Jamba, Inc. (NASDAQ:JMBA) today provided an update for fiscal
year 2016 and the Company’s outlook for 2017. As a result of a
delay in completing the Company’s financial statements, Jamba will
file a Form 12b-25 Notification of Late Filing with the U.S.
Securities and Exchange Commission with regard to its 2016 Annual
Report on Form 10-K.
Highlights
- For the fourth quarter of 2016,
Company-owned comparable store sales (1) decreased 2.5%, Franchise
comparable store sales (1) decreased 2.2%, and System-wide
comparable store sales (1) decreased 2.2%.
- System-wide comparable store (1) sales
and transactions exceeded the Knapp-Track Fast Casual benchmark for
the fourth quarter of 2016 by approximately 0.8% and 0.2%
respectively.
- Full year system-wide comparable store
sales (1) decreased 0.2%.
- Opened 27 stores in the fourth quarter
of 2016, comprised of 18 domestic and 9 international stores.
- Opened 75 stores in fiscal 2016, of
which 56 were domestic and 19 were located internationally.
“2016 was a year of transition for Jamba. I am confident in the
team we have assembled and our five key strategies for growth. The
critical business decisions made over the past year allow the team
to focus on our core retail business and the re-imagination of
Jamba,” said Dave Pace, President and Chief Executive Officer of
Jamba, Inc. “During the year we exited a number of non-core
businesses and focused on energizing the brand while also driving
sales and profitability. I expect these efforts to drive continued
results and look forward to a successful 2017 and beyond.”
2016 Outlook
The Company expects to achieve the following results for fiscal
2016:
Metric
Prior Guidance Revised
Guidance Total Revenue Approximately $78 million Meet or exceed
$78 million Non-GAAP Adjusted G&A expense (3)
Approximately $22.5 million, exiting
2016with a run rate of no more than $21.7million
$23.3 million to $23.8 million Non-GAAP Adjusted EBITDA (4)
Approximately $10.5 million Meet or exceed $10.5 million
Non-GAAP Adjusted G&A expense and Non-GAAP Adjusted EBITDA
set forth above are forward-looking non-GAAP measures which the
Company is not able to provide comparable GAAP forward-looking
estimates of G&A expense and net income without unreasonable
efforts because the Company is finalizing its financial statements
and determinations of whether any GAAP adjustments will be
required. The Company believes the significance is primarily
addressed in the non-GAAP reconciliation set forth in the Company’s
third-quarter earnings release and the items noted below under
“Anticipated Fourth Quarter Charges”.
Anticipated Fourth Quarter Charges
The Company expects to record unusual cash and non-cash charges
of approximately $13 million to $14 million in the fourth quarter
of 2016, resulting in part, from the Company’s efforts to focus on
the core retail business and remove all non-core activities. The
charges are primarily related to the exit of JambaGO®, relocation
of the Company’s corporate office to Frisco, Texas, closure of the
Innovation Store in Pasadena, California, legal reserves and
settlements, and asset impairments and have not been included in
the Non-GAAP Adjusted G&A expense and Non-GAAP Adjusted EBITDA
set forth above.
Liquidity
As of January 3, 2017, the Company held $7.1 million in cash and
cash equivalents, as compared to $19.7 million cash and cash
equivalents at December 29, 2015. As of January 3, 2017 and
December 29, 2015, the Company had restricted cash of $0.5 million
and $0, respectively.
2017 Outlook
The Company provided updated guidance for fiscal 2017. Revised
Guidance incorporates changes to annual Comp Sales due to the
historic rain and flooding in primary geographies, a reduction in
new store openings, the strategic exit of the JambaGO® business,
closure of the Innovation Store in Pasadena, California, and
refranchise of the Emeryville, California store.
