Jamba, Inc. Reports Financial Results for Fourth Quarter and Fiscal Year 2007
EMERYVILLE, Calif., Mar 13, 2008 (BUSINESS WIRE) -- Jamba, Inc. (NASDAQ:JMBA; NASDAQ:JMBAU; NASDAQ:JMBAW) today reported unaudited financial results for the fiscal fourth quarter and for the full 2007 fiscal year ended January 1, 2008. The Company's financial statements include the results of its wholly owned subsidiary, Jamba Juice Company.
Company reports, for the 11 week fiscal fourth quarter of 2007 compared to the proforma 12 week fiscal fourth quarter of 2006 (1):
- Total revenue increased 9.7% to $54.6 million from $49.7 million.
- Company-owned comparable store sales decreased 3.3%. In California, company-owned comparable store sales decreased 4.7%; outside of California, company-owned comparable store sales increased 1.7%. (2)
- 31 new company-owned stores were opened, compared to 12 new company-owned stores in fiscal fourth quarter of 2006.
- Net loss of $150.0 million compared to net income of $8.7 million. Included in the net loss for the fiscal fourth quarter of 2007 is a non-cash goodwill and other intangible assets impairment charge of $200.6 million ($157.1 million after tax) and a non-cash, derivative liability gain of $20.7 million associated with a change in the fair value of the Company's warrants. Included in the net income for the fiscal fourth quarter of 2006 is a non-cash derivative liability gain of $15.0 million.
- Diluted loss per share of $2.85 compared to diluted net income per share of $0.14.
Company reports, for the 51 week fiscal year 2007 compared to the proforma 52 week fiscal year 2006 (1):
- Total revenue increased 17.9% to $317.2 million from $269.0 million.
- Company-owned comparable store sales increased 0.5%. In California, company-owned comparable store sales decreased 1.3%; outside of California, company-owned comparable store sales increased 6.5%. (2)
- 99 new company-owned stores were opened, compared to 49 new company-owned stores in fiscal 2006, increasing the total number of stores in the system to 707, with 501 company-owned stores and 206 franchised stores.
- Net loss of $113.3 million compared to net loss of $57.5 million. Included in the net loss for fiscal 2007 is a non-cash goodwill and other intangible assets impairment charge of $200.6 million ($157.1 million after tax) and a non-cash derivative liability gain of $59.4 million associated with a change in the fair value of the Company's warrants. Included in the net loss for fiscal 2006 is a non-cash derivative liability loss of $57.4 million.
- Diluted loss per share of $2.17 compared to a diluted loss per share of $1.11.
"2007 was a year of transition for Jamba. We continued to make the necessary investments required by being a new public operating company, and to accelerate the transition from a smoothie company to a healthy living brand," said Paul Clayton, Jamba's CEO. "While we are disappointed with certain financial results in fiscal 2007, we made significant progress in the implementation of our strategy that will position Jamba for the future. The economic environment has been challenging and has impacted our store-level economics. We expect the economic environment to continue to be challenging in 2008, thus we have decided to slow our growth of new company-store openings to enable us to focus on store-level performance. We remain confident that we have the right strategy in place to deliver on our brand promise, improve our financial performance, and increase shareholder value."
ADDITIONAL RESULTS AND 2008 OUTLOOK
Company-Owned Comparable Store Sales (2)
For fiscal year 2008, we are forecasting full-year, company owned comparable store sales to be in a range between negative 2% and positive 2%.
Store-Level Cash Flow Margin
For purposes of evaluating operating performance, the Company uses a Store-Level Cash Flow Margin measurement. Store-level cash flow margin represents company-owned stores revenue less costs of sales, labor costs, occupancy costs, and store-level operating costs divided by company-owned stores revenue. The Store-Level Cash Flow Margin for fiscal 2007 was 13.5%. We believe that newer store Store-Level Cash Flow Margins improve as our new company-owned stores build sales volumes over time and gain efficiencies. We are also working on a number of supply chain projects to reduce costs and help offset commodity cost increases. In fiscal 2008, we are targeting Store-Level Cash Flow to modestly improve to greater than 14%.
