Business Wire | Nov 23, 2021 08:31AM EST

Jack in the Box Inc. Reports Fourth Quarter and Full-Year 2021 Earnings

Nov. 23, 2021

SAN DIEGO--(BUSINESS WIRE)--Nov. 23, 2021--Jack in the Box Inc. (NASDAQ: JACK) announced financial results for the fourth quarter ended October 3, 2021, comprised of growth in systemwide sales, same store sales and earnings per share.

"I am very proud of the execution and determination shown by our outstanding franchisees and corporate team members, continuing to deliver for our guests during a challenging operating environment," said Darin Harris, Jack in the Box Chief Executive Officer. "We closed the year with strong comps on a two-year basis of +12.3% in Q4, leading us to another record-setting year of store-level profitability - a key element in driving results against our growth strategy in the near future. We continue to focus heavily on making significant progress on our strategic pillars, growth objectives, and unlocking substantial value for JACK shareholders."

Systemwide sales for the fourth quarter increased 8.6%, or 0.2% when excluding the 53rd week for the purpose of comparison to the prior year, driven by positive results in same store sales and partially offset by a slight decline in net unit growth. Systemwide sales for full year 2021 increased 13.1%, or 11.0% when excluding the 53rd week.

The company had a fourth quarter net store decline of one store, comprised of four store openings and five closures. The five store closures included one company-owned location and four related to early terminations and an agreement expiration. In the fourth quarter, there were development agreements signed for 47 future restaurants, bringing the year-to-date total to 111 future restaurant commitments.

Company-operated same-store sales declined 4.4% in the fourth quarter, with decreases in traffic partially offset by increases in average check. Franchise same-store sales grew 0.6%, with increases in average check; partially offset by a decrease in traffic.

(1) Fiscal year 2020 Diluted EPS included non-recurring items, notably apension settlement charge and the sale of a corporate office building, thataffect the comparability to fiscal year 2021 Diluted EPS.

Same-Store Sales:

13 Weeks Ended

12 Weeks Ended

53 Weeks Ended

52 Weeks Ended

October 3, 2021

September 27, 2020

October 3, 2021

September 27, 2020

Company

(4.4)%

9.6%

6.1%

3.1%

Franchise

0.6%

12.4%

10.7%

4.0%

System SSS

0.1%

12.2%

10.3%

4.0%

Same-StoreSales:

13 Weeks 12 Weeks Ended 53 Weeks 52 Weeks Ended Ended Ended

October 3, September 27, October 3, September 27, 2021 2020 2021 2020

Company (4.4)% 9.6% 6.1% 3.1%

Franchise 0.6% 12.4% 10.7% 4.0%

System SSS 0.1% 12.2% 10.3% 4.0%

Restaurant Counts:

2021

2020

Company

Franchise

Total

Company

Franchise

Total

Store count at beginning of Q4

148

2,071

2,219

144

2,100

2,244

New

-

4

4

-

7

7

Refranchised

16

(16)

-

-

-

-

Closed

(1)

(4)

(5)

-

(10)

(10)

Store count at end of Q4

163

2,055

2,218

144

2,097

2,241

Q4 Net Unit Increase/(Decrease)

15

(16)

(1)

-

(3)

(3)

Q4/FY 2021 vs. Q4/FY 2020 Unit % Increase/(Decrease)

13.2

%

(2.0)

%

(1.0)

%

5.1

%

(0.4)

%

(0.1)

%

Fourth quarter diluted earnings per share was $1.80, up 9.8% over the prior year quarter or 2.4% excluding the benefit of the 53rd week. Total revenues increased 9.0% to $278.5 million, compared to $255.4 million in the comparable period ended September 27, 2020, driven by the 53rd week in 2021 and growth in same store sales. Net earnings increased to $38.9 million for the fourth quarter of fiscal 2021, compared with $37.8 million for the fourth quarter of fiscal 2020. Adjusted EBITDA(1), a non-GAAP measure, was $74.3 million in the fourth quarter of fiscal 2021 compared with $78.4 million for the prior year quarter.

