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Jamba, Inc. Announces Third Quarter 2012 Financial Results

The Company believes that providing these non-GAAP measures to its investors, in addition to corresponding GAAP income statement measures, 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 Company’s core business operations comprise company-owned and franchise-operated stores and consumer packaged goods (CPG) operations. The Company believes its core business performance represents the Company's on-going performance in the ordinary course of its operations. Management excludes from the Company’s core business performance those items, such as impairment charges, income taxes, restructuring and severance programs and costs relating to specific major projects which are non-routine, expenses or income from certain legal actions, settlements and related costs, general and administrative expense, including non-cash compensation related to stock and options. Management does not believe these items, including non-cash items, are reflective of the Company's ongoing core operations and accordingly excludes those items from non-GAAP adjusted operating profit and non-GAAP adjusted operating profit margin. Additionally, each non-GAAP measure has historically been presented by the Company as a complement to its most comparable GAAP measure, and the Company believes that the continuation of this practice increases the consistency and comparability of the Company's earnings releases. The non-GAAP adjustments 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.

Footnotes

(1) Comparable store sales are calculated using sales of Jamba Juice stores open at least one full fiscal year. Company-owned comparable store sales percentages are based on sales from company-owned stores included in our store base. Franchise-operated comparable store sales percentages are based on sales from franchised stores, as reported by franchisees, which are included in our store base. System-wide sales percentages are based on sales by both company-owned and franchise-operated stores, as reported by our franchisees, which are included in our store base. Company-owned stores that were sold in refranchising transactions are included in the stores base for each accounting period of the fiscal quarter to the extent the sale is consummated at least three days prior to the end of such accounting period, but only for the days such stores have been company-owned. Thereafter, such stores are excluded from the store base until such stores have been franchise-operated for at least one full fiscal period, at which point such stores are included in the store base and compared to sales in the comparable period of the prior year. Comparable store sales exclude closed locations. 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 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 company-owned comparable store sales, franchise-operated comparable store sales and system-wide 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 the franchise-operated stores.
(2) Non-GAAP adjusted operating profit is calculated as net income (loss) as determined in accordance with GAAP, excluding the items described below and as specifically identified in the non-GAAP reconciliation schedules set forth below. Non-GAAP adjusted operating profit margin is calculated as non-GAAP adjusted operating profit as a percentage of GAAP total revenue. The Company evaluates its performance using non-GAAP adjusted operating profit margin to assess the Company's historical and prospective operating financial performance, as well as its core operating performance relative to its competitors. Specifically, management uses these non-GAAP measures to further understand the Company's core business operating performance. The Company believes its core business operating performance represents the Company's on-going performance in the ordinary course of its core operations. Accordingly, the Company excludes from its core operating performance those items whose impact are not reflective of its core operations such as (a) interest income, (b) interest expense, (c) income taxes, (d) depreciation and amortization, (e) impairment of long-lived assets, (f) other operating, net, and (g) general and administrative expenses. The definition of adjusted operating profit margin is the same definition previously used by the Company to define operating profit margin in its 2012 guidance.
(3) Non-GAAP adjusted G&A expense is calculated as G&A as determined in accordance with GAAP excluding the items described below and as specifically identified in the non-GAAP reconciliation schedules set forth below. The Company believes that G&A expense adjusted for non-routine items and performance compensation is a helpful indicator of the Company’s operating performance in that it shows the G&A expense without the impact of the non-routine items and performance compensation, specifically, the impact of one additional week in the 13-week period ended October 2, 2012 and one additional week in the 40-week period ended October 4, 2011, the costs incurred for accelerated growth initiatives, charges for share-based compensation and the semi-annual performance-based compensation for achieving its strategic objectives. Management does not believe these items are reflective of the Company’s ongoing performance and accordingly excludes those items from non-GAAP adjusted G&A expense.
   