Metric
Preliminary Guidance
Revised Guidance Total Revenue $78 to $80 million $75 to $77
million Annual system-wide comparable sales (1) Increase of 2 to 4%
Flat, to slightly positive New store openings (2)
Approximately 110 new store
openings;Approximately 65 openings net of closuresIncludes Express
format
65 to 75 new store openings;25 to 35
openings, net of closuresExcludes Express format
Non-GAAP Adjusted G&A expense (3)
Approximately $21 million, exiting
2017with a run rate of no more than $20 million
Approximately $21 million, exiting
2017with a run rate of no more than $20 million
Non-GAAP Adjusted EBITDA (4) $14 to $16 million $13 to $15 million
Non-GAAP Adjusted G&A expense and Non-GAAP Adjusted EBITDA
set forth above are forward-looking non-GAAP measures which the
Company is not able to provide comparable GAAP forward-looking
estimates of G&A expense or net income without unreasonable
efforts, as information needed to make a reasonable forward-looking
estimate of G&A or net income is difficult to predict and
estimate and dependent on future events which are uncertain or
outside of the Company's control. The probable significance of such
adjustments is also similarly difficult to estimate for the same
reasons.
Fiscal 2017 is a 52-week fiscal year as compared to the 53-week
2016 fiscal year.
Express Format Removed from Store Count Guidance
The Company previously announced it will disclose Gross Store
Openings and Openings, Net of Closures to provide further
transparency to the financial contribution of new store
development. The Company will no longer include Express format
stores in store count guidance information, due to the smaller
financial contribution of the format. Refer to the table below for
a complete detail of store opening and closing counts by format for
fiscal years 2014, 2015, and 2016.
Form 10-K Filing
The delay in completion of the Company’s financial statements
has been primarily caused by transition issues stemming from the
Company relocation of its headquarters from Emeryville, California
to Frisco, Texas in the second half of 2016. While the Company had
implemented a transition plan to mitigate the risk relating to the
relocation, the relocation and resulting replacement and training
of personnel Company wide and transition of Company operating
knowledge created unanticipated difficulties and delays in
completing the Company’s year-end financials. The Company’s delay
was also contributed to, in part, by the complexities with
addressing the number of Company non-routine transactions which
occurred in 2016, many of which related to the Company’s
transition.
The Company currently does not expect to file its Form 10-K on
or before April 4, 2017, the prescribed due date under the
fifteen calendar day extension period provided by Rule 12b-25 under
the Securities Exchange Act of 1934. The Company expects to file
its Form 10-K as soon as is practicable, with timing contingent on
completion of financial statements and their subsequent audit.
Conference Call
A conference call will be held today, March 20, 2017 at 8:30
a.m. ET. The call will be webcast live from the Company’s website
at www.jambajuice.com under the Corporate Investor Relations
section or directly at http://ir.jambajuice.com. The conference
call can also be accessed live over the phone by dialing (877)
407-3982 or for international callers by dialing (201) 493-6780. A
replay will be available at 11:30 a.m. ET and can be accessed by
dialing (844) 512-2921 or (412) 317-6671 for international callers;
the pin number is 13655279. The replay will be available until
Monday, April 10, 2017.
Inducement Grants
Jamba today announced that Joe Thornton, its new Senior Vice
President, Chief Operations Officer, has been granted (i) effective
March 23, 2017, a non-qualified stock option to purchase to up
15,000 shares of the Company’s common stock at a per share price of
the closing price of the Company’s common stock on the date of
grant, vesting annually over three years and (ii) effective upon
the filing of a Form S-8 registering the restricted stock units,
(a) 5,000 restricted stock units, vesting annually over three
years, and (b) 70,000 restricted stock units of which 35,000,
20,000 and 15,000 would vest upon achievement of stock price
targets of $19.50, $24.00 and $28.50 during the three-year period
after grant, respectively, in each case subject to Mr. Thornton’s
continued employment with Jamba and/or its
affiliates. Additionally, upon a change of control during the
three year period after the grant date whereby the Company’s
stockholders receive per-share consideration equaling or exceeding
any of the price targets listed above, the units will vest in the
amounts listed above for each price target (as adjusted for any
stock splits, dividends, or similar transactions).
