DELAWARE
|
|
95-2698708
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(State of Incorporation)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
9330 BALBOA AVENUE, SAN DIEGO, CA
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|
92123
|
(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
|
þ
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Accelerated filer
|
¨
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Non-accelerated filer
|
¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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|
PART I – FINANCIAL INFORMATION
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|
Item 1.
|
|
|
|
||
|
Condensed
Consolidated Statements of Earnings
|
|
|
||
|
||
|
||
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
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Item 3.
|
||
Item 4.
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||
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PART II – OTHER INFORMATION
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
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||
Item 3.
|
Defaults of Senior Securities
|
|
Item 4.
|
||
Item 5.
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||
Item 6.
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||
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April 15,
2018 |
|
October 1,
2017 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash
|
$
|
1,154
|
|
|
$
|
4,467
|
|
Accounts and other receivables, net
|
102,404
|
|
|
59,609
|
|
||
Inventories
|
2,559
|
|
|
3,445
|
|
||
Prepaid expenses
|
11,947
|
|
|
27,532
|
|
||
Current assets held for sale
|
23,495
|
|
|
42,732
|
|
||
Other current assets
|
3,582
|
|
|
1,493
|
|
||
Total current assets
|
145,141
|
|
|
139,278
|
|
||
Property and equipment:
|
|
|
|
||||
Property and equipment, at cost
|
1,224,738
|
|
|
1,262,117
|
|
||
Less accumulated depreciation and amortization
|
(781,389
|
)
|
|
(777,841
|
)
|
||
Property and equipment, net
|
443,349
|
|
|
484,276
|
|
||
Other Assets:
|
|
|
|
||||
Intangible assets, net
|
710
|
|
|
1,413
|
|
||
Goodwill
|
47,414
|
|
|
51,412
|
|
||
Non-current assets held for sale
|
—
|
|
|
280,796
|
|
||
Other assets, net
|
238,424
|
|
|
277,570
|
|
||
Total other assets
|
286,548
|
|
|
611,191
|
|
||
|
$
|
875,038
|
|
|
$
|
1,234,745
|
|
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current maturities of long-term debt
|
$
|
42,854
|
|
|
$
|
64,225
|
|
Accounts payable
|
24,500
|
|
|
28,366
|
|
||
Accrued liabilities
|
100,181
|
|
|
135,054
|
|
||
Current liabilities held for sale
|
—
|
|
|
34,345
|
|
||
Total current liabilities
|
167,535
|
|
|
261,990
|
|
||
Long-term liabilities:
|
|
|
|
||||
Long-term debt, net of current maturities
|
900,402
|
|
|
1,079,982
|
|
||
Non-current liabilities held for sale
|
—
|
|
|
32,078
|
|
||
Other long-term liabilities
|
238,011
|
|
|
248,825
|
|
||
Total long-term liabilities
|
1,138,413
|
|
|
1,360,885
|
|
||
Stockholders’ deficit:
|
|
|
|
||||
Preferred stock $0.01 par value, 15,000,000 shares authorized, none issued
|
—
|
|
|
—
|
|
||
Common stock $0.01 par value, 175,000,000 shares authorized, 81,945,792 and 81,843,483 issued, respectively
|
819
|
|
|
818
|
|
||
Capital in excess of par value
|
459,821
|
|
|
453,432
|
|
||
Retained earnings
|
1,521,934
|
|
|
1,485,820
|
|
||
Accumulated other comprehensive loss
|
(123,045
|
)
|
|
(137,761
|
)
|
||
Treasury stock, at cost, 53,522,782 and 52,411,407 shares, respectively
|
(2,290,439
|
)
|
|
(2,190,439
|
)
|
||
Total stockholders’ deficit
|
(430,910
|
)
|
|
(388,130
|
)
|
||
|
$
|
875,038
|
|
|
$
|
1,234,745
|
|
|
Quarter
|
|
Year-to-date
|
||||||||||||
|
April 15,
2018 |
|
April 16,
2017 |
|
April 15,
2018 |
|
April 16,
2017 |
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Company restaurant sales
|
$
|
113,938
|
|
|
$
|
180,275
|
|
|
$
|
283,575
|
|
|
$
|
418,846
|
|
Franchise rental revenues
|
57,843
|
|
|
51,295
|
|
|
135,060
|
|
|
122,731
|
|
||||
Franchise royalties and other
|
37,991
|
|
|
34,314
|
|
|
85,600
|
|
|
77,488
|
|
||||
|
209,772
|
|
|
265,884
|
|
|
504,235
|
|
|
619,065
|
|
||||
Operating costs and expenses, net:
|
|
|
|
|
|
|
|
||||||||
Company restaurant costs (excluding depreciation and amortization):
|
|
|
|
|
|
|
|
||||||||
Food and packaging
|
32,638
|
|
|
52,042
|
|
|
81,502
|
|
|
120,031
|
|
||||
Payroll and employee benefits
|
33,096
|
|
|
54,529
|
|
|
82,036
|
|
|
124,712
|
|
||||
Occupancy and other
|
18,143
|
|
|
30,704
|
|
|
45,893
|
|
|
69,645
|
|
||||
Total company restaurant costs (excluding depreciation and amortization)
|
83,877
|
|
|
137,275
|
|
|
209,431
|
|
|
314,388
|
|
||||
Franchise occupancy expenses (excluding depreciation and amortization)
|
36,065
|
|
|
31,543
|
|
|
82,586
|
|
|
73,733
|
|
||||
Franchise support and other costs
|
2,583
|
|
|
1,734
|
|
|
5,065
|
|
|
4,271
|
|
||||
Selling, general and administrative expenses
|
27,017
|
|
|
25,862
|
|
|
61,642
|
|
|
66,634
|
|
||||
Depreciation and amortization
|
13,955
|
|
|
16,122
|
|
|
33,112
|
|
|
37,385
|
|
||||
Impairment and other charges, net
|
4,927
|
|
|
1,367
|
|
|
7,184
|
|
|
4,021
|
|
||||
Gains on the sale of company-operated restaurants
|
(5,472
|
)
|
|
(7,779
|
)
|
|
(14,412
|
)
|
|
(7,916
|
)
|
||||
|
162,952
|
|
|
206,124
|
|
|
384,608
|
|
|
492,516
|
|
||||
Earnings from operations
|
46,820
|
|
|
59,760
|
|
|
119,627
|
|
|
126,549
|
|
||||
Interest expense, net
|
10,413
|
|
|
9,037
|
|
|
23,193
|
|
|
19,446
|
|
||||
Earnings from continuing operations and before income taxes
|
36,407
|
|
|
50,723
|
|
|
96,434
|
|
|
107,103
|
|
||||
Income taxes
|
11,426
|
|
|
19,333
|
|
|
58,564
|
|
|
41,164
|
|
||||
Earnings from continuing operations
|
24,981
|
|
|
31,390
|
|
|
37,870
|
|
|
65,939
|
|
||||
Earnings from discontinued operations, net of taxes
|
22,624
|
|
|
1,704
|
|
|
21,925
|
|
|
3,084
|
|
||||
Net earnings
|
$
|
47,605
|
|
|
$
|
33,094
|
|
|
$
|
59,795
|
|
|
$
|
69,023
|
|
|
|
|
|
|
|
|
|
||||||||
Net earnings per share - basic:
|
|
|
|
|
|
|
|
||||||||
Earnings from continuing operations
|
$
|
0.86
|
|
|
$
|
1.02
|
|
|
$
|
1.29
|
|
|
$
|
2.09
|
|
Earnings from discontinued operations
|
0.78
|
|
|
0.06
|
|
|
0.75
|
|
|
0.10
|
|
||||
Net earnings per share (1)
|
$
|
1.64
|
|
|
$
|
1.07
|
|
|
$
|
2.04
|
|
|
$
|
2.18
|
|
Net earnings per share - diluted:
|
|
|
|
|
|
|
|
||||||||
Earnings from continuing operations
|
$
|
0.85
|
|
|
$
|
1.01
|
|
|
$
|
1.27
|
|
|
$
|
2.07
|
|
Earnings from discontinued operations
|
0.77
|
|
|
0.05
|
|
|
0.74
|
|
|
0.10
|
|
||||
Net earnings per share (1)
|
$
|
1.62
|
|
|
$
|
1.06
|
|
|
$
|
2.01
|
|
|
$
|
2.16
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted-average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
29,040
|
|
|
30,895
|
|
|
29,332
|
|
|
31,622
|
|
||||
Diluted
|
29,356
|
|
|
31,126
|
|
|
29,705
|
|
|
31,883
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash dividends declared per common share
|
$
|
0.40
|
|
|
$
|
0.40
|
|
|
$
|
0.80
|
|
|
$
|
0.80
|
|
(1)
|
Earnings per share may not add due to rounding.
