Jack In The Box Inc.

Good day, everyone, and thank you for standing by. Welcome to the Jack in the Box Inc. Second Quarter Fiscal 2021 Earnings Conference Call. My name is Christian, and I'll be your conference operator. At this time, all participants are in the listen-only mode. Have already prepared remarks. The management from Jack in the Box will conduct a question and answer session, and conference participants will be given instructions at that time. As a reminder, this conference call is being recorded. A replay of the call will be available on the Jack in the Box corporate website starting today. I'd now like to turn the call over to Mr. Ron Farhan with Arbor Advisory Group. Sir, please go ahead.

Thank you, Christian, and good evening, everyone. Thanks for joining us tonight. Joining me on today's call are Chief Executive Officer Darren Harris and EVP Chief Financial Officer Tim Mullaney. During our prepared remarks and the Q&A portion of today's call, we will refer to non-GAAP items, including operating earnings per share, adjusted EBITDA, as well as restaurant-level margin and franchise-level margin. Please refer to the non-GAAP reconciliations provided in today's earnings release and available in the investor relations section of our website at www.jackinthebox.com. Also during today's call, we may make forward-looking statements that reflect management's current expectations for the future and which are based on current information and judgments. And while management may provide current thinking on this call around the potential impacts of COVID-19 on our business, given the rapidly changing environment, any forward-looking statements should be considered with this elevated level of uncertainty. Actual results may differ materially from these expectations based on risks to the business. The safe harbor statement in today's news release and the cautionary statement in the company's most recent 10-K are considered a part of this conference call. Material risk factors, as well as information relating to company operations, are detailed in our most recent 10-K, 10-Q, and other public documents filed with the SEC and are available on the investor relations section of our website at www.jackinthebox.com. A couple of calendar items to note quickly. Jack in the Box Management plans to host a virtual investor day on Tuesday, June 29th. Watch for more information about that event in the coming weeks. And our third quarter ends on Sunday, July 4th, and we tentatively plan to announce results on Wednesday, August 4th, after market close, and host a conference call at 5 p.m. Eastern time that same day. So with that, I'll turn the call over to Darren.