JAMBA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
October 2, January 3,
(In thousands, except share and per share amounts)   2012     2012  
 
ASSETS
Current assets:
Cash and cash equivalents $ 31,856 $ 19,607
Restricted cash - 1,352
Receivables, net of allowances of $325 and $294 6,488 13,040
Inventories 2,637 2,228
Prepaid and refundable taxes 846 574
Prepaid rent 2,987 2,761
Prepaid expenses and other current assets   809     1,509  
Total current assets 45,623 41,071
 
Property, fixtures and equipment, net 38,884 44,760
Goodwill 1,336 -
Trademarks and other intangible assets, net 1,439 1,130
Other long-term assets   1,375     1,332  

 

Total assets $ 88,657   $ 88,293  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 6,928 $ 4,155
Accrued compensation and benefits 4,292 6,566
Workers' compensation and health insurance reserves 1,161 1,092
Accrued jambacard liability 26,192 33,256
Other current liabilities   9,399     9,961  
Total current liabilities 47,972 55,030
 
Deferred rent and other long-term liabilities   12,855     13,079  
Total liabilities   60,827     68,109  
 
Commitments and contingencies
 

Series B redeemable preferred stock, $.001 par value, 304,348 shares authorized; 72,889 and 168,389 shares issued and outstanding at October 2, 2012 and January 3, 2012, respectively.

7,882 17,880
 
Stockholders' equity:

Common stock, $.001 par value, 150,000,000 shares authorized; 77,333,489 and 67,280,485 shares issued and outstanding at October 2, 2012 and January 3, 2012, respectively.

78 68
Additional paid-in-capital 379,449 369,027
Accumulated deficit   (359,579 )   (366,791 )
Total stockholders' equity   19,948     2,304  
 
Total liabilities and stockholders' equity $ 88,657   $ 88,293  
 
JAMBA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
           
 
13 Week   12 Week 39 Week 40 Week
Period Ended Period Ended Period Ended Period Ended
(In thousands except share and per share amounts) October 2, 2012 October 4, 2011 October 2, 2012 October 4, 2011
 
Revenue:
Company Stores 61,795 $ 54,102 174,350 $ 173,274
Franchise and other revenue   3,687     2,976     10,223     8,834  
Total revenue   65,482     57,078     184,573     182,108  
 
Costs and operating expenses:
Cost of sales 14,918 11,808 40,504 39,828
Labor 16,457 14,565 49,013 53,139
Occupancy 7,353 6,802 22,097 23,707
Store operating 9,328 8,539 26,158 25,728
Depreciation and amortization 2,793 2,805 8,528 9,621
General and administrative 9,663 7,398 29,125 25,881
Impairment of long-lived assets 75 312 637 1,214
Other operating, net   347     924     579     1,503  
Total costs and operating expenses   60,934     53,153     176,641     180,621  
 
Income from operations 4,548 3,925 7,932 1,487
 
Other income (expense), net:
 
Interest income 21 99 61 126
Interest expense   (52 )   (117 )   (147 )   (456 )
Total other expense, net   (31 )   (18 )   (86 )   (330 )
 
Income before income taxes 4,517 3,907 7,846 1,157
 
Income tax benefit (expense) (413 ) 217 (634 ) 380
       
Net income   4,104     4,124     7,212     1,537  
 
Preferred stock dividends and deemed dividends (1,123 ) (489 ) (2,076 ) (1,854 )
       
Net income available (net loss attributable) to common stockholders $ 2,981   $ 3,635   $ 5,136   $ (317 )
 

Weighted-average shares used in computation of earnings (loss) per share:

 
Basic 70,672,511 67,042,745 68,450,782 66,024,576
Diluted 72,365,921 85,196,847 70,076,089 66,024,576
 
Earnings (loss) per share:
Basic $ 0.04 $ 0.05 $ 0.07 $ 0.00
Diluted $ 0.04 $ 0.05 $ 0.07 $ 0.00
 
JAMBA, INC.
(Unaudited)
       
Reconciliation of GAAP Net Income to Non-GAAP Adjusted Operating Profit, Non-GAAP Adjusted Operating Profit Margin
 

 

13 Week 12 Week 39 Week 40 Week
Period Ended Period Ended Period Ended Period Ended

(In thousands)

