UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September
29, 2015
OR
¨ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Jamba, Inc.
(Exact name of registrant as specified
in its charter)
Delaware |
001-32552 |
20-2122262 |
(State or other jurisdiction |
(Commission |
(I.R.S. Employer |
of incorporation) |
File No.) |
Identification No.) |
6475 Christie Avenue, Suite 150, Emeryville,
California 94608
(Address of principal executive offices)
Registrant’s telephone number,
including area code: (510) 596-0100
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject
to the filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files). Yes x No ¨
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of
“accelerated filer”, “large accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act (check one):
Large accelerated filer |
¨ |
Accelerated filer |
x |
|
|
|
|
Non-accelerated filer |
¨ (Do not check if a smaller reporting company) |
Smaller reporting company |
¨ |
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x
The number of shares of common stock, $0.001 par value, of Jamba,
Inc. issued and outstanding as of November 2, 2015 was 15,042,847.
JAMBA, INC.
QUARTERLY REPORT ON FORM 10-Q
QUARTERLY PERIOD ENDED SEPTEMBER 29,
2015
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JAMBA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share and per share
amounts)
| |
September
29, 2015 | | |
December
30, 2014 | |
| |
| | |
| |
ASSETS | |
| | | |
| | |
Current Assets: | |
| | | |
| | |
Cash and cash equivalents | |
$ | 25,236 | | |
$ | 17,750 | |
Receivables, net of allowances of $538 and $280 | |
| 17,620 | | |
| 16,977 | |
Inventories | |
| 1,451 | | |
| 2,300 | |
Prepaid and refundable taxes | |
| 343 | | |
| 474 | |
Prepaid rent | |
| 1,773 | | |
| 504 | |
Assets held for sale | |
| 4,883 | | |
| 26,626 | |
Prepaid expenses and other current assets | |
| 4,872 | | |
| 8,105 | |
| |
| | | |
| | |
Total current assets | |
| 56,178 | | |
| 72,736 | |
Property, fixtures and equipment, net | |
| 13,484 | | |
| 15,236 | |
Goodwill | |
| 908 | | |
| 982 | |
Trademarks and other intangible assets, net | |
| 1,061 | | |
| 1,294 | |
Other long-term assets | |
| 3,863 | | |
| 2,241 | |
| |
| | | |
| | |
Total assets | |
$ | 75,494 | | |
$ | 92,489 | |
| |
| | | |
| | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |
| | | |
| | |
Current Liabilities: | |
| | | |
| | |
Accounts payable | |
$ | 1,417 | | |
$ | 3,926 | |
Accrued compensation and benefits | |
| 3,421 | | |
| 6,325 | |
Workers’ compensation and health insurance reserves | |
| 840 | | |
| 1,311 | |
Accrued jambacard liability | |
| 28,799 | | |
| 38,184 | |
Other current liabilities | |
| 19,556 | | |
| 16,454 | |
| |
| | | |
| | |
Total current liabilities | |
| 54,033 | | |
| 66,200 | |
Deferred rent and other long-term liabilities | |
| 8,621 | | |
| 9,544 | |
| |
| | | |
| | |
Total liabilities | |
| 62,654 | | |
| 75,744 | |
| |
| | | |
| | |
Commitments and contingencies (Note 9) | |
| | | |
| | |
| |
| | | |
| | |
Stockholders’ equity: | |
| | | |
| | |
Common stock, $0.001 par value—30,000,000 shares authorized; 17,886,779 and 15,160,499 shares issued and outstanding at September 29, 2015, respectively, and 17,478,616 and 16,567,803 shares issued and outstanding at December 30, 2014, respectively, | |
| 18 | | |
| 17 | |
Additional paid-in capital | |
| 401,295 | | |
| 396,629 | |
Treasury shares, at cost | |
| (38,113 | ) | |
| (11,991 | ) |
Accumulated deficit | |
| (350,360 | ) | |
| (368,041 | ) |
| |
| | | |
| | |
Total equity attributable to Jamba, Inc. | |
| 12,840 | | |
| 16,614 | |
Noncontrolling interest | |
| - | | |
| 131 | |
| |
| | | |
| | |
Total stockholders’ equity | |
| 12,840 | | |
| 16,745 | |
| |
| | | |
| | |
Total liabilities and stockholders’ equity | |
$ | 75,494 | | |
$ | 92,489 | |
See accompanying notes to the unaudited
condensed consolidated financial statements.
