Jamba Inc reports financial results for Q209

Financial and operational highlights

Highlights for the 12 weeks ended 14 July 2009 compared to the 12 weeks ended 15 July 2008:

• Consolidated Ebitda increased $0.3m to $10.3m from $10.0m for 2Q08.
• Store-level Ebitda decreased 6.9% to $18.5m from $19.9m for 2Q08.
• Total revenue for 2Q09 decreased 15.1% to $83.2m from $98.0m for 2Q08.
• Net loss for 2Q09 of $(5.1)m showed significant improvement when compared to a net loss for 2Q08 of $(89.2)m. Included in the net loss for 2Q09 are a non-cash store impairment charge of $7.5m, a write-off of $2.9m for loan fees and discounts relating to the payoff of its senior term note, offset by a gain from derivative liabilities of $1.4m associated with senior note holder’s exercise of its’ put option and the June expiration of the Company’s warrants. Included in the net loss for 2Q08 are a non-cash charge of $49.7m for trademark impairment, net of tax, and $3.3m for store impairment charges, offset by $2.5m in gain from derivative liabilities.
• Diluted loss per share for 2Q09 of $(0.10) compared to a diluted loss per share for 2Q08 of $(1.69).
• Company-owned comparable store sales for 2Q09 decreased 13.7%(1), which contributed to the decrease in store-level Ebitda.
• Six new franchise stores and no new Company-owned stores were opened during the fiscal second quarter of 2009, compared to 14 new Company-owned stores in fiscal second quarter of 2008. The total number of stores, net of any closures occurring during the period, increased to 735, comprising 490 Company-owned stores and 245 franchise stores.

“We continued to make strong progress against our strategic initiatives in the second quarter despite a challenging operating environment,” said James D White, president and CEO, Jamba Inc. “We successfully completed the sale of $35m in convertible, preferred stock. The sale proceeds, which were used to repay our senior term note and eliminate all of our long-term debt, have strengthened our balance sheet. We expanded food into almost 300 locations and made good progress in our brand licensing initiative. We grew our franchise base and are making progress in our refranchising programme. We also continue to advance our cost management initiatives. In the face of an intensely difficult macro-economic climate, we implemented our ‘Blend’ plan, which is mitigating some of the headwinds we face.

“We’re pleased with the initial response to the grab-and-go food offerings launched in June. Based on our preliminary analysis, our stores in California, which were the first to offer grab-and-go food items, are showing an increase in customer visits and average check. The introduction of great tasting, high quality, value-priced, better-for-you food is a game-changing proposition for Jamba and we’re fully committed to its success. These foods are a great fit with the Jamba brand and a perfect complement to our beverages. We recently expanded our food offering to the East Coast with the launch of our California Flatbreads into the New York City marketplace in July and, as we announced today, the launch of a full menu of offerings into the Chicago marketplace.

“We’ve made good progress on our franchise development initiative. We opened six new franchise locations and are on pace with our plans to open 40 to 45 new outlets, primarily franchised locations, by year end. In July, we announced the sale of nine Company stores in Oregon to an existing franchisee, which followed the earlier sale in the first quarter of 2009, of 10 Company locations to an existing franchisee in Arizona. We expect to close a number of additional deals this year.”

Source: Jamba