JACK IN THE BOX INC
For the period ended Jul 7, 2024. Filed Aug 6, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 7, 2024 · Filed Aug 6, 2024
JACK$14.09-1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-04-14; filed 2024-05-14.
0000807882-24-000019
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-07-07; filed 2024-08-06.
0000807882-24-000033
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 149 previous paragraphs and 154 current paragraphs.
101 unchanged; 45 reworded; 8 added; 3 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 20 previous and 20 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
Commodity costs inflation was 0.2% in the quarter and deflation of 0.5% year-to-date. The greatest impact on the quarter inflation was seen in produce and dairy, and the greatest impact on the year-to-date deflation was in cheese and pork.
Current report
Insurance decreased $2.9 million in the quarter, as well as on a year-to-date basis, as compared to the prior year primarily due to the positive development factors related to workers compensation and general liability claims in each period, respectively.
Current report
Goodwill Impairment Charges
Current report
As of the June 9, 2024 testing date, the balance of the Del Taco reporting unit goodwill was $194.0 million. During the third quarter of 2024, the Company identified triggering events that indicated the goodwill allocated to the Del Taco reporting unit might be impaired. The triggering events related to i) a recent negative trend in Del Taco same store sales, ii) lower margins due in part to lower sales and wage increases required in California effective April 1, 2024 under AB 1228, iii) unfavorable changes in the economic environment specifically impacting our industry, including inflation and interest rates, and iv) a sustained lower share price. As a result, the Company performed a quantitative test over the Del Taco reporting unit, noting that the fair value of the reporting unit was less than the carrying value, which resulted in an impairment of goodwill of $162.6 million.
Current report
Other operating expenses (income), net decreased $2.0 million in the quarter and increased $11.2 million on a year-to-date basis, as compared to the prior year. For the quarter, the decrease was primarily due to $4.4 million of impairment charges recognized for Del Taco restaurants in the prior year, partially offset by an increase of $2.0 million in connection with consulting fees for strategic initiatives in the current year.
Current report
Under GAAP, the Company ordinarily calculates its provision for income taxes at the end of each interim reporting period by computing an estimated annual effective tax rate adjusted for tax items that are discrete to each period. For the third quarter of fiscal year 2024, the company calculated its interim tax provision based on actual year-to-date results because small changes in forecasted pre-tax book income led to large differences in the estimated annual effective tax rate.
Current report
For the third quarter and year-to-date of fiscal year 2024, the Company recorded income tax provisions of $0.1 million and $23.3 million, respectively, resulting in effective tax rates of negative 0.1% and negative 66.0%, respectively. The effective tax rates for such periods differed from the U.S. statutory tax rate primarily due to the impairment of non-deductible goodwill partially offset by the reversal of state deferred tax liabilities on basis difference of investments in subsidiaries and non-taxable gains from the market performance of insurance products used to fund certain non-qualified retirement plans.
Current report
For the third quarter and year-to-date of fiscal year 2023, the Company recorded income tax provisions of $14.1 million and $47.7 million, respectively, resulting in effective tax rates of 32.6% and 30.4%, respectively. The effective tax rates for such periods differed from the U.S. statutory tax rate primarily due to the impact of estimated disposals of non-deductible goodwill attributable to refranchising transactions partially offset by non-taxable gains from the market performance of insurance products used to fund certain non-qualified retirement plans.
Removed paragraphs (3)
Previous report
Commodity costs deflation was 1.6% in the quarter and 0.8% year-to-date, with the greatest impact in produce, dairy and beverages for the quarter and cheese, pork and poultry for the year-to-date.
Previous report
Incentive compensation decreased by $4.1 million in the quarter and $4.7 million on a year-to-date basis as compared to the prior year primarily due to lower achievement levels compared to the prior year for the Company’s annual incentive plan.
Previous report
The income tax provisions reflect an effective tax rate of 26.5% in the second quarter of 2024, as compared to 34.8% in the second quarter of the prior year, as well as 26.7% for the year-to-date period in 2024, as compared to 29.6% in the same period in 2023. The major component of the year-over-year decrease in tax rates was a decrease in the impact of estimated disposals of non-deductible goodwill attributable to refranchising transactions.