JAMBA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(unaudited)
(in thousands, except share and per share
amounts)
| |
13-Week Period Ended | | |
39-Week Period Ended | |
| |
September 29, 2015 | | |
September 30, 2014 | | |
September 29, 2015 | | |
September 30, 2014 | |
Revenue: | |
| | | |
| | | |
| | | |
| | |
Company stores | |
$ | 28,213 | | |
$ | 53,377 | | |
$ | 124,301 | | |
$ | 159,281 | |
Franchise and other revenue | |
| 7,284 | | |
| 4,907 | | |
| 17,826 | | |
| 14,834 | |
| |
| | | |
| | | |
| | | |
| | |
Total revenue | |
| 35,497 | | |
| 58,284 | | |
| 142,127 | | |
| 174,115 | |
| |
| | | |
| | | |
| | | |
| | |
Costs and operating expenses: | |
| | | |
| | | |
| | | |
| | |
Cost of sales | |
| 6,626 | | |
| 14,611 | | |
| 30,507 | | |
| 39,780 | |
Labor | |
| 8,843 | | |
| 16,793 | | |
| 39,807 | | |
| 47,366 | |
Occupancy | |
| 3,980 | | |
| 6,917 | | |
| 16,946 | | |
| 20,783 | |
Store operating | |
| 5,901 | | |
| 9,400 | | |
| 21,994 | | |
| 25,297 | |
Depreciation and amortization | |
| 1,143 | | |
| 2,617 | | |
| 4,360 | | |
| 7,915 | |
General and administrative | |
| 9,003 | | |
| 9,487 | | |
| 26,393 | | |
| 27,419 | |
Gain on disposal of assets | |
| (16,076 | ) | |
| (555 | ) | |
| (21,334 | ) | |
| (1,601 | ) |
Other operating, net | |
| 2,776 | | |
| 821 | | |
| 5,360 | | |
| 2,576 | |
| |
| | | |
| | | |
| | | |
| | |
Total costs and operating expenses | |
| 22,196 | | |
| 60,091 | | |
| 124,033 | | |
| 169,535 | |
| |
| | | |
| | | |
| | | |
| | |
Income (loss) from operations | |
| 13,301 | | |
| (1,807 | ) | |
| 18,094 | | |
| 4,580 | |
| |
| | | |
| | | |
| | | |
| | |
Other income (expense), net: | |
| | | |
| | | |
| | | |
| | |
Interest income | |
| 49 | | |
| 21 | | |
| 78 | | |
| 55 | |
Interest expense | |
| (53 | ) | |
| (49 | ) | |
| (162 | ) | |
| (143 | ) |
| |
| | | |
| | | |
| | | |
| | |
Total other expense, net | |
| (4 | ) | |
| (28 | ) | |
| (84 | ) | |
| (88 | ) |
| |
| | | |
| | | |
| | | |
| | |
Income (loss) before income taxes | |
| 13,297 | | |
| (1,835 | ) | |
| 18,010 | | |
| 4,492 | |
Income tax (expense) benefit | |
| (194 | ) | |
| 156 | | |
| (277 | ) | |
| (62 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net income (loss) | |
| 13,103 | | |
| (1,679 | ) | |
| 17,733 | | |
| 4,430 | |
Less: Net income attributable to noncontrolling interest | |
| - | | |
| 22 | | |
| 52 | | |
| 39 | |
| |
| | | |
| | | |
| | | |
| | |
Net income (loss) attributable to Jamba, Inc. | |
$ | 13,103 | | |
$ | (1,701 | ) | |
$ | 17,681 | | |
$ | 4,391 | |
| |
| | | |
| | | |
| | | |
| | |
Weighted-average shares used in computation of earnings per share attributable to Jamba, Inc.: Basic | |
| 15,808,680 | | |
| 17,291,287 | | |
| 16,084,411 | | |
| 17,219,043 | |
Diluted | |
| 16,214,943 | | |
| 17,291,287 | | |
| 16,558,680 | | |
| 17,663,050 | |
| |
| | | |
| | | |
| | | |
| | |
Net income (loss) per share attributable to common stockholders attributable to Jamba, Inc. Basic | |
$ | 0.83 | | |
$ | (0.10 | ) | |
$ | 1.10 | | |
$ | 0.26 | |
Diluted | |
$ | 0.81 | | |
$ | (0.10 | ) | |
$ | 1.07 | | |
$ | 0.25 | |
See accompanying
notes to the unaudited condensed consolidated financial statements.