|
|
Quarter
|
|
Year-to-date
|
||||||||||||
|
April 15,
2018 |
|
April 16,
2017 |
|
April 15,
2018 |
|
April 16,
2017 |
||||||||
Net earnings
|
$
|
47,605
|
|
|
$
|
33,094
|
|
|
$
|
59,795
|
|
|
$
|
69,023
|
|
Cash flow hedges:
|
|
|
|
|
|
|
|
||||||||
Net change in fair value of derivatives
|
4,295
|
|
|
(3,981
|
)
|
|
14,586
|
|
|
19,105
|
|
||||
Net loss reclassified to earnings
|
876
|
|
|
1,219
|
|
|
2,550
|
|
|
3,285
|
|
||||
|
5,171
|
|
|
(2,762
|
)
|
|
17,136
|
|
|
22,390
|
|
||||
Tax effect
|
(1,313
|
)
|
|
1,069
|
|
|
(4,352
|
)
|
|
(8,663
|
)
|
||||
|
3,858
|
|
|
(1,693
|
)
|
|
12,784
|
|
|
13,727
|
|
||||
Unrecognized periodic benefit costs:
|
|
|
|
|
|
|
|
||||||||
Actuarial losses and prior service costs reclassified to earnings
|
1,151
|
|
|
1,483
|
|
|
2,686
|
|
|
3,461
|
|
||||
Tax effect
|
(292
|
)
|
|
(574
|
)
|
|
(834
|
)
|
|
(1,339
|
)
|
||||
|
859
|
|
|
909
|
|
|
1,852
|
|
|
2,122
|
|
||||
Other:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
Tax effect
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Derecognition of foreign currency translation adjustments due to sale
|
76
|
|
|
—
|
|
|
76
|
|
|
—
|
|
||||
|
80
|
|
|
—
|
|
|
80
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss), net of tax
|
4,797
|
|
|
(784
|
)
|
|
14,716
|
|
|
15,849
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income
|
$
|
52,402
|
|
|
$
|
32,310
|
|
|
$
|
74,511
|
|
|
$
|
84,872
|
|
|
Year-to-date
|
||||||
|
April 15,
2018 |
|
April 16,
2017 |
||||
Cash flows from operating activities:
|
|
|
|
||||
Net earnings
|
$
|
59,795
|
|
|
$
|
69,023
|
|
Earnings from discontinued operations
|
21,925
|
|
|
3,084
|
|
||
Income from continuing operations
|
37,870
|
|
|
65,939
|
|
||
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
33,112
|
|
|
37,385
|
|
||
Amortization of franchise tenant improvement allowances
|
265
|
|
|
48
|
|
||
Deferred finance cost amortization
|
1,725
|
|
|
1,919
|
|
||
Excess tax benefits from share-based compensation arrangements
|
(816
|
)
|
|
(4,034
|
)
|
||
Deferred income taxes
|
34,726
|
|
|
2,428
|
|
||
Share-based compensation expense
|
6,148
|
|
|
6,270
|
|
||
Pension and postretirement expense
|
1,252
|
|
|
2,269
|
|
||
Gains on cash surrender value of company-owned life insurance
|
(312
|
)
|
|
(73
|
)
|
||
Gains on the sale of company-operated restaurants
|
(14,412
|
)
|
|
(7,916
|
)
|
||
Losses on the disposition of property and equipment, net
|
481
|
|
|
957
|
|
||
Impairment charges and other
|
1,502
|
|
|
745
|
|
||
Changes in assets and liabilities, excluding dispositions:
|
|
|
|
||||
Accounts and other receivables
|
(13,876
|
)
|
|
30,666
|
|
||
Inventories
|
886
|
|
|
528
|
|
||
Prepaid expenses and other current assets
|
(5,458
|
)
|
|
18,560
|
|
||
Accounts payable
|
(3,742
|
)
|
|
(1,637
|
)
|
||
Accrued liabilities
|
(35,959
|
)
|
|
(30,003
|
)
|
||
Pension and postretirement contributions
|
(3,077
|
)
|
|
(2,773
|
)
|
||
Franchise tenant improvement allowance distributions
|
(3,487
|
)
|
|
—
|
|
||
Other
|
(7,551
|
)
|
|
(6,111
|
)
|
||
Cash flows provided by operating activities
|
29,277
|
|
|
115,167
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(18,347
|
)
|
|
(15,596
|
)
|
||
Purchases of assets intended for sale and leaseback
|
(5,491
|
)
|
|
(1,752
|
)
|
||
Proceeds from the sale and leaseback of assets
|
4,949
|
|
|
2,466
|
|
||
Proceeds from the sale of company-operated restaurants
|
16,844
|
|
|
31,389
|
|
||
Collections on notes receivable
|
9,722
|
|
|
1,121
|
|
||
Proceeds from the sale of property and equipment
|
600
|
|
|
2,082
|
|
||
Other
|
2,969
|
|
|
(172
|
)
|
||
Cash flows provided by investing activities
|
11,246
|
|
|
19,538
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Borrowings on revolving credit facilities
|
283,200
|
|
|
534,500
|
|
||
Repayments of borrowings on revolving credit facilities
|
(199,100
|
)
|
|
(305,000
|
)
|
||
Principal repayments on debt
|
(282,626
|
)
|
|
(28,738
|
)
|
||
Debt issuance costs
|
(1,367
|
)
|
|
—
|
|
||
Dividends paid on common stock
|
(23,370
|
)
|
|
(25,462
|
)
|
||
Proceeds from issuance of common stock
|
39
|
|
|
4,840
|
|
||
Repurchases of common stock
|
(100,000
|
)
|
|
(322,687
|
)
|
||
Excess tax benefits from share-based compensation arrangements
|
—
|
|
|
4,034
|
|
||
Change in book overdraft
|
1,397
|
|
|
—
|
|
||
Payroll tax payments for equity award issuances
|
(4,268
|
)
|
|
(5,706
|
)
|
||
Cash flows used in financing activities
|
(326,095
|
)
|
|
(144,219
|
)
|
||
Cash flows used in continuing operations
|
(285,572
|
)
|
|
(9,514
|
)
|
||
Net cash provided by operating activities of discontinued operations
|
5,503
|
|
|
16,692
|
|
||
Net cash provided by (used in) investing activities of discontinued operations
|
273,653
|
|
|
(17,788
|
)
|
||
Net cash used in financing activities of discontinued operations
|
(78
|
)
|
|
(62
|
)
|
||
Net cash provided by (used in) discontinued operations
|
279,078
|
|
|
(1,158
|
)
|
||
Effect of exchange rate changes on cash
|
6
|
|
|
—
|
|
||
Cash at beginning of period, including discontinued operations cash
|
7,642
|
|
|
17,030
|
|
||
Cash at end of period, including discontinued operations cash
|
$
|
1,154
|
|
|
$
|
6,358
|
|
|
April 15,
2018 |
|
April 16,
2017 |
||
Company-operated
|
188
|
|
|
371
|
|
Franchise
|
2,057
|
|
|
1,889
|
|
Total system
|
2,245
|
|
|
2,260
|
|
2.
|
DISCONTINUED OPERATIONS
|
|
Quarter
|
|
Year-to-date
|
||||||||||||
|
April 15,
2018 |
|
April 16,
2017 |
|
April 15,
2018 |
|
April 16,
2017 |
||||||||
Company restaurant sales
|
$
|
66,850
|
|
|
$
|
98,793
|
|
|
$
|
192,620
|
|
|
$
|
227,492
|
|
Franchise revenues
|
3,351
|
|
|
4,711
|
|
|
9,337
|
|
|
10,764
|
|
||||
Company restaurant costs (excluding depreciation and amortization)
|
(57,504
|
)
|
|
(80,713
|
)
|
|
(166,122
|
)
|
|
(186,429
|
)
|
||||
Franchise costs (excluding depreciation and amortization)
|
(930
|
)
|
|
(910
|
)
|
|
(2,338
|
)
|
|
(2,083
|
)
|
||||
Selling, general and administrative expenses
|
(5,848
|
)
|
|
(7,956
|
)
|
|
(18,112
|
)
|
|
(20,385
|
)
|
||||
Depreciation and amortization
|
—
|
|
|
(5,057
|
)
|
|
(5,012
|
)
|
|
(11,752
|
)
|
||||
Impairment and other charges, net
|
(594
|
)
|
|
(3,811
|
)
|
|
(2,263
|
)
|
|
(7,715
|
)
|
||||
Interest expense, net
|
(1,575
|
)
|
|
(2,044
|
)
|
|
(4,787
|
)
|
|
(4,559
|
)
|
||||
Operating earnings from discontinued operations before income taxes
|
3,750
|
|
|
3,013
|
|
|
3,323
|
|
|
5,333
|
|
||||
Gain on Qdoba Sale
|
35,729
|
|
|
—
|
|
|
35,729
|
|
|
—
|
|
||||
Earnings from discontinued operations before income taxes
|
39,479
|
|
|
3,013
|
|
|
39,052
|
|
|
5,333
|
|
||||
Income taxes
|
(16,819
|
)
|
|
(1,181
|
)
|
|
(17,024
|
)
|
|
(2,057
|
)
|
||||
Earnings from discontinued operations, net of income taxes
|
$
|
22,660
|
|
|
$
|
1,832
|
|
|
$
|
22,028
|
|
|
$
|
3,276
|
|
|
|
|
|
|
|
|
|
||||||||
Net earnings per share from discontinued operations:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.78
|
|
|
$
|
0.06
|
|
|
$
|
0.75
|
|
|
$
|
0.10
|
|
Diluted
|
$
|
0.77
|
|
|
$
|
0.06
|
|
|
$
|
0.74
|
|
|
$
|
0.10
|
|
Net proceeds received from the Qdoba Sale (1)
|
|
$
|
301,904
|
|
|
|
|
||
Qdoba assets:
|
|
|
||
Cash
|
|
3,113
|
|
|
Accounts receivable, net
|
|
9,461
|
|
|
Inventories
|
|
3,112
|
|
|
Prepaid expenses and other current assets
|
|
5,007
|
|
|
Property and equipment, net
|
|
163,404
|
|
|
Intangible assets, net
|
|
12,518
|
|
|
Goodwill
|
|
117,636
|
|
|
Other assets, net
|
|
2,604
|
|
|
Total Qdoba assets
|
|
316,855
|
|
|
|
|
|
||
Qdoba liabilities:
|
|
|
||
Accounts payable
|
|
7,847
|
|
|
Accrued liabilities
|
|
20,265
|
|
|
Current maturities of long-term debt
|
|
180
|
|
|
Straight-line rent accrual
|
|
14,595
|
|
|
Deferred income tax liability
|
|
8,676
|
|
|
Other long-term liabilities
|
|
11,144
|
|
|
Total Qdoba liabilities
|
|
62,707
|
|
|
|
|
|
||
Other transaction costs incurred as part of the Qdoba Sale (2)
|
|
12,027
|
|
|
|
|
|
||
Gain on Qdoba Sale before income taxes
|
|
$
|
35,729
|
|
(1)
|
The proceeds received from the Qdoba Sale are net of working capital adjustments outlined in the Qdoba Purchase Agreement, which must be finalized within 90 days after the closing date of the Qdoba Sale, and the derecognition of foreign currency translation adjustments recorded in accumulated other comprehensive income of
$0.1 million
.
