Jamba, Inc. (NASDAQ:JMBA) (“the Company”) today provided updates
for the quarter ended October 3, 2017 (“third quarter”), progress
against select business initiatives, the status of the Company’s
Form 10-K and 10-Q filings, and announced receipt of a standard
notification letter from Nasdaq.
Highlights
- On a comparable calendar basis,
system-wide comparable store sales (1) declined 0.2% in the third
quarter of fiscal 2017.
- Comparable store sales (1) increased
0.2% at franchise-owned locations and declined 3.9% at
company-owned locations in the third quarter of fiscal 2017.
- Comparable store sales (1) at
company-owned locations performed similarly to franchise-owned
stores in the same geography. Approximately 94% of company owned
stores operate in southern California, as of October 3, 2017.
- Opened 10 new stores and closed 14
stores, in the third quarter of fiscal 2017.
- Opened 35 new stores and closed 31
stores, resulting in 4 openings, net of closures (2) in the first
three quarters of fiscal 2017. Average unit volume (3) for the 31
closed stores is below $300,000, less than half of the average unit
volume (3) of the remaining store base.
- Held $11.9 million in cash as of
October 3, 2017. The reported balance is unaudited.
“While the consumer environment remains choppy, we are pleased
comparable store sales outperformed the industry benchmark for the
sixth consecutive quarter,” said Dave Pace, President, and Chief
Executive Officer. “With the new team now fully in place and the
transition of the support center complete, we are building the
tools and processes necessary to support and grow our franchise
focused business. Additionally, we have made important progress on
key business initiatives and I remain confident we have the vision,
the plan and the team to grow this iconic brand.”
Select Business Initiative Update
- Catering: The Company initiated a
catering test in 2017 to validate operational feasibility.
Following success in the operational testing stage, the Company
expanded the test in the third quarter. The Company is utilizing
aggressive B2B marketing tactics to commercially test and optimize
the offering and plans to continue the expanded test through the
remainder of 2017.
- Domestic new stores: Franchisees are
increasingly interested in drive-thru expansion based on strong
financial performance of the initial drive-thru store base. Sales
in drive-thru format locations continue to over-index versus the
Company’s standard predictive model and result in meaningfully
improved unit economics. While franchisee interest has increased,
consumer response to the convenience offered by drive-thru formats
has created a highly competitive real estate environment with
significant competition for limited real estate options. While the
Company’s new store pipeline for drive-thru format stores is
increasing, the longer lead-time associated with securing
appropriate real estate results in the pace of 2017 new store
openings below the Company’s previous expectations. The Company is
maintaining its focus on increasing the number of new drive-thrus
as a percentage of total openings and expects to capture long-term
benefit from this shift to higher value formats.
- International new stores: The Company
continues to partner with franchisees in early stage market
development to deliver consumer driven menu options and optimize
cost management with each international operating environment being
unique. To ensure market expansion readiness, the Company has
deferred 2017 new store development in select international markets
in order to further build in-country operating excellence and
infrastructure support. The Company expects this action will better
prepare these markets for long-term expansion.
- Market optimization: Two
franchisee-to-franchisee sale transactions were completed in the
Phoenix and Seattle markets during the third quarter of 2017. Both
acquiring franchisees bring operational expertise, which is
expected to significantly improve execution and performance within
their acquired stores. Both acquisitions also deepen their
long-term partnership with Jamba through development commitments
totaling 22 new stores over the next 5 years.
- Reimage prototype: The Company reimaged
5 company-owned stores and franchisees opened 2 new stores that
incorporate new design elements. Work is also underway with an
additional group of franchise-owned test stores. After an
appropriate promotional and test period, both qualitative and
quantitative results will be evaluated. Further updates will be
provided as the tests progress.
Receipt of Expected Letter from Nasdaq; Status of Nasdaq
Listing and Form 10-K and 10-Q Filings
The Company also announced that on November 13, 2017 it received
an additional standard notification letter from Nasdaq stating that
because the Company has not yet filed its Form 10-Q for the period
ended October 3, 2017 (“Third Quarter Form 10-Q”) in addition to
its Form 10-K for the year ended January 3, 2017 (the “Form 10-K”)
and its Form 10-Qs for the periods ended April 4 and July 4, 2017
(collectively with the Third Quarter Form 10-Q, the “Form 10-Qs”),
the Company is not in compliance with Nasdaq Listing Rule
5250(c)(1) (the “Rule”), which requires timely filing of periodic
reports with the Securities and Exchange Commission, with the
delinquent Third Quarter Form 10-Q serving as an additional basis
for delisting the Company’s securities from The Nasdaq Stock
Market. The Notification Letter has no immediate effect on the
listing of the Company’s common stock on The Nasdaq Stock
Market.
As previously disclosed, the Company was unable to file its
delinquent periodic reports prior to the September 18, 2017
extension date originally granted by Nasdaq, and as a result, the
Company requested a hearing before a Nasdaq Hearings Panel (the
“Panel”) to address the delinquent Form 10-K and Form 10-Qs, at
which time it would also address the additional delinquency of the
Third Quarter Form 10-Q. The hearing occurred earlier today, with
the Company presenting to the Panel its plan to regain compliance
with the Rule. The Panel previously granted the Company's request
to extend the automatic 15-day stay of suspension from The Nasdaq
Stock Market. The stay, which allows for the continued trading of
the Company's common stock on Nasdaq, will continue until a final
determination regarding the Company's listing status is issued
after the November 16, 2017 hearing.
The Company fully intends to continue to take all steps
necessary to regain compliance with the Rule and expects to file
its fiscal year 2016 Form 10-K and delinquent Form 10-Qs from 2017
as soon as is practicable, with timing contingent on completion of
financial statements and their subsequent audit and review,
respectively.
