FRISCO, Texas - (BUSINESS WIRE) - May 11, 2018 - Jamba, Inc. (NASDAQ:JMBA) (the “Company”) today reported financial results for the fiscal year ended January 2, 2018 (“fiscal 2017”), provided an update of results for the fiscal quarter ended April 3, 2018 (“first quarter”) and announced its expected timeline to return to a standard reporting cadence.
Highlights for fiscal 2017 as compared to the 53 weeks ended January 3, 2017 (“fiscal 2016”):
Highlights for the first quarter of 2018:
The Company anticipates the following timeline to return to a standard reporting cadence:
CEO Comments
Dave Pace, President and Chief Executive Officer, stated: “Today’s filing of our 2017 10-K completes another important step on our path to return to a standard reporting cadence. We anticipate being back on track after the filing of our first quarter 10-Q and the completion of our annual shareholder meeting planned for late June.”
Pace continued: “Financial results for 2017 delivered on our previously communicated guidance and demonstrate the progress being made in our revitalization of the Jamba business. Notably, despite the anticipated decline in total revenues related to our pivot to an asset-light model, Adjusted EBITDA grew by over 33%. The concrete actions we have taken to reinvigorate our core system have continued to drive performance into early 2018. Comparable store sales in the first quarter increased 2.3% and beat the industry benchmark for the eighth consecutive quarter.”
Pace concluded: “Our efforts in 2018 will continue to be focused on enhancing the customer experience, driving transaction growth, increasing store level margins and rebuilding the momentum behind our new store pipeline. We have repositioned this iconic brand for sustainable growth and significant value-creation for our shareholders and continue to be optimistic about our performance in 2018 and beyond.”
Results are in line with prior guidance expectations.
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First Quarter of Fiscal 2018
Liquidity
The Company held cash of $7.5 million as of April 3, 2018 and $10.0 million as of January 2, 2018. Reported amounts include restricted cash of $0.3 million in both periods.
The Company used $1.8 million of cash in the first quarter of 2018 to pay audit and related expenses. This amount is in addition to the $5.7 million of cash used during fiscal 2017, the Company previously reported. The Company anticipates the usage of cash for incremental audit and related expenses will be substantially complete in the second quarter of 2018 and will be at a reduced level in the second quarter as compared to the first quarter of 2018.
The Company had not drawn against its line of credit, and had no outstanding principal balance as of April 3, 2018.
Reported balances are unaudited.
Guidance Policy
The Company provides annual guidance as it relates to certain financial metrics and will only provide updates if there is a material change versus the original guidance. Consistent with prior practice, management will not discuss intra-period sales or other key operating results not yet reported as the limited data may not accurately reflect the final results of the period or quarter referenced.
Inducement Grants
In connection with the Company’s 2017 hiring of Claudia Schaefer, the Company’s Senior Vice President, Chief Marketing Officer, and as required by Ms. Schaefer’s 2017 employment offer letter, the Company was to issue to Ms. Schaefer (i) a non-qualified stock option to purchase to up 35,000 shares of the Company’s common stock at a per share price of the closing price of the Company’s common stock on the date of grant, vesting annually over four years and (ii) (a) 10,000 restricted stock units, vesting annually over three years, and (b) 35,000 performance-based restricted stock units of which 17,500, 10,000 and 7,500 would vest upon achievement of stock price targets of $19.50, $24.00 and $28.50 prior to July 2019, respectively, in each case subject to Ms. Schaefer’s continued employment with Jamba and/or its affiliates. Upon a change of control during the three year period after the grant date whereby the Company’s stockholders receive per-share consideration equaling or exceeding any of the price targets listed above, the performance-based units would vest in the amounts listed above for each price target (as adjusted for any stock splits, dividends, or similar transactions). With the Company’s 2017 10-K filing earlier today, the Company was able to file the Form S-8 for the inducement grants described above in order to issue such grants, to be effective May 14, 2018.
Additionally, in connection with the Company’s hiring of other non-executive officer employees in 2017 and as required by their respective 2017 employment offer letters, the Company was to issue to such employees (i) nonqualified stock options to purchase an aggregate of up to 7,500 shares of the Company's common stock at an exercise price per share equal to the closing price of the Company’s common stock on the date of such grant, annually over four years so long as each employee remains an employee of Jamba Juice Company and/or its affiliates and (ii) 15,000 restricted stock units, vesting annually over three years so long as each employee remains an employee of Jamba Juice Company and/or its affiliates. With the Company’s 2017 10-K filing earlier today, the Company was able to file the Form S-8 for the inducement grants described above in order to issue such grants, to be effective May 14, 2018.
The grants were made as an inducement that was a material component of each person’s compensation and subsequent acceptance of employment with the Company and was granted as an employment inducement award pursuant to NASDAQ Listing Rule 5635(c)(4) approved by the Compensation and Executive Development Committee of the Company’s board of directors.
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 April 3, 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 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.
Non-GAAP Financial Measures
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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Todd Wilson
Investor Relations
Jamba, Inc.
469-294-9749
investors@jambajuice.com
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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.