Jack in the Box Inc. (NYSE: JBX), operator and franchiser of Jack in the Box® restaurants, today reported earnings of $19.9 million for its fourth quarter ended Sept. 30, compared with $20.1 million in the fourth quarter a year ago. For fiscal year 2001, earnings grew 8.7 percent to $84.1 million, compared with $77.4 million last year. Financial comparisons are before an unusual tax benefit recorded in fiscal 2000's fourth quarter and before an accounting change (SAB 101) adopted in the fourth quarter of this year. Additional details about the accounting change can be found toward the end of this release.

Earnings per share were 50 cents in the fourth quarter, one cent higher than consensus estimates, compared with 51 cents in last year's fourth quarter, and were $2.11 for the full year versus $1.97 last year.

Including the effect of the adoption of SAB 101, net earnings for the fourth quarter of fiscal 2001 were $20.7 million, or 52 cents per share, and $82.2 million, or $2.06 per share, for the fiscal year. In fiscal 2000, an unusual tax benefit of $22.9 million, or 58 cents per share, contributed to net earnings of $43 million, or $1.09 per share in the fourth quarter, and $100.3 million, or $2.55 per share, for the fiscal year.

Company restaurant sales in the fourth quarter increased 11.3 percent to $411.2 million compared with a year ago. For the full year, company restaurant sales grew 12.1 percent to $1.71 billion. Total revenues in the quarter increased 11.5 percent to $441.2 million compared with last year's fourth quarter. For the full year, total revenues were up 12.3 percent to $1.83 billion.

Same-store sales during the quarter were 3.8 percent higher than last year's fourth quarter, marking the company's 27th consecutive quarter of same-store sales increases. For fiscal 2001, same-store sales increased 4.1 percent over last year's 3.3 percent increase.

"By focusing on the customer, the company continues to improve sales and build the Jack in the Box brand," said Chairman and CEO Robert J. Nugent. "Enhancing the restaurant experience and offering customers quality and value remains our top priority, one that will support our long-term goals to become a national chain and increase shareholder value."

Some examples Nugent noted include:

  • A 40-second improvement in average speed of service since the assemble-to-order initiative;
  • The successful new product launch of the Sourdough Grilled Chicken Club sandwich, with an improved chicken fillet;
  • Value promotions such as the $1.99 Ultimate Cheeseburger;
  • An improvement in the company's annual drive-thru service ranking from 20 to 13 as reported recently by QSR Magazine.

Jack in the Box opened 40 new company restaurants during the fourth quarter compared with 31 new units opened during the same quarter last year. For the full year, the company opened 126 new restaurants, and ended the year with a total of 1,431 Jack in the Box company restaurants in operation, a 9.2 percent increase over the prior year.

"We remain committed to growing our business responsibly in this challenging economic environment," Nugent said. "To that end, our fiscal 2002 business plan calls for conserving capital and protecting our earnings stream while adding 100 new company restaurants and further enhancing the product and service improvements our customers want."

The company also announced sales for the first period of fiscal 2002, and provided earnings guidance for the first quarter of fiscal 2002, which ends Jan. 20.

Company restaurant sales for the first four-week period of fiscal 2002 ended Oct. 28 increased 9.4 percent to $137.4 million compared with the same period last year. Same-store sales were up 0.5 percent on top of last year's 4.2 percent increase. Said Nugent: "Same-store sales have softened since the tragic events of Sept. 11, and we now anticipate that same-store sales will increase 1-2 percent in the first quarter on top of a 4.3 percent increase last year."

The company estimates that its first-quarter earnings per share will be 60-61 cents compared with 61 cents in the first quarter last year, prior to the effects of SAB 101 adoption. Including the effects of the SAB 101 adoption, the company estimates that its first-quarter earnings per share will be 64-65 cents versus 65 cents in last year's first quarter. The company reaffirms its earnings per share guidance for the full year of $2.18.

The major assumptions on which these pre-SAB 101 first-quarter earnings estimates and comparisons are based include the following:

  • The opening of 30 new company restaurants, compared with 32 in the first quarter of last year, and ending the quarter with 1,792 restaurants systemwide compared to 1,666 a year ago.
  • Company restaurant sales of approximately $555 million, a 10 percent increase from last year's first quarter.
  • Total revenues of approximately $594 million, 10 percent higher than the first quarter of fiscal 2001.
  • Gross profit rate of approximately 18.7 percent of revenues compared with 19.9 percent in last year's first quarter, reflecting continued higher costs for utilities, occupancy, labor and food.
  • SG&A expense rate of approximately 11 percent of revenues versus 11.2 percent in last year's first quarter, reflecting continued leverage in travel and payroll expense.
  • Earnings before interest and taxes (EBIT) of approximately $46 million compared with $46.7 million in the first quarter of last year.
  • Interest expense as a percent of revenues at approximately 1.2 percent compared with 1.5 percent in last year's first quarter, related to lower borrowing rates and lower debt balances.
  • Earnings before taxes of approximately $38.8 million versus $38.7 million in the first quarter of last year.
  • Income tax rate of approximately 38 percent versus 37.9 percent in the first quarter of 2001.
  • Net earnings of approximately $24 million, the same as last year's first quarter.
  • Weighted average shares outstanding of approximately 40.2 million.
  • EBITDA of approximately $67 million compared with $65.8 million in the first quarter of fiscal 2001.
  • Capital expenditures of approximately $27 million compared with $38.8 million in last year's first quarter.

