Jack in the Box Inc. Reports Third Quarter FY 2016 Earnings; Updates Guidance for FY 2016; Declares Quarterly Cash Dividend

SAN DIEGO--()--Jack in the Box Inc. (NASDAQ: JACK) today reported earnings from continuing operations of $30.8 million, or $0.93 per diluted share, for the third quarter ended July 3, 2016, compared with $28.4 million, or $0.75 per diluted share, for the third quarter of fiscal 2015.

Operating earnings per share, a non-GAAP measure which the company defines as diluted earnings per share from continuing operations on a GAAP basis excluding restructuring charges and gains or losses from refranchising, were $1.07 in the third quarter of fiscal 2016 compared with $0.76 in the prior year quarter.

A reconciliation of non-GAAP measurements to GAAP results is provided below, with additional information included in the attachment to this release. Figures may not add due to rounding.

  12 Weeks Ended   40 Weeks Ended
July 3,
2016
  July 5,
2015
July 3,
2016
  July 5,
2015
Diluted earnings per share from
continuing operations – GAAP
$ 0.93 $ 0.75 $ 2.72 $ 2.30
Restructuring charges 0.15 0.14
(Gains) losses from refranchising (0.01 )   (0.02 ) 0.07
Operating earnings per share – Non-GAAP $ 1.07   $ 0.76   $ 2.84   $ 2.37
 

During fiscal 2016, the company announced plans to reduce general and administrative costs. A comprehensive review of its organizational structure identified cost savings from workforce reductions, relocation and consolidation of the Qdoba corporate support center, refranchising initiatives, and information technology synergies across both brands. As a result, restructuring charges of $7.7 million, or approximately $0.15 per diluted share, were recorded during the third quarter. Charges consist primarily of employee severance pay and facility closing costs. These charges are included in “impairment and other charges, net” in the accompanying consolidated statements of earnings, which increased in the third quarter to $10.5 million from $3.8 million a year ago.

Lenny Comma, chairman and chief executive officer, said, “Operating earnings per share for the third quarter exceeded our expectations, and resulted primarily from healthy margins combined with proceeds from a legal settlement, mark-to-market adjustments and a lower tax rate. We were particularly pleased that Jack in the Box® system same-store sales closed the gap as compared to the industry, with results steadily improving throughout the quarter. We also began implementing our G&A cost reduction plans, and are happy with the progress that has been made thus far.”

Increase (decrease) in same-store sales:

    12 Weeks Ended   40 Weeks Ended
July 3,
2016
  July 5,
2015
July 3,
2016
  July 5,
2015
 
Jack in the Box:
Company (0.2 )% 5.5 % (0.2 )% 5.4 %
Franchise 1.5 % 7.9 % 1.3 % 7.0 %
System 1.1 % 7.3 % 0.9 % 6.6 %
Qdoba®:
Company 1.0 % 6.6 % 1.8 % 9.1 %
Franchise 0.1 % 9.0 % 1.3 % 11.4 %
System 0.6 % 7.7 % 1.6 % 10.2 %
 

Jack in the Box system same-store sales increased 1.1 percent for the quarter and lagged the QSR sandwich segment by 0.1 percentage points for the comparable period, according to The NPD Group’s SalesTrack® Weekly for the 12-week time period ended July 3, 2016. Included in this segment are 16 of the top QSR sandwich and burger chains in the country. Company same-store sales decreased 0.2 percent, with average check up 3.5 percent.

Qdoba same-store sales increased 0.6 percent system-wide and 1.0 percent for company restaurants in the third quarter. Company same-store sales reflected a 0.4 percent increase in transactions as well as growth in catering sales.