JAMBA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
(in thousands)
| |
39-Week Period Ended | |
| |
September 29, 2015 | | |
September 30, 2014 | |
Cash flows (used in) provided by operating activities: | |
| | | |
| | |
Net income | |
$ | 17,733 | | |
$ | 4,430 | |
Adjustments to reconcile net income to net cash used in operating activities: | |
| | | |
| | |
Depreciation and amortization | |
| 4,360 | | |
| 7,915 | |
Impairment, store closure costs and gain on disposals | |
| (25,394 | ) | |
| (1,512 | ) |
Jambacard breakage income | |
| (2,649 | ) | |
| (2,335 | ) |
Gain on contingent consideration | |
| (156 | ) | |
| - | |
Gain on sale of investment in joint venture | |
| (662 | ) | |
| - | |
Stock-based compensation | |
| 3,633 | | |
| 2,246 | |
Bad debt and purchase obligation reserves | |
| 1,433 | | |
| 501 | |
Deferred rent | |
| (1,330 | ) | |
| (2,742 | ) |
Loss on investment | |
| 173 | | |
| - | |
Changes in operating assets and liabilities: | |
| | | |
| | |
Receivables | |
| 997 | | |
| 2,914 | |
Inventories | |
| 486 | | |
| (558 | ) |
Prepaid and refundable taxes | |
| 131 | | |
| (222 | ) |
Prepaid rent | |
| (1,269 | ) | |
| (2,791 | ) |
Prepaid expenses and other current assets | |
| 2,579 | | |
| 138 | |
Other long-term assets | |
| (1,696 | ) | |
| (1,202 | ) |
Accounts payable | |
| (2,884 | ) | |
| (1,222 | ) |
Accrued compensation and benefits | |
| (2,904 | ) | |
| (1,002 | ) |
Workers’ compensation and health insurance reserves | |
| (471 | ) | |
| 286 | |
Accrued jambacard liability | |
| (6,736 | ) | |
| (3,902 | ) |
Other current liabilities | |
| 3,130 | | |
| 4,569 | |
Other long-term liabilities | |
| 600 | | |
| 166 | |
| |
| | | |
| | |
Net cash (used in) provided by operating activities | |
| (10,896 | ) | |
| 5,677 | |
| |
| | | |
| | |
Cash flows provided by (used in) investing activities: | |
| | | |
| | |
Capital expenditures | |
| (3,907 | ) | |
| (11,528 | ) |
Business acquisition | |
| - | | |
| (611 | ) |
Proceeds from disposal of assets | |
| 46,926 | | |
| 2,772 | |
| |
| | | |
| | |
Net cash provided by (used in) investing activities | |
| 43,019 | | |
| (9,367 | ) |
| |
| | | |
| | |
Cash flows provided by (used in) financing activities: | |
| | | |
| | |
Payment on capital lease obligations | |
| (28 | ) | |
| (31 | ) |
Payments for treasury shares | |
| (26,122 | ) | |
| - | |
Proceeds pursuant to stock issuance | |
| 1,565 | | |
| 1,019 | |
Payment to noncontrolling interest | |
| (52 | ) | |
| - | |
Proceeds from sale to noncontrolling interest | |
| - | | |
| 750 | |
| |
| | | |
| | |
Net cash (used in) provided by financing activities | |
| (24,637 | ) | |
| 1,738 | |
| |
| | | |
| | |
Net increase (decrease) in cash and cash equivalents | |
| 7,486 | | |
| (1,952 | ) |
| |
| | | |
| | |
Cash and cash equivalents at beginning of period | |
| 17,750 | | |
| 32,386 | |
| |
| | | |
| | |
Cash and cash equivalents at end of period | |
$ | 25,236 | | |
$ | 30,434 | |
| |
| | | |
| | |
Supplemental cash flow information: | |
| | | |
| | |
Cash paid for interest | |
$ | 23 | | |
$ | 25 | |
Cash paid for income taxes | |
$ | - | | |
$ | 107 | |
| |
| | | |
| | |
Noncash investing and financing activities: | |
| | | |
| | |
Property, fixtures and equipment in accounts payable | |
$ | 383 | | |
$ | 373 | |
Note taken for store disposal | |
$ | 2,000 | | |
$ | - | |
Noncash acquisition consideration | |
$ | - | | |
$ | 81 | |
See accompanying notes to the unaudited
condensed consolidated financial statements.
