Exhibit 99.1
Jack in the Box Inc. Earns $16.3 Million in Second Quarter;
Reaffirms Earnings Guidance for Fiscal 2003
SAN DIEGO--(BUSINESS WIRE)--May 14, 2003--Jack in the Box Inc.
(NYSE: JBX), operator and franchiser of Jack in the Box(R) and Qdoba
Mexican Grill(R) restaurants, today announced net earnings of $16.3
million, or 44 cents per diluted share, for the second quarter ended
April 13 compared with $18.2 million, or 45 cents per share, for the
same quarter last year. Year-to-date, earnings per share totaled $1.00
versus $1.12 in 2002. The company, which met its second-quarter
earnings forecast, also reaffirmed its earnings-per-share estimate for
fiscal 2003 of approximately $1.97 to $2.01.
Weak economic conditions in certain key markets, along with
continued competitive discounting, poor weather and soft sales in
markets impacted by the war, contributed to a 4.3 percent decrease in
Jack in the Box same-store sales compared with a 0.3 percent decrease
for last year's second quarter. Year-to-date, same-store sales were
down 3.3 percent compared with a 0.3 percent increase for the first
half of fiscal 2002.
Qdoba produced a systemwide double-digit increase in same-store
sales for the second quarter on top of a double-digit increase in
2002. This is Qdoba's first reporting quarter since
Jack in the Box Inc. acquired the fast-casual chain in January 2003.
Jack in the Box Inc. also achieved a double-digit increase in
same-store sales, excluding fuel sales, at its Quick Stuff(R)
convenience stores for the second quarter, and same-store sales at the
Jack in the Box restaurants adjacent to Quick Stuff stores were above
system average. Qdoba and Quick Stuff operations are not material
components of Jack in the Box Inc. consolidated financial results and
projections.
Consolidated company restaurant sales were $418 million for the
quarter, the same as a year ago, and were $978 million year-to-date
versus $971 million last year. Other revenues were $10.3 million
compared with $4.3 million in last year's second quarter, primarily
related to a higher average price on the sale of five company
restaurants to franchisees compared with six last year. Other revenues
were $18.6 million year-to-date versus $8.2 million for the same
period in fiscal 2002, primarily related to the sale of 14 company
restaurants to franchisees compared with nine last year. Total
revenues in the quarter were $463 million compared with $448 million
last year, and were $1.08 billion year-to-date versus $1.04 billion in
2002.
"We anticipated that competitor discounting and weak economic
conditions, particularly in our western markets, would continue to
impact sales for the near term, but unusually high fuel costs and the
war in Iraq adversely affected sales as well," said Chairman and CEO
Robert J. Nugent. "Despite these factors, Jack in the Box remains
focused on the major elements of its strategic plan, including the
development of higher-quality products that are unique to the
quick-serve hamburger category."
At the beginning of the third quarter, Jack in the Box introduced
three new premium salads: Asian Chicken, Southwest Chicken and Chicken
Club, marketed collectively as Jack's Ultimate Salads(TM). The initial
consumer response has been very positive. Late in the third quarter,
the company will launch a new premium sandwich.
In April, the company commenced construction on a
70,000-square-foot innovation center near its corporate offices in San
Diego. When completed next summer, the innovation center will unite
the company's marketing group with key technical teams in a
state-of-the-art facility to expedite the development of new products
as well as new equipment and processes to deliver those products.
During the second quarter, the company opened 20 new
Jack in the Box restaurants, bringing to 1,527 the total number of
company-operated restaurants. Total Jack in the Box units at April 13
were 1,897 compared with 1,817 units at quarter-end last year. The
company also operated 12 Quick Stuff(R) convenience stores at
quarter-end compared with 11 a year ago. Qdoba opened one new company
restaurant and six franchised restaurants during the second quarter,
bringing to 92 the total number of units operating at quarter-end
versus 76 in 2002.
Gross profit rate in the second quarter was 18.1 percent of
revenues, as forecast, versus 18.7 percent in 2002, primarily as a
result of higher occupancy, insurance and POS-system rollout costs, as
well as reduced leverage on fixed costs from lower same-store sales.
Restaurant operating margin was 16.4 percent of sales versus 18.1
percent in last year's second quarter for the same reasons.
SG&A expense rate for the second quarter was 11.2 percent of
revenues, as forecast, which is slightly higher than last year,
primarily due to higher pension costs and reduced leverage from lower
same-store sales.
In the second quarter, the company completed the remaining $14
million of its $90 million share-repurchase authorization. Average
shares outstanding are now estimated to be approximately 37 million
for the full year.
Third-Quarter Guidance
The company currently expects to earn approximately 49 cents per
share in the third quarter compared with 60 cents per share reported
in 2002, or 57 cents per share when normalizing the annual income tax
rate to 38 percent and eliminating the amortization of indefinite life
intangible assets of approximately $1 million related to this year's
adoption of FAS 142. The primary assumptions supporting this
earnings-per-share estimate are as follows, in approximate amounts:
-- 19 new Jack in the Box restaurants open.
-- 2.5 percent decrease in Jack in the Box same-store sales due
to continued economic weakness and competitive promotional
activity, partially offset by new product introductions. For
the full year, the company continues to estimate a same-store
sales decrease of approximately 2.5 percent.
-- 14 Jack in the Box conversions to franchises versus five last
year, producing approximately $6.5 million in other revenues
versus $4.7 million in 2002. For the full year, the company
now expects to convert approximately 35 restaurants to
franchises and produce approximately $31 million in other
revenues compared with $20 million from the conversion of 22
restaurants last year. These conversions represent only 2
percent of all company-operated restaurants.