Reworded paragraphs (45)
Previous wording
The Company’s fiscal year is 52 or 53 weeks ending the Sunday closest to September 30. In fiscal 2023, Del Taco operated on a fiscal year ending the Tuesday closest to September 30. Beginning fiscal 2024, Del Taco’s fiscal year shifted to align with Jack in the Box. As a result, Del Taco’s fiscal 2024 results include two fewer days. Fiscal years 2024 and 2023 include 52 weeks. Our first quarter includes 16 weeks and all other quarters include 12 weeks. All comparisons between 2024 and 2023 refer to the 12 weeks (“quarter”) and 28 weeks (“year-to-date”) ended April 14, 2024 and April 16, 2023, respectively, unless otherwise indicated.
Current wording
The Company’s fiscal year is 52 or 53 weeks ending the Sunday closest to September 30. In fiscal 2023, Del Taco operated on a fiscal year ending the Tuesday closest to September 30. Beginning fiscal 2024, Del Taco’s fiscal year shifted to align with Jack in the Box. As a result, Del Taco’s fiscal 2024 results include two fewer days. Fiscal years 2024 and 2023 include 52 weeks. Our first quarter includes 16 weeks and all other quarters include 12 weeks. All comparisons between 2024 and 2023 refer to the 12 weeks (“quarter”) and 40 weeks (“year-to-date”) ended July 7, 2024 and July 9, 2023, respectively, unless otherwise indicated.
Previous wording
Founded in 1951, Jack in the Box Inc. (the “Company”) operates and franchises Jack in the Box® and Del Taco® quick-service restaurants. As of April 14, 2024, we operated and franchised 2,195 Jack in the Box quick-service restaurants, primarily in the western and southern United States, including two in Guam, and 595 Del Taco quick-service restaurants across 16 states.
Current wording
Founded in 1951, Jack in the Box Inc. (the “Company”) operates and franchises Jack in the Box® and Del Taco® quick-service restaurants. As of July 7, 2024, we operated and franchised 2,195 Jack in the Box quick-service restaurants, primarily in the western and southern United States, including two in Guam, and 597 Del Taco quick-service restaurants across 17 states.
Previous wording
Company restaurant sales increased $3.4 million, or 3.6% in the quarter and $9.4 million, million or 4.2% year-to-date compared to the prior year. The following table presents the approximate impact of changes in AUVs and the number of restaurants on company restaurant sales for each respective period (in millions):
Current wording
Company restaurant sales increased $3.5 million, or 3.7% in the quarter and $12.9 million, or 4.0% year-to-date compared to the prior year. The following table presents the approximate impact of changes in AUVs and the number of restaurants on company restaurant sales for each respective period (in millions):
Previous wording
Same-store sales at company-operated restaurants decreased 0.6% in the quarter and increased 0.9% year-to-date compared to a year ago. The following table summarizes the change versus a year ago:
Current wording
Same-store sales at company-operated restaurants increased 0.1% in the quarter and 0.6% year-to-date compared to a year ago. The following table summarizes the change versus a year ago:
Previous wording
(1)Includes price increases of approximately 7.4% in the quarter and 7.3% year-to-date.
Current wording
(1)Includes price increases of approximately 8.4% in the quarter and 7.6% year-to-date.
Previous wording
Food and packaging costs as a percentage of company restaurant sales decreased 2.5% in the quarter and 2.8% year-to-date compared to the prior year primarily due to commodity deflation and menu price increases, partially offset by unfavorable menu item mix.
Current wording
Food and packaging costs as a percentage of company restaurant sales decreased 2.2% in the quarter and 2.6% year-to-date compared to the prior year primarily due to commodity deflation and menu price increases, partially offset by unfavorable menu item mix.
Previous wording
Commodity deflation was 0.5% in the quarter and 1.9% year-to-date. The greatest impacts were seen in poultry and beef in the quarter, and produce, beef and oil on a year-to-date basis.
Current wording
Commodity deflation was 0.5% in the quarter and 1.5% year-to-date. The greatest impacts were seen in poultry and beef in the quarter, and beef, produce and poultry, on a year-to-date basis.
Previous wording
Payroll and employee benefit costs as a percentage of company restaurant sales was flat in the quarter and decreased 0.3% year-to-date compared to the prior year. During the quarter, increases in wage inflation and group insurance were offset by decreases in incentive compensation. The decrease on a year-to-date basis is primarily due to sales leverage and lower incentive compensation, partially offset by wage inflation and higher group insurance costs. Labor inflation was approximately 4.6% in the quarter and 3.6% year-to-date for the current year.