|
(2)
|
Costs directly incurred as a result of the Qdoba Sale, including investment bank fees, legal fees, professional fees, employee transaction awards, transfer taxes and other administrative costs.
|
3.
|
INDEBTEDNESS
|
|
Quarter
|
|
Year-to-date
|
||||||||||||
|
April 15,
2018 |
|
April 16,
2017 |
|
April 15,
2018 |
|
April 16,
2017 |
||||||||
Restaurants sold to franchisees
|
63
|
|
|
60
|
|
|
85
|
|
|
60
|
|
||||
New restaurants opened by franchisees
|
3
|
|
|
6
|
|
|
8
|
|
|
13
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Initial franchise fees
|
$
|
2,735
|
|
|
$
|
2,538
|
|
|
$
|
3,730
|
|
|
$
|
2,828
|
|
|
|
|
|
|
|
|
|
||||||||
Proceeds from the sale of company-operated restaurants:
|
|
|
|
|
|
|
|
||||||||
Cash (1)
|
$
|
11,253
|
|
|
$
|
31,251
|
|
|
$
|
16,844
|
|
|
$
|
31,389
|
|
Short-term notes receivable (2)
|
22,422
|
|
|
—
|
|
|
31,506
|
|
|
—
|
|
||||
|
33,675
|
|
|
31,251
|
|
|
48,350
|
|
|
31,389
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net assets sold (primarily property and equipment)
|
(9,509
|
)
|
|
(10,306
|
)
|
|
(13,146
|
)
|
|
(10,306
|
)
|
||||
Lease commitment charges (3)
|
(863
|
)
|
|
(7,651
|
)
|
|
(863
|
)
|
|
(7,651
|
)
|
||||
Goodwill related to the sale of company-operated restaurants
|
(3,807
|
)
|
|
(341
|
)
|
|
(3,960
|
)
|
|
(342
|
)
|
||||
Other (4)
|
(14,024
|
)
|
|
(5,174
|
)
|
|
(15,969
|
)
|
|
(5,174
|
)
|
||||
Gains on the sale of company-operated restaurants
|
$
|
5,472
|
|
|
$
|
7,779
|
|
|
$
|
14,412
|
|
|
$
|
7,916
|
|
(1)
|
Year-to-date, amounts in
2018
and
2017
include additional proceeds of
$1.2 million
and
$0.1 million
, respectively, related to restaurants sold in prior years. There were no additional proceeds and an immaterial amount of additional proceeds recognized during the quarter in
2018
and
2017
, respectively.
|
(2)
|
We collected payments of
$9.1 million
related to notes due from franchisees in the first quarter of
2018
.
|
(3)
|
Charges are for operating restaurant leases with lease commitments in excess of our sublease rental income from franchisees.
|
(4)
|
Amounts in
2018
include an
$8.8 million
reduction of gains related to the modification of certain 2017 refranchising transactions. The quarter and year-to-date amounts in 2018 also include
$3.7 million
and
$5.2 million
, respectively, of costs related to franchise remodel incentives. Amounts in
2017
primarily represent impairment of
$3.1 million
and equipment write-offs of
$1.4 million
related to restaurants closed in connection with the sale of the related markets.
|
5.
|
FAIR VALUE MEASUREMENTS
|
|
Total
|
|
Quoted Prices
in Active
Markets for
Identical
Assets (3)
(Level 1)
|
|
Significant
Other
Observable
Inputs (3)
(Level 2)
|
|
Significant
Unobservable
Inputs (3)
(Level 3)
|
||||||||
Fair value measurements as of April 15, 2018:
|
|
|
|
|
|
|
|
||||||||
Non-qualified deferred compensation plan (1)
|
$
|
(36,534
|
)
|
|
$
|
(36,534
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swaps (Note 6) (2)
|
(5,791
|
)
|
|
—
|
|
|
(5,791
|
)
|
|
—
|
|
||||
Total liabilities at fair value
|
$
|
(42,325
|
)
|
|
$
|
(36,534
|
)
|
|
$
|
(5,791
|
)
|
|
$
|
—
|
|
Fair value measurements as of October 1, 2017:
|
|
|
|
|
|
|
|
||||||||
Non-qualified deferred compensation plan (1)
|
$
|
(37,219
|
)
|
|
$
|
(37,219
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swaps (Note 6) (2)
|
(22,927
|
)
|
|
—
|
|
|
(22,927
|
)
|
|
—
|
|
||||
Total liabilities at fair value
|
$
|
(60,146
|
)
|
|
$
|
(37,219
|
)
|
|
$
|
(22,927
|
)
|
|
$
|
—
|
|
(1)
|
We maintain an unfunded defined contribution plan for key executives and other members of management. The fair value of this obligation is based on the closing market prices of the participants’ elected investments. The obligation is included in accrued liabilities and other long-term liabilities on our condensed consolidated balance sheets.
|
(2)
|
We entered into interest rate swaps to reduce our exposure to rising interest rates on our variable rate debt. The fair values of our interest rate swaps are based upon Level 2 inputs which include valuation models as reported by our counterparties. The key inputs for the valuation models are quoted market prices, discount rates and forward yield curves.
|
(3)
|
We did not have any transfers in or out of Level 1, 2 or 3.
|
6.
|
DERIVATIVE INSTRUMENTS
|
|
Balance
Sheet
Location
|
|
Fair Value
|
||||||
|
|
April 15,
2018 |
|
October 1, 2017
|
|||||
Derivatives designated as cash flow hedging instruments:
|
|
|
|
|
|
||||
Interest rate swaps
|
Accrued liabilities
|
|
$
|
(1,153
|
)
|
|
$
|
(4,777
|
)
|
Interest rate swaps
|
Other long-term liabilities
|
|
(4,638
|
)
|
|
(18,150
|
)
|
||
Total derivatives (Note 5)
|
|
|
$
|
(5,791
|
)
|
|
$
|
(22,927
|
)
|
|
Location in Income
|
|
Quarter
|
|
Year-to-date
|
||||||||||||
|
|
April 15,
2018 |
|
April 16,
2017 |
|
April 15,
2018 |
|
April 16,
2017 |
|||||||||
Gain (loss) recognized in OCI
|
N/A
|
|
$
|
4,295
|
|
|
$
|
(3,981
|
)
|
|
$
|
14,586
|
|
|
$
|
19,105
|
|
Loss reclassified from accumulated OCI into net earnings
|
Interest expense, net
|
|
$
|
876
|
|
|
$
|
1,219
|
|
|
$
|
2,550
|
|
|
$
|
3,285
|
|
7.
|
IMPAIRMENT AND OTHER CHARGES, NET
|
|
Quarter
|
|
Year-to-date
|
||||||||||||
|
April 15,
2018 |
|
April 16,
2017 |
|
April 15,
2018 |
|
April 16,
2017 |
||||||||
Restructuring costs
|
$
|
2,575
|
|
|
$
|
247
|
|
|
$
|
2,933
|
|
|
$
|
430
|
|
Costs of closed restaurants and other
|
1,730
|
|
|
417
|
|
|
3,105
|
|
|
2,256
|
|
||||
Accelerated depreciation
|
324
|
|
|
276
|
|
|
374
|
|
|
378
|
|
||||
Losses on disposition of property and equipment, net
|
298
|
|
|
427
|
|
|
481
|
|
|
957
|
|
||||
Operating restaurant impairment charges (1)
|
—
|
|
|
—
|
|
|
291
|
|
|
—
|
|
||||
|
$
|
4,927
|
|
|
$
|
1,367
|
|
|
$
|
7,184
|
|
|
$
|
4,021
|
|
(1)
|
Impairment charges are primarily resulting from our landlord’s sale of a restaurant property to a franchisee.
