020234 Jack in the Box Reports Increases in Q1February 14, 2002San Diego, CA - Jack in the Box Inc., operator and franchiser of Jack in the Box restaurants, announced that net earnings in the first quarter ended Jan. 20 increased 4.3% to $26.7 million, or 67 cents per share, compared with $25.6 million, or 65 cents per share, in the first quarter a year ago. Results include adjustments for the adoption of SAB 101 in the fourth quarter of fiscal 2001, which added four cents per share to first quarter net earnings in both years. On a full-year basis, SAB 101 adjustments are expected to have an immaterial impact on operating results. Robert J. Nugent, chairman and CEO of the quick-serve restaurant chain said, “Our profit improvement versus forecast was the result of a renewed focus on all aspects of our business. It includes an improvement in restaurant operating margin versus forecast; a reduction in this year's estimated tax rate to 36.5% from 37.9% in last year's first quarter; and leverage of our SG&A expenses to 11.1% of revenues versus 11.2% in the first quarter of 2001, despite softer than anticipated sales.” Company restaurant sales reached $552.5 million, a 9.1% increase over the first quarter of fiscal 2001. Total revenues grew 9.4% to $594.2 million. Same-store sales at company restaurants grew 0.7% on top of a 4.3% increase last year, and were slightly higher than forecast, marking the company's 28th consecutive quarter of same-store sales improvement. Same-store sales in the January fiscal period increased 1.2% on top of a 5% increase in 2001. “We remain committed to increasing shareholder value through building our brand and strengthening the quality of our operations,” said Nugent. “Our recently announced Profit Improvement Program is supporting that goal by helping us identify both short- and long-term ways to run our business more effectively. “Additionally, we are continuing our efforts to selectively increase the use of franchising in our business model as we grow, with three franchise conversions in the first quarter of this year compared with one last year.” During the quarter, the company launched several promotions, including the $1.99 Ultimate Cheeseburger, the Free Holiday Ball with a Sourdough Jack® Combo, Free Jumbo Sizing with the purchase of a Bacon Ultimate Cheeseburger and the holiday-oriented Egg Nog Shake. In addition, the company introduced a new, 99-cent product to its Value Menu, The Big Cheeseburger, and in Texas, the Big Texas Cheeseburger. Jack in the Box opened 35 new company restaurants during the quarter, five more than forecast, for a total of 1,462 units, an increase of 8.6% compared with the first quarter last year. Franchised restaurants at quarter end totaled 335, for a systemwide total of 1,797 Jack in the Box restaurants, compared with 1,666 total units last year. The company currently estimates that its second-quarter earnings per share will be 44 cents compared with 42 cents in the second quarter last year, as adjusted for SAB 101. Guidance for fiscal 2002 earnings per share has been increased to $2.24 from $2.18, primarily due to the reduction in this year's effective tax rate. The major assumptions upon which the second-quarter earnings estimates and comparisons are based include the following: * The opening of 18 new company restaurants, compared with 26 in the second quarter last year, reflecting the acceleration of five restaurants into the first quarter, and ending the second quarter with 1,815 restaurants systemwide versus 1,693 a year ago. * Company restaurant sales of approximately $420 million, an 8% increase versus the second quarter of fiscal 2001. * Same-store sales improvement of approximately 1% on top of the 4.1% increase reported last year. * Other revenues of approximately $2.3 million vs. $1.5 million reported in the second quarter of last year. * Total revenues of approximately $450 million, 9% higher than the second quarter of fiscal 2001. * Gross profit rate of approximately 18.6% of revenues compared with 18.7% in last year's second quarter, reflecting continued higher costs for utilities, occupancy and labor. * SG&A expense rate of approximately 11.2% of revenues versus 11% in the second quarter of fiscal 2001, due primarily to reduced leverage on certain fixed expenses from sales estimates that are lower than original guidance. * The Gross Profit and the SG&A expense rates are each approximately .1% better than those included in original fiscal 2002 estimates due to new profit improvement program initiatives. * Earnings before interest and taxes (EBIT) of approximately $33 million compared with $31.9 million in last year's second quarter. * Interest expense as a percent of revenues of approximately 1.2% versus 1.4% last year, related to lower debt balances from growth in cash flows. * Earnings before taxes of approximately $28 million compared with $26 million in fiscal 2001, an improvement of 7.7%. * Estimated income tax rate of approximately 36.5% versus 35.4% estimated last year, due to one-time receipts of enterprise zone and franchise tax credits in the second quarter of 2001. * Net earnings of approximately $17.7 million compared with $16.8 million in the second quarter of fiscal 2001, a 5.4% increase. * Weighted-average shares outstanding of approximately 40.2 million. * EBITDA of approximately $49 million versus $46.7 million last year. Capital expenditures of approximately $32 million versus $33.7 million in the second quarter of fiscal 2001.
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