990517 Jack in the Box Reports 56% Earnings Growth

San Diego, CA - Achieving the highest second quarter results in its history before unusual items, Foodmaker, Inc., operator and franchisor of Jack in the Box(r) restaurants, reported net earnings of $13.6 million, or 35 cents per diluted share. The new record is more than 56% higher than second quarter earnings a year ago of $8.7 million, or 22 cents per diluted share, excluding unusual items.

"These strong results tell us that our strategy of improving the overall restaurant experience is resonating with our customers, resulting in both more customer visits and higher check amounts," said Robert J. Nugent, Foodmaker's president and chief executive officer. The company is benefiting from such initiatives as new, easier-to-read menu boards that showcase combo meals and feature an order confirmation system, as well as an assemble-to-order program where sandwiches are prepared only after the customer orders them, he added.

During the second quarter, the company reduced accrued liabilities and restaurant operating costs by approximately $18 million, primarily due to a change in estimates resulting from improvements to its loss prevention and risk management programs, which have been more successful than anticipated. This unusual item increased net earnings by approximately $11 million, net of taxes, resulting in net earnings for the quarter of $25 million, or 64 cents per diluted share. Unusual items in last year's second quarter, including income from the settlement of litigation with meat suppliers and a non-cash charge relating to various writeoffs, resulted in second quarter net earnings of $34.3 million, or 85 cents per diluted share in fiscal 1998.

Sales at company-operated restaurants during the quarter reached $304 million, a 22% improvement compared with the second quarter a year ago. Systemwide sales improved about 19%, to $389 million. Total revenues reached $322 million, or nearly 22% more than in last year's second quarter, excluding the settlement income.

Per store average sales (PSAs) at comparable company restaurants increased 9.1% during the quarter compared with last year, representing the 17th consecutive quarter of PSA growth. Of that amount, 5.5% was achieved through increased customer visits and 3.6% was through increases in average check amounts.

The company's restaurant operating margin exclusive of the reported change in estimate in 1999 grew to 19.5% of restaurant sales during the quarter, nearly a full percentage point higher than a year ago.

During the quarter, the company added 26 new company-operated restaurants for a total of 1,129 company-operated units. With 57 new company-operated restaurants year-to-date, Foodmaker is more than half way toward achieving its goal of 110 new company units in fiscal 1999.

Foodmaker operates and franchises 1,469 Jack in the Box restaurants, primarily in the West. With more than $1.2 billion in annual revenues, the company has 35,000 employees. Foodmaker is headquartered in San Diego.

Foodmaker's plans are subject to risks and uncertainties that could cause actual results to differ materially. Risk factors relating to Foodmaker's business are described in the company's Form 10-K.

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