Jamba Juice Results

Jamba, Inc. Provides Update for Fiscal Year 2017 First and Second Quarter

On a comparable calendar basis, company comparable store sales increased 1.0% in the second quarter of fiscal 2017, following a decline of 7.3% in the first quarter of fiscal 2017.

Jamba

Jamba, Inc. (NASDAQ:JMBA) today provided updates for the quarters ended July 4, 2017 and April 4, 2017. The Company also provided updates on select business initiatives, and with respect to the status of the Company’s Form 10-K for its 2016 fiscal year.

Highlights

  • On a comparable calendar basis, company comparable store sales (1) increased 1.0% in the second quarter of fiscal 2017, following a decline of 7.3% in the first quarter of fiscal 2017.
  • System-wide comparable store sales (1) were 0.0% in the second quarter of fiscal 2017, following a decline of 5.8% in the first quarter of fiscal 2017.
  • The decline in the first quarter for both company and system-wide comparable store sales (1) was primarily due to the historic wet weather during the period that affected west coast geographies.
  • Opened 25 stores comprised of 19 domestic and 6 international locations during the first and second quarters of fiscal 2017.
  • Closed 17 stores, resulting in 8 openings, net of closures (2) during the first and second quarters of fiscal 2017.
  • Held $11.2 million in cash and cash equivalents as of July 4, 2017, and $8.2 million as of April 4, 2017. Reported balances are unaudited.

President, and Chief Executive Officer Dave Pace stated, “We continued to make progress against our five core strategies in the first half of the year. Comp Sales have now outperformed the industry benchmark for five consecutive quarters. We brought new sales driving initiatives to life, with tests for catering and delivery, and we finalized plans for the Jamba store re-image. Additionally, customer satisfaction levels improved while our operators successfully captured efficiency opportunities. Finally, new store counts for both gross and net openings beat our internal targets.”

Pace continued, “The accounting team continues to work diligently to complete the 2016 audit and regulatory filings. We have committed significant resources to complete this work accurately and to ensure it does not distract from excellence in operating the day-to-day business.”

Pace concluded, “I remain confident in the direction and prospects for this iconic brand.”

Business Initiative Update

  • Catering: The Company launched a catering test in May 2017, featuring the Jamba Bowl Bar, allowing guests to customize their bowl for a healthful breakfast, lunch, or snack occasion. The Company expects to continue the test through the remainder of 2017.
  • Chicago refranchise: On June 21, 2017, the Company announced the refranchise of 13 company owned stores in the Chicago market and signed a 10-unit development agreement with an existing Jamba franchisee. The Company expects the transaction will reduce Revenue and have no material impact to Net Income, in 2017.
  • Delivery: The Company initially launched a delivery test in 15 Texas stores in March 2017. The test expanded to the Southern California market in May 2017. The Company expects to continue the test through the remainder of 2017.
  • Domestic new stores: 19 domestic openings include 9 stores on the west coast and 10 stores east of the Rockies. The Company continues to execute an infill strategy in the west, while penetrating and building presence in targeted eastern markets. As communicated on March 20, 2017, the Company now excludes Express format stores from store counts.
  • International new stores: There were 6 international new store openings across 5 countries, including the first store in Thailand.
  • Drive-thru format: 3 Drive-thru format stores opened in the first half of the fiscal year. Sales performance in drive-thru format stores continues to over-index versus the Company’s standard predictive model.
  • Re-image prototype: The Company’s re-image prototype offers guests a holistic update to their Jamba experience, with a modern look, enhanced sensory experience, and new menu. The Company plans to test in approximately 20 stores across multiple markets. The first wave of test store renovations is underway with the final wave expected to be complete later this year. The Company will provide updates as the test progresses.

Form 10-K and 10-Q Filings

The delay in completion of the Company’s financial statements has been primarily caused by transition issues stemming from the Company relocation of its headquarters from Emeryville, California to Frisco, Texas in the second half of 2016. While the Company had implemented a transition plan to mitigate the risk relating to the relocation, the relocation and resulting replacement and training of personnel Company wide and transition of Company operating knowledge created unanticipated difficulties and delays in completing the Company’s year-end financials. The Company’s delay was also contributed to, in part, by the complexities with addressing the number of Company non-routine transactions which occurred in 2016, many of which related to the Company’s transition.

In March 2017, in response to the Company’s late 2016 Form 10-K filing, the Company received a letter from Nasdaq notifying it of its failure to comply with Nasdaq listing rules relating to the timely filing of periodic reports with the Securities and Exchange Commission. In May 2017, in response to the Company’s late Form 10-Q filing for its Q1.2017, the Company received an additional similar letter from Nasdaq relating to such filing. The Company thereafter submitted its plan to regain compliance for continued listing, to which Nasdaq has provided the Company until September 18, 2017 to regain compliance with Nasdaq's filing requirements for continued listing.

The Company expects to file its fiscal year 2016 Form 10-K and Form 10-Q for the first quarter of fiscal 2017, as soon as is practicable, with timing contingent on completion of financial statements and their subsequent audit and review, respectively.