Current wording
Payroll and employee benefit costs as a percentage of company restaurant sales increased 2.0% in the quarter and 0.4% year-to-date compared to the prior year. During the quarter and on a year-to-date basis, increases in wage inflation and group insurance were offset by decreases in incentive compensation. Labor inflation was approximately 14.9% in the quarter and 6.9% year-to-date for the current year.
Previous wording
Occupancy and other costs, as a percentage of company restaurant sales, increased 0.2% in the quarter and 0.3% year-to-date compared to the prior year. These increases were primarily due to higher other operating costs including security, credit card fees, rent and delivery fees, partially offset by sales leverage year-to-date and lower maintenance and repair costs in both the quarter and year-to-date.
Current wording
Occupancy and other costs, as a percentage of company restaurant sales, increased 0.9% in the quarter and 0.4% year-to-date compared to the prior year. For the quarter, these increases were primarily due to higher utilities and insurance costs. For the year-to-date period, these increases were primarily due to higher security costs, other operating costs, partially offset by lower maintenance and repair costs.
Previous wording
Franchise rental revenues decreased $1.3 million, or 1.6% in the quarter and $1.8 million, or 1.0% year-to-date, compared to the prior year primarily due to lower percentage rent of $2.5 million in the quarter and $3.5 million year-to-date, respectively, driven by lower franchise restaurant sales. These decreases were partially offset by increases in minimum rent of $0.9 million and $1.9 million, in the respective periods.
Current wording
Franchise rental revenues decreased $1.1 million, or 1.3% in the quarter and $2.9 million, or 1.1% year-to-date, compared to the prior year primarily due to lower percentage rent of $2.7 million in the quarter and $6.2 million year-to-date, respectively, driven by lower franchise restaurant sales. These decreases were partially offset by increases in minimum rent of $0.9 million and $2.7 million, in the respective periods, as well as an increase of $1.3 million and $1.3 million, related to lease terminations, respectively.
Previous wording
Franchise royalties and other decreased $0.5 million, or 1.1% in the quarter and $6.6 million, or 5.6% year-to-date. In the quarter, the decrease was primarily due to lower royalty income of $1.0 million, partially offset by an increase in franchise termination fees. The year-to-date decrease was primarily due to a $7.3 million termination fee paid in the prior year by a franchise operator to sell his restaurants to a new franchisee, partially offset by an increase in franchise early termination fees in the current year. Refer also to Note 2, Revenue, in the notes to the condensed consolidated financial statements for additional information.
Current wording
Franchise royalties and other decreased $0.9 million, or 1.9% in the quarter and $7.5 million, or 4.5% year-to-date. In the quarter, the decrease was primarily due to lower royalty income of $0.9 million driven by lower sales. The year-to-date decrease was primarily due to a $7.3 million termination fee paid in the prior year by a franchise operator to sell his restaurants to a new franchisee, partially offset by an increase in franchise early termination fees in the current year. Refer also to Note 2, Revenue, in the notes to the condensed consolidated financial statements for additional information.
Previous wording
Franchise contributions for advertising and other services revenues decreased $0.2 million, or 0.4% in the quarter and increased $1.9 million, or 1.6% year-to-date, as compared to the prior year. The decrease in the quarter is primarily due to lower marketing contribution of $1.1 million, driven by lower franchise restaurant sales, partially offset by an increase in digital and and technology fees of $0.8 million. On a year-to-date basis, the increase is primarily due to the increase in digital and technology fees of $1.8 million.
Current wording
Franchise contributions for advertising and other services revenues increased $0.1 million, or 0.1% in the quarter and $1.9 million, or 1.2% year-to-date, as compared to the prior year. The increase in the quarter is primarily due to an increase in digital and technology fees of $0.9 million offset by lower marketing contribution of $0.9 million, driven by lower franchise restaurant sales. On a year-to-date basis, the increase is primarily due to the increase in digital and technology fees of $2.7 million offset by lower marketing contribution of $1.1 million.
Previous wording
Franchise occupancy expenses, primarily rent, increased $0.8 million, or 1.7% in the quarter and $1.5 million, or 1.3% year-to-date compared to the prior year primarily due to an increase in operating lease costs in the current year.
Current wording
Franchise occupancy expenses, primarily rent, increased less than $0.1 million, or 0.1% in the quarter and $1.5 million, or 0.9% year-to-date compared to the prior year primarily due to an increase in operating lease costs in the current year.