Restaurant-Level Margin(2), a non-GAAP measure, was 20.1%, a decrease of 6.9% from the fourth quarter a year ago, primarily driven by the take back of lower-volume franchise restaurants; increases in food and packaging costs; wage inflation of 9.8%; and increases in utilities, and maintenance and repair costs, partially offset by lower incentive compensation and menu price increases. Commodity costs increased in the quarter by approximately 11.8%, primarily due to increases in pork, beef and beverages.

Franchise-Level Margin(2), a non-GAAP measure, increased by $6.1 million, or 8.7% from the fourth quarter a year ago, driven by the benefit of the 53rd week in 2021.

G&A expense for the fourth quarter was $16.7 million, an increase of $6.4 million compared to the prior year quarter, driven primarily by a $3.8 million favorable litigation settlement in the prior year quarter; mark-to-market changes in the cash surrender value of company owned life insurance ("COLI") policies, net of a deferred compensation obligation supported by these policies, resulting in a year-over-year increase of $1.1 million; a $1.1 million increase in incentive compensation; and $1.5 million related to the 53rd week in fiscal 2021. G&A for the full-year was $63.1 million. When including selling and advertising expense, SG&A was $82.7 million for fiscal 2021.

RestaurantCounts:

2021 2020

Company Franchise Total Company Franchise Total

Store count at 148 2,071 2,219 144 2,100 2,244 beginning of Q4

New - 4 4 - 7 7

Refranchised 16 (16) - - - -

Closed (1) (4) (5) - (10) (10)

Store count at 163 2,055 2,218 144 2,097 2,241 end of Q4

Q4 Net UnitIncrease/ 15 (16) (1) - (3) (3) (Decrease)

Q4/FY 2021 vs.Q4/FY 2020 Unit 13.2 % (2.0) % (1.0) % 5.1 % (0.4) % (0.1) %% Increase/(Decrease)

Fourth quarter diluted earnings per share was $1.80, up 9.8% over the prior year quarter or 2.4% excluding the benefit of the 53rd week. Total revenues increased 9.0% to $278.5 million, compared to $255.4 million in the comparable period ended September 27, 2020, driven by the 53rd week in 2021 and growth in same store sales. Net earnings increased to $38.9 million for the fourth quarter of fiscal 2021, compared with $37.8 million for the fourth quarter of fiscal 2020. Adjusted EBITDA(1), a non-GAAP measure, was $74.3 million in the fourth quarter of fiscal 2021 compared with $78.4 million for the prior year quarter.

Restaurant-Level Margin(2), a non-GAAP measure, was 20.1%, a decrease of 6.9% from the fourth quarter a year ago, primarily driven by the take back of lower-volume franchise restaurants; increases in food and packaging costs; wage inflation of 9.8%; and increases in utilities, and maintenance and repair costs, partially offset by lower incentive compensation and menu price increases. Commodity costs increased in the quarter by approximately 11.8%, primarily due to increases in pork, beef and beverages.

Franchise-Level Margin(2), a non-GAAP measure, increased by $6.1 million, or 8.7% from the fourth quarter a year ago, driven by the benefit of the 53rd week in 2021.

G&A expense for the fourth quarter was $16.7 million, an increase of $6.4 million compared to the prior year quarter, driven primarily by a $3.8 million favorable litigation settlement in the prior year quarter; mark-to-market changes in the cash surrender value of company owned life insurance ("COLI") policies, net of a deferred compensation obligation supported by these policies, resulting in a year-over-year increase of $1.1 million; a $1.1 million increase in incentive compensation; and $1.5 million related to the 53rd week in fiscal 2021. G&A for the full-year was $63.1 million. When including selling and advertising expense, SG&A was $82.7 million for fiscal 2021.