|
|
Quarter
|
|
Year-to-date
|
||||||||||||
|
April 15,
2018 |
|
April 16,
2017 |
|
April 15,
2018 |
|
April 16,
2017 |
||||||||
Employee severance and related costs (1)
|
$
|
1,808
|
|
|
$
|
163
|
|
|
$
|
1,352
|
|
|
$
|
256
|
|
Qdoba Evaluation consulting costs (2)
|
542
|
|
|
—
|
|
|
768
|
|
|
—
|
|
||||
Qdoba Evaluation retention bonus
|
225
|
|
|
—
|
|
|
812
|
|
|
—
|
|
||||
Other
|
—
|
|
|
84
|
|
|
1
|
|
|
174
|
|
||||
|
$
|
2,575
|
|
|
$
|
247
|
|
|
$
|
2,933
|
|
|
$
|
430
|
|
(1)
|
Year-to-date 2018 includes a reduction in severance and related costs due to a change in the number of employees to be terminated in connection with our restructuring activities.
|
(2)
|
Qdoba Evaluation consulting costs are primarily related to third party advisory services.
|
Balance as of October 1, 2017
|
|
$
|
648
|
|
Additions/adjustments
|
|
1,352
|
|
|
Cash payments
|
|
(1,484
|
)
|
|
Balance as of April 15, 2018
|
|
$
|
516
|
|
Balance as of October 1, 2017
|
|
$
|
6,175
|
|
Additions
|
|
135
|
|
|
Adjustments (1)
|
|
549
|
|
|
Interest expense
|
|
957
|
|
|
Cash payments
|
|
(3,253
|
)
|
|
Balance as of April 15, 2018 (2) (3)
|
|
$
|
4,563
|
|
(1)
|
Adjustments relate primarily to revisions of certain sublease and cost assumptions. Our estimates related to our future lease obligations, primarily the sublease income we anticipate, are subject to a high degree of judgment and may differ from actual sublease income due to changes in economic conditions, desirability of the sites and other factors.
|
(2)
|
The weighted average remaining lease term related to these commitments is approximately
4
years.
|
(3)
|
This balance excludes
$3.2 million
of restaurant closing costs that are included in accrued liabilities and other long-term liabilities
on
our condensed consolidated balance sheets, which were initially recorded as losses on the sale of company-operated restaurants to Jack in the Box franchisees.
|
8.
|
INCOME TAXES
|
|
Quarter
|
|
Year-to-date
|
||||||||||||||||||||||||
|
April 15,
2018 |
|
April 16,
2017 |
|
April 15,
2018 |
|
April 16,
2017 |
||||||||||||||||||||
Income tax expense at statutory rate
|
$
|
10,717
|
|
|
29.4
|
%
|
|
$
|
19,221
|
|
|
37.9
|
%
|
|
$
|
28,037
|
|
|
29.1
|
%
|
|
$
|
40,961
|
|
|
38.2
|
%
|
Non-cash impact of the Tax Act
|
577
|
|
|
1.6
|
%
|
|
—
|
|
|
—
|
%
|
|
31,204
|
|
|
32.4
|
%
|
|
—
|
|
|
—
|
%
|
||||
Stock compensation excess tax benefit
|
(14
|
)
|
|
—
|
%
|
|
—
|
|
|
—
|
%
|
|
(816
|
)
|
|
(0.9
|
)%
|
|
—
|
|
|
—
|
%
|
||||
Other
|
146
|
|
|
0.4
|
%
|
|
112
|
|
|
0.2
|
%
|
|
139
|
|
|
0.1
|
%
|
|
203
|
|
|
0.2
|
%
|
||||
(1)
|
$
|
11,426
|
|
|
31.4
|
%
|
|
$
|
19,333
|
|
|
38.1
|
%
|
|
$
|
58,564
|
|
|
60.7
|
%
|
|
$
|
41,164
|
|
|
38.4
|
%
|
(1)
|
Percentages may not add due to rounding.
|
9.
|
RETIREMENT PLANS
|
|
Quarter
|
|
Year-to-date
|
||||||||||||
|
April 15,
2018 |
|
April 16,
2017 |
|
April 15,
2018 |
|
April 16,
2017 |
||||||||
Defined benefit pension plans:
|
|
|
|
|
|
|
|
||||||||
Interest cost
|
$
|
5,160
|
|
|
$
|
5,248
|
|
|
$
|
12,039
|
|
|
$
|
12,244
|
|
Service cost
|
516
|
|
|
504
|
|
|
1,203
|
|
|
1,177
|
|
||||
Expected return on plan assets
|
(6,510
|
)
|
|
(6,494
|
)
|
|
(15,190
|
)
|
|
(15,153
|
)
|
||||
Actuarial loss (1)
|
1,123
|
|
|
1,411
|
|
|
2,621
|
|
|
3,292
|
|
||||
Amortization of unrecognized prior service costs (1)
|
34
|
|
|
35
|
|
|
79
|
|
|
82
|
|
||||
Net periodic benefit cost
|
$
|
323
|
|
|
$
|
704
|
|
|
$
|
752
|
|
|
$
|
1,642
|
|
Postretirement healthcare plans:
|
|
|
|
|
|
|
|
||||||||
Interest cost
|
$
|
220
|
|
|
$
|
231
|
|
|
$
|
514
|
|
|
$
|
540
|
|
Actuarial (gain) loss (1)
|
(6
|
)
|
|
37
|
|
|
(14
|
)
|
|
87
|
|
||||
Net periodic benefit cost
|
$
|
214
|
|
|
$
|
268
|
|
|
$
|
500
|
|
|
$
|
627
|
|
(1)
|
Amounts were reclassified from accumulated OCI into net earnings as a component of selling, general and administrative expenses.
|
|
SERP
|
|
Postretirement
Healthcare Plans
|
||||
Net year-to-date contributions
|
$
|
2,200
|
|
|
$
|
877
|
|
Remaining estimated net contributions during fiscal 2018
|
$
|
2,200
|
|
|
$
|
500
|
|
10.
|
SHARE-BASED COMPENSATION
|
Nonvested stock units
|
60,965
|
|
Stock options
|
113,447
|
|
Performance share awards
|
22,735
|
|
|
Quarter
|
|
Year-to-date
|
||||||||||||
|
April 15,
2018 |
|
April 16,
2017 |
|
April 15,
2018 |
|
April 16,
2017 |
||||||||
Nonvested stock units
|
$
|
2,082
|
|
|
$
|
1,584
|
|
|
$
|
3,860
|
|
|
$
|
3,653
|
|
Stock options
|
697
|
|
|
312
|
|
|
1,179
|
|
|
1,113
|
|
||||
Nonvested stock awards
|
7
|
|
|
20
|
|
|
21
|
|
|
47
|
|
||||
Performance share awards
|
75
|
|
|
397
|
|
|
738
|
|
|
1,187
|
|
||||
Deferred compensation for non-management directors
|
350
|
|
|
270
|
|
|
350
|
|
|
270
|
|
||||
Total share-based compensation expense
|
$
|
3,211
|
|
|
$
|
2,583
|
|
|
$
|
6,148
|
|
|
$
|
6,270
|
|
11.
|
STOCKHOLDERS’ EQUITY
|
12.
|
AVERAGE SHARES OUTSTANDING
|
|
Quarter
|
|
Year-to-date
|
||||||||
|
April 15,
2018 |
|
April 16,
2017 |
|
April 15,
2018 |
|
April 16,
2017 |
||||
Weighted-average shares outstanding – basic
|
29,040
|
|
|
30,895
|
|
|
29,332
|
|
|
31,622
|
|
Effect of potentially dilutive securities:
|
|
|
|
|
|
|
|
||||
Nonvested stock awards and units
|
268
|
|
|
163
|
|
|
311
|
|
|
178
|
|
Stock options
|
41
|
|
|
52
|
|
|
55
|
|
|
66
|
|
Performance share awards
|
7
|
|
|
16
|
|
|
7
|
|
|
17
|
|
Weighted-average shares outstanding – diluted
|
29,356
|
|
|
31,126
|
|
|
29,705
|
|
|
31,883
|
|
Excluded from diluted weighted-average shares outstanding:
|
|
|
|
|
|
|
|
||||
Antidilutive
|
150
|
|
|
90
|
|
|
116
|
|
|
64
|
|
Performance conditions not satisfied at the end of the period
|
67
|
|
|
79
|
|
|
67
|
|
|
79
|
|
14.