October 2, 2012 October 4, 2011 October 2, 2012 October 4, 2011
 
 
Net income $ 4,104 $ 4,124 $ 7,212 $ 1,537
Interest income (21 ) (99 ) (61 ) (126 )
Interest expense 52 117 147 456
Income tax (benefit) expense 413 (217 ) 634 (380 )
Depreciation and amortization 2,793 2,805 8,528 9,621
Impairment of long-lived assets 75 312 637 1,214
Other operating, net 347 924 579 1,503
General and administrative   9,663     7,398     29,125     25,881  
Non-GAAP Adjusted operating profit $ 17,426   $ 15,364   $ 46,801   $ 39,706  
 
 
Non-GAAP Adjusted operating profit margin
 
Total Revenue $ 65,482   $ 57,078   $ 184,573   $ 182,108  
Non-GAAP Adjusted operating profit margin   26.6 %   26.9 %   25.4 %   21.8 %
 
 
 
Reconciliation of GAAP General & Administrative (G&A) Expense to Non-GAAP General & Administrative Expense adjusted
 
13 Week 12 Week 39 Week 40 Week
Period Ended Period Ended Period Ended Period Ended
(In thousands) October 2, 2012 October 4, 2011 October 2, 2012 October 4, 2011
 
G&A expense $ 9,663 $ 7,398 $ 29,125 $ 25,881
Adjustment for same weeks for each period ended - 754 - (619 )
Charges for accelerated growth initiatives (928 ) - (1,715 ) -
Share-based compensation (656 ) (295 ) (1,429 ) (833 )
Performance-based compensation   -     (194 )   (2,050 )   (718 )
Non-GAAP G&A expense adjusted $ 8,079   $ 7,663   $ 23,931   $ 23,711  
 
JAMBA, INC.
PRO-FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
               
Non-GAAP
13 Week 13 Week
(In thousands) Period Ended Period Ended
October 2, 2012   September 27, 2011
Revenue:
Company Stores $ 61,795 $ 60,233
Franchise and other revenue   3,687     3,159  
Total revenue   65,482     63,392  
 
Costs and operating expenses:
Cost of sales 14,918 13,108
Labor 16,457 16,102
Occupancy 7,353 7,271
Store operating 9,328 9,095
Depreciation and amortization 2,793 3,060
General and administrative 9,663 8,152
Impairment of long-lived assets 75 312
Other operating, net   347     933  
Total costs and operating expenses   60,934     58,033  
 
Income from operations 4,548 5,359
 
 
Total other expense, net   (31 )   (29 )
 
Income before income taxes 4,517 5,330
 
Income tax benefit (expense) (413 ) 217
 
   
Net income   4,104     5,547  
 
Preferred stock dividends and deemed dividends (1,123 ) (551 )
 
   
Net income available to common stockholders $ 2,981   $ 4,996  
 

JAMBA, INC.

(Unaudited)

       
STORE COUNT
NUMBER OF STORES
COMPANY FRANCHISE TOTAL
Domestic International
39 week period ended October 2, 2012
At January 3, 2012 307 443 19 769
Opened - 19 16 35
Closed (5 ) (9 ) (2 ) (16 )
Refranchised (1 ) 1   -   -  
At October 2, 2012 301   454   33   788  
 
 
40 week period ended October 4, 2011
At December 28, 2010 351 391 1 743
Opened 9 20 9 38
Closed (8 ) (11 ) - (19 )
Refranchised (42 ) 42   -   -  
At October 4, 2011 310   442   10   762  
 
 
 
COMPARABLE STORE SALES
13 WEEK 12 WEEK 39 WEEK 40 WEEK
PERIOD ENDED PERIOD ENDED PERIOD ENDED PERIOD ENDED
October 2, 2012 October 4, 2011 October 2, 2012 October 4, 2011
 
Percentage Change in Comparable store sales
Company stores 3.9 % 3.3 % 6.7 % 3.2 %
Franchise stores 1.0 % 4.2 % 5.8 % 3.3 %
System-wide 2.5 % 3.7 % 6.2 % 3.3 %
 
 
Percentage Change in Comparable Company store sales
Traffic effect 5.1 % -2.1 % 4.5 % -1.6 %
Average check effect -1.2 % 5.4 % 2.2 % 4.8 %
Total Comparable Company store sales 3.9 % 3.3 % 6.7 % 3.2 %




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