JACK IN THE BOX INC
For the period ended Jan 19, 2025. Filed Feb 25, 2025.
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.
Jan 19, 2025 · Filed Feb 25, 2025
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 2024-07-07; filed 2024-08-06.
0000807882-24-000033
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-01-19; filed 2025-02-25.
0000807882-25-000016
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 154 previous paragraphs and 143 current paragraphs.
95 unchanged; 31 reworded; 16 added; 28 removed; 0 previous and 1 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 (16)
Current report
Occupancy and other costs, as a percentage of company restaurant sales, increased 1.2% compared to a year ago primarily due to higher rent and other operating costs including delivery fees.
Current report
Franchise rental revenues increased $0.2 million, or 0.2% compared to the prior year primarily due to higher pass through property tax and common area maintenance (“CAM”) revenue of $1.8 million, partially offset by lower percentage rent of $1.7 million.
Current report
Franchise royalties and other increased $0.3 million, or 0.4% compared to the prior year primarily due to higher royalty income driven by higher sales.
Current report
Franchise contributions for advertising and other services revenues increased $0.6 million, or 0.8% compared to the prior year primarily due to higher marketing contributions of $0.2 million in connection with higher sales, as well as an increase in digital and technology fees of $0.2 million.
Current report
Franchise occupancy expenses, primarily rent, increased $2.7 million, or 4.2% compared to the prior year primarily due to higher pass through property tax expense and CAM costs of $1.8 million and operating lease costs.
Current report
Franchise support and other costs decreased $0.4 million, or 11.9% compared to the prior year.
Current report
Franchise advertising and other service expenses decreased $0.9 million, or 1.3% compared to the prior year primarily due to lower franchise IT support costs, partially offset by higher marketing and digital processing fees.
Current report
Franchise contributions for advertising and other services revenues decreased less than $0.1 million, or 0.3%, compared to the prior year primarily due to lower income from equipment sales, partially offset by increased franchise marketing contributions resulting from the 60 restaurants refranchised since the first quarter of 2024.
Current report
Franchise support and other costs increased $0.5 million, or 31.2%, compared to the prior year primarily due mainly to higher bad debt expense and franchise support costs resulting from the 60 restaurants refranchised since the first quarter of 2024.
Current report
Franchise advertising and other service expenses decreased $0.3 million, or 3.2%, compared to the prior year primarily due to lower expense from equipment sales, partially offset by increases in marketing expense resulting from the 60 restaurants refranchised since the first quarter of 2024.
Current report
Share-based compensation decreased by $1.1 million compared to the prior year, primarily due to current year forfeitures and lower achievement levels for performance-based equity awards.
Current report
Other Operating Expenses, Net
Current report
Other operating expenses, net decreased $1.7 million compared to the prior year. The decrease was primarily due to the decrease of integration and strategic initiatives of $4.2 million, partially offset by a $2.4 million acquisition gain in the prior year and $0.7 million of restaurant impairment charges in the current year.
Current report
For the first quarter of 2025, the Company recognized a net gain on the sale of 13 company-operated restaurants of $2.8 million. For the first quarter of 2024, the net loss on the sale of company-operated restaurants of $0.3 million was comprised of a $2.2 million impairment of assets held for sale related to a Del Taco refranchising transaction that closed in the second quarter of 2024, partially offset by additional proceeds received in connection with the extension of franchise agreements and the resolution of certain contingencies related to the sale of restaurants in prior years.
Current report
The income tax provisions reflect a year-to-date effective tax rate of 29.8%, compared with 26.9% in fiscal year 2024. The major components of the year-over-year increase in tax rates were an increase in tax expenses on share-based compensation and non-deductible losses in the current year as opposed to non-taxable gains in the prior year from the market performance of insurance products used to fund certain non-qualified retirement plans, partially offset by a decrease in the impact of non-deductible goodwill related to the sale of company-operated restaurants.
Current report
Capital expenditures decreased $3.7 million primarily due to a decrease in the number of properties acquired with intent of selling to franchisees or selling and leasing back, and a decrease in corporate technology spending due to the completion of our new enterprise resource planning software implementation last year. These decreases were partially offset by an increase in restaurant technology expenditures related to the rollout of a new POS system for company restaurants and investments in digital and other restaurant technology enhancements.