|
SUPPLEMENTAL CONSOLIDATED CASH FLOW INFORMATION (
in thousands
)
|
|
Year-to-date
|
||||||
|
April 15,
2018 |
|
April 16,
2017 |
||||
Cash paid during the year for:
|
|
|
|
||||
Interest, net of amounts capitalized
|
$
|
23,522
|
|
|
$
|
18,460
|
|
Income tax payments
|
$
|
12,706
|
|
|
$
|
27,356
|
|
Decrease in obligations for purchases of property and equipment
|
$
|
3,465
|
|
|
$
|
1,998
|
|
Non-cash transactions:
|
|
|
|
||||
Increase in notes receivable from the sale of company-operated restaurants
|
$
|
31,506
|
|
|
$
|
—
|
|
Increase in accrued franchise tenant improvement allowances
|
$
|
5,132
|
|
|
$
|
1,398
|
|
Increase in dividends accrued or converted to common stock equivalents
|
$
|
160
|
|
|
$
|
151
|
|
Increase in obligations for treasury stock repurchases
|
$
|
—
|
|
|
$
|
4,466
|
|
Decrease in equipment capital lease obligations from the sale of company-operated restaurants, closure of stores and termination of equipment leases
|
$
|
2,330
|
|
|
$
|
2,031
|
|
Decrease in capital lease obligations from the termination of building leases
|
$
|
233
|
|
|
$
|
87
|
|
Equipment capital lease obligations incurred
|
$
|
59
|
|
|
$
|
59
|
|
15.
|
SUPPLEMENTAL CONSOLIDATED BALANCE SHEET INFORMATION
(in thousands)
|
|
|||||||
|
April 15,
2018 |
|
October 1,
2017 |
||||
Accounts and other receivables, net:
|
|
|
|
||||
Trade
|
$
|
51,876
|
|
|
$
|
55,108
|
|
Due from marketing fund
|
19,634
|
|
|
—
|
|
||
Notes receivable
|
22,970
|
|
|
988
|
|
||
Other
|
9,440
|
|
|
5,672
|
|
||
Allowance for doubtful accounts
|
(1,516
|
)
|
|
(2,159
|
)
|
||
|
$
|
102,404
|
|
|
$
|
59,609
|
|
Prepaid expenses:
|
|
|
|
||||
Prepaid rent
|
$
|
8,301
|
|
|
$
|
—
|
|
Prepaid income taxes
|
—
|
|
|
16,928
|
|
||
Other
|
3,646
|
|
|
10,604
|
|
||
|
$
|
11,947
|
|
|
$
|
27,532
|
|
Other assets, net:
|
|
|
|
||||
Company-owned life insurance policies
|
$
|
107,940
|
|
|
$
|
110,057
|
|
Deferred tax assets
|
62,889
|
|
|
105,117
|
|
||
Deferred rent receivable
|
47,562
|
|
|
46,962
|
|
||
Other
|
20,033
|
|
|
15,434
|
|
||
|
$
|
238,424
|
|
|
$
|
277,570
|
|
Accrued liabilities:
|
|
|
|
||||
Insurance
|
$
|
35,945
|
|
|
$
|
39,011
|
|
Payroll and related taxes
|
25,416
|
|
|
23,361
|
|
||
Deferred rent income
|
10,646
|
|
|
18,961
|
|
||
Advertising
|
—
|
|
|
18,493
|
|
||
Sales and property taxes
|
3,034
|
|
|
7,275
|
|
||
Gift card liability
|
2,243
|
|
|
2,237
|
|
||
Deferred franchise fees
|
425
|
|
|
450
|
|
||
Other
|
22,472
|
|
|
25,266
|
|
||
|
$
|
100,181
|
|
|
$
|
135,054
|
|
Other long-term liabilities:
|
|
|
|
||||
Defined benefit pension plans
|
$
|
102,864
|
|
|
$
|
107,011
|
|
Straight-line rent accrual
|
32,511
|
|
|
33,749
|
|
||
Other
|
102,636
|
|
|
108,065
|
|
||
|
$
|
238,011
|
|
|
$
|
248,825
|
|
16.
|
SUBSEQUENT EVENTS
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Overview
— a general description of our business and
2018
highlights.
|
•
|
Financial reporting
— a discussion of changes in presentation, if any.
|
•
|
Results of operations
— an analysis of our condensed consolidated statements of earnings for the periods presented in our condensed consolidated financial statements.
|
•
|
Liquidity and capital resources
— an analysis of our cash flows including pension and postretirement health contributions, capital expenditures, sale of company-operated restaurants, franchise tenant improvement allowance distributions, our credit facility, share repurchase activity, dividends, known trends that may impact liquidity and the impact of inflation, if applicable.
|
•
|
Discussion of critical accounting estimates
— a discussion of accounting policies that require critical judgments and estimates.
|
•
|
New accounting pronouncements
— a discussion of new accounting pronouncements, dates of implementation and the impact on our consolidated financial position or results of operations, if any.
|
•
|
Cautionary statements regarding forward-looking statements
— a discussion of the risks and uncertainties that may cause our actual results to differ materially from any forward-looking statements made by management.
|
•
|
Changes in sales at restaurants open more than one year (“same-store sales”), system restaurant sales, franchised restaurant sales, and average unit volumes (“AUVs”). Same-store sales, restaurant sales, and AUVs are presented for franchised restaurants and on a system-wide basis, which includes company and franchise restaurants. Franchise sales represent sales at franchise restaurants and are revenues of our franchisees. We do not record franchise sales as revenues; however, our royalty revenues and percentage rent revenues are calculated based on a percentage of franchise sales. We believe franchise and system same-store sales, franchised and system restaurant sales,
and AUV information is useful to investors as they have a direct effect on the Company’s profitability.
|
•
|
Adjusted EBITDA, which represents net earnings on a generally accepted accounting principles (“GAAP”) basis excluding gains or losses from discontinued operations, income taxes, interest expense, net, gains on the sale of company-operated restaurants, impairment and other charges, depreciation and amortization, and the amortization of tenant improvement allowances.
We are presenting Adjusted EBITDA because we believe that it provides a meaningful supplement to net earnings of the Company's core business operating results, as well as a comparison to those of other similar companies. Management believes that Adjusted EBITDA, when viewed with the Company's results of operations in accordance with GAAP and the accompanying reconciliations within MD&A, provides useful information about operating performance and period-over-period change, and provides additional information that is useful for evaluating the operating performance of the Company's core business without regard to potential distortions. Additionally, management believes that Adjusted EBITDA permits investors to gain an understanding of the factors and trends affecting our ongoing cash earnings, from which capital investments are made and debt is serviced.
|
•
|
Same-store and System Sales
—
Same-store sales decreased
0.2%
year-to-date in 2018 system wide compared with a year ago, and system sales decreased
$5.8 million
, or 0.3%, year-to-date in 2018 compared with a year ago. These decreases were primarily due to a decrease in traffic at both company-operated and franchise-operated restaurants, partially offset by menu price increases and favorable mix.
|
•
|
Company Restaurant Operations
—
Jack in the Box company restaurant costs as a percentage of company restaurant sales decreased in
2018
to
73.9%
from
75.1%
a year ago primarily due to the benefit of refranchising units that had lower AUVs than the average for all company restaurants.
|
•
|
Franchise Operations
—
Jack in the Box franchise costs as a percentage of franchise revenues increased in 2018 to
39.7%
, from
39.0%
in the prior year, primarily due to a 0.3% decrease in same-store sales at franchised restaurants and reduced royalties for certain restaurants sold to franchisees in 2017.
|
•
|
Jack in the Box Franchising Program
—
Franchisees opened a total of
8
restaurants. As part of our refranchising strategy, we sold
85
company-operated restaurants to franchisees in several different markets during 2018 resulting in proceeds of approximately
$48.4 million
. In fiscal year
2018
, we expect approximately
25
Jack in the Box restaurants to open system-wide, the majority of which will be franchise locations. Our Jack in the Box system was
92%
franchised as of
April 15, 2018
. We plan to increase franchise ownership of the Jack in the Box system to approximately 95% by the end of the fiscal year. Prior and subsequent to the end of the second quarter of 2018, we signed non-binding letters of intent with franchisees to sell approximately 46 company-operated restaurants in several markets. Pre-tax gross proceeds related to these sales are estimated at $37.0 million to $41.0 million, and we have classified
$3.3 million
of equipment, related to sales under letters executed prior to quarter-end, as assets held for sale in our April 15, 2018 condensed consolidated balance sheet.
|
•
|
Restructuring Costs (including costs related to the Qdoba Evaluation)
—
In 2016, we announced a plan to reduce our general and administrative costs, and in the third quarter of 2017, we began an evaluation of potential alternatives with respect to the Qdoba brand (the “Qdoba Evaluation”), which ultimately resulted in the sale of Qdoba (the “Qdoba Sale”). In connection with these activities, we have recorded
$2.9 million
of restructuring charges in 2018, which includes $1.6 million related to the Qdoba Evaluation, and $1.3 million primarily related to severance costs. These costs are included in impairment and other costs, net in the accompanying condensed consolidated statements of earnings.
|
•
|
Return of Cash to Shareholders
—
We returned cash to shareholders in the form of share repurchases and cash dividends. We repurchased approximately
1.1 million
shares of our common stock in 2018 at an average price of
$89.98
per share, totaling
$100.0 million
, including the costs of brokerage fees. We also declared two cash dividends of $0.40 per share totaling
$23.5 million
.
|
•
|
Adjusted EBITDA
—
Adjusted EBITDA decreased in 2018 to
$145.8 million
from
$160.1 million
in 2017 due primarily to the execution of our refranchising strategy.
