Juices Now Offered by More Than 500 Jamba Stores
Net income flat at $6.4 million; non-GAAP net income $7.7 million, an increase of 21.3%; G&A Decreases
Tech Innovations Score Breakthroughs with Consumers
EMERYVILLE, Calif. - (BUSINESS WIRE) - Aug. 4, 2014 - Jamba, Inc. (NASDAQ:JMBA) today reported unaudited financial results for the second fiscal quarter ended July 1, 2014. Jamba® recorded quarterly comparable store sales(1) increases for company-owned and franchise-operated stores, driven by the expansion of Jamba’s fresh-squeezed juice and whole food blending platform.
Juice and whole food blending was introduced to 376 stores during the quarter as a result of the accelerated national rollout, bringing the new platform to a total of 508 Jamba units by quarter end. The juice platform, which was available for only one month during the quarter in most units, is on target to add 300-400 basis points to sales based upon store sales to date. Beyond juice, Jamba continued its global growth with 19 units opened in domestic and international markets, putting the Company on track to reach its annual target of 60-80 new units. The Company also made progress on its refranchising efforts / transition to an asset-light model and decreased the number of company operated stores to 258 at quarter end. This transition helped contribute to our reduction in general and administration (G&A) expense by 6.4% year-over-year to $9.6 million.
Highlights for the 13 weeks ended July 1, 2014, compared to the 13 weeks ended July 2, 2013:
"Our second-quarter marked a significant milestone for Jamba as we continue to successfully execute on our U.S. growth strategy and drive shareholder value. Our fresh-squeezed juice and whole food blending platform is now in more than 500 stores across the U.S. While we’re in the very early days of this national rollout, we are very pleased with the marketplace excitement, consumer acceptance and incremental sales generated by this initiative," said James D. White, chairman, president and CEO of Jamba, Inc.
"The full impact of juice is not captured in our second quarter results, but in our core California market, which served as a pilot for juice, same store sales increased 3.6%, and while we are only one month into the third quarter, the initial results are positive and indicate that we are off to a strong start, up 6-7% on a same store sales basis. By year-end, we believe we will have established Jamba as the clear national leader in fresh-squeezed juice. In addition, two recent technological innovations – a smart-phone enabled customer loyalty program and a mobile payment system – achieved significant breakthroughs with high levels of consumer engagement and use," Mr. White said.
For the 13 weeks ended July 1, 2014, total revenue decreased 5.4% to $64.2 million from $67.8 million in the prior year period. The decrease is primarily caused by the reduction in the number of Company-owned stores due to the Company’s refranchising strategy, partially offset by the 2.5% increase in Company-owned comparable store sales(1). The number of Company-owned stores at the end of the 13 week periods ended July 1, 2014 and July 2, 2013 was 258 and 295, respectively. The increase in Company-owned comparable store sales(1) of 2.5% was driven primarily by an increase in average check of 410 basis points, partially offset by a decrease in transaction count of 160 basis points. During the 13 week period ended July 1, 2014, franchise-operated comparable store sales(1) increased 2.0%. Franchise and other revenue increased 24.6% to $5.6 million from $4.5 million in the prior year period. JambaGO® and CPG revenue was $1.5 million for the 13 week period ended July 1, 2014 and $1.1 million for the prior year period.
The Company’s operating margin improved by 60 basis points to 10.3% for the second quarter of 2014 compared to 9.8% for the quarter ended July 2, 2013. On a non-GAAP basis excluding one-time costs relating to the Company’s juice launch, adjusted income from operations(2) was $8.0 million, an increase of $1.4 million. The $1.4 million improvement primarily reflected reduced cost of goods sold and labor cost resulting from sampling and promotional activities and reduced general and administration expenses.
During the quarter, 376 stores launched fresh-squeezed juice – 120 Company-owned stores and 256 franchise-operated. As of July 1, 2014, 508 Jamba Juice® stores offered the fresh-squeezed juice platform.
At quarter end, system-wide, Jamba® had 809 stores in the United States, of which 551 are franchise-operated stores, and 258 are Company-owned. Franchise-operated stores include 34 Jamba Smoothie Stations™, the limited menu express format.
During the quarter, Jamba opened 13 new domestic franchise-operated stores, of which five are non-traditional and eight traditional, and six international franchise-operated stores, two of which are in the Philippines, two in Canada, one in Mexico and one in South Korea. No new Company-owned stores opened during the quarter; 16 stores were closed globally. Over 1,800 JambaGO® units were in operation.
On July 1, 2014, the Company held $32.4 million in cash and cash equivalents, flat compared to cash and cash equivalents at December 31, 2013. As of July 1, 2014 the Company did not have any restricted cash.
The Company continues to expect to achieve the following results for fiscal 2014:
A conference call to review the second quarter 2014 results will be held today, August 4, 2014 at 5:00 p.m. ET. The conference call can be accessed live over the phone by dialing (877) 407-3982 or for international callers by dialing (201) 493-6780. A replay will be available at 8:00 p.m. ET and can be accessed by dialing (877) 870-5176 or (858) 384-5517 for international callers; the pin number is 13586372. The replay will be available until August 25, 2014. The call can be accessed from the Company’s website at www.jambajuice.com under the Corporate Investor Relations section or directly at http://ir.jambajuice.com.