Removed paragraphs (28)
Previous report
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 report
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 report
(1)Excluding the impact of the $7.3 million termination fee in the first quarter of 2023 royalties as a percentage of total franchised restaurant sales would be 5.0%.
Previous report
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 report
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 report
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 report
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 report
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 report
(1)Includes price increases of approximately 8.0% in the quarter and 7.0% year-to-date.
Previous 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.
Previous report
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 report
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 report
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 report
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 report
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 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.
Previous report
Goodwill Impairment Charges
Previous 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.
Previous report
Other Operating Expenses (Income), Net
Previous 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.
Previous report
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 report
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 report
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 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.
Previous 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.
Previous 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.
Previous report
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.
Previous report
•The COVID-19 pandemic has disrupted and may continue to disrupt our business, which has affected and could continue to materially affect our operations, financial condition, and results of operations.
Reworded paragraphs (31)
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 40 weeks (“year-to-date”) ended July 7, 2024 and July 9, 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 2025 and 2024 include 52 weeks. Our first quarter includes 16 weeks and all other quarters include 12 weeks. All comparisons between 2025 and 2024 refer to the 16 weeks (“quarter”) ended January 19, 2025 and January 21, 2024, respectively, unless otherwise indicated.
Previous wording
•Changes in sales at restaurants open more than one year (“same-store sales”), systemwide sales, franchised restaurant sales, and average unit volumes (“AUVs”). Same-store sales, restaurant sales, and AUVs are presented for franchised restaurants and on a system-wide basis, which includes company and franchise restaurants. Franchise sales represent sales at franchise restaurants and are revenues of our franchisees. We do not record franchise sales as revenues; however, our royalty revenues, marketing fees and percentage rent revenues are calculated based on a percentage of franchise sales. We believe franchise and system same-store sales, franchised and system restaurant sales, and AUV information are useful to investors as they have a direct effect on the Company’s profitability.
Current wording
•Changes in sales at restaurants open more than 18 months (“same-store sales”), systemwide sales, franchised restaurant sales, and average unit volumes (“AUVs”). Same-store sales, restaurant sales, and AUVs are presented for franchised restaurants and on a system-wide basis, which includes company and franchise restaurants. Franchise sales represent sales at franchise restaurants and are revenues of our franchisees. We do not record franchise sales as revenues; however, our royalty revenues, marketing fees and percentage rent revenues are calculated based on a percentage of franchise sales. We believe franchise and system same-store sales, franchised and system restaurant sales, and AUV information are useful to investors as they have a direct effect on the Company’s profitability.
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 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.
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 January 19, 2025, we operated and franchised 2,190 Jack in the Box quick-service restaurants, primarily in the western and southern United States, including two in Guam and two in Mexico, and 589 Del Taco quick-service restaurants across 17 states.
Previous 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):
Current wording
Company restaurant sales increased $1.7 million, or 1.3% 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 (in millions):
Previous 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:
Current wording
Same-store sales at company-operated restaurants decreased 0.4% in the quarter compared to a year ago. The following table summarizes the change versus a year ago:
Previous wording
(1)Includes price increases of approximately 8.4% in the quarter and 7.6% year-to-date.
Current wording
(1)Includes price increases of approximately 5.1% in the quarter.
Previous 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.
Current wording
Food and packaging costs, as a percentage of company restaurant sales, decreased 3.8% compared to the prior year due mainly to a 3.4% benefit from a new beverage contract with funding retroactive to January 1, 2024, the majority of which is non-recurring, as well as menu price increases, partially offset by commodity inflation and unfavorable menu item mix. Commodity inflation was 2.8% in the quarter, with the greatest impacts in beef and beverages.
Previous 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.
Current wording
Payroll and employee benefit costs, as a percentage of company restaurant sales, increased 2.5% compared to the prior year. During the quarter, increases in wage inflation, were partially offset by a decrease in incentive compensation due to lower achievement levels compared to the prior year. Labor inflation was approximately 14.7% in the quarter primarily due to the wage increases required in California effective April 1, 2024 under AB 1228.
