jack-20240121

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 21, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from ________to________.

Commission File Number: 1-9390

____________________________________________________

JACK IN THE BOX INC.

(Exact name of registrant as specified in its charter)

_______________________________________________________________________________________

Delaware

95-2698708

(State of Incorporation)

(I.R.S. Employer Identification No.)

9357 Spectrum Center Blvd.

San Diego, California 92123

(Address of principal executive offices)

Registrant’s telephone number, including area code (858) 571-2121

_______________________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	JACK	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	þ	Smaller reporting company	☐
Accelerated filer	☐	Emerging growth company	☐
Non-accelerated filer	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No þ

As of the close of business February 15, 2024, 19,536,206 shares of the registrant’s common stock were outstanding.

JACK IN THE BOX INC. AND SUBSIDIARIES

INDEX


		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited):
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Earnings	3
	Condensed Consolidated Statements of Comprehensive Income	4
	Condensed Consolidated Statements of Cash Flows	5
	Condensed Consolidated Statements of Stockholders’ Deficit	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults of Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	33
	Signature	34

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JACK IN THE BOX INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)


	January 21, 2024		October 1, 2023
ASSETS
Current assets:
Cash	$	53,975	$	157,653
Restricted cash	28,559		28,254
Accounts and other receivables, net	63,251		99,678
Inventories	4,381		3,896
Prepaid expenses	8,982		16,911
Current assets held for sale	23,656		13,925
Other current assets	6,109		5,667
Total current assets	188,913		325,984
Property and equipment:
Property and equipment, at cost	1,261,323		1,258,589
Less accumulated depreciation and amortization	(845,375)		(846,559)
Property and equipment, net	415,948		412,030
Other assets:
Operating lease right-of-use assets	1,411,019		1,397,555
Intangible assets, net	11,251		11,330
Trademarks	283,500		283,500
Goodwill	329,583		329,986

Other assets, net	247,048		240,707
Total other assets	2,282,401		2,263,078
	$	2,887,262	$	3,001,092
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Current maturities of long-term debt	$	29,941	$	29,964
Current operating lease liabilities	159,045		142,518
Accounts payable	70,135		84,960
Accrued liabilities	167,788		302,178
Total current liabilities	426,909		559,620
Long-term liabilities:
Long-term debt, net of current maturities	1,718,813		1,724,933
Long-term operating lease liabilities, net of current portion	1,277,947		1,265,514
Deferred tax liabilities	27,878		26,229
Other long-term liabilities	143,872		143,123
Total long-term liabilities	3,168,510		3,159,799
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, 82,752,989 and 82,645,814 issued, respectively	827		826
Capital in excess of par value	524,970		520,076
Retained earnings	1,967,555		1,937,598
Accumulated other comprehensive loss	(51,306)		(51,790)
Treasury stock, at cost, 63,218,724 and 62,910,964 shares, respectively	(3,150,203)		(3,125,037)
Total stockholders’ deficit	(708,157)		(718,327)
	$	2,887,262	$	3,001,092

See accompanying notes to condensed consolidated financial statements.

JACK IN THE BOX INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data)

(Unaudited)


	Sixteen Weeks Ended
	January 21, 2024		January 22, 2023
Revenues:
Company restaurant sales	$	224,040	$	270,191
Franchise rental revenues	113,196		108,830
Franchise royalties and other	73,330		76,390
Franchise contributions for advertising and other services	76,932		71,685
	487,498		527,096
Operating costs and expenses, net:
Food and packaging	64,132		81,933
Payroll and employee benefits	73,054		88,641
Occupancy and other	42,053		51,371
Franchise occupancy expenses	72,624		67,224
Franchise support and other costs	5,194		1,877
Franchise advertising and other services expenses	80,234		74,570
Selling, general and administrative expenses	46,365		50,142
Depreciation and amortization	18,473		19,402
Pre-opening costs	465		331
Other operating expenses (income), net	5,170		(5,501)
Losses (gains) on the sale of company-operated restaurants	254		(3,825)
	408,018		426,165
Earnings from operations	79,480		100,931
Other pension and post-retirement expenses, net	2,106		2,144
Interest expense, net	24,486		26,148
Earnings before income taxes	52,888		72,639
Income taxes	14,205		19,385
Net earnings	$	38,683	$	53,254

Earnings per share:
Basic	$	1.94	$	2.55
Diluted	$	1.93	$	2.54

Cash dividends declared per common share	$	0.44	$	0.44

See accompanying notes to condensed consolidated financial statements.