Previous wording
Franchise support and other costs was flat in the quarter and increased $2.4 million, or 56.7% year-to-date compared to the prior year. Year-to-date, the increase is primarily due to the rollover of a bad debt reversal in the prior year.
Current wording
Franchise support and other costs decreased $0.6 million, or 17.9% in the quarter, and increased $2.3 million, or 32.7% year-to-date compared to the prior year. Year-to-date, the increase is primarily due to the rollover of a bad debt reversal in the prior year.
Previous wording
Franchise advertising and other service expenses decreased $0.7 million, or 1.2% in the quarter and increased $1.3 million, or 1.1% year-to-date compared to the prior year. In the quarter, the decrease is primarily driven by lower franchise sales, partially offset by higher costs for digital processing fees. Year-to-date, the increase is primarily driven by higher franchise IT revenue costs as well as higher costs for digital processing fees, partially offset by lower sales driving lower marketing expenses.
Current wording
Franchise advertising and other service expenses decreased $0.7 million, or 1.3% in the quarter and was essentially flat year-to-date compared to the prior year. In the quarter, the decrease is primarily driven by lower franchise marketing expense due to lower sales, partially offset by higher costs for digital processing fees. On a year-to-date basis, the decrease from lower sales driving lower marketing expenses was offset by higher franchise IT revenue costs as well as higher costs for digital processing fees.
Previous wording
Company restaurant sales decreased $38.9 million or 36.4% in the quarter and $91.0 million or 36.2% year-to-date compared to the prior year. These decreases were primarily due to the refranchising of 108 company-operated restaurants and the closing of 8 company-operated restaurants since the second quarter of 2023. The following table presents the approximate impact of changes in AUVs and the number of restaurants on company restaurant sales for each respective period on company restaurant sales (in millions):
Current wording
Company restaurant sales decreased $35.6 million or 35.0% in the quarter and $126.6 million or 35.9% year-to-date compared to the prior year. These decreases were primarily due to the refranchising of 58 company-operated restaurants and the closing of 10 company-operated restaurants since the third quarter of 2023 and decreases in same store sales, for both the quarter and year-to-date compared to the prior year. The following table presents the approximate impact of changes in AUVs and the number of restaurants on company restaurant sales for each respective period on company restaurant sales (in millions):
Previous wording
Same-store sales at company-operated restaurants decreased 1.8% in the quarter and increased 0.2% year-to-date compared to a year ago. The following table summarizes the change versus a year ago:
Current wording
Same-store sales at company-operated restaurants decreased 3.5% in the quarter and decreased 0.9% year-to-date compared to a year ago. The following table summarizes the change versus a year ago:
Previous wording
(1)Includes price increases of approximately 7.0% in the quarter and 6.6% year-to-date.
Current wording
(1)Includes price increases of approximately 8.0% in the quarter and 7.0% year-to-date.
Previous wording
Food and packaging costs as a percentage of company restaurant sales decreased 1.9% in the quarter and 1.5% year-to-date, compared to the prior year primarily due to menu price increases and commodity deflation, partially offset by the change in mix of restaurants resulting from franchise acquisitions.
Current wording
Food and packaging costs as a percentage of company restaurant sales decreased 2.1% in the quarter and 1.6% year-to-date, compared to the prior year primarily due to menu price increases and the change in mix of restaurants resulting from company restaurant refranchising, partially offset by commodity inflation.
Previous wording
Payroll and employee benefit costs as a percentage of company restaurant sales increased 1.4% in the quarter and 1.1% year-to-date, compared to the prior year primarily due to labor inflation, which was 4.7% in the quarter and 3.8% year-to-date, and the change in mix of restaurants resulting from franchise acquisitions.
Current wording
Payroll and employee benefit costs as a percentage of company restaurant sales increased 4.6% in the quarter and 2.2% year-to-date, compared to the prior year primarily due to labor inflation, which was 17.7% in the quarter and 7.9% year-to-date.
Previous wording
Occupancy and other costs as a percentage of company restaurant sales increased 1.1% in the quarter and 0.8% year-to-date, compared to the prior year primarily due to utility inflation, an increase in information technology costs and the change in mix of restaurants resulting from franchise acquisitions.
Current wording
Occupancy and other costs as a percentage of company restaurant sales increased 1.6% in the quarter and 1.1% year-to-date, compared to the prior year primarily due to higher utilities and increased information technology costs.
