EMERYVILLE, Calif., May 26, 2010 — Jamba, Inc. (NASDAQ:JMBA) today reported unaudited financial results for the fiscal first quarter ended April 20, 2010. The turnaround momentum Jamba achieved last year in their menu expansion, franchise growth, and brand licensing continued in the first quarter.
Highlights for the 16 weeks ended April 20, 2010, compared to the 16 weeks ended April 21, 2009:
•Net loss decreased $4.9 million to $(5.3) million for the 16 weeks ended April 20, 2010 compared to $(10.2) million for the prior year period. The change in net loss was driven by a $2.8 million decrease in impairment of long-lived assets and a $2.1 million gain on sales of refranchised stores during Q110.
•Diluted loss per share decreased to $(0.13) per share in the 16 weeks ended April 20, 2010 compared to $(0.19) for the prior year.
•Total revenue for Q110 decreased 9.5% to $80.4 million from $88.9 million for Q109 reflecting a decrease of $8.5 million primarily due to the reduction in the number of company-owned stores which was driven by our refranchising initiative.
•Company-owned comparable store sales for Q110 declined 3.3% compared to the prior year period, reflecting a 200 basis point sequential improvement over the fourth fiscal quarter of 2009.(1)
•General and administrative expenses for Q110 decreased 7.2% to $10.9 million, due to wage and payroll related expense reductions.
•Consolidated EBITDA(2) for Q110 decreased $1.6 million to $(1.2) million compared to $0.4 million for the prior year period. Adjusted for the impact of refranchised stores, Adjusted Consolidated EBITDA(3) decreased $0.6 million to $(1.4) million for Q110 compared to $(0.8) million for the prior year period.
•Store-level EBITDA(2) decreased $2.5 million to $9.7 million for Q110 compared to $12.2 million for the prior year period. Adjusted for the impact of refranchised stores, Adjusted Store-level EBITDA(3) decreased $1.4 million to $9.5 million for the 16 week period compared to $10.9 million for the prior year period.
•Seven new franchise stores and one new company-owned store were opened during the fiscal first quarter of 2010, bringing the store count to 745 stores system-wide, of which 287 are franchise stores and 458 are company-owned stores.
Outlook for 2010
The Company plans to achieve the following in 2010:
•Deliver positive comparable store sales;
•Reduce G&A by 10-12% (excluding share-based compensation);
•Deliver consolidated EBITDA margins(2) of 5-7%;
•Deliver store-level EBITDA margins(2) of 15-17%;
•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.
BLEND Plan Update
"We have several key strategies for 2010 and our first quarter results put us on track to meet them," said James D. White, Chairman, President, and CEO of Jamba, Inc. "I am also pleased with the sequential quarter over quarter improvement in our comparable sales and store traffic improvement, which came despite negative weather impact. Two key initiatives–our expanded food menu and hot beverage platform–are gaining traction and we have several other initiatives underway."
"We are testing coffee in 47 stores across key markets, including San Diego and Sacramento. We also just launched a value menu promotion, which will drive traffic, trial and awareness by offering customer value menu items on all five weekdays," added Mr. White. "Our extended value menu offerings follow the great success of our Wednesday value offering of oatmeal, which was hugely popular and created a new Jamba breakfast occasion."
During the first quarter Jamba continued to make solid progress in several additional strategically important areas, including continued rigorous focus on expense management, growth in franchise development, steady progress against refranchising, and the successful launch of three new Jamba-branded retail products.
"Jamba-branded frozen novelty bars and Jamba-branded make-at-home smoothie kits are in distribution, in total, in over 3,000 retail outlets and a line of Jamba-inspired apparel launched in mass, specialty, and upscale retailers as well as online. We expect the Jamba-branded smoothie kits to be in distribution in over 5,000 retail outlets by the end of our second quarter. During the quarter our franchisees opened seven new stores and we successfully refranchised 20 stores. We also added two seasoned executives to our store and franchise operations team who will be key to building a service and sales culture in our stores that is second to none. We also brought on a seasoned executive to our marketing team to accelerate our consumer products, licensing and growth initiatives. We remain focused on the transformation of our company into a healthy, active lifestyle brand," concluded Mr. White.
The Company said the momentum in these key areas continues to accelerate as it enters the second quarter and reiterates guidance provided for 2010.
Liquidity
On April 20, 2010, the Company held $32.0 million in cash, cash equivalents, and restricted cash. The increase in cash and cash equivalents from the prior quarter was primarily attributable to proceeds received from refranchising transactions largely offset by cash used in operating activities. The restricted cash balance was $2.8 million.
Source: Jamba Inc.