JACK IN THE BOX INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)


	Sixteen Weeks Ended
	January 21, 2024		January 22, 2023
Net earnings	$	38,683	$	53,254
Other comprehensive income:

Actuarial losses and prior service costs reclassified to earnings	657		664

Tax effect	(173)		(175)
Other comprehensive income, net of taxes	484		489

Comprehensive income	$	39,167	$	53,743

See accompanying notes to condensed consolidated financial statements.

JACK IN THE BOX INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Sixteen Weeks Ended
	January 21, 2024		January 22, 2023
Cash flows from operating activities:
Net earnings	$	38,683	$	53,254
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	18,473		19,402
Amortization of franchise tenant improvement allowances and incentives	1,418		1,215
Deferred finance cost amortization	1,493		1,616
Excess tax (benefits) deficiency from share-based compensation arrangements	(9)		143
Deferred income taxes	(719)		3,385
Share-based compensation expense	4,820		3,534
Pension and post-retirement expense	2,106		2,144
Gains on cash surrender value of company-owned life insurance	(6,161)		(6,631)
Losses (gains) on the sale of company-operated restaurants	254		(3,825)
Gains on acquisition of restaurants	(2,357)		—
Losses (gains) on the disposition of property and equipment, net	1,011		(10,009)
Impairment charges and other	28		483
Changes in assets and liabilities, excluding acquisitions:
Accounts and other receivables	40,139		37,813
Inventories	(484)		194
Prepaid expenses and other current assets	9,587		6,953
Operating lease right-of-use assets and lease liabilities	12,208		11,281
Accounts payable	(13,826)		(31,285)
Accrued liabilities	(125,861)		(24,677)
Pension and post-retirement contributions	(1,698)		(1,688)
Franchise tenant improvement allowance and incentive disbursements	(523)		(527)
Other	(1,257)		(303)
Cash flows (used in) provided by operating activities	(22,675)		62,472
Cash flows from investing activities:
Purchases of property and equipment	(38,829)		(24,028)
Proceeds from the sale of property and equipment	516		22,103

Proceeds from the sale of company-operated restaurants	1,739		17,609

Cash flows (used in) provided by investing activities	(36,574)		15,684
Cash flows from financing activities:



Principal repayments on debt	(7,481)		(7,557)

Dividends paid on common stock	(8,652)		(9,154)
Proceeds from issuance of common stock	1		—
Repurchases of common stock	(25,000)		(14,999)
Payroll tax payments for equity award issuances	(2,992)		(868)
Cash flows used in financing activities	(44,124)		(32,578)
Net (decrease) increase in cash and restricted cash	(103,373)		45,578
Cash and restricted cash at beginning of period	185,907		136,040
Cash and restricted cash at end of period	$	82,534	$	181,618

See accompanying notes to condensed consolidated financial statements.

JACK IN THE BOX INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(In thousands)

(Unaudited)


	Number of Shares	Amount		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total
Balance at October 1, 2023	82,646	$	826	$	520,076	$	1,937,598	$	(51,790)	$	(3,125,037)	$	(718,327)
Shares issued under stock plans, including tax benefit	107	1		—		—		—		—		1
Share-based compensation	—	—		4,820		—		—		—		4,820
Dividends declared	—	—		74		(8,726)		—		—		(8,652)
Purchases of treasury stock

SEC Form 10-Q filed by Jack In The Box Inc.