior enhancements. The company
remains on track to re-image 150-200 restaurants in fiscal 2007 and
expects to complete the program in 4-5 years.
New credit facility and modified "Dutch auction" tender offer
The company secured a new $625 million credit facility in the
first quarter, which includes a $150 million revolving credit facility
and a $475 million term loan. Proceeds from the new credit facility
were used to retire the $268 million term debt outstanding and fund a
modified "Dutch auction" tender offer in the first quarter. The
company announced in December that it accepted for purchase
approximately 2.3 million shares of its common stock, about 6 percent
of the shares then outstanding, for a total cost of $143.1 million.
Stock repurchase program
The company said today that its board of directors has authorized
a program to repurchase up to 3.3 million shares of the company's
common stock at prevailing market prices, in the open market, from
time to time during calendar year 2007. At Jan. 21, 2007, the company
had 34.0 million shares of common stock outstanding. Such repurchases
will be made using the company's cash resources.
Fiscal year 2007 guidance update (in approximate amounts)
Jack in the Box Inc. today updated its earnings guidance and
certain underlying assumptions for fiscal year 2007, which reflects
the effect of the recently completed tender offer but not the effect
of additional shares that may be repurchased through the remainder of
fiscal 2007.
-- $3.27-$3.33 per diluted share in earnings.
-- 4-5 percent same-store sales increase at Jack in the Box
company-operated restaurants.
-- 3-5 percent same-store sales increase at Qdoba system
restaurants.
-- $29-31 million in gains from the sale of 70-80 restaurants to
franchisees.
-- 36-37 percent tax rate.
-- 40-45 new company and franchise-operated Jack in the Box
restaurants.
-- 80-90 new company and franchise-operated Qdoba restaurants.
-- $160-170 million in capital expenditures, including investment
costs related to the Jack in the Box restaurant re-image
program and kitchen enhancements.
Second quarter guidance (in approximate amounts)
Jack in the Box Inc. also today announced the following guidance
for the second quarter of 2007, which reflects the effect of the
recently completed tender offer but not the effect of additional
shares that may be repurchased through the remainder of fiscal 2007:
-- 67-70 cents per diluted share in earnings.
-- 3.5-4.5 percent same-store sales increase at Jack in the Box
company-operated restaurants.
About Jack in the Box Inc.
Jack in the Box Inc. (NYSE:JBX), based in San Diego, is a
restaurant company that operates and franchises Jack in the Box(R)
restaurants, one of the nation's largest hamburger chains, with more
than 2,000 restaurants in 17 states. The company also operates a
proprietary chain of convenience stores called Quick Stuff(R), with
more than 50 locations, each built adjacent to a full-size Jack in the
Box restaurant and including a major-brand fuel station. Additionally,
through a wholly owned subsidiary, the company operates and franchises
Qdoba Mexican Grill(R), an emerging leader in fast-casual dining, with
more than 300 restaurants in 40 states. For more information, visit
www.jackinthebox.com.
Safe harbor statement
Except for the historical information contained herein, the
matters discussed in this press release are forward-looking statements
that are subject to substantial risks and uncertainties. These
statements may be identified by the use of words such as "believe,"
"expects," "will," and other words of similar meaning.
The following are some of the factors that could cause the
company's actual results to differ materially from those expressed in
the forward-looking statements: delays in the opening of new or
remodeled restaurants; costs that exceed projections; uncertainty
whether test results for products or facility enhancements are
predictive of successful results on a larger scale; loss of sales due
to restaurant closures related to weather or other adverse conditions
in the regions in which restaurants are located; changes in laws,
regulations, and accounting rules and interpretations; and adverse
economic and other local, national and international conditions or
events that affect consumer confidence and spending.
Further information about factors that could affect the company's
financial and other results is included in the company's annual report
on Form 10-K and its periodic reports on Forms 10-Q filed with the
Securities and Exchange Commission. The information in this press
release is as of Feb. 20, 2007. 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
UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
Sixteen Weeks Ended
-------------------
Jan. 21, Jan. 22,
2007 2006
--------- ---------
Revenues:
Restaurant sales $651,408 $639,880
Distribution and other sales 163,750 139,961
Franchised restaurant revenues 41,534 33,162
--------- ---------
856,692 813,003
--------- ---------
Operating costs and expenses:
Restaurant costs of sales 202,126 203,945
Restaurant operating costs 329,638 331,148
Distribution and other costs of sales 162,795 138,158
Franchised restaurant costs 16,420 12,867
Selling, general and administrative expenses 89,352 89,550
Gains on sale of company-operated restaurants (7,157) (6,714)
--------- ---------
793,174 768,954
--------- ---------
Earnings from operations 63,518 44,049
Interest expense, net 5,494 3,990
--------- ---------
Earnings before income taxes 58,024 40,059
Income taxes 20,670 14,836
--------- ---------
Net earnings $37,354 $25,223
========= =========
Net earnings per share:
Basic $1.06 $.72
Diluted $1.03 $.70
Weighted-average shares outstanding:
Basic 35,140 34,978
Diluted 36,144 36,053
JACK IN THE BOX INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
Jan. 21, Jan. 22,
2007 2006
- ---------------------------------------------- ----------- -----------
ASSETS
Current assets:
Cash and cash equivalents $301,607 $101,639
Accounts and notes receivable, net 34,610 23,888
Inventories 45,728 40,575
Other current assets 86,848 103,629
----------- -----------
Total current assets 468,793 269,731
----------- -----------
Property and equipment, net 904,909 870,733
Other assets, net 211,044 175,640
----------- -----------
TOTAL $1,584,746 $1,316,104
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $5,899 $7,846
Other current liabilities 236,524 254,503
----------- -----------
Total current liabilities 242,423 262,349
----------- -----------
Long-term debt, net of current maturities 491,409 287,914
Other long-term liabilities 215,574 216,212
----------- -----------
Total liabilities 949,406 766,475
----------- -----------
Stockholders' equity 635,340 549,629
----------- -----------
TOTAL $1,584,746 $1,316,104
=========== ===========
CONTACT: Jack in the Box Inc.
Brian Luscomb, 858-571-2229
Division Vice President, Corporate Communications
brian.luscomb@jackinthebox.com
www.jackinthebox.com