Jamba, Inc. Reports Financial Results for Fourth Quarter and Fiscal Year 2009
Financial initiatives that improved store level margins to 15.1% of total revenue, lowered G&A by 22.9% to $37.0 million, and eliminated all long term debt.
Jamba, Inc. (NASDAQ:JMBA) today reported financial results for the fiscal year and fourth quarter ended December 29, 2009. The results showed continued progress on strategic priorities, including the disciplined management of costs and expenses and the expansion of food, licensed consumer products, and franchising. The Company said that incremental sales from its food and hot beverage initiatives during the seasonally low fourth quarter indicates a potential for a return to positive comparable store sales growth for the full year in 2010.
“At the start of 2009, we said that turnaround and transformation would be our mission. With the implementation of disciplined cost controls and the expansion of our business model, we are evolving from a made-to-order smoothie company into a healthy, active lifestyle company”For fiscal year 2009, Jamba achieved and exceeded several strategic priorities that included:
- Financial initiatives that improved store level margins to 15.1% of total revenue, lowered G&A by 22.9% to $37.0 million, and eliminated all long term debt.
- Major programs that strengthened its new business model with the extension of oatmeal to more than 600 locations, the introduction of new food items in more than 370 locations, the testing of hot beverages, the licensing of five new consumer products and the retail launch of one licensed consumer product.
- Expanded efforts in franchise development and re-franchising resulting in the opening of 25 new stores and refranchising of 27 units.
- Consolidated EBITDAfor fiscal 2009 increased by $14.2 million to $8.6 million from $(5.6) million for fiscal 2008.*
- Company store-level EBITDA for fiscal 2009 improved $3.3 million to $45.7 million from $42.4 million for fiscal 2008, reflecting an improvement of 7.7%.*
- Total revenue for fiscal 2009 decreased 12.1% to $301.6 million from $342.9 million for fiscal 2008, reflecting a decrease of $41.3 million.
- Company-owned comparable store sales for fiscal 2009 declined 10.3%.(1)
- 23 new franchise stores and two new company-owned stores were opened during fiscal 2009.
- Consolidated EBITDAfor Q409 increased 18.8% to $(9.1) million from $(11.2) million for Q408, reflecting an improvement of $2.1 million.*
- Company store-level EBITDAfor Q409 decreased $0.4 million to $(0.8) million from ($0.4) million for Q408.*
- Total revenue for Q409 decreased 9.8% to $50.6 million from $56.1 million for Q408.
- Company-owned comparable store sales for Q409 declined 5.3%.(1)
- One new franchise store and one new company-owned store were opened during the fiscal fourth quarter of 2009, bringing the store count to 739 stores system-wide, of which 261 are franchise stores and 478 are company-owned stores.
“Despite the tough operating environment, we delivered on our commitments and made significant progress on our long-term plan. Jamba’s performance in 2009 makes us confident about the outlook for 2010. We believe that for the year Jamba will see positive comparable store sales, but comparable store sales growth is only one of several metrics we’ll use to gauge our progress,” concluded Mr. White.
Outlook for 2010
The Company plans to achieve the following in 2010:
- Deliver positive comparable store sales;
- Reduce G&A by 10-12 percent (excluding share-based compensation);
- Deliver consolidated EBITDA margins of 5-7 percent;
- Deliver store-level EBITDA margins of 15-17 percent;
- Grow via franchise development with the addition of up to 50 franchise stores and expansion into one major international market;
- Add new licensing agreements in relevant categories; and
- Complete the refranchising of up to 150 company-owned stores started in 2009.
On December 29, 2009, the Company held $31.5 million in cash, cash equivalents, and restricted cash. The restricted cash balance was $2.7 million. The Company eliminated all debt for borrowed money with the convertible preferred stock transaction completed in July of 2009.
Footnotes
* Use of Non-GAAP Financial Measures
The Company uses the non-GAAP financial measures of consolidated EBITDA and store-level EBITDA in its statements made in this release. The Company believes that consolidated EBITDA and store-level EBITDA are helpful indicators of the Company’s financial performance. Consolidated EBITDA is equal to net loss plus franchise support reimbursement, less: (a) interest income; (b) interest expense; (c) income taxes; (d) depreciation and amortization; (e) gain from mark-to-market of derivative liabilities; (f) store pre-opening expenses; (g) trademark and goodwill impairment; (h) impairment of long-lived assets; (i) store lease termination and closure cost; and (j) other operating, net. Our definition of store-level EBITDA is different from consolidated EBITDA because we further adjust net income to exclude general and administrative expenses. Consolidated EBITDA margins and store-level EBITDA margins are calculated by dividing consolidated EBITDA or store-level EBITDA by total revenue. Consolidated EBITDA and store-level EBITDA are not measurements determined in accordance with GAAP and should not be considered in isolation or as an alternative to income (loss) from operations or net income (loss) as indicators of financial performance. Each non-GAAP financial measure used as presented may not be comparable to other similarly titled measures used by other companies. For a reconciliation of net income (loss) to these non-GAAP financial measures, see the discussion and related table below.
(1) Comparable store sales are calculated using sales of stores open at least thirteen full fiscal periods. Management reviewsthe increase or decrease in comparable store sales compared with the same period in the prior year to assess business trends and make certain business decisions.
About Jamba, Inc.