(1) Adjusted EBITDA represents net earnings on a GAAP basis excluding incometaxes, interest expense, net, gains or losses on the sale of company-operatedrestaurants, impairment and other charges, net, depreciation and amortization,the amortization of franchise tenant improvement allowances and other, andpension settlement charges. See "Reconciliation of Non-GAAP Measurements toGAAP Results."

(2) Restaurant-Level Margin and Franchise-Level Margin are non-GAAP measures.These non-GAAP measures are reconciled to earnings from operations, the mostcomparable GAAP measure, in the attachment to this release. See "Reconciliationof Non-GAAP Measurements to GAAP Results."

Capital Allocation

The company repurchased 0.7 million shares of our common stock for an aggregate cost of $70.0 million. As of October 3, 2021, there was no remaining amount under the Board-authorized stock buyback program. On November 19, 2021, the Board of Directors authorized an additional $200.0 million stock buy-back program that expires on November 20, 2023.

On November 19, 2021, the Board of Directors declared a cash dividend of $0.44 per share, to be paid on December 23, 2021 to shareholders of record as of the close of business on December 9, 2021. Future dividends will be subject to approval by our Board of Directors.

2022 Guidance & Outlook

The following guidance and underlying assumptions reflect the company's current expectations for the current fiscal year ending October 2, 2022:

* 2022 CapEx & Other Investments Guidance of $65-75 million Previously stated at Q3 2021 earnings on August 4, 2021 Includes: Capital expenditures (located within cash flows from investing activities) Franchise tenant improvement allowances and incentives (located within cash flows from operating activities)

* 2022 SG&A Guidance of $92-97 million Excludes net COLI gains/losses, and now includes selling/advertising expense * 2022 Commodity Guidance up 6-7% compared to 2021 * 2022 Company-owned Wage Rate Guidance up 8-10% compared to 2021

* No change to 3-5 Year Outlook as provided at Investor Day on June 29, 2021 Same store sales up 2 to 3% Unit growth up 1 to 3% Systemwide sales up 3 to 5%

2022 Restaurant Level Margin Outlook

* Due to an anticipated unique cost environment, we are providing one-time Company-owned restaurant level margin annual guidance for 2022 Restaurant Level Margin is expected to be 20-21%, which includes mid-to-high single digit price increases

Company-owned Restaurant Funding Outlook

* 2022: Planning to fund up to 5 company-owned restaurants * 2023: Planning to fund between 7 and 15 company-owned restaurants

Conference Call

The company will host a conference call for analysts and investors on Tuesday, November 23, 2021, beginning at 7:30 a.m. PT (10:30 a.m. ET). The call will be webcast live via the Investors section of the Jack in the Box company website at http://investors.jackinthebox.com. A replay of the call will be available through the Jack in the Box Inc. corporate website for 21 days. The call can be accessed via phone by dialing (833) 513-0565 and using ID 7573711.

About Jack in the Box Inc.

Jack in the Box Inc. (NASDAQ: JACK), founded and headquartered in San Diego, California, is a restaurant company that operates and franchises Jack in the Box(r) restaurants, one of the nation's largest hamburger chains, with more than 2,200 restaurants in 21 states and Guam. For more information on Jack in the Box, including franchising opportunities, visit www.jackinthebox.com.

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may be identified by words such as "anticipate," "believe," "estimate," "expect," "forecast," "goals," "guidance," "intend," "plan," "project," "may," "will," "would" and similar expressions. These statements are based on management's current expectations, estimates, forecasts and projections about our business and the industry in which we operate. These estimates and assumptions involve known and unknown risks, uncertainties, and other factors that are in some cases beyond our control. Factors that may cause our actual results to differ materially from any forward-looking statements include, but are not limited to: the potential impacts to our business and operations resulting from the coronavirus COVID-19 pandemic, the success of new products, marketing initiatives and restaurant remodels and drive-thru enhancements; the impact of competition, unemployment, trends in consumer spending patterns and commodity costs; the company's ability to reduce G&A and operate efficiently; 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, risks relating to expansion into new markets and successful franchise development; the ability to attract, train and retain top-performing personnel, litigation risks; risks associated with disagreements with franchisees; supply chain disruption; food-safety incidents or negative publicity impacting the reputation of the company's brand; increased regulatory and legal complexities, including federal, state and local policies regarding mitigation strategies for controlling the coronavirus COVID-19 pandemic, risks associated with the amount and terms of the securitized debt issued by certain of our wholly owned subsidiaries; 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

CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share data) (Unaudited)

13 Weeks 12 Weeks 53 Weeks 52 Weeks Ended Ended Ended Ended

October 3, September October 3, September 2021 27, 2021 27, 2020 2020

Revenues:

Company restaurant sales $ 95,634 $ 86,799 $ 387,766 $ 348,987

Franchise rental revenues 84,386 78,657 346,634 320,647

Franchise royalties and 49,264 44,850 204,725 178,319 other

Franchise contributionsfor advertising and other 49,170 45,095 204,545 173,553 services

278,454 255,401 1,143,670 1,021,506

Operating costs and expenses, net:

Food and packaging 29,630 24,787 113,006 102,449

Payroll and employee 30,306 25,304 119,033 106,540 benefits

Occupancy and other 16,456 13,295 61,743 54,157

Franchise occupancy 52,016 48,568 214,913 210,038 expenses

Franchise support and 3,716 2,720 13,052 13,059 other costs

Franchise advertising and 51,361 47,660 210,328 180,794 other services expenses

Selling, general and 21,578 14,710 82,734 80,841 administrative expenses

Depreciation and 10,844 11,647 46,500 52,798 amortization

Impairment and other (5,080) 1,344 (3,382) (6,493) (gains) charges, net

Gains on the sale ofcompany-operated (1,124) (636) (4,203) (3,261) restaurants

209,703 189,399 853,724 790,922

Earnings from operations 68,751 66,002 289,946 230,584

Other pension andpost-retirement expenses, 203 748 881 41,720 net

Interest expense, net 16,338 15,692 67,458 66,743

Earnings from continuingoperations and before 52,210 49,562 221,607 122,121 income taxes

Income taxes 13,276 11,704 55,852 32,727

Earnings from continuing 38,934 37,858 165,755 89,394 operations

(Losses) earnings fromdiscontinued operations, - (9) - 370 net of income taxes

Net earnings $ 38,934 $ 37,849 $ 165,755 $ 89,764



Net earnings per share - basic:

Earnings from continuing $ 1.81 $ 1.65 $ 7.40 $ 3.87 operations

Earnings (losses) from - - - 0.02 discontinued operations

Net earnings per share ^ $ 1.81 $ 1.65 $ 7.40 $ 3.88 (1)

Net earnings per share - diluted:

Earnings from continuing $ 1.80 $ 1.65 $ 7.37 $ 3.84 operations

Earnings (losses) from - - - 0.02 discontinued operations

Net earnings per share ^ $ 1.80 $ 1.64 $ 7.37 $ 3.86 (1)

Weighted-average shares outstanding:

Basic 21,537 22,903 22,402 23,125

Diluted 21,594 23,012 22,478 23,269



Cash dividends declared $ 0.44 $ 0.40 $ 1.68 $ 1.20 per common share

______________________(1)

Earnings per share may not add due to rounding.

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

JACK IN THE BOX INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data) (Unaudited)

October 3, September 27, 2021 2020

ASSETS

Current assets:

Cash $ 55,346 $ 199,662

Restricted cash 18,222 37,258

Accounts and other receivables, net 74,335 78,417

Inventories 2,335 1,808

Prepaid expenses 12,682 10,114

Current assets held for sale 1,692 4,598

Other current assets 4,346 3,724

Total current assets 168,958 335,581

Property and equipment, at cost:

Land 105,393 100,460

Buildings 907,792 914,311

Restaurant and other equipment 112,959 112,675

Construction in progress 6,894 4,984

1,133,038 1,132,430

Less accumulated depreciation and amortization (810,124) (796,448)