Previous 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):
Current wording
Company restaurant sales decreased $24.3 million or 26.5% compared to the prior year primarily due to the refranchising of 60 company-operated restaurants since the first quarter of 2024 and decreases in same-store sales 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 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:
Current wording
Same-store sales at company-operated restaurants decreased 2.5% in the quarter compared to a year ago. The following table summarizes the change versus a year ago:
Previous 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.
Current wording
Food and packaging costs, as a percentage of company restaurant sales, decreased 1.9% compared to the prior year primarily due to menu price increases and favorable beverage funding, partially offset by commodity inflation and unfavorable menu item mix. Commodity inflation was 1.9% in the quarter. The greatest impact on the quarter inflation was seen in poultry and cheese.
Previous 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.
Current wording
Payroll and employee benefit costs, as a percentage of company restaurant sales, increased 2.9% compared to the prior year due to labor inflation, which was 15.4% in the quarter.
Previous 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.
Current wording
Occupancy and other costs, as a percentage of company restaurant sales, increased 0.9% compared to the prior year primarily due to a change in the mix of company restaurants from refranchising and higher maintenance and repair.
Previous 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.
Current wording
Franchise rental revenues increased $3.1 million, or 41.3%, compared to the prior year primarily due to higher rental income and property tax revenue resulting from new subleases related to the 60 restaurants refranchised since the first quarter of 2024.
Previous 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.
Current wording
Franchise royalties and other increased $0.4 million, or 4.3%, compared to the prior year primarily due to higher franchise restaurant sales resulting from the 60 restaurants refranchised since the first quarter of 2024.
Previous 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.
Current wording
Franchise occupancy expenses, primarily rent, increased $3.5 million, or 46.8%, compared to the prior year primarily due to higher operating lease costs in the current year from refranchising.
Previous 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.
Current wording
Depreciation and amortization for the quarter ended January 19, 2025 decreased $0.2 million as compared to the prior year period primarily due to the 60 Del Taco restaurants refranchised since a year ago, 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 operated restaurants.
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 $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.
Current wording
Advertising costs mainly represent company contributions to our marketing funds and are generally determined as a percentage of company-operated restaurant sales. Advertising costs increased $0.1 million compared to the prior year, primarily due to an increase in expenses related to new markets and third party digital sponsorships, partially offset by a decrease in Del Taco company-operated restaurant sales in the current year.
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 favorable impact of $2.6 million in the quarter and $2.1 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 an unfavorable impact of $6.2 million compared to the prior year.
Previous 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.
Current wording
Litigation matters increased $0.2 million compared to the prior year primarily due to the timing of litigation developments. 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 is comprised of the following (in thousands):
Current wording
Other operating expenses, net is comprised of the following (in thousands):
Previous 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.
Current wording
Interest expense, net, decreased $0.1 million as compared to the prior year, This was primarily due to a decrease of $0.4 million in interest expense compared to the prior year due to lower average borrowings, which was partially offset by a decrease in interest income of $0.3 million due to lower investment balances compared to a year ago.
Previous 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.
Current wording
As of January 19, 2025, the Company had $104.6 million of cash and restricted cash on its consolidated balance sheet and available borrowings of $170.7 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 $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.
Current wording
Operating Activities. Operating cash flows increased $128.3 million compared with a year ago. This is primarily due to a favorable change in working capital of $132.5 million, partially offset by lower net income, when adjusted for non-cash items, of $4.1 million. The favorable change in working capital is primarily a result of $50.3 million paid in 2024 for fiscal 2023 income tax payments deferred in connection with the Southern California winter storm disaster declaration, $35.0 million received in the current year in connection with the a new supply chain contract, and $25.5 million paid in 2024 in connection with the Torrez settlement.
Previous 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.
Current wording
Investing Activities. Cash flows used in investing activities decreased by $10.5 million compared with a year ago primarily due to higher proceeds from the sale of Del Taco restaurant properties to franchisees of $4.0 million in the current year, lower purchases of property and equipment of $3.7 million in the current year, and death benefit proceeds received of $3.3 million in the current year.
