Jamba, Inc. Reports Financial Results for Fourth Quarter and Fiscal Year 2009

Jamba, Inc. (NASDAQ:JMBA) today reported financial results for the fiscal year and fourth quarter ended December 29, 2009. The results showed continued progress on strategic priorities, including the disciplined management of costs and expenses and the expansion of food, licensed consumer products, and franchising. The Company said that incremental sales from its food and hot beverage initiatives during the seasonally low fourth quarter indicates a potential for a return to positive comparable store sales growth for the full year in 2010.

“At the start of 2009, we said that turnaround and transformation would be our mission. With the implementation of disciplined cost controls and the expansion of our business model, we are evolving from a made-to-order smoothie company into a healthy, active lifestyle company”

For fiscal year 2009, Jamba achieved and exceeded several strategic priorities that included:

• Financial initiatives that improved store level margins to 15.1% of total revenue, lowered G&A by 22.9% to $37.0 million, and eliminated all long term debt.
• Major programs that strengthened its new business model with the extension of oatmeal to more than 600 locations, the introduction of new food items in more than 370 locations, the testing of hot beverages, the licensing of five new consumer products and the retail launch of one licensed consumer product.
• Expanded efforts in franchise development and re-franchising resulting in the opening of 25 new stores and refranchising of 27 units.

Highlights for the 52 week fiscal year 2009 compared to the 52 week fiscal year 2008.

• Consolidated EBITDAfor fiscal 2009 increased by $14.2 million to $8.6 million from $(5.6) million for fiscal 2008.*
• Company store-level EBITDA for fiscal 2009 improved $3.3 million to $45.7 million from $42.4 million for fiscal 2008, reflecting an improvement of 7.7%.*
• Total revenue for fiscal 2009 decreased 12.1% to $301.6 million from $342.9 million for fiscal 2008, reflecting a decrease of $41.3 million.
• Company-owned comparable store sales for fiscal 2009 declined 10.3%.⁽¹⁾
• 23 new franchise stores and two new company-owned stores were opened during fiscal 2009.

Highlights for the 12 week fiscal fourth quarter of 2009 compared to the 12 week fiscal fourth quarter of 2008.

• Consolidated EBITDAfor Q409 increased 18.8% to $(9.1) million from $(11.2) million for Q408, reflecting an improvement of $2.1 million.*
• Company store-level EBITDAfor Q409 decreased $0.4 million to $(0.8) million from ($0.4) million for Q408.*
• Total revenue for Q409 decreased 9.8% to $50.6 million from $56.1 million for Q408.
• Company-owned comparable store sales for Q409 declined 5.3%.⁽¹⁾
• One new franchise store and one new company-owned store were opened during the fiscal fourth quarter of 2009, bringing the store count to 739 stores system-wide, of which 261 are franchise stores and 478 are company-owned stores.

“At the start of 2009, we said that turnaround and transformation would be our mission. With the implementation of disciplined cost controls and the expansion of our business model, we are evolving from a made-to-order smoothie company into a healthy, active lifestyle company,” stated James D. White, President and CEO, Jamba, Inc. “Our addition of food and hot beverages are key elements in extending Jamba’s menu to cover all day-parts. We are pleased with their contributions to incremental sales.”

“Despite the tough operating environment, we delivered on our commitments and made significant progress on our long-term plan. Jamba’s performance in 2009 makes us confident about the outlook for 2010. We believe that for the year Jamba will see positive comparable store sales, but comparable store sales growth is only one of several metrics we’ll use to gauge our progress,” concluded Mr. White.

Outlook for 2010

The Company plans to achieve the following in 2010:

• Deliver positive comparable store sales;
• Reduce G&A by 10-12 percent (excluding share-based compensation);
• Deliver consolidated EBITDA margins of 5-7 percent;
• Deliver store-level EBITDA margins of 15-17 percent;
• 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.

Liquidity

On December 29, 2009, the Company held $31.5 million in cash, cash equivalents, and restricted cash. The restricted cash balance was $2.7 million. The Company eliminated all debt for borrowed money with the convertible preferred stock transaction completed in July of 2009.

Footnotes

* Use of Non-GAAP Financial Measures

The Company uses the non-GAAP financial measures of consolidated EBITDA and store-level EBITDA in its statements made in this release. The Company believes that consolidated EBITDA and store-level EBITDA are helpful indicators of the Company’s financial performance. Consolidated EBITDA is equal to net loss plus franchise support reimbursement, less: (a) interest income; (b) interest expense; (c) income taxes; (d) depreciation and amortization; (e) gain from mark-to-market of derivative liabilities; (f) store pre-opening expenses; (g) trademark and goodwill impairment; (h) impairment of long-lived assets; (i) store lease termination and closure cost; and (j) other operating, net. Our definition of store-level EBITDA is different from consolidated EBITDA because we further adjust net income to exclude general and administrative expenses. Consolidated EBITDA margins and store-level EBITDA margins are calculated by dividing consolidated EBITDA or store-level EBITDA by total revenue. Consolidated EBITDA and store-level EBITDA are not measurements determined in accordance with GAAP and should not be considered in isolation or as an alternative to income (loss) from operations or net income (loss) as indicators of financial performance. Each non-GAAP financial measure used as presented may not be comparable to other similarly titled measures used by other companies. For a reconciliation of net income (loss) to these non-GAAP financial measures, see the discussion and related table below.