|
•
|
Tax Reform
—
The
Tax Cuts and Jobs Act (the “Tax Act”) was enacted into law on December 22, 2017, resulting in an estimated annual statutory federal tax rate of 24.5% for fiscal 2018, and 21.0% for subsequent fiscal years. Due to the Tax Act, a tax expense of $31.2 million was recognized and is included as a component of income taxes from continuing operations in 2018.
|
•
|
The Qdoba Sale
—
During the second quarter of 2018, we completed the sale of Qdoba Restaurant Corporation ("Qdoba"), a wholly owned subsidiary of the company, to certain funds managed by affiliates of Apollo Global Management, LLC (together with its consolidated subsidiaries, "Apollo"). The transaction closed on March 21, 2018. As a result of the sale, operating results for Qdoba are included in discontinued operations for all periods presented.
|
•
|
Credit Facility
—
Pursuant to the Qdoba Sale and amendment of our credit facility, we made a payment of $260.0 million on our term loan. We also extended the maturity date of our credit facility one year to March 19, 2020, and raised the maximum leverage ratio from 4.0 times to 4.5 times.
|
|
Quarter
|
|
Year-to-date
|
||||||||
|
April 15, 2018
|
|
April 16, 2017
|
|
April 15, 2018
|
|
April 16, 2017
|
||||
Revenues:
|
|
|
|
|
|
|
|
||||
Company restaurant sales
|
54.3
|
%
|
|
67.8
|
%
|
|
56.2
|
%
|
|
67.7
|
%
|
Franchise rental revenues
|
27.6
|
%
|
|
19.3
|
%
|
|
26.8
|
%
|
|
19.8
|
%
|
Franchise royalties and other
|
18.1
|
%
|
|
12.9
|
%
|
|
17.0
|
%
|
|
12.5
|
%
|
Total revenues
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Operating costs and expenses, net:
|
|
|
|
|
|
|
|
||||
Company restaurant costs (excluding depreciation and amortization):
|
|
|
|
|
|
|
|
||||
Food and packaging (1)
|
28.6
|
%
|
|
28.9
|
%
|
|
28.7
|
%
|
|
28.7
|
%
|
Payroll and employee benefits (1)
|
29.0
|
%
|
|
30.2
|
%
|
|
28.9
|
%
|
|
29.8
|
%
|
Occupancy and other (1)
|
15.9
|
%
|
|
17.0
|
%
|
|
16.2
|
%
|
|
16.6
|
%
|
Total company restaurant costs (excluding depreciation and amortization) (1)
|
73.6
|
%
|
|
76.1
|
%
|
|
73.9
|
%
|
|
75.1
|
%
|
Franchise occupancy expenses (excluding depreciation and amortization) (2)
|
62.3
|
%
|
|
61.5
|
%
|
|
61.1
|
%
|
|
60.1
|
%
|
Franchise support and other costs (3)
|
6.8
|
%
|
|
5.1
|
%
|
|
5.9
|
%
|
|
5.5
|
%
|
Selling, general and administrative expenses
|
12.9
|
%
|
|
9.7
|
%
|
|
12.2
|
%
|
|
10.8
|
%
|
Depreciation and amortization
|
6.7
|
%
|
|
6.1
|
%
|
|
6.6
|
%
|
|
6.0
|
%
|
Impairment and other charges, net
|
2.3
|
%
|
|
0.5
|
%
|
|
1.4
|
%
|
|
0.6
|
%
|
Gains on the sale of company-operated restaurants
|
(2.6
|
)%
|
|
(2.9
|
)%
|
|
(2.9
|
)%
|
|
(1.3
|
)%
|
Earnings from operations
|
22.3
|
%
|
|
22.5
|
%
|
|
23.7
|
%
|
|
20.4
|
%
|
Income tax rate (4)
|
31.4
|
%
|
|
38.1
|
%
|
|
60.7
|
%
|
|
38.4
|
%
|
(1)
|
As a percentage of company restaurant sales.
|
(2)
|
As a percentage of franchise rental revenues.
|
(3)
|
As a percentage of franchise royalties and other.
|
(4)
|
As a percentage of earnings from continuing operations and before income taxes.
|
|
Quarter
|
|
Year-to-date
|
||||||||||||||
|
Fiscal Basis
|
|
Calendar Basis (1)
|
|
Fiscal Basis
|
|
Calendar Basis (1)
|
||||||||||
|
April 15, 2018
|
|
April 16, 2017
|
|
April 16, 2017
|
|
April 15, 2018
|
|
April 16, 2017
|
|
April 16, 2017
|
||||||
Company
|
0.9
|
%
|
|
(1.7
|
)%
|
|
(2.4
|
)%
|
|
0.5
|
%
|
|
(0.7
|
)%
|
|
(0.7
|
)%
|
Franchise
|
(0.2
|
)%
|
|
0.4
|
%
|
|
(0.4
|
)%
|
|
(0.3
|
)%
|
|
2.1
|
%
|
|
2.0
|
%
|
System
|
(0.1
|
)%
|
|
(0.1
|
)%
|
|
(0.8
|
)%
|
|
(0.2
|
)%
|
|
1.4
|
%
|
|
1.4
|
%
|
(1)
|
Due to the transition from a 53-week year in fiscal 2016 to a 52-week year in fiscal 2017, year-over-year fiscal period comparisons are off by one week. The change in same-store sales presented in the Calendar Basis column uses comparable calendar periods to balance the one-week shift from fiscal 2016 and to provide a clearer year-over-year comparison.
|
|
Quarter
|
|
Year-to-date
|
||||||||||||||
|
Fiscal Basis
|
|
Calendar Basis
|
|
Fiscal Basis
|
|
Calendar Basis
|
||||||||||
|
April 15, 2018
|
|
April 16, 2017
|
|
April 16, 2017
|
|
April 15, 2018
|
|
April 16, 2017
|
|
April 16, 2017
|
||||||
Average check (1)
|
2.6
|
%
|
|
5.2
|
%
|
|
4.7
|
%
|
|
2.6
|
%
|
|
4.9
|
%
|
|
4.8
|
%
|
Transactions
|
(1.7
|
)%
|
|
(6.9
|
)%
|
|
(7.1
|
)%
|
|
(2.1
|
)%
|
|
(5.6
|
)%
|
|
(5.5
|
)%
|
Change in same-store sales
|
0.9
|
%
|
|
(1.7
|
)%
|
|
(2.4
|
)%
|
|
0.5
|
%
|
|
(0.7
|
)%
|
|
(0.7
|
)%
|
(1)
|
Amounts on a fiscal basis in 2018 include price increases of approximately
2.5%
in the quarter and
2.0%
year-to-date. Amounts in 2017 on a calendar and fiscal basis include price increases of approximately
2.6%
in the quarter and
2.8%
year-to-date.