Anticipated Expenses

The Company expects to record additional expenses in fiscal 2017 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. Due to the unusual and non-recurring nature of these expenses, the Company anticipates adjusting for them in its non-GAAP financial measures.

Liquidity

As of July 4, 2017 and April 4, 2017, the Company held $11.2 and $8.2 million, respectively, in cash and cash equivalents, as compared to $7.1 million in cash and cash equivalents at January 3, 2017.

As of July 4, 2017 and April 4, 2017, the Company had no amount of restricted cash. As of January 3, 2017, the Company had $0.4 million restricted cash.

Reported balances are unaudited.

The Company had not drawn against its line of credit, and had no outstanding principal balance as of July 4, 2017.

About Jamba, Inc.

Jamba, Inc. (NASDAQ: JMBA) through its wholly-owned subsidiary, Jamba Juice Company, is a healthful, active lifestyle brand with a robust global business driven by a portfolio of franchised and company-owned Jamba Juice ® stores and Jamba Juice Express™ formats. Jamba Juice ® is a leading restaurant retailer of “better-for-you” specialty beverage and food offerings which include flavorful, whole fruit and vegetable smoothies, fresh squeezed juices and juice blends, Energy Bowls™, signature “boosts”, shots and a variety of food items including: hot oatmeal, breakfast wraps, sandwiches, Artisan Flatbreads™, baked goods and snacks.

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 in Footnotes 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.

 

Footnotes

(1) 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, 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.
 
(2) New store openings, net of closures is defined as the count of new store openings, minus the count of store closures.
           
 
STORE COUNT QUARTER 1
NUMBER OF STORES
COMPANY FRANCHISE TOTAL
Domestic International
For the Quarter Ended April 4, 2017
At January 3, 2017 66 726 70 862
Opened 13 2 15
Acquired
Closed (5 ) (4 ) (9 )
Refranchised
At April 4, 2017 66 734 68 868
 
For the Quarter Ended March 29, 2016(a)
At December 29, 2015 70 706 75 851
Opened 10 3 13
Acquired
Closed (2 ) (7 ) (13 ) (22 )
Refranchised
At March 29, 2016 68 709 65 842
 
 
STORE COUNT QUARTER 2
NUMBER OF STORES
COMPANY FRANCHISE TOTAL
Domestic International
For the Quarter Ended July 4, 2017
At April 4, 2017 66 734 68 868
Opened 6 4 10
Acquired
Closed (8 ) (8 )
Refranchised (13 ) 13
At July 4, 2017 53 745 72 870
 
For the Quarter Ended June 28, 2016(a)
At March 29, 2016 68 709 65 842
Opened 1 8 2 11
Acquired
Closed (1 ) (9 ) (1 ) (11 )
Refranchised
At June 28, 2016 68 708 66 842
 
 
COMPARABLE STORE SALES
               

Fiscal Calendar Basis

2017 2016
Quarter Ended

26 Weeks

Ended

Quarter Ended

26 Weeks

Ended

Increase/(Decrease)

April 4, 2017

vs

March 29,

2016

July 4, 2017

vs

June 28, 2016

July 4, 2017

vs

June 28, 2016

March 29,

2016 vs

March 31,

2015

June 28, 2016

vs

June 30, 2015

June 28, 2016

vs

June 30, 2015

 
Percentage Change in Comparable store sales
Company stores (4.5 )% 0.9 % (1.6 )% 0.2 % 5.7 % 3.0 %
Franchise stores (2.2 )% (1.0 )% (1.5 )% (2.4 )% 4.0 % 1.1 %
System-wide (2.5 )% (0.8 )% (1.5 )% (2.1 )% 4.2 % 1.3 %
 
 

Comparable Calendar Basis (a)

2017 2016
Quarter Ended

26 Weeks

Ended

Quarter Ended

26 Weeks

Ended

Increase/(Decrease)

April 4, 2017

vs

April 5, 2016

July 4, 2017

vs

July 5, 2016

July 4, 2017

vs

July 5, 2016

March 29,

2016 vs

March 31,

2015

June 28, 2016

vs

June 30, 2015

June 28, 2016

vs

June 30, 2015

 
Percentage Change in Comparable store sales
Company stores (7.3 )% 1.0 % (3.0 )% 0.2 % 5.7 % 3.0 %
Franchise stores (5.6 )% (0.2 )% (2.7 )% (2.4 )% 4.0 % 1.1 %
System-wide (5.8 )% (0.0 )% (2.7 )% (2.1 )% 4.2 % 1.3 %
 
 
Percentage Change in Comparable Company store sales
Traffic (9.9 )% (2.9 )% (6.2 )% (4.5 )% 1.4 % (1.6 )%
Average check 2.6 % 3.9 % 3.3 % 4.7 % 4.3 % 4.6 %
Total Comparable Company store sales (7.3 )% 1.0 % (3.0 )% 0.2 % 5.7 % 3.0 %



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