Previous wording
Financing Activities. Cash flows from financing activities decreased by $55.5 million compared with a year ago. The change is primarily due to the $50.0 million repayment in the prior year on the Variable Funding Notes and the $5.4 million decrease in stock repurchases in the current year versus the prior year.
Current wording
Financing Activities. Cash flows used in financing activities decreased by $15.0 million compared with a year ago. The change is primarily due to a $20.0 million decrease in stock repurchases compared with a year ago, partially offset by a $6.0 million repayment in the current year on the Variable Funding Notes.
Previous wording
Repurchases of common stock — The Company repurchased 0.8 million shares of its common stock in fiscal 2024 for an aggregate cost of $55.4 million. As of July 7, 2024, there was $195.0 million remaining under share repurchase programs authorized by the Board of Directors which do not expire.
Current wording
Repurchases of common stock — The Company repurchased 0.1 million shares of its common stock in fiscal 2025 for an aggregate cost of $5.0 million. As of January 19, 2025, there was $175.0 million remaining under share repurchase programs authorized by the Board of Directors which does not expire.
Previous wording
Dividends — Up through July 7, 2024, the Board of Directors declared three cash dividends of $0.44 per common share totaling $25.8 million.
Current wording
Dividends — Up through January 19, 2025, the Board of Directors declared one cash dividends of $0.44 per common share totaling $8.4 million.
Previous wording
The Company also entered into a revolving financing facility of Series 2022-1 Variable Funding Senior Secured Notes (the “Variable Funding Notes”), which permits borrowings up to a maximum of $150.0 million, subject to certain borrowing conditions, a portion of which may be used to issue letters of credit. As of July 7, 2024, we did not have any outstanding borrowings and had available borrowing capacity of $100.5 million under our Variable Funding Notes, net of letters of credits issued of $49.5 million.
Current wording
The Company also entered into a revolving financing facility of Series 2022-1 Variable Funding Senior Secured Notes (the “Variable Funding Notes”), which permits borrowings up to a maximum of $150.0 million, subject to certain borrowing conditions, a portion of which may be used to issue letters of credit. As of January 19, 2025, we did not have any outstanding borrowings and had available borrowing capacity of $95.7 million under our Variable Funding Notes, net of letters of credits issued of $54.3 million.
Previous wording
Restricted cash — In accordance with the terms of the Indenture, certain cash accounts have been established with the Indenture trustee for the benefit of the note holders and are restricted in their use. As of July 7, 2024, the Company had restricted cash of $29.1 million, which primarily represented cash collections and cash reserves held by the trustee to be used for payments of interest and commitment fees required for the Class A-1 and A-2 Notes.
Current wording
Restricted cash — In accordance with the terms of the Indenture, certain cash accounts have been established with the Indenture trustee for the benefit of the note holders and are restricted in their use. As of January 19, 2025, the Company had restricted cash of $29.7 million, which primarily represented cash collections and cash reserves held by the trustee to be used for payments of interest and commitment fees required for the Class A-1 and A-2 Notes.
Previous wording
Revolving credit facility —In connection with the Del Taco acquisition, Del Taco’s existing debt related to a Syndicated Credit Facility dated August 5, 2015, was repaid and extinguished on the Closing Date. On the Closing Date, Del Taco entered into a new syndicated credit facility with an aggregate principal amount of up to $75.0 million, which was extended and now matures on February 28, 2025. The revolving credit facility, as amended, includes a limit of $20.0 million for letters of credit, all of which were cancelled as of October 1, 2023. As of July 7, 2024, we had no outstanding borrowings and available borrowing capacity of $75.0 million under the facility.
Current wording
Revolving credit facility —In connection with the Del Taco acquisition, Del Taco’s existing debt related to a Syndicated Credit Facility dated August 5, 2015, was repaid and extinguished on the Closing Date. On the Closing Date, Del Taco entered into a syndicated credit facility with an aggregate principal amount of up to $75.0 million, which will matures on February 28, 2025. The revolving credit facility, as amended, includes a limit of $20.0 million for letters of credit, all of which were cancelled as of October 1, 2023. As of January 19, 2025, we had no outstanding borrowings and available borrowing capacity of $75.0 million under the facility.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
(1)Includes price increases of approximately 7.6%.