JAMBA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(unaudited)
1. Description of Business
Jamba, Inc., a Delaware corporation
(“Jamba” or the “Company”), and its wholly-owned subsidiary, Jamba Juice Company, is a healthy, active
lifestyle brand with a robust expanding global business driven by a portfolio of franchised and company-owned Jamba Juice®
stores and licensed JambaGO® and Jamba Juice ExpressTM formats. The Jamba® brand
includes innovative product platforms and both licensed and Company driven consumer packaged goods. The Company is a leading restaurant
retailer of “better-for-you” specialty food and beverage offerings which include great tasting, whole fruit smoothies,
fresh squeezed juices and juice blends, Energy BowlsTM, hot teas, and a variety of food items, including hot oatmeal,
breakfast wraps, sandwiches, Artisan FlatbreadsTM , baked goods, and snacks. The Company continues to expand the Jamba
brand by direct selling of consumer packaged goods (“CPG”), and by licensing its trademarks for CPG products sold
through retail channels such as grocery stores, warehouse clubs and convenience stores. The Company’s headquarters are located
in Emeryville, California.
During the third quarter of 2015, Jamba
Juice changed the name of their Smoothie Station offering to Jamba Juice Express TM. All references throughout the document
have been changed to reflect this name change.
As
of September 29, 2015, there were 884 Jamba Juice stores globally, consisting of 94 Company-owned and operated stores (“Company
Stores”), 720 franchisee-owned and operated stores (“Franchise Stores”) in the United States, and 70 Franchise
Stores in international locations (“International Stores”). The JambaGO® business consists of
over 2,000 licensed units located across the United States. JambaGo® units are typically installed in K-12 schools,
colleges, universities, Target Cafes as well as other captive venues.
2. Summary of Significant Accounting Policies
Basis of presentation and consolidation
The accompanying unaudited condensed
consolidated financial statements of Jamba, Inc. have been prepared pursuant to generally accepted accounting principles in the
United States of America (“U.S. GAAP”) for interim financial information and the rules and regulations of the United
States Securities and Exchange Commission (the “SEC”) for Form 10-Q. The December 30, 2014 condensed consolidated balance
sheet was derived from the audited financial statements, but does not include all disclosures required by U.S. GAAP. Certain information
and note disclosures normally included in annual financial statements have been condensed or omitted pursuant to the rules and
regulations of the SEC. In the opinion of management, all adjustments considered necessary for a fair presentation have been included.
The results of the 13-week or 39-week periods ended September 29, 2015 are not necessarily indicative of the results of operations
to be expected for the entire fiscal year.
The condensed consolidated financial statements
include the accounts of the Company and its direct or indirect subsidiary, Jamba Juice Company. The accounts of Jamba Juice Southern
California, LLC (“JJSC”) are included through April 28, 2015, when the Company sold its 88% interest in JJSC to the
holder of JJSC’s noncontrolling interest, in connection with the refranchising initiative. All significant intercompany balances
and transactions have been eliminated in consolidation. Certain reclassifications were made to the Company’s prior financial
statements to conform to current year presentation. These condensed consolidated financial statements should be read in conjunction
with the financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 30, 2014.
Use of estimates
The preparation of financial statements
in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reported periods. Actual results could differ from those estimates.
Advertising fund
The Company participates with the franchisees
in an advertising fund to collect and administer funds contributed for use in advertising and promotional programs designed to
increase sales and enhance the reputation of the Company and its franchise owners. Contributions to the advertising fund are required
for the Company Stores and traditional Franchise Stores, and are generally based on a percentage of store revenue. The Company
has control of the advertising fund. The fund is consolidated and all assets and liabilities of the fund are reported.
The advertising fund assets, consisting
primarily of accounts receivable from franchisees, can only be used for selected purposes and are considered restricted. The
advertising fund liabilities represent the corresponding obligation arising from the receipts of the marketing program. The receipts
from the franchisees are recorded as a liability against which specified advertising costs are charged. Franchisee contributions
to the fund are not reflected in the condensed consolidated statements of operations.
Advertising fund assets as of September
29, 2015 include $2.5 million of receivables from franchisees, which is recorded in receivables on the condensed consolidated balance
sheet. Advertising fund liabilities as of September 29, 2015 of $1.9 million are reported in other current liabilities and accounts
payable on the condensed consolidated balance sheet.