-- $479 million in total revenues versus $461 million in 2002.
-- Gross profit rate of 18.4 percent compared with 20 percent
last year due to higher costs for food, packaging, insurance,
utilities, new point-of-sale (POS) system and de-leveraging on
certain fixed costs from lower sales.
-- SG&A expense rate of 11.2 percent compared with 11.1 percent
last year, primarily due to higher pension costs and the
absorption of Qdoba, partially offset by continued savings
from the company's Profit Improvement Program.
-- Income tax rate of 38 percent versus 32.7 percent last year.
-- Weighted average shares outstanding of 36.8 million versus
40.5 million in 2002.
-- Capital expenditures of approximately $45 million versus $37.2
million last year.
-- Operating income plus depreciation/amortization of
approximately $51 million versus $57.3 million a year ago.
About Jack in the Box Inc.
Jack in the Box Inc. (NYSE: JBX) operates and franchises two
restaurant chains, Jack in the Box(R) and Qdoba Mexican Grill(R), in
29 states combined. Jack in the Box is the nation's first major
drive-thru hamburger chain, with more than 1,900 restaurants, and
Qdoba Mexican Grill is an emerging leader in fast-casual dining, with
nearly 100 restaurants. The company also operates 12 proprietary
convenience stores called Quick Stuff(R), which include a
major-branded fuel station, and are developed adjacent to full-size
Jack in the Box restaurants. With headquarters in San Diego,
Jack in the Box Inc. has more than 44,000 employees. For more
information, visit www.jackinthebox.com and www.qdoba.com.
This news release contains forward-looking statements about, among
other items, the company's projected earnings, sales, revenues,
growth, completion of a new facility, sales of franchises, franchise
conversions, profits, expenses, tax rates, shares outstanding, new
products, and marketing plans. These forward-looking statements are
subject to risks and uncertainties. The statements reflect
management's current expectations regarding future events.
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: the effect of competition, including
pricing, marketing initiatives and new products introduced by
competitors; the availability and cost of food ingredients, labor,
utilities, insurance and real estate; the success of the company's new
products and marketing initiatives; delays in the opening of
restaurants and of the innovation center; the availability of
financing on terms satisfactory to franchisees and potential
franchisees; the attractiveness of the company's franchise offerings;
the continuation of franchise conversions; adverse weather conditions
and other local or national conditions or events which affect consumer
confidence and spending patterns; the company's ability to
successfully execute its strategic plans; the volume of advertising
the company is able to purchase compared to its competitors; consumer
health concerns about fast food in general or the company's products
specifically; changes in government regulations; changes in accounting
standards, policies and practices; changes in effective tax rates;
potential variances between estimated and actual liabilities; effects
of legal claims; the possibility of unforeseen events affecting the
industry in general and other risk factors listed from time to time in
the company's reports filed with the Securities and Exchange
Commission. Statements about the company's past performance are not
necessarily indicative of its future results. The company undertakes
no obligation to publicly update or revise any forward-looking
statement, whether as the result of new information, future events 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 13, April 14, April 13, April 14,
2003 2002 2003 2002
- ----------------------------------------------------------------------
Revenues:
Restaurant sales $418,272 $418,118 $977,703 $970,666
Distribution and other sales 24,282 16,950 52,424 38,102
Franchise rents and royalties 10,496 8,247 27,997 24,886
Other 10,298 4,315 18,559 8,156
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463,348 447,630 1,076,683 1,041,810
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Costs of revenues:
Restaurant costs of sales 125,551 127,579 296,821 297,697
Restaurant operating costs 224,228 214,840 518,245 496,389
Costs of distribution and
other sales 23,789 16,454 51,281 37,139
Franchised restaurant costs 5,774 5,123 13,214 11,764
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379,342 363,996 879,561 842,989
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Gross profit 84,006 83,634 197,122 198,821
Selling, general and
administrative 51,884 49,804 122,612 115,680
--------------------------------------
Earnings from operations 32,122 33,830 74,510 83,141
Interest expense 5,802 5,190 14,061 12,495
--------------------------------------
Earnings before income taxes 26,320 28,640 60,449 70,646
Income taxes 10,001 10,454 22,970 25,786
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Net earnings $16,319 $18,186 $37,479 $44,860
======================================
Net earnings per share:
Basic $.45 $.46 $1.02 $1.14
Diluted $.44 $.45 $1.00 $1.12
Weighted-average shares
outstanding:
Basic 36,399 39,436 36,866 39,342
Diluted 36,846 40,299 37,306 40,125
JACK IN THE BOX INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
April 13, April 14,
2003 2002
- ----------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $8,242 $6,138
Accounts receivable, net 30,748 19,042
Inventories 32,030 28,108
Other current assets 37,538 88,447
----------------------
Total current assets 108,558 141,735
----------------------
Property and equipment, at cost 1,247,170 1,150,544
Accumulated depreciation and amortization (401,129) (355,519)
----------------------
Property and equipment, net 846,041 795,025
----------------------
Other assets, net 158,067 108,509
----------------------
TOTAL $1,112,666 $1,045,269
======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $2,519 $76,396
Accounts payable 40,736 37,557
Other current liabilities 174,392 169,822
----------------------
Total current liabilities 217,647 283,775
----------------------
Long-term debt, net of current maturities 298,989 179,063
Other long-term liabilities 144,239 117,501
Total stockholders' equity 451,791 464,930
----------------------
TOTAL $1,112,666 $1,045,269
======================
CONTACT: Jack in the Box Inc., San Diego
Karen Bachmann, Vice President, Corporate Communications
858/571-2229
karen.bachmann@jackinthebox.com
www.jackinthebox.com