|
|
2018
|
|
2017
|
||||||||||||||
|
Company
|
|
Franchise
|
|
Total
|
|
Company
|
|
Franchise
|
|
Total
|
||||||
Beginning of year
|
276
|
|
|
1,975
|
|
|
2,251
|
|
|
417
|
|
|
1,838
|
|
|
2,255
|
|
New
|
1
|
|
|
8
|
|
|
9
|
|
|
2
|
|
|
13
|
|
|
15
|
|
Refranchised
|
(85
|
)
|
|
85
|
|
|
—
|
|
|
(60
|
)
|
|
60
|
|
|
—
|
|
Acquired from franchisees
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
(19
|
)
|
|
—
|
|
Closed
|
(4
|
)
|
|
(11
|
)
|
|
(15
|
)
|
|
(7
|
)
|
|
(3
|
)
|
|
(10
|
)
|
End of period
|
188
|
|
|
2,057
|
|
|
2,245
|
|
|
371
|
|
|
1,889
|
|
|
2,260
|
|
% of system
|
8
|
%
|
|
92
|
%
|
|
100
|
%
|
|
16
|
%
|
|
84
|
%
|
|
100
|
%
|
|
Quarter
|
|
Year-to-date
|
||||||||||||
|
April 15, 2018
|
|
April 16, 2017
|
|
April 15, 2018
|
|
April 16, 2017
|
||||||||
Company-owned restaurant sales
|
$
|
113,938
|
|
|
$
|
180,275
|
|
|
$
|
283,575
|
|
|
$
|
418,846
|
|
Franchised restaurant sales
|
685,514
|
|
|
621,788
|
|
|
1,584,576
|
|
|
1,455,074
|
|
||||
System sales
|
$
|
799,452
|
|
|
$
|
802,063
|
|
|
$
|
1,868,151
|
|
|
$
|
1,873,920
|
|
|
|
Quarter
|
|
Year-to-date
|
||||||||||||
|
|
April 15, 2018
|
|
April 16, 2017
|
|
April 15, 2018
|
|
April 16, 2017
|
||||||||
Net earnings - GAAP
|
|
$
|
47,605
|
|
|
$
|
33,094
|
|
|
$
|
59,795
|
|
|
$
|
69,023
|
|
Earnings from discontinued operations, net of taxes
|
|
(22,624
|
)
|
|
(1,704
|
)
|
|
(21,925
|
)
|
|
(3,084
|
)
|
||||
Income taxes
|
|
11,426
|
|
|
19,333
|
|
|
58,564
|
|
|
41,164
|
|
||||
Interest expense, net
|
|
10,413
|
|
|
9,037
|
|
|
23,193
|
|
|
19,446
|
|
||||
Earnings from operations
|
|
46,820
|
|
|
59,760
|
|
|
119,627
|
|
|
126,549
|
|
||||
Gains on the sale of company-operated restaurants
|
|
(5,472
|
)
|
|
(7,779
|
)
|
|
(14,412
|
)
|
|
(7,916
|
)
|
||||
Impairment and other charges, net
|
|
4,927
|
|
|
1,367
|
|
|
7,184
|
|
|
4,021
|
|
||||
Depreciation and amortization
|
|
13,955
|
|
|
16,122
|
|
|
33,112
|
|
|
37,385
|
|
||||
Amortization of franchise tenant improvement allowances
|
|
118
|
|
|
23
|
|
|
265
|
|
|
48
|
|
||||
Adjusted EBITDA - Non-GAAP
|
|
$
|
60,348
|
|
|
$
|
69,493
|
|
|
$
|
145,776
|
|
|
$
|
160,087
|
|
|
Quarter
|
|
Year-to-date
|
||||||||||||||||||||||||
|
April 15, 2018
|
|
April 16, 2017
|
|
April 15, 2018
|
|
April 16, 2017
|
||||||||||||||||||||
Company restaurant sales
|
$
|
113,938
|
|
|
|
|
$
|
180,275
|
|
|
|
|
$
|
283,575
|
|
|
|
|
$
|
418,846
|
|
|
|
||||
Company restaurant costs (excluding depreciation and amortization):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Food and packaging
|
32,638
|
|
|
28.6
|
%
|
|
52,042
|
|
|
28.9
|
%
|
|
81,502
|
|
|
28.7
|
%
|
|
120,031
|
|
|
28.7
|
%
|
||||
Payroll and employee benefits
|
33,096
|
|
|
29.0
|
%
|
|
54,529
|
|
|
30.2
|
%
|
|
82,036
|
|
|
28.9
|
%
|
|
124,712
|
|
|
29.8
|
%
|
||||
Occupancy and other
|
18,143
|
|
|
15.9
|
%
|
|
30,704
|
|
|
17.0
|
%
|
|
45,893
|
|
|
16.2
|
%
|
|
69,645
|
|
|
16.6
|
%
|
||||
Total company restaurant costs
|
$
|
83,877
|
|
|
73.6
|
%
|
|
$
|
137,275
|
|
|
76.1
|
%
|
|
$
|
209,431
|
|
|
73.9
|
%
|
|
$
|
314,388
|
|
|
75.1
|
%
|
|
Quarter
|
|
Year-to-date
|
||||
Decrease in the average number of restaurants
|
$
|
(95.7
|
)
|
|
$
|
(191.1
|
)
|
AUV increase
|
29.4
|
|
|
55.8
|
|
||
Total change in company restaurant sales
|
$
|
(66.3
|
)
|
|
$
|
(135.3
|
)
|
|
Quarter
|
|
Year-to-date
|
||||||||
|
April 15, 2018
|
|
April 16, 2017
|
|
April 15, 2018
|
|
April 16, 2017
|
||||
Average check (1)
|
2.6
|
%
|
|
5.2
|
%
|
|
2.6
|
%
|
|
4.9
|
%
|
Transactions
|
(1.7
|
)%
|
|
(6.9
|
)%
|
|
(2.1
|
)%
|
|
(5.6
|
)%
|
Change in same-store sales
|
0.9
|
%
|
|
(1.7
|
)%
|
|
0.5
|
%
|
|
(0.7
|
)%
|
(1)
|
Amounts in
2018
and
2017
include price increases of approximately
2.5%
and
2.6%
, respectively, in the quarter, and
2.0%
and
2.8%
, respectively, year-to-date.
|
|
Quarter
|
|
Year-to-date
|
||||||||||||
|
April 15, 2018
|
|
April 16, 2017
|
|
April 15, 2018
|
|
April 16, 2017
|
||||||||
Franchise rental revenues
|
$
|
57,843
|
|
|
$
|
51,295
|
|
|
$
|
135,060
|
|
|
$
|
122,731
|
|
|
|
|
|
|
|
|
|
||||||||
Royalties
|
35,185
|
|
|
31,688
|
|
|
81,478
|
|
|
74,276
|
|
||||
Franchise fees and other
|
2,806
|
|
|
2,626
|
|
|
4,122
|
|
|
3,212
|
|
||||
Franchise royalties and other
|
37,991
|
|
|
34,314
|
|
|
85,600
|
|
|
77,488
|
|
||||
Total franchise revenues
|
$
|
95,834
|
|
|
$
|
85,609
|
|
|
$
|
220,660
|
|
|
$
|
200,219
|
|
|
|
|
|
|
|
|
|
||||||||
Franchise occupancy expenses (excluding depreciation and amortization)
|
$
|
36,065
|
|
|
$
|
31,543
|
|
|
$
|
82,586
|
|
|
$
|
73,733
|
|
Franchise support and other costs
|
2,583
|
|
|
1,734
|
|
|
5,065
|
|
|
4,271
|
|
||||
Total franchise costs
|
$
|
38,648
|
|
|
$
|
33,277
|
|
|
$
|
87,651
|
|
|
$
|
78,004
|
|
Franchise costs as a % of total franchise revenues
|
40.3
|
%
|
|
38.9
|
%
|
|
39.7
|
%
|
|
39.0
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
Average number of franchise restaurants
|
2,005
|
|
|
1,834
|
|
|
1,988
|
|
|
1,836
|
|
||||
% increase
|
9.3
|
%
|
|
|
|
8.3
|
%
|
|
|
||||||
(Decrease) increase in franchise-operated same-store sales
|
(0.2
|
)%
|
|
0.4
|
%
|
|
(0.3
|
)%
|
|
2.1
|
%
|
||||
Franchised restaurant sales
|
$
|
685,514
|
|
|
$
|
621,788
|
|
|
$
|
1,584,576
|
|
|
$
|
1,455,074
|
|
Franchised restaurant AUVs
|
$
|
342
|
|
|
$
|
339
|
|
|
$
|
797
|
|
|
$
|
792
|
|
Royalties as a percentage of total franchised restaurant sales
|
5.1
|
%
|
|
5.1
|
%
|
|
5.1
|
%
|
|
5.1
|
%
|
|
Increase / (Decrease)
|
||||||
|
Quarter
|
|
Year-to-date
|
||||
Cash surrender value of COLI policies, net
|
$
|
1,773
|
|
|
$
|
525
|
|
Incentive compensation (including share-based compensation and related payroll taxes)
|
1,570
|
|
|
1,907
|
|
||
Region administration
|
(170
|
)
|
|
(1,062
|
)
|
||
Pension and postretirement benefits
|
(436
|
)
|
|
(1,018
|
)
|
||
Advertising
|
(1,878
|
)
|
|
(4,987
|
)
|
||
Other (including savings related to our restructuring plan)
|
296
|
|
|
(357
|
)
|
||
|
$
|
1,155
|
|
|
$
|
(4,992
|
)
|
|
Quarter
|
|
Year-to-date
|
||||||||||||
|
April 15, 2018
|
|
April 16, 2017
|
|
April 15, 2018
|
|
April 16, 2017
|
||||||||
Restructuring costs
|
$
|
2,575
|
|
|
$
|
247
|
|
|
$
|
2,933
|
|
|
$
|
430
|
|
Costs of closed restaurants and other
|
1,730
|
|
|
417
|
|
|
3,105
|
|
|
2,256
|
|
||||
Accelerated depreciation
|
324
|
|
|
276
|
|
|
374
|
|
|
378
|
|
||||
Losses on disposition of property and equipment, net
|
298
|
|
|
427
|
|
|
481
|
|
|
957
|
|
||||
Operating restaurant impairment charges
|
—
|
|
|
—
|
|
|
291
|
|
|
—
|
|
||||
|
$
|
4,927
|
|
|
$
|
1,367
|
|
|
$
|
7,184
|
|
|
$
|
4,021
|
|
|
Quarter
|
|
Year-to-date
|
||||||||||||
|
April 15, 2018
|
|
April 16, 2017
|
|
April 15, 2018
|
|
April 16, 2017
|
||||||||
Number of restaurants sold to franchisees
|
63
|
|
|
60
|
|
|
85
|
|
|
60
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Gains on the sale of company-operated restaurants
|
$
|
5,472
|
|
|
$
|
7,779
|
|
|
$
|
14,412
|
|
|
$
|
7,916
|
|
|
Quarter
|
|
Year-to-date
|
||||||||||||
|
April 15, 2018
|
|
April 16, 2017
|
|
April 15, 2018
|
|
April 16, 2017
|
||||||||
Interest expense
|
$
|
10,471
|
|
|
$
|
9,062
|
|
|
$
|
23,282
|
|
|
$
|
19,498
|
|
Interest income
|
(58
|
)
|
|
(25
|
)
|
|
(89
|
)
|
|
(52
|
)
|
||||
Interest expense, net
|
$
|
10,413
|
|
|
$
|
9,037
|
|
|
$
|
23,193
|
|
|
$
|
19,446
|
|
•
|
working capital;
|
•
|
capital expenditures for new restaurant construction and restaurant renovations;
|
•
|
income tax payments;
|
•
|
debt service requirements;
|
•
|
franchise tenant improvement allowance distributions; and
|
•
|
obligations related to our benefit plans.