Consolidated restaurant operating margin increased by 10 basis points to 21.9 percent of sales in the third quarter of 2016, compared with 21.8 percent of sales in the year-ago quarter. Restaurant operating margin for Jack in the Box company restaurants increased 50 basis points to 22.5 percent of sales. The increase was due primarily to favorable food and packaging costs, which were partially offset by higher costs related to equipment and exterior upgrades and minimum wage increases in California that went into effect in January 2016. The decrease in food and packaging costs as a percentage of sales resulted from the benefit of commodity deflation of approximately 2.7 percent in the quarter, favorable product mix changes and menu price increases. Restaurant operating margin for Qdoba company restaurants decreased 80 basis points to 20.6 percent of sales. The decrease was due primarily to costs associated with a greater number of new restaurant openings, increased promotional activity, and higher costs related to equipment upgrades which more than offset the sales growth and benefits from commodity deflation of approximately 3.8 percent in the quarter.

Franchise margin as a percentage of total franchise revenues improved to 52.8 percent in the third quarter from 52.1 percent in the prior year quarter. The improvement was due primarily to higher royalty revenue for both brands and higher rental income from Jack in the Box franchised restaurants resulting from increases in franchise average unit volumes.

SG&A expense for the third quarter decreased by $8.2 million and was 11.6 percent of revenues as compared to 14.2 percent in the prior year quarter. Key items contributing to the decrease were a $2.5 million legal settlement related to an oil spill in the Gulf of Mexico in 2010, a $1.3 million reduction in incentive compensation, and a $1.2 million decrease in pension and postretirement benefits related to the sunsetting of the company's qualified pension plan on December 31, 2015. In addition, mark-to-market adjustments on investments supporting the company’s non-qualified retirement plans positively impacted SG&A by $1.3 million in the third quarter of 2016 as compared to a negative impact of $1.0 million in the third quarter of 2015, resulting in a year-over-year decrease in SG&A of $2.3 million. These decreases were partially offset by a $1.3 million increase in insurance costs due to unfavorable workers' compensation and general liability claim developments in the year.

Interest expense, net, increased by $3.1 million in the third quarter due to increased leverage and a higher effective interest rate for 2016.

The tax rate for the third quarter of 2016 was 36.0 percent versus 38.2 percent for the third quarter of 2015. The lower tax rate in the third quarter of 2016 was due primarily to favorable adjustments on investments supporting the company's non-qualified retirement plans and the conclusion of a state audit during the prior year quarter.

Capital Allocation

Due to the significant announcements made at the company's investor meeting in late May which was more than halfway through the quarter, the company did not repurchase any shares of its common stock in the third quarter of 2016. Year-to-date through the third quarter, the company has repurchased approximately 3,451,000 shares at an average price of $72.44, for an aggregate cost of $250.0 million. The company currently has $150.0 million remaining under stock-buyback programs authorized by its Board of Directors in February and May 2016 that expire in November 2017.

The company also announced today that on July 28, 2016, its Board of Directors declared a quarterly cash dividend of $0.30 per share on the company’s common stock. The dividend is payable on August 29, 2016, to shareholders of record at the close of business on August 16, 2016.

Guidance

The following guidance and underlying assumptions reflect the company’s current expectations for the fourth quarter and fiscal year ending October 2, 2016. Fiscal 2016 is a 53-week year, with 16 weeks in the first quarter, 12 weeks in each of the second and third quarters, and 13 weeks in the fourth quarter.

Fourth quarter fiscal year 2016 guidance

  • Same-store sales increase of approximately 1.0 to 2.0 percent at Jack in the Box company restaurants versus a 4.1 percent increase in the year-ago quarter.
  • Same-store sales increase of approximately 1.0 to 2.0 percent at Qdoba company restaurants versus a 6.1 percent increase in the year-ago quarter.