Please see the reconciliation of Store-Level Cash Flow, a non-GAAP financial measure, to a GAAP financial measure in the table at the end of this release. Please also see "Use of Non-GAAP Financial Measures" at the end of this release.
General and Administrative Expense
General and administrative expense, including stock-based compensation expense, was 15.3% of total revenue for fiscal 2007. In fiscal 2008, the Company expects to leverage its G&A expense and has targeted G&A expense to be less than 13.0% of total revenue.
New Store Openings
Given the challenging economic conditions, which can impact our customer frequency of visit, and our focus on ensuring that our new initiatives are operationally executed at a high level, we believe it is prudent to moderate our capital spending. Due to these reasons, for fiscal 2008, the Company has reduced its targeted store growth to 45-55 company-owned stores and 35-45 franchise stores.
Fiscal 2007 Impairment Charges
In accordance with SFAS 142, "Goodwill and Other Intangible Assets," the Company tested and concluded that impairment existed in its goodwill and other intangible assets, resulting in a non-cash impairment charge of $200.6 million which reflects the difference between the fair value and carrying value for goodwill and trademarks. We continue to believe in the growth and value of our business; however, according to current accounting convention, we are required to place significant emphasis on current stock trading values in performing our impairment assessment.
Liquidity and Capital Resources
The Company ended the fourth fiscal quarter with cash and cash equivalents of $23.0 million. For fiscal 2008, we expect to fund our development growth out of operating cash flow while maintaining a prudent cash position. The Company has received a commitment letter for a $25 million revolving line of credit and expects to close in March 2008.
Footnotes
- (1)The operating results for fiscal 2007 include the full year results of Jamba Juice Company, but Jamba Juice Company results in fiscal 2006 are only included for the period subsequent to November 29, 2006, the date the Company acquired Jamba Juice Company. Therefore, to facilitate an understanding of the Company's trends and on-going performance, the fourth quarter and 52 week fiscal 2006 results have been presented herein on a proforma basis to give effect to the acquisition as if it had occurred at the beginning of fiscal 2006. A reconciliation of proforma amounts has been included at the end of this release.
(2)Comparable store sales for 4Q07 are compared to the first 11 weeks of 4Q06, and for FY07 are compared to the first 51 weeks of FY06. Comparable store sales are calculated using sales of stores open at least 13 full fiscal periods.
Webcast and Conference Call Information
A conference call to review fourth quarter and fiscal 2007 results will be held on March 13, 2008 at 5:00 p.m. EDT. Participating on the call with be Steve Berrard, Chairman; Paul Clayton, CEO; and Don Breen, CFO. The conference call can be accessed live over the phone by dialing (888) 278-8469 or for international callers by dialing (913) 981-5531. A simultaneous web cast of the call will be available by visiting http://www.jamba.com. A replay will be available at 8:00 p.m. EDT and can be accessed by dialing 888-203-1112 or 719-457-0820 for international callers; the pin number is 7117254. The replay will be available until March 27, 2008.
About Jamba, Inc.
Jamba, Inc. (NASDAQ:JMBA; NASDAQ:JMBAU; NASDAQ:JMBAW) is a holding company and through its wholly-owned subsidiary, Jamba Juice Company, owns and franchises JAMBA JUICE(R) stores. JAMBA JUICE(R) is the leading blender of fruit and other naturally healthy ingredients. Founded in 1990, Jamba strives to inspire and simplify healthy living for its customers and employees. As of the end of Fiscal Year 2007, JAMBA JUICE had 707 stores, of which 501 were company-owned and operated. For the nearest location or a complete menu including new All Fruit(TM) and Functional smoothies, please call: 1-866-4R-FRUIT or visit the JAMBA JUICE website at www.jamba.com. Look for Jamba's healthy Ready-To-Drink Smoothies and Juicies in grocery stores in 2008.
