FRISCO, Texas - (BUSINESS WIRE) - Mar. 15, 2018 - Jamba, Inc. (NASDAQ:JMBA) (“the Company”) today announced financial results for the fiscal quarters ended April 4, 2017 (“first quarter”), July 4, 2017 (“second quarter”), and October 3, 2017 (“third quarter”), and updated its fiscal 2017 and 2018 financial guidance.
Highlights for the 39-week period ended October 3, 2017 compared to the 39-week period ended September 27, 2016:
CEO Comments
Dave Pace, President and Chief Executive Officer, noted: “Along with the filing of the 2016 10-K on February 12th, completion of the 2017 10-Qs meets an important filing deadline, and accelerates our return to a standard reporting cadence.”
Pace continued: “Financial results for the first three quarters of 2017 reflect our concrete actions to reinvigorate the Jamba business. We enhanced our organization with experienced additions to the leadership team, exited non-core and underperforming business units to improve profitability, and launched innovative new products. Together, these changes elevated the customer experience in our stores. We saw sequential improvements in comparable store sales through 2017, culminating in our previously reported 5.3% increase in the fourth quarter. The fourth quarter also marked the seventh consecutive quarter in which our comparable store sales beat the industry benchmark. Adjusted EBITDA grew 39% through the first three quarters of 2017.”
Pace concluded: “Jamba is an iconic brand. We have positioned it for sustainable growth and significant value-creation for our shareholders and are optimistic about our performance in 2018.”
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Liquidity
As previously disclosed, the Company held cash of $11.9 million as of October 3, 2017, $11.2 million as of July 4, 2017, $8.2 million as of April 4, 2017, and $7.1 million as of January 3, 2017.
On February 12, 2018, the Company provided additional information. As of January 2, 2018, the Company held cash of $10.0 million, including restricted cash of $0.3 million.
The Company used approximately $5.7 million of cash during fiscal 2017 to pay audit and related expenses. The Company anticipates audit and related expenses will continue into 2018 and result in additional use of cash, and financial statement expense, though at a reduced level as compared to 2017.
The Company had not drawn against its line of credit, and had no outstanding principal balance as of the end of fiscal 2017.
Reported balances are unaudited.
Fiscal 2017 Financial Guidance
The Company expects to achieve the following results for fiscal 2017:
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Marie Perry, Executive Vice President and Chief Financial Officer, noted: “We expect 2017 to be a year of strong profit growth. The transition to an asset-light model, along with a strategic refocusing on the core retail business, will cause revenue to decline in a predictable fashion. On this reduced revenue base, however, we expect significant improvements in profitability. Specifically, we anticipate an improvement of approximately $3.5 million in Adjusted EBITDA in fiscal 2017 as compared to fiscal 2016.”
Total Revenue guidance issued March 20, 2017 included 13 stores in the greater Chicago area as Company-owned for the full year. Subsequent to this guidance, in June 2017, these 13 stores were successfully refranchised to an existing franchisee. As a result of this transaction, 2017 Revenue declined by approximately $3.8 million relative to the March 20, 2017 guidance expectation.
Fiscal 2018 Financial Guidance
The Company expects to achieve the following results for fiscal 2018:
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At a future date, the Company will provide an update to this guidance to include the necessary adjustments for the new revenue recognition standard. The Fiscal 2018 Financial Guidance currently excludes the impact of this new standard.
Non-GAAP Adjusted G&A Expense, Non-GAAP Adjusted EBITDA and Non-GAAP Adjusted EBITDA Margin Percent set forth above are forward looking Non-GAAP measures which the Company is not able to provide comparable GAAP forward-looking estimate of net income without unreasonable effort, as information needed to make a reasonable forward-looking estimate is difficult to predict and estimate and dependent on future events which are uncertain or outside the Company’s control. The probable significance of such adjustments is also similarly difficult to estimate for the same reasons.
Fiscal 2017 Form 10-K Filing
As previously disclosed, the delay in completion of the Company’s financial statements resulted from changes the Company underwent in the past several years, including:
The Company continues to work diligently with Jamba’s newly appointed auditor, Whitley Penn LLP to complete fiscal 2017 financial statements and their subsequent audit, and to thereafter file the 2017 Form 10-K as soon as practicable.
Anticipated Expenses
As previously disclosed, the Company expects to record additional expenses (collectively, “audit and related expenses”) resulting from efforts to complete 2016 financial statements, their subsequent audit and review, and remediation efforts related to the anticipated Material Weakness disclosed in the Company’s Form 12b-25 filed with the Securities and Exchange Commission on May 15, 2017. As a result of the ongoing nature of this work, the Company expects to record expenses in its 2017 and 2018 financial statements in addition to expenses in 2016 as reflected in its 2016 Form 10-K. Due to the unusual and non-recurring nature of these expenses, the Company anticipates adjusting for them in its Non-GAAP financial measures.