Fiscal year 2016 guidance

  • Same-store sales of approximately flat to up 0.5 percent at Jack in the Box company restaurants.
  • Same-store sales increase of approximately 1.5 to 2.0 percent at Qdoba company restaurants.
  • Commodity deflation of approximately 2 to 3 percent for Jack in the Box and approximately 5 percent for Qdoba.
  • Consolidated restaurant operating margin of approximately 20.0 to 20.5 percent.
  • SG&A as a percentage of revenue of approximately 13.0 to 13.5 percent as compared to 14.4 percent in fiscal 2015.
  • Impairment and other charges as a percentage of revenue of approximately 80 basis points, excluding restructuring charges.
  • Approximately 20 new Jack in the Box restaurants opening system-wide, the majority of which will be franchise locations.
  • Approximately 50 to 60 new Qdoba restaurants, of which approximately 35 are expected to be company locations.
  • Capital expenditures of $100 million to $110 million.
  • Tax rate of approximately 37 percent.
  • Operating earnings per share, which the company defines as diluted earnings per share from continuing operations on a GAAP basis excluding restructuring charges and gains or losses from refranchising, ranging from $3.65 to $3.75 in fiscal 2016 as compared to operating earnings per share of $3.00 in fiscal 2015. The estimated benefit of the 53rd week in fiscal 2016 is approximately $0.08 per diluted share.

Conference call

The company will host a conference call for financial analysts and investors on Thursday, August 4, 2016, beginning at 8:30 a.m. PT (11:30 a.m. ET). The conference call will be broadcast live over the Internet via the Jack in the Box Inc. corporate website. To access the live call through the Internet, log onto the Investors section of the Jack in the Box Inc. website at http://investors.jackinthebox.com at least 15 minutes prior to the event in order to download and install any necessary audio software. A replay of the call will be available through the Jack in the Box Inc. corporate website for 21 days, beginning at approximately 11:30 a.m. PT on August 4.

About Jack in the Box Inc.

Jack in the Box Inc. (NASDAQ: JACK), based in San Diego, is a restaurant company that operates and franchises Jack in the Box® restaurants, one of the nation’s largest hamburger chains, with more than 2,200 restaurants in 21 states and Guam. Additionally, through a wholly owned subsidiary, the company operates and franchises Qdoba Mexican Eats®, a leader in fast-casual dining, with more than 600 restaurants in 47 states, the District of Columbia and Canada. For more information on Jack in the Box and Qdoba, including franchising opportunities, visit www.jackinthebox.com or www.qdoba.com.

Safe harbor statement

This press release contains forward-looking statements within the meaning of the federal securities laws. Such statements are subject to substantial risks and uncertainties. A variety of factors could cause the company’s actual results to differ materially from those expressed in the forward-looking statements, including the following: the success of new products and marketing initiatives; the impact of competition, unemployment, trends in consumer spending patterns and commodity costs; the company's ability to reduce G&A the company's ability to execute its refranchising strategy; the company’s ability to achieve and manage its planned growth, which is affected by the availability of a sufficient number of suitable new restaurant sites, the performance of new restaurants, and risks relating to expansion into new markets; litigation risks; food safety incidents or negative publicity impacting the reputations of the company's brands; and stock market volatility. These and other factors are discussed in the company’s annual report on Form 10-K and its periodic reports on Form 10-Q filed with the Securities and Exchange Commission which are available online at http://investors.jackinthebox.com or in hard copy upon request. The company undertakes no obligation to update or revise any forward-looking statement, whether as the result of new information or otherwise.

JACK IN THE BOX INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASUREMENTS TO GAAP RESULTS
(Unaudited)

Operating earnings per share, a non-GAAP measure, is defined by the company as diluted earnings per share from continuing operations on a GAAP basis excluding restructuring charges and gains or losses from refranchising. Management believes this non-GAAP financial measure provides important supplemental information to assist investors in analyzing the performance of the company’s core business. In addition, the company uses operating earnings per share in establishing performance goals for purposes of executive compensation. The company encourages investors to rely upon its GAAP numbers but includes this non-GAAP financial measure as a supplemental metric to assist investors. This non-GAAP financial measure should not be considered as a substitute for, or superior to, financial measures calculated in accordance with GAAP. In addition, this non-GAAP financial measure used by the company may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies.

Below is a reconciliation of non-GAAP operating earnings per share to the most directly comparable GAAP measure, diluted earnings per share from continuing operations. Figures may not add due to rounding.