Forward-looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward looking statements are statements that are not historical facts. Forward looking statements in this release include our estimated company-owned comparable store sales for fiscal 2008, our target Store-Level Cash Flow margin for fiscal 2008, G&A leverage for fiscal 2008, new store openings for fiscal 2008, the growth and value of the Company's business, the closing of the line of credit, and capital expenditures for fiscal 2008. Such forward-looking statements, based upon the current beliefs and expectations of Jamba, Inc.'s management, are subject to risks and uncertainties, which could cause actual results to differ from the forward looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: changing interpretations of generally accepted accounting principles; continued compliance with government regulations; legislation or regulatory environments, requirements or changes adversely affecting the businesses in which Jamba, Inc. is engaged; demand for the products and services that Jamba, Inc. provides, general economic conditions; geopolitical events and regulatory changes, as well as other relevant risks detailed in the Company's filings with the Securities and Exchange Commission. The information set forth herein should be read in light of such risks. The Company does not assume any obligation to update the information contained in this press release.
Use of Non-GAAP Financial Measures
In this earnings release, conference calls, slide presentations or webcasts, the Company may use or discuss Store-Level Cash Flow Margins. We believe that Store-Level Cash Flow Margins are critical to our long-term success. Accordingly, we review Store-Level Cash Flow Margins as a key business metric, both within our system and as compared to our peers. Store-Level Cash Flow Margin is a non-GAAP financial measure. As compared to the nearest GAAP measurement for our Company, operating loss, Store-Level Cash Flow Margin represents Company stores revenue less cost of sales, labor costs, occupancy costs, and store operating expense as a percentage of Company store revenue. Not included in the calculation is depreciation and amortization, general and administrative expense, store pre-opening expense, other operating expense, goodwill impairment, and formation and operating costs. Store-Level Cash Flow Margin as we define it may not be comparable to similar measurements used by other companies and is not a measure of performance or liquidity presented in accordance with GAAP. The Company believes that Store-Level Cash Flow Margin is an important component of financial results because it is a widely used measurement within the restaurant industry to evaluate store-level productivity, efficiency, and performance. This non-GAAP measurement should not be used as a substitute for net income (loss), net cash provided by or used in operations or other financial data prepared in accordance with GAAP.
JAMBA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
January 1, January 9,
(In thousands, except share and per share
amounts) 2008 2007
---------- ----------
Assets
Current assets:
Cash and cash equivalents $ 23,016 $ 87,379
Restricted cash and investments 4,866 -
Receivables, net of allowances of $133 and
$96 6,402 3,420
Inventories 3,582 2,356
Deferred income taxes 8,102 6,170
Prepaid taxes 5,814 1,980
Prepaid rent 3,261 1,880
Prepaid expenses and other current assets 1,607 1,583
---------- ----------
Total current assets 56,650 104,768
---------- ----------
Property, fixtures and equipment, net 128,516 85,305