Thank you, Ron, and good evening, everyone. Thank you for joining us today. We are very pleased with our second quarter results announced earlier this afternoon. They reflect the power of the Jack in the Box brand, our iconic, differentiated all-day menu, and our continuous product innovation. And, most importantly, they are a direct result of the dedication and passion of our franchisees, store managers, and staff. And all of the team members throughout the entire Jack system have worked relentlessly to serve our guests safely and effectively through the challenges of the past year. Tim will go into more detail on our strong second quarter results and how we currently anticipate fiscal year 2021 playing out. I'm pleased to report that we are off to a good start through the first four weeks of the third quarter, giving us confidence that our key strategies continue to resonate with guests and position us to maintain momentum while we work closely with our franchisees. Let me provide a brief update on the strategies which I believe are driving our current performance and laying the groundwork to pursue our longer-term strategic initiative to expand JAK's reach with renewed unit growth. All of our strategies are rooted in two foundational principles. The first foundational principle is shaping a caring, high-performance culture focused on serving our people and franchisees well. If we do this, we are confident they will take care of our guests. The second foundational principle is accentuating Jack's history of innovation and leveraging technology. On top of these foundational principles sit our four strategic pillars. First, building brand loyalty. Second, driving operational excellence. Third, growing restaurant profits. And fourth, expanding Jack's reach. Over the long run, Jack will create value by investing in serving our people and franchisees, innovating in new ways, leveraging our data, expanding our reach, and scaling our infrastructure to drive operational excellence. As we've indicated, with the past 10-year refranchising process now solidly behind us, Jack's next 10 years are going to be driven by new unit growth, and by emphasizing all the things that Jack guests love and trust about the Jack brand, our broad and unique menu, all-day availability, constant innovation, and out-of-the-box attitude. As part of solidifying our first foundational principle, one of my priorities over the past year has been to revitalize our leadership team with professionals who have deep experience in expansion-oriented restaurant and franchise business models. and whose talents complement those of our current leadership team who have deep and valuable experience with Jack. So I'd like to start today by welcoming the two newest additions to the team. First, Steve Piano, our new Chief People Officer, joined the company on April 26th. Steve brings more than 10 years of executive-level HR experience from GNC Holdings, a $1.6 billion global health, wellness, and supplements brand where he served as head of human resources and previously as EBP of HR at MoneyGram. Second, Carlson Choi, our new chief information officer, joined us on May 3rd. He comes to us from Jollibee Foods, a $4 billion global restaurant operator with a portfolio of franchise brands where he served as global chief digital officer and chief information officer. He also served previously as Global VP in the Digital Initiatives Group at Mattel. As a reminder, over the past six months, we've also welcomed Tim Linderman as Senior Vice President of Franchise and Corporate Development, Tim Mulaney as Chief Financial Officer, and Ryan Ostrom as Chief Marketing Officer. We're also in the final stages of recruiting a new Chief Operating Officer who will be responsible for leading both company and franchise operations. focused on driving operational excellence and growing restaurant profitability across the system, two of the four key pillars of our long-term strategic plan. Our executive leadership team is already working closely with our corporate team members and our franchisees to drive Jack's long-term growth initiatives. In addition to installing a new leadership team, Working collaboratively with our franchisees to develop and execute our new strategy has been and continues to be a top priority. As many of you know, Jack in the Box is celebrating its 70th anniversary this year. Over that time, Jack has carved out a distinctive position in the QSR industry, and our committed franchisees have been a key part of this achievement. Jack's future success will be a function of building strong relationships with our franchisees and enabling them to deliver exceptional guest experiences that enhance brand loyalty and grow their business. Their success is our success. I'm very encouraged by the progress that we continue to make on that front. We held our first quarterly Leadership Advisory Council meeting in January and have another scheduled in San Diego in less than two weeks. And between these quarterly meetings, We've also held virtual monthly business meetings that are helping to accelerate the exchange of ideas and activation of our strategies in partnership with our franchisees. We're openly sharing with our franchisees our corporate aspirations to expand Jack's Reach, and they, in return, are sharing their own aspirations to capitalize on the strong Jack brand and on the substantial expansion opportunities available to us together to build and operate new restaurants. Although we're still in the early stages, we're very encouraged by the initial enthusiasm expressed by our franchisees. To date, more than two-thirds of our existing franchisees have expressed interest in expanding in the coming years. We recently signed development agreements with eight existing franchisees, our first such agreement in recent years. That calls for them to add a total of 23 new stores over the next several years, representing a greater than 6% expansion of their current combined 358 units. In addition to our plans to expand with the majority of our existing franchisees, we launched several new franchise recruitment initiatives in late March, including filing our updated franchise disclosure document, standing up a new franchise development website, jackintheboxfranchising.com, and in late April, initiating our first paid ad campaign to solicit new franchisee leads. These steps are also beginning to bear fruit. Through the first four months of 2021, we've received double the number of inbound franchise leads compared with last year at this time. And our store development team has been finalizing work on a modular jack-in-the-box restaurant of the future design that will provide franchisees greater access to a wider variety of store sites, including drive-through only, end caps, smaller and streamlined narrow sites, and non-traditional, such as airports, convenience stores, and college campuses. As part of that work, we've developed a new efficient kitchen for our smaller drive-through only stores that is incorporated into our future modular restaurant design. Initial construction costs for the drive-through only store prototype are approximately 20% lower than our current stores, making our category leading store economics even more compelling as an investment for new and existing franchisees. We recently finalized an agreement with a national partner, Reef Kitchens, to open an initial group of up to eight ghost kitchens in three states this summer. These are the latest additions to our strategy of accelerating both our restaurant growth and growth through digital channels. This also builds upon our system-wide rollout of an in-app ordering, and the launch of Jack's first-ever loyalty program over the past few weeks. All of these initiatives have accelerated our acquisition of customer data to expand our database, which has grown by more than 60% over the past 18 months. This represents a significant opportunity for Jack. Combined with our newly implemented digital marketing technology platform, our growing guest database will enable us to support our strategic pillar to build brand loyalty and by communicating through more personalized messages and timely offers. Over the past year, our customer data indicates that we have been attracting and retaining more higher-income consumers, even as dining restrictions have been relaxed. As you can see, we're working on all fronts, putting the building blocks in place to drive brand loyalty and franchise opportunities that will fuel future growth and category-leading performance. We're pleased with the progress we're making and with enthusiasm of existing and prospective franchisees. At the same time, I want to carefully manage expectations, taking into account normal and COVID-impacted lead times for site selection, financing, permitting, and build-out. We anticipate it will be at least 18 to 24 months before we begin to show meaningful net new store growth. In the meantime, we will continue to focus on driving operating performance across our existing store base building brand loyalty by working closely with our franchisees to delight guests with our all-day menu, continually introduce new craveable menu innovations, and introduce new technologies and procedures to ensure consistent speed of service so guests enjoy every visit to Jack in the Box across our 21-state geography. We look forward to providing additional details about our long-term strategies and our three-year financial framework at our June 29th Virtual Investor Day. Watch for an email soon inviting you to register in advance. Before I turn the call over to Tim to review our second quarter financial results and elements of our full-year expectations, I'd like to again sincerely thank our restaurant team members for keeping everyone's safety a top priority as we provide for the needs of our guests. I'd also like to thank our corporate employees, franchisees, and suppliers for their partnership, flexibility, and ingenuity during these unprecedented times. At this time, I'll turn it over to Tim.