  12 Weeks Ended   40 Weeks Ended
July 3,
2016
  July 5,
2015
July 3,
2016
  July 5,
2015
Diluted earnings per share from
continuing operations – GAAP
$ 0.93 $ 0.75 $ 2.72 $ 2.30
Restructuring charges 0.15 0.14
(Gains) losses from refranchising (0.01 )   (0.02 ) 0.07
Operating earnings per share – Non-GAAP $ 1.07   $ 0.76   $ 2.84   $ 2.37
 

JACK IN THE BOX INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data)

(Unaudited)

   
12 Weeks Ended 40 Weeks Ended
July 3,
2016
  July 5,
2015
July 3,
2016
  July 5,
2015
Revenues:
Company restaurant sales $ 278,829 $ 270,655 $ 903,842 $ 891,455
Franchise rental revenues 52,878 52,375 175,218 174,036
Franchise royalties and other 37,231   36,476   121,852   120,758  
368,938   359,506   1,200,912   1,186,249  
Operating costs and expenses, net:
Company restaurant costs:
Food and packaging 81,825 82,649 272,802 279,790
Payroll and employee benefits 76,910 72,896 250,954 241,648
Occupancy and other 59,118   56,103   196,344   187,602  
Total company restaurant costs 217,853 211,648 720,100 709,040
Franchise occupancy expenses 38,848 39,087 128,475 130,821
Franchise support and other costs 3,654 3,449 12,423 11,915
Selling, general and administrative expenses 42,768 50,986 155,535 166,553
Impairment and other charges, net 10,519 3,758 14,598 8,068
(Gains) losses on the sale of company-operated restaurants (409 ) 183   (1,224 ) 4,353  
313,233   309,111   1,029,907   1,030,750  
Earnings from operations 55,705 50,395 171,005 155,499
Interest expense, net 7,613   4,504   22,699   13,937  
Earnings from continuing operations and before income taxes 48,092 45,891 148,306 141,562
Income taxes 17,308   17,528   54,597   52,739  
Earnings from continuing operations 30,784 28,363 93,709 88,823
Losses from discontinued operations, net of income tax benefit (595 ) (1,532 ) (1,617 ) (3,152 )
Net earnings $ 30,189   $ 26,831   $ 92,092   $ 85,671  
 
Net earnings per share - basic:
Earnings from continuing operations $ 0.94 $ 0.76 $ 2.75 $ 2.34
Losses from discontinued operations (0.02 ) (0.04 ) (0.05 ) (0.08 )
Net earnings per share (1) $ 0.92   $ 0.72   $ 2.70   $ 2.26  
Net earnings per share - diluted:
Earnings from continuing operations $ 0.93 $ 0.75 $ 2.72 $ 2.30
Losses from discontinued operations (0.02 ) (0.04 ) (0.05 ) (0.08 )
Net earnings per share (1) $ 0.91   $ 0.71   $ 2.67   $ 2.22  
 
Weighted-average shares outstanding:
Basic 32,642 37,106 34,073 37,980
Diluted 33,016 37,661 34,469 38,630
 
Cash dividends declared per common share $ 0.30 $ 0.30 $ 0.90 $ 0.70

___________________________

(1) Earnings per share may not add due to rounding.