Goodwill - 94,162
Trademarks and other intangible assets, net 87,599 177,580
Other long-term assets 3,066 5,738
---------- ----------
Total assets $ 275,831 $ 467,553
========== ==========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 14,141 $ 10,456
Accrued compensation and benefits 6,490 6,702
Workers' compensation and health self-
insurance reserves 4,746 3,917
Accrued jambacard liability 28,576 19,712
Litigation settlement payable - 614
Other accrued expenses 8,277 4,749
Derivative liabilities 9,290 71,197
---------- ----------
Total current liabilities 71,520 117,347
Deferred income tax 8,443 60,331
Deferred rent and other long-term liabilities 12,360 4,000
Commitments and contingencies - -
Stockholders' equity:
Common stock, $0.001 par value, 150,000,000
shares authorized, and 52,637,131 and
51,881,616 issued and oustanding at
January 1, 2008 and January 9, 2007 53 52
Additional paid-in-capital 352,184 341,256
Accumulated deficit (168,729) (55,433)
---------- ----------
Total stockholders' equity 183,508 285,875
---------- ----------
Total liabilities and stockholders'
equity $ 275,831 $ 467,553
========== ==========
JAMBA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, 11 Week 12 Week 51 Week 52 Week
except share and Period Period Period Period
per share Ended Ended Ended Ended
amounts)
January 1, January 9, January 1, January 9,
(In thousands
except share and
per share
amounts) 2008 2007 2008 2007
------------ ------------ ------------ ------------
Revenue:
Company stores $ 52,617 $ 22,064 $ 306,035 $ 22,064
Franchise and
other revenue 1,959 1,051 11,174 1,051
------------ ------------ ------------ ------------
Total revenue 54,576 23,115 317,209 23,115
------------ ------------ ------------ ------------
Operating
expenses:
Cost of sales 14,529 6,039 84,226 6,039
Labor costs 21,515 8,524 102,661 8,524
Occupancy costs 8,777 3,590 37,458 3,590
Store operating
expense 9,265 4,222 40,449 4,222
Depreciation and
amortization 4,981 1,878 19,168 1,878
General and
administrative
expense 10,787 6,195 48,384 6,195
Store pre-opening
expense 1,879 285 5,863 285
Other operating
expense 1,886 212 6,567 675
Goodwill and
other intangible
asset impairment 200,624 - 200,624 -
------------ ------------ ------------ ------------
Total operating
expenses 274,243 30,945 545,400 31,408
------------ ------------ ------------ ------------
Loss from
operations (219,667) (7,830) (228,191) (8,293)
Other income
(expense):
Gain (loss) from
derivative
liabilities 20,673 15,015 59,424 (57,383)
Interest income 427 980 3,517 4,177
Interest expense (26) (71) (181) (71)
------------ ------------ ------------ ------------
Total other
income
(expense) 21,074 15,924 62,760 (53,277)
------------ ------------ ------------ ------------
Income (loss)
before income
taxes (198,593) 8,094 (165,431) (61,570)
Income tax benefit 48,625 2,728 52,135 2,544
------------ ------------ ------------ ------------
Net income (loss) $ (149,968) $ 10,822 $ (113,296) $ (59,026)
============ ============ ============ ============
Weighted-average shares used in the
computation of earnings (loss) per share:
Basic 52,617,488 33,660,800 52,323,898 24,478,384
Diluted 52,617,488 41,297,832 52,323,898 24,478,384
Earnings (loss)
per share:
Basic $ (2.85) $ 0.32 $ (2.17) $ (2.41)
Diluted $ (2.85) $ 0.26 $ (2.17) $ (2.41)
JAMBA INC. PROFORMA 2006
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE 12 WEEK PERIOD ENDED JANUARY 9, 2007
(Unaudited)
(In thousands, except share and per share amounts)
12 Week Period
Ended Pre-merger(1)
(In thousands) January 9, 2007 Activity
--------------- ----------