Conference Call
The Company will host a conference call Friday, March 16 at 8:30 a.m. Eastern Time. The call will be webcast live from the Company’s website at www.jambajuice.com under the Corporate Investor Relations section or directly at http://ir.jambajuice.com. The conference call can also be accessed live over the phone by dialing (877) 407-3982. A replay will be available at 11:30 a.m. Eastern Time and can be accessed by dialing (844) 512-2921; the pin number is 13677475. The replay will be available until Friday, April 6, 2018.
Jamba, Inc. (Nasdaq: JMBA) through its wholly-owned subsidiary, Jamba Juice Company, is a global healthy lifestyle brand that inspires and simplifies healthful living through freshly blended whole fruit and vegetable smoothies, bowls, juices, cold-pressed shots, boosts, snacks, and meal replacements. Jamba’s blends are made with premium ingredients free of artificial flavors and preservatives so guests can feel their best and blend the most into life.
Jamba Juice® has more than 800 franchised and company-owned locations worldwide, as of January 2, 2018. For more information, visit jambajuice.com.
Forward-Looking Statements
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 “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 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 from those expressed in any forward-looking statements. These statements include, but are not limited to, statements referenced under the caption “Fiscal 2017 Financial Guidance” and “Fiscal 2018 Financial Guidance” above, risks and uncertainties relating to the Company’s ability to file its periodic reports with the Securities and Exchange Commission and hold its annual meeting in a manner to regain and continue to maintain compliance with Nasdaq listing rules, the Company’s business strategy and financial performance, its revenue and customer volatility based upon weather and general economic conditions, the operating results of the Company’s franchisees, additional costs expected to be incurred as a result of ongoing work relating to the Company’s financial statements, including anticipated remediation efforts relating to the material weakness disclosed in the Company’s Form 10-K, the fluctuations in various food and supply costs, competition and other risks related to the food services business, the Company’s ability to retain its executive management team and key employees and other 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 forward-looking Non-GAAP financial measures to its investors. The Company believes that providing these forward-looking Non-GAAP measures to its investors 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 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.
The following definitions apply to these terms as used in this release:
Blended royalty rate is defined as total royalty dollars divided by total franchise sales dollars, as reported by franchisees.
Company-owned comparable store sales represents the change in year-over-year sales for Company-owned stores opened for at least one full year. Franchise-operated comparable store sales, a Non-GAAP financial measure, represents the change in year-over-year sales for all Franchise Stores opened for at least one full year, as reported by franchisees, and excludes International Stores and Express format. System-wide comparable store sales, a Non-GAAP financial measure, represents the change in year-over-year sales for all Company and Franchise Stores opened for at least one full year, as reported by franchisees, and excludes International Stores and Express format. Comparable store sales includes closed locations for the periods in which they have comparable sales. 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 comparable stores 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 comparable store 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.
Domestic system-wide sales are the sum of company-operated restaurant revenue and sales from domestic franchised stores. Our total revenue in our consolidated statements of operations is limited to company-operated store revenue, franchise revenue from our franchisees, and other revenue. Accordingly, domestic system-wide sales should not be considered in isolation or as a substitute for our results as reported under GAAP. Management believes that domestic system-wide sales are an important figure for investors, because they are widely used in the restaurant industry, including by our management, to evaluate brand scale and market penetration. We have included a reconciliation of domestic system-wide sales to total revenue.
New store openings, net of closures is defined as the count of new store openings, minus the count of store closures.
Non-GAAP Adjusted EBITDA is equal to net income, adjusted for: (a) depreciation and amortization; (b) interest income; (c) interest expense; (d) income taxes; (e) impairment expense; (f) stock based compensation expense; and (g) other one-time or extraordinary items that are not reflective of the ongoing business such as legal settlements, expenses related to the extended audit and gain or loss resulting from refranchising activities. The Company believes this metric is useful in measuring the operating performance of the Company.
Non-GAAP Adjusted EBITDA margin percent is defined as Adjusted EBITDA divided by Total Revenue.
Non-GAAP Adjusted General and Administrative (“G&A”) expense is calculated as general and administrative expense in accordance with GAAP excluding refranchise and severance costs associated with the move to an asset-light business model, charges related to the executive organization changes, costs due to the Company’s corporate office relocation to Frisco, Texas, and other non-recurring general and administrative expenses. The Company believes that general and administrative expense adjusted to exclude the costs of such items is a helpful indicator of the Company's operating performance in that it shows the net expense without the impact of what the Company believes to be upfront transitional costs. Management does not believe such costs are reflective of the Company's ongoing performance and accordingly excludes those items from Non-GAAP Adjusted General and Administrative Expense.
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View source version on businesswire.com: http://www.businesswire.com/news/home/20180315006472/en/
Dara Dierks
Jamba, Inc.
Investor Relations
646-277-1212
investors@jambajuice.com
Source: Jamba, Inc.
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.