Additionally, the Company granted effective March 23, 2017
nonqualified stock options to two new employees who are not
executive officers of the Company to purchase an aggregate of up to
10,000 shares of the Company's common stock at an exercise price
per share equal to the closing price of the Company’s common stock
on the date of each grant, in each case vesting annually over four
years so long as each employee remains an employee of Jamba Juice
Company and/or its affiliates.
The grants were made as an inducement that was a material
component of each person’s compensation and subsequent acceptance
of employment with the Company and was granted as an employment
inducement award pursuant to NASDAQ Listing Rule 5635(c)(4)
approved by the Compensation and Executive Development
Committee of the Company’s board of directors.
About Jamba, Inc.
Jamba, Inc. (NASDAQ: JMBA) through its wholly-owned subsidiary,
Jamba Juice Company, is a healthful, active lifestyle brand with a
robust global business driven by a portfolio of franchised and
company-owned Jamba Juice ® stores and Jamba Juice Express™
formats. Jamba Juice ® is a leading restaurant retailer of
“better-for-you” specialty beverage and food offerings which
include flavorful, whole fruit and vegetable smoothies, fresh
squeezed juices and juice blends, Energy Bowls™, signature
“boosts”, shots and a variety of food items including: hot oatmeal,
breakfast wraps, sandwiches, Artisan Flatbreads™, baked goods and
snacks.
There are over 900 Jamba Juice store locations globally, as of
January 3, 2017. For more information visit www.jambajuice.com or
contact Jamba’s Guest Services team at 1-866-4R-FRUIT
(473-7848).
Forward-Looking Statements
This press release (including information incorporated or deemed
incorporated by reference herein) contains “forward-looking
statements” within the meaning of the Private Securities 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 projections as well
as the current beliefs and assumptions of the Company’s 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, including each of the statements made above with respect
to the Company’s 2016 update and under “2017 Financial
Outlook”. 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
factors discussed under the section entitled “Risk Factors” in the
Company’s reports filed with the SEC. Many of such factors
relate to events and circumstances that are beyond the Company’s
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.
Non-GAAP Financial Measures
The Company provides certain forward-looking non-GAAP financial
measures to its investors. The Company believes that providing
these forward-looking non-GAAP measures to its investors 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
non-GAAP financial measures are discussed further in Footnotes
below. The Company is unable to provide a quantitative
reconciliation of its forward-looking estimate of Non-GAAP Adjusted
G&A Expense and Non-GAAP Adjusted EBITDA to forward-looking
estimates of G&A or net income because certain information
needed to make a reasonable forward-looking estimate of G&A or
net income for the full fiscal years 2016 and 2017 is difficult to
predict and estimate and for 2017 is often dependent on future
events which may be uncertain or outside of the Company's control.
However, the Company’s projections of Non-GAAP Adjusted G&A
Expense and Non-GAAP Adjusted EBITDA for both 2016 and 2017 are
forward-looking statements not able to be fully reconciled to
corresponding GAAP income statement measures, and for 2016 these
forward-looking statements do not include charges of approximately
$13 million to $14 million in the Fourth Quarter of 2016 as
described under “Anticipated Fourth Quarter Charges” described
above.
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 opened more than one full 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 and do not include
International Stores, 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 not included in our store base. System-wide
comparable store sales do not include International Stores, Express
format, and JambaGO® locations. Company Store comparable sales
represents the change in year-over-year sales for all Company
Stores opened for at least one full year. Franchise Store
comparable sales, a non-GAAP financial measure, represents the
change in year-over-year sales for all Franchise Stores opened for
at least one full year, as reported by franchisees, and excludes
International Stores. System-wide comparable store sales, a
non-GAAP financial measure, represents the change in year-over-year
sales for all Company and Franchise Stores opened for at least one
full year and is based on sales by both company-owned and domestic
franchise-operated stores, as reported by franchisees, which are in
the store base. Comparable store sales includes closed locations
for the periods in which they have comparable sales. 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 comparable stores 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
comparable store 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 Franchise-operated
stores.
