Jamba (JMBA) Q4 2011 Earnings Call March 07, 2012 5:00 pm ET Executives Karen L. Luey - Chief Financial Officer, Principal Accounting Officer and Senior Vice President James D. White - Chairman, Chief Executive Officer and President Analysts Conrad Lyon - B. Riley & Co., LLC, Research Division Gregory J. McKinley - Dougherty & Company LLC, Research Division Scott Van Winkle - Canaccord Genuity, Research Division Chris Krueger - Northland Securities Inc., Research Division Kurt M. Frederick - Wedbush Securities Inc., Research Division Presentation Operator Ladies and gentlemen, thank you for standing by. Welcome to the Jamba, Inc. Fourth Quarter 2011 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Karen Luey, the Executive Vice President and Chief Financial Officer. Please go ahead. Karen L. Luey
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With that said, I would like to turn it over to James.James D. White Thank you, Karen, and welcome to our call. I am pleased with our fourth quarter results and overall 2011 performance. We delivered our BLEND Plan objectives and moved from the turnaround to transformation phase of our effort. With our BLEND Plan 1.0 strategic initiatives accomplished, we are now focused on our BLEND Plan 2.0 that will grow Jamba from a smoothie company to a globally recognized lifestyle brand. Let me review just a few of our accomplishments in Q4 in 2011. Our comparable sales per company-owned stores increased for the fifth consecutive quarter, improving by 7.7%. For the full year, company-owned stores increased by 4%. Comparable sales were also positive for our franchise stores for the sixth consecutive quarter. The fourth quarter increase was 3.3%. Systemwide comparable store sales increased by 3.7%, and we had positive comps in all 4 day parts, driven by product innovation in the breakfast and evening day parts. This marks our first fiscal year of comparable store sales growth since 2007. Our store margins continue to improve significantly, driven by reduced store expenses. Internationally, we accelerated franchise growth opening 16 locations in South Korea and 1 each in Canada and the Philippines, our first stores in those countries. We also achieved significant growth with our consumer products. At the close of 2011, we had 10 license agreements with roughly 30,000 points of retail distribution across all 50 states, and our balance sheet remains strong. I will return to provide additional perspectives on our accomplishments, our new BLEND Plan 2.0 strategic initiatives and our outlook for 2012. Now I'll ask Karen to review our financials. Karen L. Luey Thank you, James. For fiscal 2011, we have accomplished our financial goals that we outlined 1 year ago, which were to deliver positive comparable store sales of 2% to 4%, deliver adjusted operating profit of 18% to 20% and control general and administrative expenses consistent with 2010 levels.
Our overall financial health has improved significantly. We have a clean balance sheet, cash of over $21 million and no debt. With the recent acquisition of Talbott Teas and our new smoothie introductions, we have started to improve on the seasonality of our business.For the full year, we reduced our net loss by half as our business continues to strengthen. On a GAAP basis, the net loss was $8.3 million or a loss of $0.16 per share for fiscal 2011 compared to a net loss of $16.7 million or a loss of $0.35 per share from fiscal year 2010. On a non-GAAP basis, adjusted for nonroutine items, our loss would have been $6.6 million or a loss of $0.14 per share. We have included a supplemental schedule that reflects our results adjusting for nonroutine items. Those nonroutine items include charge of $1 million related to final settlement and expenses of existing litigation and $0.7 million expense included in other operating net related to the prior years. We also recorded performance-based compensation expenses during the year of $2.9 million for meeting or exceeding our strategic and financial targets. Our comparable store sales results for 2011 increased across the system. Company comparable store sales results increased 4%, franchise comparable store sales increased by 3.4%, and overall, our systemwide comparable store sales increased to 3.7%. In 2011, store-level margins improved by 340 basis points to 15.6%, driven by the discipline and focus on 4-wall store expenses and on our company comparable store sales increase of 4%. Of significance is the 190 basis point improvement in labor where we utilize technology to focus on controlling both rate and hours, and the 110 basis point improvement in cost of sales as we continue to leverage our supply chain expertise. On a dollar basis, the improvement over 2010 was $2.5 million to $33.6 million from $31.1 million. Read the rest of this transcript for free on seekingalpha.com