Jamba, Inc., today reiterated its strategic priorities for 2009 including a disciplined expense reduction plan as Jamba's management team seeks to revitalize the Company for future growth and long term shareholder value.
"Today we wanted to formally reiterate our strategic priorities to allow all of our core constituencies the ability to understand our actions to revitalize Jamba in light of continuing weaknesses in the consumer spending environment. Our strategic priorities are focused on a disciplined expense reduction effort, building a customer-first and operationally focused service culture across the company, assembling a retail food capability across all day-parts, accelerating franchise and non-traditional store growth, and enhancing our licensing platform," stated James White, president and chief executive officer, Jamba, Inc.
Expense Reduction Plan
The Company has implemented a disciplined expense reduction plan in 2009 designed to eliminate approximately $25 million in store level costs. The plan is focused on a number of initiatives including reductions in costs of goods sold, store labor savings from operational simplification, better wage and benefit management, the implementation of a labor planning system, occupancy savings, and improved management of controllable costs, store costs, and marketing expenditures. In addition, over the past year, the Company has taken measures to reduce general and administrative costs, before stock based compensation expenses, from 13.9% of total revenue in 2007 to a target of less than 10.0% of total revenue.
"Our revitalization efforts require a disciplined approach to managing costs and expenses. We are continuing to make progress on the initiatives that were discussed on our second and third quarter earnings calls. As part of those initiatives, we are actively renegotiating service contracts, planning for zero to negative overhead expense growth and driving more efficient marketing spending," said Mr. White.
Build a Customer First "Operationally Focused" Service Culture
Operational changes have been implemented or are in the process of being instituted to simplify operations and improve customer service. Store managers are being relieved from unnecessary administrative reporting to focus on customer service initiatives. In addition, select stores will be going through a refresh program which will revitalize the look and feel of our older Company stores to reinforce the vibrant and fun environment that our stores have been known for.
The Company is also reviewing and testing a number of proposed technology initiatives which would promote efficiency in customer service including a customer loyalty system to drive increased frequency and market share among Jamba customers. The customer loyalty system would create an opportunity to maintain lasting customer relationships and manage contact with Jamba customers. Jamba also has plans to test self service terminals to improve speed of service and customer satisfaction increased sales and optimize labor.
Build a Retail Food Capability Across Day-Parts
Jamba is actively developing and testing a number of initiatives and products to build a complementary, healthy retail food capability across all day-parts. In December 2008 Jamba launched hot oatmeal in Chicago and launched nationwide on January 15th. Jamba has tested the sale of wraps, sandwiches and salads and as part of building the food capability plans to expand this concept to a significant number of stores in 2009.
"We believe oatmeal and other food items will strengthen our relationship with existing customers and attract new customers as well. Our research indicates a significant number of Jamba customers currently purchase a smoothie from us, but then purchase a food item elsewhere," commented Mr. White.
Accelerate the Development of Franchise and Non-Traditional Stores
A key part of the Company's growth strategy includes opportunities for franchising traditional and non-traditional outlets such as college campuses, airports and travel centers. During 2008, the Company opened 37 franchise locations and plans to open 50 franchise locations in 2009 of which 30-35 will be non-traditional. The Company's sixth airport location opened last week at the San Diego International Airport. The Company continues to aggressively market five to eight new territories for multi-unit development opportunities. As previously announced Jamba is aggressively repositioning its business model with a greater emphasis on franchising with the goal of more evenly weighing the store network between Company and franchise store locations.
The Company believes an aggressive franchise strategy will better position Jamba for growth in market share, reduced capital outlay, provide greater overall margins and increased brand presence. The Company's current research shows there are potential opportunities for at least 2,700 stores in the US.
Build a Licensing Growth Platform
The Company believes there is untapped potential to extend the brand into the retail market. Management continues to seek opportunities to extend the Jamba brand and maximize revenue by leveraging the brand in new and complementary consumer packaged product categories. These efforts and the re-assessment and evaluation of the Ready-to-Drink smoothies with Nestle will be led by vice president of consumer products/licensing and growth initiatives, Susan Shields, who joined Jamba earlier this month.
The Company continues to have discussions with potential partners regarding fruit teas, fruit yogurt and parfaits, frozen smoothie bars and sorbets, breakfast and energy bars, and packaged boosts. The Company's goal is to have several additional licensing opportunities completed in 2009. "We are very excited about licensing opportunities and Susan will be a great addition to our efforts in this area. Our experience with Ready-to-Drink demonstrated the strength of the Jamba brand and gives us confidence in additional licensing opportunities," concluded Mr. White.
About Jamba, Inc.
Jamba, Inc., is a holding company and through its wholly-owned subsidiary, Jamba Juice Company, owns and franchises JAMBA JUICE(R) stores. JAMBA JUICE is the leading blender of fruit and other naturally healthy ingredients. Founded in 1990, Jamba strives to inspire and simplify healthy living for its customers and employees. As of October 7, 2008, JAMBA JUICE had 749 stores, of which 520 were company-owned and operated. For the nearest location or a complete menu including our breakfast smoothies with organic granola, please call: 1-866-4R-FRUIT or visit the JAMBA JUICE website at www.jamba.com.
This press release (including information incorporated or deemed incorporated by reference herein) contains "forward-looking statements" within the meaning of the Private Litigation Reform Act of 1995. Forward-looking statements are those involving future events and future results that are based on current expectations, estimates, forecasts, and projects as well as the current beliefs and assumptions of our management. Words such as "outlook", "believes", "expects", "appears", "may", "will", "should", "anticipates", or the negative thereof or comparable terminology, are intended to identify such forward looking statements. Any statement that is not a historical fact, including estimates, projections, future trends and the outcome of events that have not yet occurred, is a forward-looking statement. Forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Therefore actual results may differ materially and adversely from those expressed in any forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed under the section entitled "Risk Factors" in our reports filed with the SEC. Many of such factors relate to events and circumstances that are beyond our control. You should not place undue reliance on forward-looking statements. The Company does not assume any obligation to update the information contained in this press release.