In the fourth quarter, the company adopted Staff Accounting Bulletin 101 (SAB 101) relating to revenue recognition. SAB 101 requires that franchise percentage rents be recognized when earned instead of being accrued for ratably. The effect of SAB 101 on fiscal year 2001 quarters one through four, respectively, increased (decreased) franchise rental revenue as follows: $2.48 million, $(2.35) million, $(1.44) million and $1.26 million. Net earnings were increased (decreased) by quarter as follows: $1.54 million, $(1.46) million, $(.92) million and $.81 million. Earnings per share were increased (decreased) by quarter as follows: 4 cents, (4) cents, (2) cents and 2 cents. The impact of adopting SAB 101 on fiscal 2001 operating results was insignificant. However, there is a one-time, after-tax cumulative effect of $1.9 million, or 5 cents per share, related to the deferral of franchise percentage rents not yet earned as of the beginning of fiscal 2001. Going forward, the company anticipates that on a full fiscal year basis SAB 101 will not have a material impact on its operating results.

Founded in 1951, Jack in the Box is among the nation's leading fast-food hamburger chains. The company operates or franchises nearly 1,800 quick-serve restaurants in 16 states. Jack in the Box has approximately 43,000 employees. For additional financial information, visit the "Investors" section on the company's Web site, www.jackinthebox.com.

This news release contains forward-looking statements, including information regarding estimates of sales, earnings and expenses, as well as the plans, assumptions and objectives of management, all of which are subject to risks and uncertainties. Factors that could cause the company's actual results to differ materially from those expressed in the forward-looking statements include but are not limited to the following: shortages or cost increases in the ingredients we use, consumer concerns or adverse publicity regarding the safety or nutritional value of beef and other foods we serve, increases in labor costs, utility price increases, power outages, delays in the opening of new restaurants, the effectiveness of the company's advertising and marketing programs, new product development, competitors' advertising and new product strategies, changes in accounting standards, policies and practices, new legislation and governmental regulation, changes in national or local political or economic conditions, and the possibility of unforeseen events affecting the industry in general. Information regarding material risks that affect the company's business, as well as information related to its operations, are detailed further in company documents on file with the Securities and Exchange Commission. 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)

                         12 Weeks Ended           52 Weeks Ended
                      Sept. 30,    Oct. 1,     Sept. 30,     Oct. 1,
                        2001        2000         2001         2000
----------------------------------------------------------------------
Revenues:
  Restaurant sales    $ 411,166   $ 369,339   $1,714,126   $1,529,328
  Distribution and
   other sales           16,004      15,583       66,565       59,091
  Franchise rents and
   royalties             10,341       9,748       43,878       41,432
  Other                   3,731       1,030        9,060        3,461
                      ---------   ---------   ----------   ----------
                        441,242     395,700    1,833,629    1,633,312
                      ---------   ---------   ----------   ----------
Costs of revenues:
  Restaurant costs
   of sales             127,257     113,671      528,070      473,373
  Restaurant
   operating costs      210,549     181,413      864,135      750,736
  Costs of distribution
   and other sales       15,446      14,965       64,490       57,543
  Franchised restaurant
   costs                  4,863       4,679       20,353       20,105
                      ---------   ---------   ----------   ----------
                        358,115     314,728    1,477,048    1,301,757
                      ---------   ---------   ----------   ----------
Gross profit             83,127      80,972      356,581      331,555
Selling, general and
 administrative          47,328      43,787      201,715      182,961
                      ---------   ---------   ----------   ----------
Earnings from
 operations              35,799      37,185      154,866      148,594
Interest expense          4,913       5,406       24,453       25,830
                      ---------   ---------   ----------   ----------
Earnings before income
 taxes, unusual item
 and effect of
 accounting change       30,886      31,779      130,413      122,764
 Income taxes            11,020      11,700       46,320       45,400
                      ---------   ---------   ----------   ----------
Earnings before unusual
 item and effect of
 accounting change       19,866      20,079       84,093       77,364
Unusual tax benefit          --      22,900          --        22,900
SAB 101 effect on
 current year, net
 of taxes                   809          --          (33)          --
                      ---------   ---------   ----------   ----------
Earnings before cumulative
 effect of accounting
 change                  20,675      42,979       84,060      100,264
Cumulative effect from
 prior years of
 adopting SAB 101            --          --       (1,859)          --
                      ---------   ---------   ----------   ----------
Net earnings          $  20,675   $  42,979   $   82,201   $  100,264
                      =========   =========   ==========   ==========

Net earnings per share -- diluted:
  Earnings before unusual
   item and effect of
   accounting change  $     .50   $     .51   $     2.11   $     1.97
  Unusual tax benefit        --         .58           --          .58
  SAB 101 effect on
   current year, net of
   taxes                    .02          --           --           --
                      ---------   ---------   ----------   ----------
  Earnings before cumulative
   effect of accounting
   change                   .52        1.09         2.11         2.55
  Cumulative effect from
   prior years of
   adopting SAB 101          --          --         (.05)          --
                      ---------   ---------   ----------   ----------
  Net earnings per
   share              $      52   $    1.09   $     2.06   $     2.55
                      =========   =========   ==========   ==========

Weighted-average shares outstanding:
  Basic                  39,147      38,330       38,791       38,267
  Diluted                40,114      39,327       39,780       39,334