(2) New store openings, net of closures is defined as the count
of new store openings, minus the count of store closures.
(3) Non-GAAP Adjusted General and Administration Expense is
calculated as general and administration expense in accordance with
GAAP excluding costs related to the Company’s move to outsource
specified services to Cap Gemini, refranchise and severance costs
associated with the move to an asset-light business model, charges
related to the executive organization changes, costs due to the
Company’s corporate office relocation to Frisco, Texas, and other
non-recurring general and administrative expense for the fiscal
year. The Company believes that general and administration expense
adjusted to exclude the costs of such items is a helpful indicator
of the Company's operating performance in that it shows the net
expense without the impact of what the Company believes to be
upfront transitional costs. Management does not believe such costs
are reflective of the Company's ongoing performance and accordingly
excludes those items from Non-GAAP Adjusted General and
Administration Expense.
(4) The Company used the non-GAAP financial measure of Adjusted
EBITDA in its statements made in this release and believes that
these are useful in measuring the operating performance of the
Company. Adjusted EBITDA is equal to net income, adjusted for: (a)
the Company’s legal and transition costs related to the Company’s
move to outsource specified services to Cap Gemini and the move to
an asset-light business model; (b) the Company’s corporate office
relocation to Frisco, Texas, (c) gain from disposal of assets
relating to refranchising; (d) depreciation and amortization; (e)
interest income; (f) interest expense; (g) income taxes; (h)
impairment expense; (i) stock based compensation expense; and (j)
charges that occurred outside of the normal course of business,
including the “Anticipated Fourth Quarter Charges” noted above.
COMPARABLE STORE
SALES Quarter Ended(1) Fiscal Year
Ended(2) Increase/(Decrease)
January 3, 2017
December 29,2015
January 3, 2017
December 29,2015
Percentage Change in Comparable store sales Company stores (2.5 )%
5.4 % 0.8 % 1.5 % Franchise stores (2.2 )% 3.7 % (0.3 )% 2.7 %
System-wide (2.2 )% 3.9 % (0.2 )% 2.3 % Percentage Change in
Comparable Company store sales Traffic (3.7 )% 1.6 % (2.4 )% (3.5
)% Average check 1.2 % 3.8 % 3.2 % 5.0
% Total Comparable Company store sales (2.5 )% 5.4 %
0.8 % 1.5 % (1) Quarter ended January 3, 2017
amounts are calculated based on comparable 13 weeks. (2) Year ended
January 3, 2017 amounts are calculated based on comparable 52
weeks.
NEW STORE OPENINGS, NET OF CLOSURES Fiscal
Year Ended December 30, 2014 December
29, 2015 January 3, 2017 Openings
Traditional 23 30 26 Non-traditional 9 13 18 Drive thru — 1 2
International 24
22 19 Total excluding Express
56 66
65 Express 11
7 10
Total including Express 67
73 75
Closures Traditional (27 ) (18 ) (14 ) Non-traditional (5 )
(17 ) (16 ) Drive thru — — — International (10
) (9 ) (24 ) Total
excluding Express (42 )
(44 ) (54 ) Express (8 )
(4 ) (5 ) Total including
Express (50 ) (48 )
(59 )
Openings, Net of
Closures(2) Traditional (4 ) 12 12 Non-traditional 4 (4
) 2 Drive thru — 1 2 International 14
13 (5 ) Total
excluding Express 14
22 11 Express
3 3
5 Total including Express 17
25 16
FISCAL YEAR END STORE COUNTS
Fiscal Year Ended December 30, 2014 December 29,
2015 January 3, 2017 Store Counts Traditional 570
582 594 Non-traditional 195 191 193 Drive thru 2 3 5 International
62 75 70
Total
excluding Express 829
851 862 Express 39
42 47
Total including Express
868 893
909
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version on businesswire.com: http://www.businesswire.com/news/home/20170320005431/en/
Investor RelationsJamba, Inc.Dara Dierks,
646-277-1212investors@jambajuice.com
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