Jamba, Inc. (NASDAQ:JMBA) is a holding company and through its wholly-owned subsidiary, Jamba Juice Company, owns and franchises JAMBA JUICE® stores. Founded in 1990, Jamba Juice is a leading restaurant retailer of better-for-you food and beverage offerings, including great tasting fruit smoothies, juices, and teas, hot oatmeal made with organic steel cut oats, wraps, salads, sandwiches, and California Flatbreads™, and a variety of baked goods and snacks. As of December 29, 2009, Jamba Juice had 739 locations consisting of 478 company-owned and operated stores and 261 franchise stores.
| JAMBA, INC. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (Unaudited) | ||||||||
| December 29, | December 30, | |||||||
| (In thousands, except share and per share amounts) | 2009 | 2008 | ||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 28,757 | $ | 20,822 | ||||
| Restricted cash | 1,324 | 5,059 | ||||||
| Receivables, net of allowances of $116 and $416 | 9,949 | 4,594 | ||||||
| Inventories | 3,732 | 3,435 | ||||||
| Prepaid rent | 486 | 185 | ||||||
| Prepaid and refundable income taxes | 491 | 5,670 | ||||||
| Prepaid expenses and other current assets | 3,684 | 1,328 | ||||||
| Total current assets | 48,423 | 41,093 | ||||||
| Property, fixtures and equipment, net | 70,266 | 95,154 | ||||||
| Trademarks and other intangible assets, net | 1,850 | 2,998 | ||||||
| Restricted cash | 1,399 | 2,659 | ||||||
| Deferred income taxes | 998 | 354 | ||||||
| Other long-term assets | 2,882 | 3,462 | ||||||
| Total assets | $ | 125,818 | $ | 145,720 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 7,405 | $ | 8,089 | ||||
| Accrued compensation and benefits | 7,089 | 7,667 | ||||||
| Workers' compensation and health insurance reserves | 1,096 | 1,922 | ||||||
| Accrued jambacard liability | 38,255 | 30,764 | ||||||
| Current portion of capital lease obligations | 240 | 246 | ||||||
| Other accrued expenses | 10,270 | 12,074 | ||||||
| Derivative liabilities | - | 2,098 | ||||||
| Total current liabilities | 64,355 | 62,860 | ||||||
| Note payable | - | 22,829 | ||||||
| Long-term capital lease obligations | 5 | 281 | ||||||
| Long-term workers' compensation and health insurance reserves | 1,158 | 2,659 | ||||||
| Deferred rent and other long-term liabilities | 14,695 | 16,670 | ||||||
| Total liabilities | 80,213 | 105,299 | ||||||
| Commitments and contingencies | ||||||||
| Series B redeemable preferred stock, $.001 par value, 304,348 shares authorized and outstanding at December 29, 2009. No shares authorized and outstanding at December 30, 2008 | 31,069 | - | ||||||
| Stockholders' equity: | ||||||||
| Common stock, $0.001 par value, 150,000,000 shares authorized, 52,712,528 and 52,690,728 shares issued and outstanding |
53 | 55 | ||||||
| Additional paid-in-capital | 356,320 | 358,258 | ||||||
| Accumulated deficit | (341,837 | ) | (317,892 | ) | ||||
| Total stockholders' equity | 14,536 | 40,421 | ||||||
| Total liabilities and stockholders' equity | $ | 125,818 | $ | 145,720 | ||||
| JAMBA, INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| 12 Week Period Ended | 52 Week Period Ended | |||||||||||||||
| (In thousands, except share and per share amounts) | December 29, 2009 | December 30, 2008 | December 29, 2009 | December 30, 2008 | ||||||||||||
| Revenue: | ||||||||||||||||
| Company stores | $ | 49,433 | $ | 54,413 | $ | 295,607 | $ | 333,784 | ||||||||
| Franchise and other revenue | 1,165 | 1,691 | 5,946 | 9,106 | ||||||||||||
| Total revenue | 50,598 | 56,104 | 301,553 | 342,890 | ||||||||||||
| Costs and operating expenses: | ||||||||||||||||
| Cost of sales | 12,871 | 14,704 | 72,669 | 89,163 | ||||||||||||
| Labor | 19,664 | 22,709 | 100,589 | 120,251 | ||||||||||||
| Occupancy | 9,816 | 10,254 | 43,888 | 44,868 | ||||||||||||
| Store operating | 9,053 | 8,409 | 38,734 | 43,714 | ||||||||||||
| Depreciation and amortization | 3,874 | 5,386 | 18,271 | 24,717 | ||||||||||||
| General and administrative | 8,297 | 10,829 | 37,044 | 48,057 | ||||||||||||
| Store pre-opening | 43 | 124 | 516 | 2,044 | ||||||||||||
| Impairment of long-lived assets | 1,532 | 14,604 | 12,639 | 27,802 | ||||||||||||
| Store lease termination and closure | 406 | 7,130 | 1,234 | 10,029 | ||||||||||||
| Trademark and goodwill impairment | - | 1,461 | - | 84,061 | ||||||||||||
| Other operating, net | (2,935 | ) | 269 | (3,924 | ) | 3,817 | ||||||||||
| Total costs and operating expenses | 62,621 | 95,879 | 321,660 | 498,523 | ||||||||||||
| Loss from operations | (12,023 | ) | (39,775 | ) | (20,107 | ) | (155,633 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Gain from derivative liabilities | - | 285 | 1,597 | 7,895 | ||||||||||||
| Interest income | 20 | 50 | 404 | 365 | ||||||||||||
| Interest expense | 15 | (1,361 | ) | (6,905 | ) | (2,064 | ) | |||||||||
| Total other income (expense) | 35 | (1,026 | ) | (4,904 | ) | 6,196 | ||||||||||
| Loss before income taxes | (11,988 | ) | (40,801 | ) | (25,011 | ) | (149,437 | ) | ||||||||
| Income tax benefit (expense) | 604 | (373 | ) | 1,066 | 274 | |||||||||||
| Net loss | (11,384 | ) | (41,174 | ) | (23,945 | ) | (149,163 | ) | ||||||||