Revenue:
Company stores $ 22,064 $25,396
Franchise and other revenue 1,051 1,218
--------------- ----------
Total revenue 23,115 26,614
--------------- ----------
Operating expenses:
Cost of sales 6,039 6,874
Labor costs 8,524 8,968
Occupancy costs 3,590 3,610
Store operating expense 4,222 3,320
Depreciation and amortization 1,878 1,616
General and administrative expense 6,195 3,599
Store pre-opening expense 285 354
Other operating expense 212 20
--------------- ----------
Total operating expenses 30,945 28,361
--------------- ----------
Loss from operations (7,830) (1,747)
Other income (expense):
Gain from derivative liabilities 15,015 -
Interest income 980 13
Interest expense (71) (130)
--------------- ----------
Total other income (expense) 15,924 (117)
--------------- ----------
Income (loss) before income tax 8,094 (1,864)
Income tax benefit 2,728 318
--------------- ----------
Net income (loss) $ 10,822 $(1,546)
=============== ==========
Weighted-average shares used in the computation of earnings (loss) per
share:
Basic 33,660,800
Diluted 41,297,832
Earnings (loss) per share:
Basic $ 0.32
Diluted $ 0.26
Purchase % of
(In thousands) Accounting Proforma Revenue
------------- -----------------------
Revenue:
Company stores $ - $ 47,460 95.4 %
Franchise and other revenue - 2,269 4.6
------------- --------------------
Total revenue - 49,729 100.0
------------- --------------------
Operating expenses:
Cost of sales - 12,913 27.2 (2)
Labor costs - 17,492 36.9 (2)
Occupancy costs 359 (3) 7,559 15.9 (2)
Store operating expense - 7,542 15.9 (2)
Depreciation and
amortization 80 (4) 3,574 7.2
General and administrative
expense 96 (5) 9,890 19.9
Store pre-opening expense - 639 1.3
Other operating expense 416 (6) 648 1.3
------------- --------------------
Total operating expenses 951 60,257 121.2
------------- --------------------
Loss from operations (951) (10,528) (21.2)
Other income (expense):
Gain from derivative
liabilities - 15,015 30.2
Interest income 6 (7) 999 2.0
Interest expense (64) (8) (265) (0.5)
------------- --------------------
Total other income
(expense) (58) 15,749 31.7
------------- --------------------
Income (loss) before income
tax (1,009) 5,221 10.5
Income tax benefit 404 (9) 3,450 6.9
------------- --------------------
Net income (loss) $ (605) $ 8,671 17.4 %
============= ====================
Weighted-average shares used in the computation of earnings (loss) per
share:
Basic 18,219,815 (10) 51,880,615
Diluted 18,536,108 (10) 59,833,940
Earnings (loss) per share:
Basic $ 0.17
Diluted $ 0.14
Notes
---------------------------------------------------------
(1) Pre-merger activity represents results of operations of Jamba
Juice Company from October 18, 2006 to November 28, 2006.
(2) Percent of Company Store revenue.
(3) Adjustment to include the effect of the acquisition write off of
deferred rent balances.
(4) Adjustment to include the effect of the amortization of
acquisition related intangible assets.
(5) Adjustment to include the effect of non-cash stock-based
compensation expense related to stock options and restricted
stock awards granted, net of transaction costs expensed by Jamba
Juice Company.
(6) Adjustment to include the current period expense effect of
acquisition write down of our jambacard liability.
(7) Adjustment to include effect of interest income from purchase
transaction.
(8) Adjustment to include effect of interest expense from purchase
transaction.
(9) Tax effect of purchase accounting.
(10) Adjustment to include the effect of common stock issued and
options rolled over in connection with the purchase transaction.
