Exhibit 99.1
Jack in the Box Inc. Reports Record
Second Quarter Profit; Raises Fiscal 2007 Earnings Forecast and
Provides Third-Quarter Guidance
SAN DIEGO--(BUSINESS WIRE)--May 16, 2007--Fueled by another strong
quarter of comparable sales growth at its namesake Jack in the Box(R)
restaurants, Jack in the Box Inc. (NYSE:JBX) today reported that
earnings increased to $27.2 million, or 80 cents per diluted share,
for the second quarter ended April 15, 2007, compared with $21.8
million, or 61 cents per diluted share, for the same quarter a year
ago. Year-to-date net earnings increased to $64.6 million, or $1.83
per diluted share, versus $47.0 million, or $1.31 per diluted share,
last year - a 39 percent improvement in EPS.
Second quarter earnings exceeded the high end of the range
previously forecast by the company and analysts' First Call consensus
estimate of 70 cents.
"Our commitment to reinvent the Jack in the Box brand has
generated new products and new initiatives that drove the increase in
restaurant sales for the first half of the year," said Linda A. Lang,
chairman and chief executive officer. "We continue to develop a strong
lineup of innovative and high-quality menu items, like our new 100%
Sirloin Burger, which we introduced earlier this month and is the only
100% sirloin burger offered by a major quick-serve chain."
Second quarter financial highlights
Same-store sales at Jack in the Box company restaurants increased
6.4 percent in the second quarter, with an increase in both average
check and transactions, on top of a year-ago increase of 4.0 percent.
Year to date, same-store sales are up 5.9 percent on top of a 4.9
percent increase for the same period last year. System same-store
sales at Qdoba Mexican Grill(R) increased 3.5 percent in the second
quarter on top of a 5.6 percent increase in the second quarter of
2006. Year to date, same-store sales are up 3.8 percent at Qdoba, on
top of a 6.8 percent increase for the first half of fiscal 2006.
Restaurant operating margin improved to 18.3 percent of sales in
the second quarter compared with 17.6 percent of sales a year ago, due
primarily to fixed cost leverage from higher sales in 2007 and lower
utility costs. For the first half of fiscal 2007, restaurant operating
margin improved to 18.3 percent of sales versus 16.9 percent of sales
for the same period a year ago, with the 140 basis point improvement
due primarily to the same reasons cited for the quarterly increase as
well as lower food and packaging costs.
SG&A expense rate in the second quarter improved to 10.5 percent
of revenues compared with 11.2 percent last year, due primarily to
leverage from higher sales and franchise revenues, lower pension
expense, and the impact of the company's refranchising strategy.
Ten company and franchised Jack in the Box restaurants opened in
the second quarter, compared with 5 new restaurants that opened in the
same quarter a year ago. Qdoba opened 13 company and franchised
restaurants in the second quarter, the same as last year. At April 15,
the company's system total comprised 2,098 company and franchised Jack
in the Box restaurants, including 57 with Quick Stuff convenience
stores, and 353 company and franchised Qdoba restaurants.
Gains on sale of company-operated restaurants were $7.2 million in
the second quarter, resulting from the sale of 15 Jack in the Box
company restaurants to franchisees. In the second quarter of fiscal
2006, gains on sale of company-operated restaurants totaled $7.5
million, resulting from the sale of 13 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.
The effective tax rate in the second quarter was 36.5 percent
versus 37.0 percent a year ago.
Capital expenditures, including capital lease obligations, were
$29.1 million in the quarter compared with $21.5 million in fiscal
2006, with the increase due primarily to investment in the Jack in the
Box re-image program.
Second quarter initiatives
In the second quarter, Jack in the Box added several new products
as part of the company's strategy to holistically reinvent the Jack in
the Box brand through major upgrades to its menu, restaurant
environment and guest service. Menu additions included the following
products:
-- Steak 'n' Mushroom Ciabatta Sandwich, which features tender,
marinated, 100-percent sirloin steak on toasted ciabatta bread
with savory sliced mushrooms, provolone cheese, grilled onions
and creamy peppercorn mayo.
-- Jack's Sampler Trio, which includes three stuffed jalapenos,
three mozzarella cheese sticks and seven Spicy Chicken Bites -
a new snack item consisting of chicken breast pieces with a
spicy, crunchy coating. The Sampler Trio is served with
buttermilk ranch and zesty marinara dipping sauces.
-- Grilled cheese sandwich, which features two slices of American
cheese on sourdough bread. This product joined Jack's Kids'
Meal(R) menu along with new 8-ounce milk chugs, available in
reduced-fat regular or low-fat chocolate flavors.
-- Andes(R) Mint Shake, which blends real vanilla ice cream, mint
flavor and pieces of Andes chocolate mint candy and features
whipped topping and a maraschino cherry.
Through the first half of fiscal 2007, Jack in the Box re-imaged
56 restaurants and remains on pace to re-image 150-200 restaurants in
fiscal 2007 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, which is expected to be
rolled out to the entire Jack in the Box system in 4-5 years, also
includes music, uniforms and packaging, along with new paint schemes,
landscaping and other exterior enhancements. According to a
proprietary brand image and loyalty study, the newly re-imaged
restaurants are expanding their customer base, generating more guest
visits, and gaining more loyal users.
"Our re-imaged restaurants are receiving higher ratings on all
attributes, from being trendy and a good dining destination to
providing friendly, consistent customer service," Lang said. "This has
led to positive sales trends in the re-imaged markets."
In the second quarter, Jack in the Box also completed the
installation of new interior and exterior menu boards at all
locations.