⁽¹⁾ Comparable store sales are calculated using sales of stores open at least thirteen full fiscal periods. Management reviewsthe 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.

About Jamba, Inc.

Jamba, Inc. (NASDAQ:JMBA) is a holding company and through its wholly-owned subsidiary, Jamba Juice Company, owns and franchises JAMBA JUICE® stores. Founded in 1990, Jamba Juice is a leading restaurant retailer of better-for-you food and beverage offerings, including great tasting fruit smoothies, juices, and teas, hot oatmeal made with organic steel cut oats, wraps, salads, sandwiches, and California Flatbreads™, and a variety of baked goods and snacks. As of December 29, 2009, Jamba Juice had 739 locations consisting of 478 company-owned and operated stores and 261 franchise stores.

JAMBA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
		December 29,				December 30,
(In thousands, except share and per share amounts)		2009				2008
ASSETS
Current assets:
Cash and cash equivalents		$	28,757			$	20,822
Restricted cash			1,324				5,059
Receivables, net of allowances of $116 and $416			9,949				4,594
Inventories			3,732				3,435
Prepaid rent			486				185
Prepaid and refundable income taxes			491				5,670
Prepaid expenses and other current assets			3,684				1,328
Total current assets			48,423				41,093
Property, fixtures and equipment, net			70,266				95,154
Trademarks and other intangible assets, net			1,850				2,998
Restricted cash			1,399				2,659
Deferred income taxes			998				354
Other long-term assets			2,882				3,462
Total assets		$	125,818			$	145,720
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	7,405			$	8,089
Accrued compensation and benefits			7,089				7,667
Workers' compensation and health insurance reserves			1,096				1,922
Accrued jambacard liability			38,255				30,764
Current portion of capital lease obligations			240				246
Other accrued expenses			10,270				12,074
Derivative liabilities			-				2,098
Total current liabilities			64,355				62,860
Note payable			-				22,829
Long-term capital lease obligations			5				281
Long-term workers' compensation and health insurance reserves			1,158				2,659
Deferred rent and other long-term liabilities			14,695				16,670
Total liabilities			80,213				105,299
Commitments and contingencies
Series B redeemable preferred stock, $.001 par value, 304,348 shares authorized and outstanding at December 29, 2009. No shares authorized and outstanding at December 30, 2008			31,069				-
Stockholders' equity:
Common stock, $0.001 par value, 150,000,000 shares authorized, 52,712,528 and 52,690,728 shares issued and outstanding			53				55
Additional paid-in-capital			356,320				358,258
Accumulated deficit			(341,837	)			(317,892	)
Total stockholders' equity			14,536				40,421
Total liabilities and stockholders' equity		$	125,818			$	145,720

JAMBA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
		12 Week Period Ended								52 Week Period Ended
(In thousands, except share and per share amounts)		December 29, 2009				December 30, 2008				December 29, 2009				December 30, 2008
Revenue:
Company stores		$	49,433			$	54,413			$	295,607			$	333,784
Franchise and other revenue			1,165				1,691				5,946				9,106
Total revenue			50,598				56,104				301,553				342,890
Costs and operating expenses:
Cost of sales			12,871				14,704				72,669				89,163
Labor			19,664				22,709				100,589				120,251
Occupancy			9,816				10,254				43,888				44,868
Store operating			9,053				8,409				38,734				43,714
Depreciation and amortization			3,874				5,386				18,271				24,717
General and administrative			8,297				10,829				37,044				48,057
Store pre-opening			43				124				516				2,044
Impairment of long-lived assets			1,532				14,604				12,639				27,802
Store lease termination and closure			406				7,130				1,234				10,029
Trademark and goodwill impairment			-				1,461				-				84,061
Other operating, net			(2,935	)			269				(3,924	)			3,817
Total costs and operating expenses			62,621				95,879				321,660				498,523
Loss from operations			(12,023	)			(39,775	)			(20,107	)			(155,633	)
Other income (expense):
Gain from derivative liabilities			-				285				1,597				7,895
Interest income			20				50				404				365
Interest expense			15				(1,361	)			(6,905	)			(2,064	)
Total other income (expense)			35				(1,026	)			(4,904	)			6,196
Loss before income taxes			(11,988	)			(40,801	)			(25,011	)			(149,437	)
Income tax benefit (expense)			604				(373	)			1,066				274
Net loss			(11,384	)			(41,174	)			(23,945	)			(149,163	)

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