JACK IN THE BOX INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

   
July 3,
2016
September 27,
2015
ASSETS
Current assets:
Cash and cash equivalents $ 6,647 $ 17,743
Accounts and other receivables, net 61,990 47,975
Inventories 7,933 7,376
Prepaid expenses 38,064 16,240
Assets held for sale 19,546 15,516
Other current assets 2,073   3,106  
Total current assets 136,253   107,956  
Property and equipment, at cost 1,592,049 1,563,377
Less accumulated depreciation and amortization (874,562 ) (835,114 )
Property and equipment, net 717,487   728,263  
Intangible assets, net 14,177 14,765
Goodwill 149,007 149,027
Other assets, net 274,590   303,968  
$ 1,291,514   $ 1,303,979  
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Current maturities of long-term debt $ 26,286 $ 26,677
Accounts payable 21,289 32,137
Accrued liabilities 173,764   170,575  
Total current liabilities 221,339   229,389  
Long-term debt, net of current maturities 869,982 688,579
Other long-term liabilities 367,668 370,058
Stockholders’ (deficit) equity:
Preferred stock $0.01 par value, 15,000,000 shares authorized, none issued
Common stock $0.01 par value, 175,000,000 shares authorized, 81,428,150 and 81,096,156 issued, respectively 814 811
Capital in excess of par value 421,195 402,986
Retained earnings 1,377,565 1,316,119
Accumulated other comprehensive loss (145,616 ) (132,530 )
Treasury stock, at cost, 48,765,738 and 45,314,529 shares, respectively (1,821,433 ) (1,571,433 )
Total stockholders’ (deficit) equity (167,475 ) 15,953  
$ 1,291,514   $ 1,303,979  
 

JACK IN THE BOX INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 
40 Weeks Ended
July 3,
2016
  July 5,
2015
Cash flows from operating activities:
Net earnings $ 92,092 $ 85,671
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 70,314 68,205
Deferred finance cost amortization 2,049 1,690
Excess tax benefits from share-based compensation arrangements (3,822 ) (17,781 )
Deferred income taxes 15,672 (4,046 )
Share-based compensation expense 9,220 10,041
Pension and postretirement expense 10,374 14,423
Gains on cash surrender value of company-owned life insurance (5,008 ) (1,960 )
(Gains) losses on the sale of company-operated restaurants (1,224 ) 4,353
Losses on the disposition of property and equipment 2,295 1,074
Impairment charges and other 2,928 4,813
Changes in assets and liabilities:
Accounts and other receivables (16,333 ) (6,895 )
Inventories (557 ) 33
Prepaid expenses and other current assets (7,677 ) 20,760
Accounts payable (7,466 ) 690
Accrued liabilities 1,534 4,215
Pension and postretirement contributions (14,700 ) (14,359 )
Other (2,992 ) (5,782 )
Cash flows provided by operating activities 146,699   165,145  
Cash flows from investing activities:
Purchases of property and equipment (74,971 ) (54,832 )
Purchases of assets intended for sale and leaseback (5,593 ) (8,323 )
Proceeds from the sale and leaseback of assets 7,748
Proceeds from the sale of company-operated restaurants 1,434 2,651
Collections on notes receivable 3,237 5,648
Acquisition of franchise-operated restaurants 324
Other 51   1,888  
Cash flows used in investing activities (67,770 ) (52,968 )
Cash flows from financing activities:
Borrowings on revolving credit facilities 576,000 742,000
Repayments of borrowings on revolving credit facilities (376,000 ) (698,000 )
Proceeds from issuance of debt 300,000
Principal repayments on debt (19,651 ) (198,217 )
Debt issuance costs (1,942 )
Dividends paid on common stock (30,513 ) (26,556 )
Proceeds from issuance of common stock 5,093 14,590
Repurchases of common stock (250,000 ) (254,668 )
Excess tax benefits from share-based compensation arrangements 3,822 17,781
Change in book overdraft 1,213    
Cash flows used in financing activities (90,036 ) (105,012 )
Effect of exchange rate changes on cash and cash equivalents 11   (37 )
Net (decrease) increase in cash and cash equivalents (11,096 ) 7,128
Cash and cash equivalents at beginning of period 17,743   10,578  
Cash and cash equivalents at end of period $ 6,647   $ 17,706  
 

JACK IN THE BOX INC. AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION
 

The following table presents certain income and expense items included in our condensed

consolidated statements of earnings as a percentage of total revenues, unless otherwise indicated.

Percentages may not add due to rounding.