|
|
Year-to-date
|
||||||
|
April 15, 2018
|
|
April 16, 2017
|
||||
Total cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
29,277
|
|
|
$
|
115,167
|
|
Investing activities
|
11,246
|
|
|
19,538
|
|
||
Financing activities
|
(326,095
|
)
|
|
(144,219
|
)
|
||
Net cash flows
|
$
|
(285,572
|
)
|
|
$
|
(9,514
|
)
|
|
Year-to-date
|
||||||
|
April 15, 2018
|
|
April 16, 2017
|
||||
Jack in the Box:
|
|
|
|
||||
Restaurant facility expenditures
|
$
|
13,028
|
|
|
$
|
10,771
|
|
New restaurants
|
560
|
|
|
1,653
|
|
||
Other, including information technology
|
3,024
|
|
|
1,602
|
|
||
|
16,612
|
|
|
14,026
|
|
||
Corporate Services:
|
|
|
|
||||
Information technology
|
1,646
|
|
|
1,553
|
|
||
Other, including facility improvements
|
89
|
|
|
17
|
|
||
|
1,735
|
|
|
1,570
|
|
||
|
|
|
|
||||
Total capital expenditures
|
$
|
18,347
|
|
|
$
|
15,596
|
|
|
Year-to-date
|
||||||
|
April 15, 2018
|
|
April 16, 2017
|
||||
Number of restaurants sold and leased back
|
2
|
|
|
1
|
|
||
|
|
|
|
||||
Purchases of assets intended for sale and leaseback
|
$
|
(5,491
|
)
|
|
$
|
(1,752
|
)
|
Proceeds from the sale and leaseback of assets
|
$
|
4,949
|
|
|
$
|
2,466
|
|
|
Year-to-date
|
||||||
|
April 15, 2018
|
|
April 16, 2017
|
||||
Number of restaurants sold to franchisees
|
85
|
|
|
60
|
|
||
|
|
|
|
||||
Cash proceeds from the sale of company-operated restaurants
|
$
|
16,844
|
|
|
$
|
31,389
|
|
Short-term financing provided in connection with the sale of company-operated restaurants
|
$
|
31,506
|
|
|
$
|
—
|
|
•
|
Changes in consumer confidence and declines in general economic conditions could negatively impact our financial results.
|
•
|
We face significant competition in the food service industry and our inability to compete may adversely affect our business.
|
•
|
Changes in demographic trends and in customer tastes and preferences could cause sales to decline.
|
•
|
Increases in food and commodity costs could decrease our profit margins or result in a modified menu, which could adversely affect our financial results.
|
•
|
Failure to receive scheduled deliveries of high quality food ingredients and other supplies could harm our operations.
|
•
|
We have a limited number of suppliers for our major products and rely on a distribution network with a limited number of distribution partners for the majority of our national distribution program in the United States. If our suppliers or distributors are unable to fulfill their obligations under their contracts, it could harm our operations.
|
•
|
Food safety and food-borne illness concerns may have an adverse effect on our business by reducing demand and increasing costs.
|
•
|
Negative publicity relating to our business or industry could adversely impact our reputation.
|
•
|
Our business could be adversely affected by increased labor costs or difficulties in finding and retaining top-performing personnel.
|
•
|
We may not have the same resources as our competitors for advertising and promotion.
|
•
|
We may be adversely impacted by severe weather conditions, natural disasters, terrorist acts or civil unrest that could result in property damage, injury to employees and staff, and lost restaurant sales.
|
•
|
Our business is subject to seasonal fluctuations.
|
•
|
We may not achieve our development goals.
|
•
|
The failure of our franchisees to operate successful and profitable restaurants could negatively impact our business.
|
•
|
We are subject to land risks and regulations with respect to our owned and leased properties and real estate development projects.
|
•
|
Estimated values of our property, fixtures, and equipment or operating results that are lower than our current estimates at certain restaurant locations may cause us to incur impairment charges on certain long-lived assets; such charges may adversely affect our results of operations.
|
•
|
Our tax provision may fluctuate due to changes in expected earnings.
|
•
|
We may incur costs as a result of certain restructuring activities which may negatively impact our financial results.
|
•
|
We may experience cyber security breaches or other similar incidents.
|
•
|
We may not be able to adequately protect our intellectual property, which could harm the value of our brands and adversely affect our business.
|
•
|
We adjust our capital structure from time to time and we may increase our debt leverage which would make us more sensitive to the effects of economic downturns.
|
•
|
The trading volatility and price of our common stock may be affected by many factors.
|
•
|
Changes in accounting standards may negatively impact our results of operations.
|
•
|
We may be subject to claims or litigation that are costly and could result in our payment of substantial damages or settlement costs.
|
•
|
Unionization activities or labor disputes may disrupt our operations and affect our profitability.
|
•
|
Our insurance may not provide adequate levels of coverage against claims.
|
•
|
Our bylaws contain an exclusive forum provision that may discourage lawsuits against us and our directors and officers.
|
•
|
Governmental regulation may adversely affect our existing and future operations and results, including by harming our ability to profitably operate our restaurants.
|
•
|
The proliferation of federal, state, and local regulations increases our compliance risks, which in turn could adversely affect our business.
|
•
|
Changes to healthcare laws in the United States or the repeal of existing healthcare laws may negatively impact our financial results in future periods.
|
•
|
Legislation and regulations regarding our products and ingredients, including the nutritional content of our products, could impact customer preferences and negatively impact our financial results.
|
•
|
Failure to obtain and maintain required licenses and permits or to comply with food control regulations could lead to the loss of our food service licenses and, thereby, harm our business.
|
|
|
(a)
Total number of shares purchased
|
|
(b)
Average price paid per share
|
|
(c)
Total number of shares purchased as part of publicly announced programs
|
|
(d)
Maximum dollar value that may yet be purchased under these programs
|
||||||
|
|
|
|
|
|
|
|
$
|
181,019,706
|
|
||||
January 22, 2018 - February 18, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
181,019,706
|
|
February 19, 2018 - March 18, 2018
|
|
1,111,375
|
|
|
$
|
89.98
|
|
|
1,111,375
|
|
|
$
|
81,019,826
|
|
March 19, 2018 - April 15, 2018
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
81,019,826
|
|
Total
|
|
1,111,375
|
|
|
|
|
1,111,375
|
|
|
|
Number
|
Description
|
Form
|
Filed with SEC
|
3.1
|
8-K
|
9/24/2007
|
|
3.2
|
10-Q
|
8/10/2017
|
|
10.1.13
|
8-K
|
3/21/2018
|
|
10.2.7
|
8-K
|
1/26/2018
|
|
10.2.8
|
|
10-Q
|
Filed herewith
|
31.1
|
—
|
Filed herewith
|
|
31.2
|
—
|
Filed herewith
|
|
32.1
|
—
|
Filed herewith
|
|
32.2
|
—
|
Filed herewith
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
JACK IN THE BOX INC.
|
|
|
|
|
|
By:
|
/
S
/ LANCE TUCKER
|
|
|
Lance Tucker
|
|
|
Executive Vice President and Chief Financial Officer (principal financial officer)
(Duly Authorized Signatory)
|
1.
|
12 months of base salary plus an additional two weeks of base pay for every full year of service from five years to current (up to a maximum of 18 months total base pay),
|
2.
|
1 month of COBRA medical coverage for each 4 weeks of severance (rounded up) (up to a maximum of 18 months of total COBRA medical coverage) or at her election, in lieu of COBRA medical coverage, a lump sum cash payment for the same time period ranging from $500 to $1,000 per month based on plan coverage tier,
|
3.
|
lump sum cash payment equivalent to the value of any unvested RSUs that would have vested through December 31, 2018,
|
4.
|
Base pay from Separation Date through September 1, 2018 if Ms. Alter’s employment is terminated without Cause,
|
1.
|
Not voluntarily terminating her employment before the Separation Date,
|
2.
|
Not being terminated for Cause, and
|
3.
|
Signing and returning a Separation and Release Agreement
|
1.
|
I have reviewed this
quarterly
report on Form
10-Q
of Jack in the Box Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated:
|
May 17, 2018
|
/S/ LEONARD A. COMMA
|
|
|
Leonard A. Comma
|
|
|
Chief Executive Officer & Chairman of the
Board
|
1.
|
I have reviewed this
quarterly
report on Form
10-Q
of Jack in the Box Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated:
|
May 17, 2018
|
/S/ LANCE TUCKER
|
|
|
Lance Tucker
|
|
|
Chief Financial Officer
|
(1)
|
the
quarterly
report on Form
10-Q
of the Registrant, to which this certification is attached as an exhibit (the “Report”), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
Dated:
|
May 17, 2018
|
/S/ LEONARD A. COMMA
|
|
|
Leonard A. Comma
|
|
|
Chief Executive Officer
|
(1)
|
the
quarterly
report on Form
10-Q
of the Registrant, to which this certification is attached as an exhibit (the “Report”), fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and
|
(2)
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
Dated:
|
May 17, 2018
|
/S/ LANCE TUCKER
|
|
|
Lance Tucker
|
|
|
Chief Financial Officer
|