Previous wording
Franchise rental revenues increased $3.6 million, or 137.9%, in the quarter and $8.5 million, or 158.7% year-to-date, compared to the prior year. The increase is primarily due to higher rental income resulting from new subleases related to the 108 restaurants refranchised since the second quarter of 2023.
Current wording
Franchise rental revenues increased $4.0 million, or 134.2%, in the quarter and $12.5 million, or 149.9% year-to-date, compared to the prior year. The increase is primarily due to higher rental income resulting from new subleases related to the 58 restaurants refranchised since the third quarter of 2023.
Previous wording
Franchise royalties and other increased $1.6 million, or 27.7%, in the quarter and $4.6 million, or 35.6% year-to-date, compared to the prior year primarily due to higher franchise restaurant sales resulting from the 108 restaurants refranchised and the 15 franchise-operated restaurants opened since the second quarter of 2023.
Current wording
Franchise royalties and other increased $1.3 million, or 20.3%, in the quarter and $5.9 million, or 30.6% year-to-date, compared to the prior year primarily due to royalties from the higher franchise restaurant sales resulting from the 58 restaurants refranchised and the 17 franchise-operated restaurants opened since the third quarter of 2023.
Previous wording
Franchise contributions for advertising and other services revenues increased $1.9 million, or 35.7%, in the quarter and $5.1 million, or 43.6% year-to-date, compared to the prior year primarily due to higher marketing contributions related to higher franchise restaurant sales resulting from the 108 restaurants refranchised and the 15 franchise-operated restaurants opened since the second quarter of 2023.
Current wording
Franchise contributions for advertising and other services revenues increased $1.0 million, or 17.2%, in the quarter and $6.1 million, or 34.8% year-to-date, compared to the prior year primarily due to higher marketing contributions related to higher franchise restaurant sales resulting from the 58 restaurants refranchised and the 17 franchise-operated restaurants opened since the third quarter of 2023.
Previous wording
Franchise occupancy expenses, primarily rent, increased $3.6 million, or 136.3%, in the quarter and $8.4 million, or 157.6% year-to-date, compared to the prior year primarily due to higher rent related to franchise subleases for the 108 restaurants refranchised since the second quarter of 2023.
Current wording
Franchise occupancy expenses, primarily rent, increased $4.0 million, or 137.6%, in the quarter and $12.4 million, or 150.5% year-to-date, compared to the prior year primarily due to higher rent related to franchise subleases for the 58 restaurants refranchised since the third quarter of 2023.
Previous wording
Franchise support and other costs increased $0.6 million, or 110.1%, in the quarter and $1.6 million, or 158.3% year-to-date, compared to the prior year primarily due to higher franchise development support costs.
Current wording
Franchise support and other costs increased $0.4 million, or 73.4%, in the quarter and $2.0 million, or 127.8% year-to-date, compared to the prior year primarily due to higher franchise development support costs in each period, as well as additional overhead costs on a year-to-date basis.
Previous wording
Franchise advertising and other service expenses increased $2.0 million, or 37.2%, in the quarter and $5.8 million, or 47.7% year-to-date, compared to the prior year primarily due to higher franchise restaurant sales resulting from the 108 restaurants refranchised and the 15 franchise-operated restaurants opened since the second quarter of 2023.
Current wording
Franchise advertising and other service expenses increased $1.6 million, or 26.2%, in the quarter and $7.4 million, or 40.5% year-to-date, compared to the prior year primarily due to higher franchise restaurant sales resulting from the 58 restaurants refranchised and the 17 franchise-operated restaurants opened since the third quarter of 2023.
Previous wording
Depreciation and amortization for the quarter ended April 14, 2024 decreased $0.7 million in the quarter and $1.6 million year-to-date compared to the prior year period. The decreases in depreciation are primarily due to the refranchising of Del Taco restaurants since the prior year, as well as certain Jack in the Box franchise assets becoming fully depreciated. These decreases were partially offset by increases for new technology assets and new company restaurant openings.
Current wording
Depreciation and amortization for the quarter ended July 7, 2024 decreased $0.6 million in the quarter and $2.3 million year-to-date compared to the prior year period. The decreases in depreciation are primarily due to the refranchising of Del Taco restaurants since the prior year, as well as certain Jack in the Box franchise assets becoming fully depreciated. These decreases were partially offset by increases for new technology assets and new company restaurant openings.
