Jack In The Box 2013 Annual Report Download - page 22

•Franchising Program — We refranchised 78 Jack in the Box restaurants, while Jack in the Box franchisees opened a total of 11 restaurants in
2013. Our Jack in the Box system was approximately 79% franchised at the end of fiscal 2013, and we plan to maintain franchise ownership in
the Jack in the Box system at a level between 80-85%. During fiscal 2013, Qdoba franchisees opened a total of 34 restaurants, including two in
Canada.
•Credit Facility — During the first quarter of fiscal 2013, we entered into a new credit agreement consisting of a $400.0 million revolving credit
facility and a $200.0 million term loan, both with a five-year maturity.
•Restructuring Costs — During fiscal 2013, we continued our comprehensive review of our organization structure, including evaluating
opportunities for outsourcing, restructuring of certain functions and workforce reductions. As a result, restructuring charges of $3.5 million were
recorded during fiscal 2013.
•Discontinued Operations — During the first quarter of 2013, we completed the outsourcing of our Jack in the Box distribution business.
Additionally, during the third quarter of fiscal 2013, we closed 62 Qdoba company-operated restaurants. We expect the outsourcing and store
closures to have a positive impact on future earnings and cash flows. As a result of these two transactions, we recognized an after tax loss of
$31.5 million, or $0.70 per diluted share, in fiscal 2013.
•Share Repurchases — Pursuant to share repurchase programs authorized by our Board of Directors, we repurchased 4.0 million shares of our
common stock at an average price of $35.29 per share, including the cost of brokerage fees.
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The consolidated statements of earnings for all periods presented have been prepared reflecting the results of operations for the 2013 Qdoba closures and
charges incurred as a result of closing these restaurants as discontinued operations. The results of operations and costs incurred to outsource our distribution
business are also reflected as discontinued operations for all periods presented. Refer to Note 2, Discontinued Operations, in the notes to our consolidated
financial statements for more information.
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The following table presents certain income and expense items included in our consolidated statements of earnings as a percentage of total revenues, unless
otherwise indicated. Percentages may not add due to rounding.
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Revenues:
Company restaurant sales
76.8 %
78.4 %
82.7 %
Franchise revenues
23.2 %
21.6 %
17.3 %
Total revenues
100.0 %
100.0 %
100.0 %
Operating costs and expenses, net:
Company restaurant costs:
Food and packaging (1)
32.6 %
32.9 %
33.5 %
Payroll and employee benefits (1)
28.0 %
28.6 %
29.7 %
Occupancy and other (1)
22.3 %
22.5 %
23.6 %
Total company restaurant costs (1)
82.9 %
84.0 %
86.7 %
Franchise costs (1)
50.2 %
51.0 %
48.3 %
Selling, general and administrative expenses
14.8 %
14.9 %
13.7 %
Impairment and other charges, net
0.9 %
2.2 %
0.8 %
Gains on the sale of company-operated restaurants
(0.3)%
(1.9)%
(3.7)%
Earnings from operations
9.3 %
8.0 %
9.3 %
Income tax rate (2)
32.8 %
33.2 %
36.1 %
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(1) As a percentage of the related sales and/or revenues.
(2) As a percentage of earnings from continuing operations and before income taxes.
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