Treasury highlights
In the second quarter the company repurchased under a 10b5-1 plan
approximately 3.2 million shares of its common stock at an aggregate
cost of approximately $220 million. Including 2.3 million shares
acquired through a modified Dutch auction tender offer in December,
the company has repurchased approximately 5.5 million shares of its
stock in fiscal 2007 at an aggregate cost of approximately $363
million. The company still has a $100 million authorization from its
board to repurchase Jack in the Box stock.
Using its available cash resources, the company prepaid without
penalty $60 million of its $475 million term loan in the second
quarter. The paydown will reduce borrowing rates by 25 basis points
and result in an annualized interest savings of approximately $2.0
million.
To reduce future exposure to rising interest rates, the company in
March entered into interest-rate swap agreements to effectively
convert $200 million of its $415 million term loan at floating
interest rates to a fixed rate for three years.
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:
-- $3.45-3.50 per diluted share in earnings.
-- 5.0-6.0 percent same-store sales increase at Jack in the Box
company-operated restaurants.
-- 3.0-5.0 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.
Third quarter guidance (in approximate amounts)
Jack in the Box Inc. also today announced the following guidance
for the third quarter of 2007:
-- 85-89 cents per diluted share in earnings, which reflects an
expected 5-6 percent increase in beef costs versus the prior
year's quarter.
-- 5.0-6.0 percent same-store sales increase at Jack in the Box
company-operated restaurants.
Third quarter initiatives
-- Near the beginning of May, Jack in the Box introduced a 100%
Sirloin Burger, the first all-sirloin beef patty among major
quick-serve chains. Weighing in at nearly one-third of a pound
after cooking, the 100% Sirloin Burger features a sirloin
patty on a toasted bakery-style bun with peppercorn mayo,
pickle strips, lettuce, tomato, and a choice of American,
cheddar or Swiss cheese, grilled or red onions, and bacon.
-- Earlier this month Jack in the Box added a blackberry flavor
to its lineup of shakes. The new shake features real vanilla
ice cream blended with pieces of real blackberries and served
with creamy whipped topping and a maraschino cherry.
-- To continue to grow breakfast transactions and build consumer
awareness for its Buttermilk Biscuit Sandwiches, Jack in the
Box last month launched a 2 for $2 campaign. The two builds of
Buttermilk Biscuit Sandwiches feature a freshly fried egg,
slice of American cheese, and choice of sausage patty or
bacon.
-- In June, Jack in the Box will launch an upgrade to its line of
entree salads, which will feature a new blend of mostly
Romaine lettuce and spring mix, and offer guests the
opportunity to customize their salad with grilled or crispy
chicken breast strips. The company will also introduce the new
BBQ Ranch Chicken Salad, which will be topped with real
cheddar cheese, fresh cucumber slices and red onion rings, and
served with crunchy barbecue tortilla strips, barbecue sauce
and ranch dressing on the side.
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 350 restaurants in 39 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; the 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; the costs of
legal claims by employees, franchisees, customers, stockholders and
others; and adverse economic and other local, national and
international conditions or events which 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 May 15, 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)
Twelve Weeks Ended Twenty-eight Weeks
Ended
------------------- -----------------------
April 15, April 16, April 15, April 16,
2007 2006 2007 2006
------------------- -----------------------
Revenues:
Restaurant sales $500,445 $487,822 $1,151,853 $1,127,702
Distribution and other
sales 129,807 108,122 293,557 248,083
Franchised restaurant
revenues 30,415 22,819 71,949 55,981
--------- --------- ----------- -----------
660,667 618,763 1,517,359 1,431,766
--------- --------- ----------- -----------
Operating costs and
expenses:
Restaurant costs of
sales 155,205 151,569 357,331 355,514
Restaurant operating
costs 253,750 250,418 583,388 581,566
Distribution and other
costs of sales 128,359 107,134 291,154 245,292
Franchised restaurant
costs 12,923 9,984 29,343 22,851
Selling, general and
administrative expenses 69,552 69,131 158,904 158,681
Gains on sale of
company-operated
restaurants (7,244) (7,473) (14,401) (14,187)
--------- --------- ----------- -----------
612,545 580,763 1,405,719 1,349,717
--------- --------- ----------- -----------
Earnings from operations 48,122 38,000 111,640 82,049
Interest expense, net 5,281 3,440 10,775 7,430
--------- --------- ----------- -----------
Earnings before income
taxes 42,841 34,560 100,865 74,619
Income taxes 15,632 12,773 36,302 27,609
--------- --------- ----------- -----------
Net earnings $27,209 $21,787 $64,563 $47,010
========= ========= =========== ===========
Net earnings per share:
Basic $.82 $.63 $1.89 $1.35
Diluted $.80 $.61 $1.83 $1.31
Weighted-average shares
outstanding:
Basic 33,060 34,482 34,249 34,766
Diluted 33,944 35,701 35,213 35,921
JACK IN THE BOX INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
April 15, April 16,
2007 2006
- ----------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $77,113 $159,134
Accounts and notes receivable, net 42,927 27,200
Inventories 45,495 39,789
Other current assets 98,535 104,535
----------- -----------
Total current assets 264,070 330,658
----------- -----------
Property and equipment, net 903,997 867,643
Other assets, net 215,269 177,547
----------- -----------
TOTAL $1,383,336 $1,375,848
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $5,950 $7,884
Other current liabilities 269,410 264,494
----------- -----------
Total current liabilities 275,360 272,378
----------- -----------
Long-term debt, net of current maturities 429,911 285,937
Other long-term liabilities 215,523 215,190
----------- -----------
Total liabilities 920,794 773,505
----------- -----------
Stockholders' equity 462,542 602,343
----------- -----------
TOTAL $1,383,336 $1,375,848
=========== ===========
CONTACT: Jack in the Box Inc.
Brian Luscomb, 858-571-2229
Division Vice President, Corporate Communications
brian.luscomb@jackinthebox.com
www.jackinthebox.com