Company: JACK
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0000807882-25-000030
Chunk: 11

Company: JACK IN THE BOX INC
Filing Date: 2025-05-14
Form: 10-Q
Item: Item 2
Chunk 11
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 to the prior year.

26

Litigation matters increased $0.3 million in the quarter and $0.5 million on a year-to-date basis as 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.

Impairment of Goodwill and Intangible Assets

As of the March 16, 2025 testing date, the balance of the Del Taco reporting unit goodwill was $25.3 million. During the second quarter of 2025, 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) continued negative trend in Del Taco same store sales, ii) unfavorable changes in the economic environment specifically impacting our industry, including inflation and interest rates, iii) the potential for a divestment of Del Taco, 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 $25.3 million.

Additionally, as a result of the quantitative test over the Del Taco reporting unit, the Company also impaired the trademark asset associated with the Del Taco reporting unit in the amount of $177.9 million. 

Other Operating Expenses, Net

Other operating expenses, net is comprised of the following (in thousands):

QuarterYear-to-dateApril 13,2025April 14,2024April 13,2025April 14,2024Integration and strategic initiatives$276 $4,268 $1,691 $9,889 Costs of closed restaurants and other1,927 773 2,768 1,632 Operating restaurant impairment charges1,129 — 1,877 — Accelerated depreciation20 88 20 125 Gains on acquisition of restaurants— — (6)(2,357)Losses on disposition of property and equipment, net864 138 1,385 1,148 $4,216 $5,267 $7,735 $10,437 

Other operating expenses, net decreased $1.1 million in the quarter and $2.7 million on a year-to-date basis. For the quarter, the decrease was primarily due to the decrease of integration and strategic initiatives