Anticipated Expenses
As previously disclosed, the Company expects to record
additional expenses in fiscal 2017 resulting from efforts to
complete 2016 financial statements, their subsequent audit and
review, and remediation efforts related to the Material Weakness
disclosed in the Company’s Form 12b-25 filed with the Securities
and Exchange Commission on May 15, 2017. Due to the unusual and
non-recurring nature of these expenses, the Company anticipates
adjusting for them in its non-GAAP financial measures.
Liquidity
As of October 3, 2017, the Company held $11.9 million in cash,
as compared to $7.1 million at January 3, 2017. The Company had no
amount of restricted cash, as compared to $0.4 million as of
January 3, 2017.
The reported balances are unaudited.
The Company had not drawn against its line of credit, and had no
outstanding principal balance as of October 3, 2017.
About Jamba, Inc.
Jamba, Inc. (Nasdaq: JMBA) through its wholly-owned subsidiary,
Jamba Juice Company, is a global healthy lifestyle brand that
inspires and simplifies healthful living through freshly blended
whole fruit and vegetable smoothies, bowls, juices, cold-pressed
shots, boosts, snacks, and meal replacements. Jamba’s blends
are made with premium ingredients free of artificial flavors and
preservatives so guests can feel their best and blend the most into
life.
Jamba Juice® has more than 800 franchised and company-owned
locations worldwide, as of October 3, 2017. For more information,
visit jambajuice.com.
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 “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
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.
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) Company-owned comparable store sales
represents the change in year-over-year sales for Company-owned
stores opened for at least one full year. Franchise-operated
comparable store 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 and Express format. 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, as reported by franchisees,
and excludes International Stores and Express format. 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 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) Average unit volume is defined as trailing 52 weeks of sales
for stores open at least one full year.
JAMBA, INC. (Unaudited)
COMPARABLE STORE SALES
Fiscal Calendar
Basis
13 Weeks Ended 39 Weeks Ended 2017
2016 2017 2016 Increase/(Decrease)
October 3, 2017
vs
September 27, 2016
September 27, 2016
vs
September 29, 2015
October 3, 2017
vs
September 27, 2016
September 27, 2016
vs
September 29, 2015
Percentage Change in Comparable store sales Company stores
(3.8)% (0.8)% (2.3)% 1.6% Franchise stores (0.6)% (1.1)% (1.2)%
0.2% System-wide (0.9)% (1.1)% (1.3)% 0.4%
Comparable
Calendar Basis (a)
13 Weeks Ended 39 Weeks Ended 2017
2016 2017 2016 Increase/(Decrease)
October 3, 2017
vs
October 4, 2016
September 27, 2016
vs
September 29, 2015
October 3, 2017
vs
October 4, 2016
September 27, 2016
vs
September 29, 2015
Percentage Change in Comparable store sales Company stores
(3.9)% (0.8)% (3.3)% 1.6% Franchise stores 0.2% (1.1)% (1.7)% 0.2%
System-wide (0.2)% (1.1)% (1.9)% 0.4% Percentage Change in
Comparable Company store sales Traffic (7.2)% (1.8)% (6.5)% (1.6)%
Average check 3.3% 0.9% 3.3% 3.2% Total Comparable Company store
sales (3.9)% (0.8)% (3.3)% 1.6% (a) Due to a 53 week fiscal 2016,
year-over-year fiscal comparisons are offset by one week. Using
comparable calendar periods balances the one week shift and
provides a clearer year over year comparison. 2016 fiscal and
calendar comparisons are the same.
JAMBA, INC.
(Unaudited) STORE COUNT
QUARTER 3 NUMBER OF STORES COMPANY
FRANCHISE TOTAL Domestic International
For the Quarter Ended October 3, 2017 At July 4, 2017 53 745
72 870 Opened — 8 2 10 Acquired — — — — Closed (1) (10) (3) (14)
Refranchised — — — — At October 3, 2017 52 743 71 866
For
the Quarter Ended September 27, 2016(a) At June 28, 2016
68 708 66 842 Opened 1 10 5 16 Acquired — — — — Closed — (6) (3)
(9) Refranchised — — — — At September 27, 2016 69 712 68 849 (a) As
communicated on March 20, 2017, the Company now excludes Express
format stores from store counts. Store counts exclude Express in
both 2016 and 2017 for comparability.
JAMBA,
INC. (Unaudited)
NEW STORE OPENINGS, NET OF CLOSURES
QUARTER 3
13 Weeks Ended 39 Weeks Ended October 3, 2017
September 27, 2016(a) October 3, 2017
September 27, 2016(a) Openings Traditional 3 9
18 20 Non-traditional 4 1 5 8 Drive thru 1 1 4 2 International
2 5 8 10 Total 10 16
35 40
Closures Traditional (5) (5) (10)
(10) Non-traditional (6) (1) (14) (15) Drive thru — — — —
International (3) (3) (7) (17) Total
(14) (9) (31) (42)
Openings,
Net of Closures(b) Traditional (2) 4 8 10
Non-traditional (2) - (9) (7) Drive thru 1 1 4 2 International
(1) 2 1 (7) Total (4) 7
4 (2) (a) As communicated on March 20, 2017, the
Company now excludes Express format stores from store counts. Store
counts exclude Express in both 2016 and 2017 for comparability. (b)
New store openings, net of closures is defined as the count of new
store openings, minus the count of store closures.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171116006301/en/
Investor RelationsFor Jamba, Inc.Dara Dierks,
646-277-1212investors@jambajuice.com
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