Previous wording
Advertising costs represent company contributions to our marketing funds and are generally determined as a percentage of company-operated restaurant sales. Advertising costs decreased $1.4 million in the quarter and $3.1 million on a year-to-date basis as compared to the prior year, primarily due to a decrease in company-operated restaurant sales in the current year which was driven by refranchising.
Current wording
Advertising costs represent company contributions to our marketing funds and are generally determined as a percentage of company-operated restaurant sales. Advertising costs decreased $0.7 million in the quarter and $3.9 million on a year-to-date basis as compared to the prior year, primarily due to a decrease in company-operated restaurant sales in the current year which was driven by Del Taco refranchising.
Previous wording
Share-based compensation increased by $1.4 million in the quarter and $2.7 million on a year-to-date basis as compared to the prior year primarily due to higher achievement relating to performance-based equity awards.
Current wording
Share-based compensation increased by $0.3 million in the quarter and $3.0 million on a year-to-date basis as compared to the prior year, primarily due to additional restricted stock unit awards, partially offset by lower performance-based equity awards due to lower performance metrics.
Previous wording
The cash surrender value of our company-owned life insurance (“COLI”) policies, net of changes in our non-qualified deferred compensation obligation supported by these policies, are subject to market fluctuations. The changes in market values had a slightly favorable impact of $0.4 million in the quarter, but an unfavorable impact of $0.5 million on a year-to-date basis, compared to the prior year.
Current wording
The cash surrender value of our company-owned life insurance (“COLI”) policies, net of changes in our non-qualified deferred compensation obligation supported by these policies, are subject to market fluctuations. The changes in market values had a favorable impact of $2.6 million in the quarter and $2.1 million on a year-to-date basis, compared to the prior year.
Previous wording
Litigation matters increased $1.6 million in the quarter and decreased $4.2 million on a year-to-date basis as compared to the prior year primarily due to the timing of litigation developments in each period, respectively. Refer to Note 14, Commitments and Contingencies, in the condensed consolidated financial statements for additional information related to the legal matters.
Current wording
Litigation matters increased $0.2 million in the quarter and decreased $4.0 million on a year-to-date basis as compared to the prior year primarily due to the timing of litigation developments in each period, respectively. Refer to Note 14, Commitments and Contingencies, in the condensed consolidated financial statements for additional information related to the legal matters.
Previous wording
Other operating expenses (income), net increased $2.3 million in the quarter and $13.0 million on a year-to-date basis, as compared to the prior year. For the quarter the increase was primarily due to $2.0 million of consulting fees for strategic initiatives in the current year. For the year-to-date period, the increase was due to $9.5 million of gains recognized in the prior year from a sale of Jack in the Box restaurant properties to franchisees who were leasing the properties from us prior to the sale as well as an increase of $7.0 million of consulting fees for strategic initiatives in the current year, partially offset by $2.4 million purchase gains related to the acquisition of 9 Del Taco restaurants, as well as a $1.1 million decrease in costs of closed restaurants in the in the current year.
Current wording
For the year-to-date period, the increase of $11.2 million was due to $9.5 million of gains recognized in the prior year from a sale of Jack in the Box restaurant properties to franchisees who were leasing the properties from us prior to the sale, as well as an increase of $9.3 million of consulting fees for strategic initiatives in the current year. These increases were partially offset by $4.4 million of impairment charges recognized for Del Taco restaurants last year, the $2.4 million purchase gain related to the acquisition of 9 Del Taco restaurants in the current year, as well as a $2.2 million decrease in costs of closed restaurants.
Previous wording
For the fiscal 2024 year-to-date period, the Company sold 13 Del Taco company-operated restaurants to franchisees, for which the Company recognized a net loss on the sale of company-operated restaurants of $1.3 million.
Current wording
For the fiscal 2024 year-to-date period, the Company sold 13 Del Taco company-operated restaurants to franchisees, for which the Company recognized a net loss on the sale of company-operated restaurants of $1.4 million.
Previous wording
For the fiscal 2023 year-to-date period, the Company sold five Jack in the Box company-operated restaurants and 16 Del Taco company-operated restaurants to franchisees, for which the Company recognized a net gain on the sale of company-operated restaurants of $4.5 million.
Current wording
For the fiscal 2023 year-to-date period, the Company sold five Jack in the Box company-operated restaurants and 66 Del Taco company-operated restaurants to franchisees, for which the Company recognized a net gain on the sale of company-operated restaurants of $10.3 million.