Property and equipment, net 322,914 335,982

Other assets:

Operating lease right-of-use assets 934,066 904,548

Intangible assets, net 470 277

Goodwill 47,774 47,161

Deferred tax assets 51,517 72,322

Other assets, net 224,438 210,623

Total other assets 1,258,265 1,234,931

$ 1,750,137 $ 1,906,494

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:

Current maturities of long-term debt $ 894 $ 818

Current operating lease liabilities 150,636 179,000

Accounts payable 29,119 31,105

Accrued liabilities 148,417 129,431

Total current liabilities 329,066 340,354

Long-term liabilities:

Long-term debt, net of current maturities 1,273,420 1,376,913

Long-term operating lease liabilities, net of 809,191 776,094 current portion

Other long-term liabilities 156,342 206,494

Total long-term liabilities 2,238,953 2,359,501

Stockholders' deficit:

Preferred stock $0.01 par value, 15,000,000 - - shares authorized, none issued

Common stock $0.01 par value, 175,000,000 sharesauthorized, 82,536,059 and 82,369,714 issued, 825 824 respectively

Capital in excess of par value 500,441 489,515

Retained earnings 1,764,412 1,636,211

Accumulated other comprehensive loss (74,254) (110,605)

Treasury stock, at cost, 61,523,475 and (3,009,306) (2,809,306) 59,646,773 shares, respectively

Total stockholders' deficit (817,882) (793,361)

$ 1,750,137 $ 1,906,494

JACK IN THE BOX INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

53 Weeks 52 Weeks Ended Ended

October 3, September 2021 27, 2020

Cash flows from operating activities:

Net earnings $ 165,755 $ 89,764

Earnings from discontinued operations - 370

Earnings from continuing operations 165,755 89,394

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation and amortization 46,500 52,798

Amortization of franchise tenant improvement 3,450 3,028allowances and incentives

Amortization of debt issuance costs 5,595 5,628

Excess tax benefits from share-based compensation (1,160) (449)arrangements

Deferred income taxes 8,008 5,162

Share-based compensation expense 4,048 4,394

Pension and postretirement expense 881 41,720

Gains on cash surrender value of company-owned life (12,753) (4,262)insurance

Gains on the sale of company-operated restaurants (4,203) (3,261)

Gains on the disposition of property and equipment (6,888) (9,768)

Impairment charges and other 2,889 322

Changes in assets and liabilities, excluding acquisitions and dispositions:

Accounts and other receivables 5,072 (27,865)

Inventories (269) 41

Prepaid expenses and other current assets (2,766) (2,780)

Operating lease right-of-use assets and lease (24,784) 490liabilities

Accounts payable (3,091) 2,018

Accrued liabilities 28,990 4,222

Pension and postretirement contributions (6,084) (6,243)

Franchise tenant improvement allowance and incentive (8,568) (10,239)disbursements

Other 500 (825)

Cash flows provided by operating activities 201,122 143,525

Cash flows from investing activities:

Purchases of property and equipment (41,008) (19,528)

Proceeds from the sale and leaseback of assets 3,884 19,828

Proceeds from the sale of company-operated 1,827 3,395restaurants

Proceeds from the sale of property and equipment 11,742 22,774

Other 2,626 2,654

Cash flows (used in) provided by investing activities (20,929) 29,123

Cash flows from financing activities:

Borrowings on revolving credit facilities - 114,376

Repayments of borrowings on revolving credit (107,875) (6,500)facilities

Principal repayments on debt (829) (10,536)

Debt issuance costs - (216)

Dividends paid on common stock (37,322) (27,538)

Proceeds from issuance of common stock 6,647 4,647

Repurchases of common stock (200,000) (155,576)

Payroll tax payments for equity award issuances (4,166) (5,946)

Cash flows used in financing activities (343,545) (87,289)

