Just got off the JACK conference call, and, there are even more unusual charges going into the 4th quarter this year which obviously are seriously impacting the guidance. So it is a rather meaningless number especially considering there is a large pending sale of units to a franchisee which may or may not close this fiscal year. So if it does not close this year, that .17 cents goes into next year which is just fine for tax and other reasons. (helps next year's EPS and that is the focus now). Also it was pointed out by one analyst, the comparisons are becoming easier when lapping some pretty awful numbers a year ago. In the first four weeks this quarter, namely the July experience, they are down 4.5 to 5.5% but lapping a rather strong July last year. So that number could improve somewhat. In other words, they are being cautious. Which is to say, this deleveraging effect starts to moderate next year and I suspect turns the corner in the spring early summer period. They also alluded to their new financing arrangement, and there are no restrictions on utlizing the line of credit for either share buybacks or dividends in the future. That is a half billion dollar line including the revolving part.
Holding my positions in JACK and will increase further on anything south of 19. I am more encouraged than ever because, ironically, this kind of phonied up second half of the year, what is really a very misleading number, will probably keep the stock price subdued for a while so a potential buyer can get his hooks in good. With the company now buying shares and also Blue Harbor, it will be interesting to see how things play out over the next six months. In my opinion things could not look better than the way they are shaping up for the next two years. This, of course, is in conideration of a very cheap stock with enough potential to get us a 50% return pretty handily I suspect. Big J in L.A.