 
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS DATA
(Unaudited)
   
12 Weeks Ended 40 Weeks Ended
July 3,
2016
  July 5,
2015
July 3,
2016
  July 5,
2015
Revenues:
Company restaurant sales 75.6 % 75.3 % 75.3 % 75.1 %
Franchise rental revenues 14.3 % 14.6 % 14.6 % 14.7 %
Franchise royalties and other 10.1 % 10.1 % 10.1 % 10.2 %
Total revenues 100.0 % 100.0 % 100.0 % 100.0 %
Operating costs and expenses, net:
Company restaurant costs:
Food and packaging (1) 29.3 % 30.5 % 30.2 % 31.4 %
Payroll and employee benefits (1) 27.6 % 26.9 % 27.8 % 27.1 %
Occupancy and other (1) 21.2 % 20.7 % 21.7 % 21.0 %
Total company restaurant costs (1) 78.1 % 78.2 % 79.7 % 79.5 %
Franchise occupancy expenses (2) 73.5 % 74.6 % 73.3 % 75.2 %
Franchise support and other costs (3) 9.8 % 9.5 % 10.2 % 9.9 %
Selling, general and administrative expenses 11.6 % 14.2 % 13.0 % 14.0 %
Impairment and other charges, net 2.9 % 1.0 % 1.2 % 0.7 %
(Gains) losses on the sale of company-operated restaurants (0.1 )% 0.1 % (0.1 )% 0.4 %
Earnings from operations 15.1 % 14.0 % 14.2 % 13.1 %
Income tax rate (4) 36.0 % 38.2 % 36.8 % 37.3 %

____________________________

(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.

The following table presents Jack in the Box and Qdoba company restaurant sales, costs and margin,
and restaurant costs and margin as a percentage of the related sales. Percentages may not add due
to rounding.
 

SUPPLEMENTAL COMPANY RESTAURANT OPERATIONS DATA

(Dollars in thousands)

(Unaudited)

   
12 Weeks Ended 40 Weeks Ended
July 3, 2016   July 5, 2015 July 3, 2016   July 5, 2015

Jack in the Box:

Company restaurant sales

$ 179,458     $ 179,451     $ 595,401     $ 605,786    
Company restaurant costs:

Food and packaging

51,893 28.9 % 55,218 30.8 % 179,142 30.1 % 192,906 31.8 %
Payroll and employee benefits 50,654 28.2 % 49,599 27.6 % 167,744 28.2 % 167,227 27.6 %
Occupancy and other 36,446   20.3 % 35,115   19.6 % 121,522   20.4 % 119,797   19.8 %
Total company restaurant costs 138,993   77.5 % 139,932   78.0 % 468,408   78.7 % 479,930   79.2 %
Restaurant margin $ 40,465   22.5 % $ 39,519   22.0 % $ 126,993   21.3 % $ 125,856   20.8 %
Qdoba:
Company restaurant sales $ 99,371 $ 91,204 $ 308,441 $ 285,669
Company restaurant costs:
Food and packaging 29,932 30.1 % 27,431 30.1 % 93,660 30.4 % 86,884 30.4 %
Payroll and employee benefits 26,256 26.4 % 23,297 25.5 % 83,210 27.0 % 74,421 26.1 %
Occupancy and other 22,672   22.8 % 20,988   23.0 % 74,822   24.3 % 67,805   23.7 %
Total company restaurant costs 78,860   79.4 % 71,716   78.6 % 251,692   81.6 % 229,110   80.2 %
Restaurant margin $ 20,511   20.6 % $ 19,488   21.4 % $ 56,749   18.4 % $ 56,559   19.8 %
 

The following table presents franchise revenues, costs and margin in each period:

SUPPLEMENTAL FRANCHISE OPERATIONS DATA

(Dollars in thousands)

(Unaudited)

   
12 Weeks Ended 40 Weeks Ended
July 3,
2016
  July 5,
2015
July 3,
2016
  July 5,
2015
Franchise rental revenues $ 52,878 $ 52,375 $ 175,218 $ 174,036
 