JAMBA INC. PROFORMA 2006
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE 52 WEEK PERIOD ENDED JANUARY 9, 2007
(Unaudited)
(In thousands, except share and per share amounts)
52 Week Period
Ended Pre-merger(1)
(In thousands) January 9, 2007 Activity
--------------- ----------
Revenue:
Company stores $ 22,064 $236,210
Franchise and other revenue 1,051 9,720
--------------- ----------
Total revenue 23,115 245,930
--------------- ----------
Operating expenses:
Cost of sales 6,039 60,346
Labor costs 8,524 75,254
Occupancy costs 3,590 25,759
Store operating expense 4,222 26,622
Depreciation and amortization 1,878 11,951
General and administrative expense 6,195 28,753
Store pre-opening expense 285 2,402
Other operating expense 675 5,115
--------------- ----------
Total operating expenses 31,408 236,202
--------------- ----------
Income (loss) from operations (8,293) 9,728
Other income (expense):
Loss from derivative liabilities (57,383) -
Interest income 4,177 140
Interest expense (71) (1,010)
--------------- ----------
Total other income (expense) (53,277) (870)
--------------- ----------
Net income / (loss) before income tax (61,570) 8,858
Income tax benefit (expense) 2,544 (4,685)
--------------- ----------
Net income (loss) $ (59,026) $ 4,173
=============== ==========
Weighted-average shares used in the computation of earnings (loss) per
share:
Basic 24,478,384
Diluted 24,478,384
Earnings (loss) per share:
Basic $ (2.41)
Diluted $ (2.41)
Purchase % of
(In thousands) Accounting Proforma Revenue
------------ ------------ ----------
Revenue:
Company stores $ - $ 258,274 96.0 %
Franchise and other revenue - 10,771 4.0
------------ ------------ -------
Total revenue - 269,045 100.0
------------ ------------ -------
Operating expenses:
Cost of sales - 66,385 25.7 (2)
Labor costs - 83,778 32.4 (2)
Occupancy costs 1,556 (3) 30,905 12.0 (2)
Store operating expense - 30,844 11.9 (2)
Depreciation and
amortization 617 (4) 14,446 5.4
General and administrative
expense 370 (5) 35,318 13.1
Store pre-opening expense - 2,687 1.0
Other operating expense 2,084 (6) 7,874 2.9
------------ ------------ -------
Total operating
expenses 4,627 272,237 101.2
------------ ------------ -------
Income (loss) from
operations (4,627) (3,192) (1.2)
Other income (expense):
Loss from derivative
liabilities - (57,383) (21.3)
Interest income (618) (7) 3,699 1.4
Interest expense 903 (8) (178) (0.1)
------------ ------------ -------
Total other income
(expense) 285 (53,862) (20.0)
------------ ------------ -------
Net income / (loss) before
income tax (4,342) (57,054) (21.2)
Income tax benefit (expense) 1,737 (9) (404) (0.6)
------------ ------------ -------
Net income (loss) $ (2,605) $ (57,458) (21.4)%
============ ============ =======
Weighted-average shares used in the computation of earnings (loss) per
share:
Basic 27,401,757 (10) 51,880,141
Diluted 27,401,757 (10) 51,880,141
Earnings (loss) per share:
Basic $ (1.11)
Diluted $ (1.11)
Notes
--------------------------------------------------------
(1) Pre-merger activity represents results of operations of Jamba
Juice Company from January 11, 2006 to November 28, 2006.
(2) Percent of Company Store revenue.
(3) Adjustment to include the effect of the acquisition write off of
deferred rent balances.
(4) Adjustment to include the effect of the amortization of
acquisition related intangible assets.
(5) Adjustment to include the effect of non-cash stock-based
compensation expense related to stock options and restricted
stock awards granted, net of transaction costs expensed by Jamba
Juice Company.
(6) Adjustment to include the current period expense effect of
acquisition write down of our jambacard liability.
(7) Adjustment to include effect of interest income from purchase
transaction.
(8) Adjustment to include effect of interest expense from purchase
transaction.
(9) Tax effect of purchase accounting.
(10)Adjustment to include the effect of common stock issued in
connection with the purchase transaction.
JAMBA, INC.
RECONCILIATION OF GAAP TO STORE LEVEL OPERATING INCOME AND STORE LEVEL
CASH FLOW MARGIN
FOR THE 51 WEEK PERIOD ENDED JANUARY 1, 2008*
(Unaudited)
(In thousands)
GAAP loss from operations $(228,191)
Franchise and other revenue (11,174)
Depreciation and amortization 19,168
General and administrative expense 48,384
Store pre-opening expense 5,863
Other operating expense 6,567
Goodwill and other intangible asset impairment 200,624
----------
Store level operating income $ 41,241
==========
Company store revenue $ 306,035
Store level cash flow margin 13.5%
* See accompanying disclosure regarding use of non-GAAP financial
measures.
SOURCE: Jamba, Inc.
###
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