Jamba, Inc., (the "Company") owns and franchises Jamba Juice® stores through its wholly-owned subsidiary, Jamba Juice Company. Jamba Juice Company is a leading restaurant retailer of better-for-you, specialty beverage and food offerings, which include great tasting, whole fruit smoothies, fresh-squeezed juices and juice blends, hot teas and a variety of food items including, hot oatmeal, breakfast wraps, sandwiches, Artisan Flatbreads™ , baked goods and snacks. As of July 1, 2014, there were 857 store locations globally. There were 258 Company-owned and operated stores and 551 franchise-operated stores in the United States, and 48 franchise-operated international stores. Jamba Juice Company expanded the Jamba® brand by direct selling of consumer packaged goods ("CPG") and licensing its trademarks. CPG products for at-home enjoyment are also available online, through select retailers across the nation and in Jamba® outlets in the United States.
Fans of Jamba Juice® can find out more about Jamba Juice's locations as well as specific offerings and promotions by visiting the Jamba Juice website at www.JambaJuice.com or by contacting Jamba’s Guest Services team at 1-866-4R-FRUIT (473-7848).
This press release (including information incorporated or deemed incorporated by reference herein) contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those involving future events and future results that are based on current expectations, estimates, forecasts, and projections as well as the current beliefs and assumptions of the Company’s management. Words such as "outlook", "believes", "expects", "appears", "may", "will", "should", "anticipates", or the negative thereof or comparable terminology, are intended to identify such forward looking statements. Any statement that is not a historical fact, including the statements made under the caption "Outlook for 2014" and any other estimates, projections, future trends and the outcome of events that have not yet occurred, is a forward-looking statement. Forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore actual results may differ materially and adversely from those expressed in any forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to factors discussed under the section entitled "Risk Factors" in the Company’s reports filed with the SEC. Many of such factors relate to events and circumstances that are beyond the Company’s control. You should not place undue reliance on forward-looking statements. The Company does not assume any obligation to update the information contained in this press release.
The Company provides certain supplemental non-GAAP financial measures to its investors as a complement to the most comparable GAAP measures. The Company believes that providing these non-GAAP measures to its investors, in addition to corresponding GAAP income statement measures, provides investors the benefit of viewing the Company's performance using the same financial metrics that the management team uses in making many key decisions and understanding how the Company's core business operations may perform and may look in the future. The non-GAAP financial measures are discussed further in Footnotes below.
Non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in the United States of America. Non-GAAP measures should not be considered in isolation from or as a substitute for financial information presented in accordance with generally accepted accounting principles, and may be different from non-GAAP measures used by other companies.
(1)Comparable store sales are calculated using sales of Jamba Juice® stores open more than one full year. Company-owned comparable store sales percentages are based on sales from Company-owned stores included in our store base. Franchise-operated comparable store sales percentages are based on sales from franchised stores, as reported by franchisees, which are included in our store base. System-wide sales percentages are based on sales by both Company-owned and franchise-operated stores, as reported by our franchisees, which are included in our store base. Company-owned stores that were sold in refranchising transactions are included in the Company-owned store base for each accounting period of the fiscal quarter to the extent the sale is consummated at least three days prior to the end of such accounting period, but only for the days such stores have been Company-owned. Thereafter, such stores are excluded from the store base until such stores have been franchise-operated for at least one full fiscal period, at which point such stores are included in the franchise-operated store base and compared to sales in the comparable period of the prior year. Comparable store sales exclude closed locations. Company-owned comparable store sales percentages as used herein, may not be equivalent to Company-owned comparable store sales as defined or used by other companies. Franchise-operated comparable store sales percentages and system-wide sales percentages as used herein are non-GAAP financial measures and should not be considered in isolation or as substitute for other measures of performance prepared in accordance with generally accepted accounting principles in the United States. Management reviews the increase or decrease in Company-owned comparable store sales, franchise-operated comparable store sales and system-wide sales compared with the same period in the prior year to assess business trends and make certain business decisions. The Company believes the data is useful in assessing the overall performance of the Jamba® brand and, ultimately, the performance of the Company, the Company-owned stores, and franchise-operated stores.
(2)Non-GAAP adjusted net income is calculated as net income as determined in accordance with GAAP excluding the cost items as specifically identified in the non-GAAP reconciliation schedules set forth below associated with the Company’s juice launch. The Company believes that net income adjusted to exclude the costs of the Company’s juice launch is a helpful indicator of the Company's operating performance in that it shows the net gain/loss without the impact of what the Company believes to be a one-time up front cost. Management does not believe such costs are reflective of the Company's ongoing performance and accordingly excludes those items from non-GAAP adjusted net income/loss.
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Source: Jamba, Inc.
Dara Dierks
ICR
646-277-1212
investors@jambajuice.com
Jamba is the global lifestyle brand leader serving on-the-go freshly blended fruit and vegetable smoothies, made-to-order bowls, fresh-squeezed juices and shots, boosts and bites.