Net (decrease) increase in cash and restricted cash (163,352) 85,359

Cash and restricted cash at beginning of year 236,920 151,561

Cash and restricted cash at end of year $ 73,568 $ 236,920

JACK IN THE BOX INC. AND SUBSIDIARIES

SUPPLEMENTAL INFORMATION

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.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS DATA

(Unaudited)

13 Weeks 12 Weeks 53 Weeks 52 Weeks Ended Ended Ended Ended

October September October September 3, 27, 3, 27, 2021 2020 2021 2020

Revenues:

Company restaurant sales 34.3 % 34.0 % 33.9 % 34.2 %

Franchise rental revenues 30.3 % 30.8 % 30.3 % 31.4 %

Franchise royalties and other 17.7 % 17.6 % 17.9 % 17.5 %

Franchise contributions for 17.7 % 17.7 % 17.9 % 17.0 %advertising and other services

100.0 % 100.0 % 100.0 % 100.0 %

Operating costs and expenses, net:

Food and packaging (1) 31.0 % 28.6 % 29.1 % 29.4 %

Payroll and employee benefits (1) 31.7 % 29.2 % 30.7 % 30.5 %

Occupancy and other (1) 17.2 % 15.3 % 15.9 % 15.5 %

Franchise occupancy expenses (2) 61.6 % 61.7 % 62.0 % 65.5 %

Franchise support and other costs 7.5 % 6.1 % 6.4 % 7.3 %(3)

Franchise advertising and other 104.5 % 105.7 % 102.8 % 104.2 %services expenses (4)

Selling, general and 7.7 % 5.8 % 7.2 % 7.9 %administrative expenses

Depreciation and amortization 3.9 % 4.6 % 4.1 % 5.2 %

Impairment and other (gains) (1.8) % 0.5 % (0.3) % (0.6) %charges, net

Gains on the sale of (0.4) % (0.2) % (0.4) % (0.3) %company-operated restaurants

Earnings from operations 24.7 % 25.8 % 25.4 % 22.6 %

Income tax rate (5) 25.4 % 23.6 % 25.2 % 26.8 %

______________________(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 franchise contributions for advertising and other services.(5)

As a percentage of earnings from continuing operations and before income taxes.______________________(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 franchise contributions for advertising and other services.(5) As a percentage of earnings from continuing operations and before income taxes.Jack in the Box system sales (in thousands):

13 Weeks Ended

12 Weeks Ended

53 Weeks Ended

52 Weeks Ended

October 3,2021

September 27,2020

October 3,2021

September 27,2020

Company-operated restaurant sales

$

95,634

$

86,799

$

387,766

$

348,987

Franchised restaurant sales (1)

914,828

843,683

3,767,574

3,323,745

Systemwide sales (1)

$

1,010,462

$

930,482

$

4,155,340

$

3,672,732

Jack in the Boxsystem sales (inthousands):

13 Weeks 12 Weeks 53 Weeks 52 Weeks Ended Ended Ended Ended

October 3, September October 3, September 27, 2021 27, 2021 2020 2020

Company-operated $ 95,634 $ 86,799 $ 387,766 $ 348,987 restaurant sales

Franchisedrestaurant sales 914,828 843,683 3,767,574 3,323,745 (1)

Systemwide sales $ 1,010,462 $ 930,482 $ 4,155,340 $ 3,672,732 (1)

______________________ Franchised restaurant sales represent sales at franchised restaurants and are revenues of our franchisees. System sales include company and franchised restaurant sales. We do not record franchised sales as(1) revenues; however, our royalty revenues, marketing fees and percentage rent revenues are calculated based on a percentage of franchised sales. We believe franchised and system restaurant sales information is useful to investors as they have a direct effect on the company's profitability.

