Jack In The Box Inc. Reports Operating Results (10-Q)
Jack In The Box Inc. has a market cap of $1.24 billion; its shares were traded at around $23.37 with a P/E ratio of 14.2 and P/S ratio of 0.5. Jack In The Box Inc. had an annual average earning growth of 6.8% over the past 10 years. GuruFocus rated Jack In The Box Inc. the business predictability rank of 2.5-star.Hedge Fund Gurus that owns JACK: Kenneth Fisher of Fisher Asset Management, LLC, Paul Tudor Jones of The Tudor Group, George Soros of Soros Fund Management LLC, Steven Cohen of SAC Capital Advisors. Mutual Fund and Other Gurus that owns JACK: John Buckingham of Al Frank Asset Management, Inc., Pioneer Investments, HOTCHKIS & WILEY of Hotchkis & Wliey Capital Management LLC.
Highlight of Business Operations: Distribution sales to Jack in the Box and Qdoba franchisees grew $42.1 million from a year ago, primarily reflecting an increase in the number of Jack in the Box franchise restaurants serviced by our distribution centers, which contributed additional sales of approximately $36.2 million, and higher commodity prices.
Franchise revenues increased $16.5 million, or 25.6%, in the quarter due primarily to a 17.2% increase in the average number of Jack in the Box franchise restaurants, which contributed additional royalties and rents of approximately $13.8 million. Also, an increase in the number of restaurants sold to franchisees in the quarter resulted in higher revenues from initial franchise fees. The following table reflects the detail of our franchise revenues in each period and other information we believe is useful in analyzing the change in franchise revenues (in thousands):
Distribution costs increased to $147.3 million in the quarter from $105.4 million last year, primarily reflecting an increase in the related sales. These costs decreased to 100.4% of distribution sales in the quarter compared with 100.7% a year ago due primarily to leverage from higher PSA sales at Jack in the Box and Qdoba franchise restaurants.
Net earnings were $32.4 million, or $0.61 per diluted share, compared with $24.2 million, or $0.43 per diluted share, a year ago.
Cash and cash equivalents increased $5.9 million to $16.5 million at the end of the quarter from $10.6 million at the beginning of the fiscal year. This increase is primarily due to cash proceeds and collections of notes receivable from the sale of restaurants to franchisees and cash flows provided by operating activities, offset in part by cash used to repurchase common stock and purchase property and equipment. We generally reinvest available cash flows from operations to develop new restaurants or enhance existing restaurants, to reduce debt and to repurchase shares of our common stock.
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