Royalties 36,554 35,936 119,338 117,659
Franchise fees and other 677   540   2,514   3,099  
Franchise royalties and other 37,231   36,476   121,852   120,758  
Total franchise revenues 90,109   88,851   297,070   294,794  
 
Rental expense 31,595 31,431 103,783 105,336
Depreciation and amortization 7,253   7,656   24,692   25,485  
Franchise occupancy expenses 38,848 39,087 128,475 130,821
Franchise support and other costs 3,654   3,449   12,423   11,915  
Total franchise costs 42,502   42,536   140,898   142,736  
Franchise margin $ 47,607   $ 46,315   $ 156,172   $ 152,058  
Franchise margin as a % of franchise revenues 52.8 % 52.1 % 52.6 % 51.6 %
 

The following table provides information related to our operating segments in each period:

SUPPLEMENTAL SEGMENT REPORTING INFORMATION

(In thousands)

(Unaudited)

   
12 Weeks Ended 40 Weeks Ended
July 3,
2016
  July 5,
2015
July 3,
2016
  July 5,
2015
Revenues by segment:
Jack in the Box restaurant operations $ 264,493 $ 263,339 $ 876,138 $ 884,734
Qdoba restaurant operations 104,445   96,167   324,774   301,515  
Consolidated revenues $ 368,938   $ 359,506   $ 1,200,912   $ 1,186,249  
Earnings from operations by segment:
Jack in the Box restaurant operations $ 69,528 $ 62,355 $ 218,364 $ 207,523
Qdoba restaurant operations 14,172 13,805 33,532 37,265
Shared services and unallocated costs (28,404 ) (25,582 ) (82,115 ) (84,936 )
Gains (losses) on the sale of company-operated restaurants 409   (183 ) 1,224   (4,353 )
Consolidated earnings from operations 55,705 50,395 171,005 155,499
Interest expense, net 7,613   4,504   22,699   13,937  
Consolidated earnings from continuing operations and before income taxes $ 48,092   $ 45,891   $ 148,306   $ 141,562  
Total depreciation expense by segment:
Jack in the Box restaurant operations $ 14,877 $ 14,737 $ 50,409 $ 49,051
Qdoba restaurant operations 4,536 3,864 14,403 13,179
Shared services and unallocated costs 1,401   1,573   4,936   5,445  
Consolidated depreciation expense $ 20,814   $ 20,174   $ 69,748   $ 67,675  
 

The following table summarizes the year-to-date changes in the number and mix of Jack in the Box
("JIB") and Qdoba company and franchise restaurants:
 

SUPPLEMENTAL RESTAURANT ACTIVITY INFORMATION

(Unaudited)

   
July 3, 2016 July 5, 2015
Company   Franchise   Total Company   Franchise   Total
Jack in the Box:
Beginning of year 413 1,836 2,249 431 1,819 2,250
New 2 9 11 2 12 14
Refranchised (1 ) 1 (21 ) 21
Acquired from franchisees 1 (1 ) 7 (7 )
Closed   (6 ) (6 ) (6 ) (10 ) (16 )
End of period 415   1,839   2,254   413   1,835   2,248  
% of JIB system 18 % 82 % 100 % 18 % 82 % 100 %
Qdoba:
Beginning of year 322 339 661 310 328 638
New 26 11 37 8 15 23
Closed (4 ) (6 ) (10 ) (4 ) (9 ) (13 )
End of period 344   344   688   314   334   648  
% of Qdoba system 50 % 50 % 100 % 48 % 52 % 100 %
Consolidated:            
Total system 759   2,183   2,942   727   2,169   2,896  
% of consolidated system 26 % 74 % 100 % 25 % 75 % 100 %

Contacts

Jack in the Box Inc.
Investor Contact:
Carol DiRaimo, (858) 571-2407
or
Media Contact:
Brian Luscomb, (858) 571-2291

Contacts

Jack in the Box Inc.
Investor Contact:
Carol DiRaimo, (858) 571-2407
or
Media Contact:
Brian Luscomb, (858) 571-2291