The following table summarizes the changes in the number and mix of Jack in the Box company and franchise restaurants:

SUPPLEMENTAL RESTAURANT ACTIVITY INFORMATION

(Unaudited)

2021 2020

Company Franchise Total Company Franchise Total



Beginning of year 144 2,097 2,241 137 2,106 2,243

New - 14 14 - 27 27

Acquired from 20 (20) - - - - franchisees

Closed (1) (36) (37) (1) (28) (29)

End of period 163 2,055 2,218 144 2,097 2,241

% of system 7 % 93 % 100 % 6 % 94 % 100 %

JACK IN THE BOX INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASUREMENTS TO GAAP RESULTS

(Unaudited)

To supplement the consolidated financial statements, which are presented in accordance with GAAP, the company uses the following non-GAAP measures: Adjusted EBITDA, Restaurant-Level Margin and Franchise-Level Margin. Management believes that these measurements, when viewed with the company's results of operations in accordance with GAAP and the accompanying reconciliations in the tables below, provide useful information about operating performance and period-over-period changes, and provide additional information that is useful for evaluating the operating performance of the company's core business without regard to potential distortions.

Adjusted EBITDA

Adjusted EBITDA represents net earnings on a GAAP basis excluding earnings from discontinued operations, income taxes, interest expense, net, gains or losses on the sale of company-operated restaurants, impairment and other charges (gains), net, depreciation and amortization, the amortization of franchise tenant improvement allowances and incentives, and pension settlement charges. Adjusted EBITDA should be considered as a supplement to, not as a substitute for, analysis of results as reported under U.S. GAAP or other similarly titled measures of other companies. Management believes Adjusted EBITDA is useful to investors to gain an understanding of the factors and trends affecting the company's ongoing cash earnings, from which capital investments are made and debt is serviced. Below is a reconciliation of non-GAAP Adjusted EBITDA to the most directly comparable GAAP measure, net earnings (in thousands).

13 Weeks 12 Weeks 53 Weeks 52 Weeks Ended Ended Ended Ended

October 3, September October 3, September 2021 27, 2021 27, 2020 2020

Net earnings - GAAP $ 38,934 $ 37,849 $ 165,755 $ 89,764

Losses (earnings) fromdiscontinued operations, - 9 - (370) net of taxes

Income taxes 13,276 11,704 55,852 32,727

Interest expense, net 16,338 15,692 67,458 66,743

Pension settlement - 188 - 39,218 charges

Gains on the sale ofcompany-operated (1,124) (636) (4,203) (3,261) restaurants

Impairment and other (5,080) 1,344 (3,382) (6,493) (gains) charges, net

Depreciation and 10,844 11,647 46,500 52,798 amortization

Amortization of franchisetenant improvement 1,120 645 3,450 3,028 allowances and incentives

Adjusted EBITDA - $ 74,308 $ 78,442 $ 331,430 $ 274,154 non-GAAP

Restaurant-Level Margin

Restaurant-Level Margin is defined as company restaurant sales less restaurant operating costs (food and packaging, labor, and occupancy costs) and is neither required by, nor presented in accordance with GAAP. Restaurant-Level Margin excludes revenues and expenses of our franchise operations and certain costs, such as selling, general, and administrative expenses, depreciation and amortization, impairment and other (gains) charges, net, gains or losses on the sale of company-operated restaurants, and other costs that are considered normal operating costs. As such, Restaurant-Level Margin is not indicative of the overall results of the company and does not accrue directly to the benefit of shareholders because of the exclusion of corporate-level expenses. Restaurant-Level Margin should be considered as a supplement to, not as a substitute for, analysis of results as reported under GAAP or other similarly titled measures of other companies. The company is presenting Restaurant-Level Margin because it believes that it provides a meaningful supplement to net earnings of the company's core business operating results, as well as a comparison to those of other similar companies. Management utilizes Restaurant-Level Margin as a key performance indicator to evaluate the profitability of company-owned restaurants.