Previous wording
Interest expense, net, decreased $0.8 million in the quarter and $2.4 million year-to-date primarily due to lower average borrowings as well as lower average interest rates resulting in a decrease of $0.7 million and $1.9 million, respectively, in interest expense compared to the prior year. Additionally, there was an increase in interest income of $0.5 million year-to-date due to higher investment balances compared to fiscal year 2023.
Current wording
Interest expense, net, decreased $0.3 million in the quarter and $2.7 million year-to-date primarily due to lower average borrowings, as well as lower average interest rates, resulting in a decrease of $0.3 million and $2.1 million, respectively, in interest expense compared to the prior year. Additionally, there was an increase in interest income of $0.5 million year-to-date due to higher investment balances compared to fiscal year 2023.
Previous wording
As of April 14, 2024, the Company had $49.0 million of cash and restricted cash on its consolidated balance sheet and available borrowings of $175.5 million under our $150.0 million Variable Funding Notes and our $75.0 million revolving credit facility. The Company continually assesses the optimal sources and uses of cash for our business. We review our balance sheet for any undervalued assets and pursue opportunities for capital sources, including the sale of our owned Jack in the Box properties and refranchising, primarily for Del Taco in the near term.
Current wording
As of July 7, 2024, the Company had $50.8 million of cash and restricted cash on its consolidated balance sheet and available borrowings of $175.5 million under our $150.0 million Variable Funding Notes and our $75.0 million revolving credit facility. The Company continually assesses the optimal sources and uses of cash for our business. We review our balance sheet for any undervalued assets and pursue opportunities for capital sources, including the sale of our owned Jack in the Box properties and refranchising, primarily for Del Taco in the near term.
Previous wording
Operating Activities. Operating cash flows decreased $100.1 million compared with a year ago. This is primarily due to an unfavorable change in working capital of $95.5 million, as well as lower net income, when adjusted for non-cash items, of $4.6 million. The change in working capital is primarily a result of the decrease of $60.8 million of income tax liabilities (of which $50.3 million was a payment deferred from 2023 in connection with the Southern California winter storm disaster area declaration), a decrease in accrued legal for the final payment of the Torrez litigation of $25.5 million, and a decrease in the advertising accruals of $11.3 million due to timing.
Current wording
Operating Activities. Operating cash flows decreased $142.8 million compared with a year ago. This is primarily due to an unfavorable change in working capital of $138.0 million, as well as lower net income, when adjusted for non-cash items, of $4.8 million. The change in working capital is primarily a result of the decrease of $58.2 million of income tax liabilities (of which $50.3 million was a payment deferred from 2023 in connection with the Southern California winter storm disaster area declaration), a decrease in accrued legal of $29.8 million (of which $25.5 million is due to the final payment of the Torrez litigation), a decrease in the advertising accruals of $14.9 million due to timing, and a decrease in payroll and related taxes accrual of $13.6 million due to company-operated restaurant refranchising activity.
Previous wording
Investing Activities. Cash flows from investing activities decreased by $65.6 million compared with a year ago primarily due to higher purchases of property and equipment of $23.9 million in the current year, lower proceeds from the sale of Jack in the Box restaurant properties to franchisees of $21.9 million in the current year, and lower proceeds from the sale of company-operated restaurants of $16.4 million.
Current wording
Investing Activities. Cash flows from investing activities decreased by $93.8 million compared with a year ago primarily due to higher purchases of property and equipment of $29.1 million in the current year, lower proceeds from the sale of Jack in the Box restaurant properties to franchisees of $14.3 million in the current year, and lower proceeds from the sale of company-operated restaurants of $49.7 million.
Previous wording
The increase in restaurant facility expenditures includes amounts spent on capital maintenance and other operational initiatives. The increase for the purchases of assets intended for sale and/or sale and leaseback includes amounts spent on exercising our right of first refusal to purchase land and building which we intend to sell and leaseback. The increase for corporate information technology includes spending in connection with our new enterprise resource planning system and digital workflow platform.
Current wording
The increase in restaurant facility expenditures includes amounts spent on capital maintenance and other operational initiatives. The increase for the purchases of assets intended for sale includes amounts spent on exercising our right of first refusal to purchase land and building which we intend to sell to franchisees and/or sell and leaseback. The increase for corporate information technology includes spending in connection with our new enterprise resource planning system and digital workflow platform.
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