Jamba, Inc. JMBA -1.27% reported unaudited financial results for the first fiscal quarter ended April 19, 2011. The Company continues to accelerate its transformation momentum with the delivery of positive comparable store sales across the system, the completion of its refranchising initiative, and the acceleration of its brand expansion through consumer products licensing.
Highlights for the 16 weeks ended April 19, 2011, compared to the 16 weeks ended April 20, 2010:
· Company-owned comparable store sales(1) increased 2.2% for the quarter as compared to the prior year period, reflecting the Company's second consecutive quarter of positive company-owned comparable stores sales growth and sequential improvement in seven of the last eight quarters.
· System-wide comparable store sales(1) increased 3.1% for the quarter as compared to the prior year period and franchise-operated comparable store sales(1) increased 4.1% for the quarter, as compared to the prior year period.
· Total revenue for the first quarter decreased 17.7% to $66.2 million from $80.4 million for the prior year period driven primarily by the impact of the trade-off of Company-owned store sales for royalties and franchise fees as a result of the Company's refranchising initiative. Non-GAAP adjusted total revenue(2) was $60.9 million for the quarter compared to non-GAAP adjusted total revenue(2) of $60.6 million for the prior year period.
· General and administrative expenses for the quarter decreased 4.6% to $10.4 million from $10.9 million as compared to the prior year period.
· Net loss was $(6.5) million, or $(0.11) diluted loss per share for the quarter, compared to net loss of $(5.3) million or $(0.13) diluted loss per share for the prior year period. Non-GAAP adjusted net loss(5) was $(5.4) million for the quarter compared to non-GAAP adjusted net loss(5) of $(6.4) million for the prior year period.
· Six new franchise stores and two new company-owned stores in the U.S. were opened during the quarter.
· Jamba's Korean master developer opened their first Jamba Juice location in South Korea. Following the close of the quarter, the Company signed a master development agreement for the development of 40 Jamba Juice locations in the Philippines over the next 10 years and a master development agreement for the development of 80 locations in Canada over the next 10 years.
· Forty-two company-owned stores were refranchised during the quarter completing the Company's refranchising initiative.
First Quarter Fiscal 2011 Results
For the first quarter, ended April 19, 2011, total revenues decreased 17.7% to $66.2 million from $80.4 million in the first quarter ended April 20, 2010. The decrease is primarily due to the reduction in the number of company-owned stores as a result of the Company's refranchising initiative. The increase in company-owned comparable store sales of 2.2% was driven primarily by an increase in average check of 380 basis points, partially offset by lowered transaction count, which we attribute to the weather impact on traffic. This represents the Company's second consecutive quarter of positive company-owned comparable store sales growth and reflects sequential improvement in seven of the last eight quarters. In the first quarter of 2011, system-wide comparable store sales increased 3.1% and franchise-operated comparable store sales increased 4.1%, compared to the prior year period. Franchise and other revenue increased 51.8%, driven primarily by the increase in the number of franchise-operated stores. Jamba's CPG licensed revenue increased to $0.2 million in the first quarter of 2011 from essentially zero in the prior year period due primarily to the commercialization and sale of licensed Jamba consumer products at more than 20,000 retail points of distribution.
Non-GAAP Adjusted Operating Profit(3) and Non-GAAP Adjusted Operating Profit Margin(3), Non-GAAP Adjusted Operating Profit (excluding refranchising)(4) and Non-GAAP Adjusted Operating Margin (excluding refranchising)(4)
Jamba's non-GAAP adjusted operating profit margin(3) increased by 190 basis points to 14.0% for the first quarter of 2011 on a year over year basis and on a dollar basis decreased $0.4 million from the first quarter of 2010 reflecting the impact of refranchised stores. Non-GAAP adjusted operating profit (excluding refranchising)(4) reflected an increase of $1.4 million and on a non-GAAP adjusted operating profit margin (excluding refranchising)(4) rate reflected a 220 basis point improvement from 13.0% to 15.2% in the first quarter of 2011 as compared to the prior year period. Quarterly comparisons excluding the effects of the refranchising initiative from non-GAAP adjusted operating profit will be provided until the end of the first quarter of fiscal 2012, which represents the last refranchising year over year comparable quarter. The Company continued to see efficiencies in the costs of sales and labor expense lines achieved through a smaller, more geographically concentrated and better performing company-owned store base as a result of its refranchising initiative. In addition, as a result of Jamba's positive company-owned comparable store sales increase, the Company started to leverage its fixed occupancy costs. During the quarter, the Company invested aggressively in marketing to introduce its new beverage offerings, including an innovative probiotic and yogurt blends platform, and a fruit and vegetable platform. During the first quarter, the Company also successfully launched its baked goods refresh which helped drive attachment rate higher.