Below is a reconciliation of non-GAAP Restaurant-Level Margin to the most directly comparable GAAP measure, earnings from operations (in thousands):

13 Weeks 12 Weeks 53 Weeks 52 Weeks Ended Ended Ended Ended

October 3, September October 3, September 2021 27, 2021 27, 2020 2020

Earnings from operations - $ 68,751 $ 66,002 $ 289,946 $ 230,584 GAAP

Franchise rental revenues (84,386) (78,657) (346,634) (320,647)

Franchise royalties and other (49,264) (44,850) (204,725) (178,319)

Franchise contributions for (49,170) (45,095) (204,545) (173,553) advertising and other services

Franchise occupancy expenses 52,016 48,568 214,913 210,038

Franchise support and other 3,716 2,720 13,052 13,059 costs

Franchise advertising and 51,361 47,660 210,328 180,794 other services expenses

Selling, general and 21,578 14,710 82,734 80,841 administrative expenses

Impairment and other (gains) (5,080) 1,344 (3,382) (6,493) charges, net

Gains on the sale of (1,124) (636) (4,203) (3,261) company-operated restaurants

Depreciation and amortization 10,844 11,647 46,500 52,798

Restaurant-Level Margin- $ 19,242 $ 23,413 $ 93,984 $ 85,841 Non-GAAP



Company restaurant sales $ 95,634 $ 86,799 $ 387,766 $ 348,987



Restaurant-Level Margin % - 20.1 % 27.0 % 24.2 % 24.6 %Non-GAAP

Franchise-Level Margin

Franchise-Level Margin is defined as franchise revenues less franchise operating costs (occupancy expenses, advertising contributions, and franchise support and other costs) and is neither required by, nor presented in accordance with GAAP. Franchise-Level Margin excludes revenue and expenses of our company-operated restaurants and certain costs, such as selling, general, and administrative expenses, depreciation and amortization, impairment and other (gains) charges, net, and other costs that are considered normal operating costs. As such, Franchise-Level Margin is not indicative of the overall results of the company and does not accrue directly to the benefit of shareholders because of the exclusion of corporate-level expenses. Franchise-Level Margin should be considered as a supplement to, not as a substitute for, analysis of results as reported under GAAP or other similarly titled measures of other companies. The company is presenting Franchise-Level Margin because it believes that it provides a meaningful supplement to net earnings of the company's core business operating results, as well as a comparison to those of other similar companies. Management utilizes Franchise-Level Margin as a key performance indicator to evaluate the profitability of our franchise operations.

Below is a reconciliation of non-GAAP Franchise-Level Margin to the most directly comparable GAAP measure, earnings from operations (in thousands):

13 Weeks 12 Weeks 53 Weeks 52 Weeks Ended Ended Ended Ended

October 3, September October 3, September 2021 27, 2021 27, 2020 2020

Earnings from operations - $ 68,751 $ 66,002 $ 289,946 $ 230,584 GAAP

Company restaurant sales (95,634) (86,799) (387,766) (348,987)

Food and packaging 29,630 24,787 113,006 102,449

Payroll and employee 30,306 25,304 119,033 106,540 benefits

Occupancy and other 16,456 13,295 61,743 54,157

Selling, general and 21,578 14,710 82,734 80,841 administrative expenses

Impairment and other (gains) (5,080) 1,344 (3,382) (6,493) charges, net

Gains on the sale of (1,124) (636) (4,203) (3,261) company-operated restaurants

Depreciation and 10,844 11,647 46,500 52,798 amortization

Franchise-Level Margin - $ 75,727 $ 69,654 $ 317,611 $ 268,628 Non-GAAP



Franchise rental revenues $ 84,386 $ 78,657 $ 346,634 $ 320,647

Franchise royalties and 49,264 44,850 204,725 178,319 other

Franchise contributions foradvertising and other 49,170 45,095 204,545 173,553 services

Total franchise revenues $ 182,820 $ 168,602 $ 755,904 $ 672,519



Franchise-Level Margin % - 41.4 % 41.3 % 42.0 % 39.9 %Non-GAAP

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CONTACT: Chris Brandon Vice President, Investor Relations chris.brandon@jackinthebox.com 619.902.0269