Number of Stores
System-wide, Jamba has 741 stores in the United States, of which 434 are franchise-operated stores and 307 are company-owned. During the quarter, the Company sold 42 company-owned stores to franchisees, resulting in the completion of its refranchising initiative. The Company opened six new domestic franchise stores, of which one was a traditional venue, two were non-traditional venue and three were Express format franchise locations. Two new company-owned stores were opened. Nine Jamba Juice stores closed system-wide. Internationally, the Company's Korean master developer opened its first Jamba Juice location in South Korea, resulting in two international stores.
Non-GAAP Adjusted Total Revenue(2)
Non-GAAP adjusted total revenue(2) which is total revenue adjusted for the effect of refranchising, improved by $0.3 million to $60.9 million for the quarter compared to the prior year period.
Non-GAAP Adjusted Net Loss(5)
Non-GAAP adjusted net loss(5) improved to $(5.4) million from $(6.4) million for the quarter compared to the prior year period.
"Our performance this quarter puts us on a solid path to deliver our overall objectives for the year. Most importantly, we achieved positive Company-store comparable sales for our second consecutive quarter, reflecting sequential improvement in seven of the last eight quarters. We also achieved positive system-wide store comparable sales and positive franchise-operated store comparable net sales. Adjusted operating profit margin adjusted for refranchising transactions improved by 220 basis points, " stated James D. White, chairman, president and CEO, Jamba, Inc. "Our improved balance sheet, including our current cash position increased our ability to make investments in marketing and G&A to accelerate three critical initiatives: product innovation, CPG licensing, and international expansion."
Outlook for 2011
· The Company continues to expect to achieve the following results for its fiscal 2011:
· Deliver positive company-owned comparable store sales(1) of 2-4%;
· Achieve Adjusted operating profitmargin(3) of 18-20%;
· Develop 50-70 U.S. locations in traditional, non-traditional, and express franchise formats;
· Maintain general and administrative expenses, in dollars (excluding litigation charges and other one-time expenses), consistent with 2010 levels.
On April 19, 2011, the Company held $23.0 million in cash, cash equivalents and restricted cash as compared to $30.6 million cash, cash equivalents and restricted cash at the end of the prior quarter. On April 19, 2011 and at the end of the prior quarter, the restricted cash balance was $1.8 million.
The replay of the conference call will be available until June 13, 2011. The call can be accessed from the Company's website at www.jambajuice.com under the Corporate Investor Relations section or directly at http://ir.jambajuice.com.
About Jamba, Inc.
Jamba, Inc. JMBA -1.27% is a holding company and through its wholly-owned subsidiary, Jamba Juice Company, owns and franchises JAMBA JUICE(R) stores. Founded in 1990, Jamba Juice is a leading restaurant retailer of better-for-you food and beverage offerings, including great tasting fruit smoothies, juices and teas, hot oatmeal made with organic steel cut oats, wraps, salads, sandwiches, and California Flatbreads(TM), and a variety of baked goods and snacks. As of April 19, 2011, Jamba Juice had 741 locations in the United States consisting of 434 franchise-operated stores, 307 Company-owned stores and two international stores. For the nearest location or a complete menu, visit the Jamba Juice website at www.jambajuice.com or call 1-866-4R-FRUIT (473-7848).