Advertising fund assets as of December
30, 2014 include $1.2 million of receivables from franchisees, which is recorded in receivables on the condensed consolidated balance
sheet. Advertising fund liabilities as of December 30, 2014 of $1.0 million are reported in other current liabilities and accounts
payable on the condensed consolidated balance sheet.
Assets held for sale
Assets are classified as held for sale
and depreciation and amortization is suspended when approval has been provided for disposal, the assets can be immediately removed
from operations, an active program has begun to locate a buyer, the assets are being actively marketed for sale at or near their
current fair value, significant changes to the plan of sale are not likely and the sale is probable within one year. Upon
classification as held for sale, long-lived assets are no longer depreciated, and an assessment of impairment is performed to identify
and expense any excess of carrying value over fair value less costs to sell. Subsequent changes to the estimated fair value less
the costs to sell will impact the measurement of assets held for sale. To the extent fair value increases, any impairment previously
taken is reversed. If the carrying value of the assets held for sale exceeds the fair value less costs to sell, an expense will
be recorded for the amount of the excess. The associated prior year balances are also reclassified.
Earnings per share
Earnings per share is computed in accordance
with Accounting Standards Codification (“ASC”) 260, Earnings per Share. Basic earnings per share is computed based
on the weighted-average of common shares outstanding during the period. Diluted earnings per share is computed based on the weighted-average
number of common shares and potentially dilutive securities, which includes outstanding warrants and outstanding options and restricted
stock awards granted under the stock compensation plans.
Anti-dilutive shares
including restricted stock awards, warrants and stock options totaling 2.0 million and 1.9 million were excluded from
the calculation of diluted weighted-average shares outstanding for the 13-week and 39-week periods ended September 29,
2015, respectively. Anti-dilutive shares including restricted stock awards, warrants and stock options totaling 2.0 million
and 1.5 million were excluded from the calculation of diluted weighted-average shares outstanding for each of the 13-week and
39-week periods ended September 30, 2014, respectively.
Fair value measurement
Fair value is an exit price, representing
the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.
As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would
use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions
and for inputs used in the valuation methodologies in measuring fair value:
Level 1: Quoted prices are available in
active markets for identical assets or liabilities.
Level 2: Inputs are other than quoted prices
in active markets included in Level 1, which are either directly or indirectly observable.
Level 3: Unobservable inputs that are supported
by little or no market activity, therefore requiring an entity to develop its own assumptions that market participants would use
in pricing.
Recent accounting pronouncements
In May 2014, the Financial Accounting
Standards Board (the “FASB”) issued amended guidance on revenue from contracts with customers which amended the
existing accounting standards for revenue recognition. ASU 2014-09 establishes principles for recognizing revenue upon the
transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in
exchange for those goods or services. In July 2015, the FASB deferred the effective date for annual reporting periods
beginning after December 15, 2017 (including interim reporting periods within those periods). Early adoption is permitted to
the original effective date of the annual period beginning after December 15, 2016 (including interim reporting periods
within those periods). The amendments may be applied retrospectively to each prior period presented or retrospectively with
the cumulative effect recognized as of the date of initial application. The Company is evaluating the impact of adopting this
new accounting standard on the consolidated financial statements.
In January 2015, the FASB issued amended
guidance which eliminates the concept of extraordinary items from generally accepted accounting principles. This amendment is effective
beginning January 1, 2016, and may be applied retrospectively or prospectively. Early adoption is permitted. Prior to this amendment,
an entity was required to separately classify and present an event or transaction that was determined to be both unusual in nature
and infrequent in occurrence as an extraordinary item, net of tax, after income from continuing operations in the income statement.
Upon adopting this amended guidance, a material event or transaction that an entity considers to be unusual or infrequent, or both,
may still be presented separately but will now be presented on a pre-tax basis within income from continuing operations or disclosed
in the notes to the financial statements. The Company does not expect this guidance to have a significant impact on the Consolidated
Financial Statements.
In February 2015, the FASB
issued amended guidance to the consolidation standard which updates the analysis that a reporting entity must perform to
determine whether it should consolidate certain types of legal entities. The amendment modifies the evaluation of whether
limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest
entities and affects the consolidation analysis of reporting entities that are involved with VIEs, particularly those that
have fee arrangements and related party relationships, among other provisions. This amended guidance will be effective for
the Company beginning fiscal year 2016. Early adoption is permitted. The Company is currently assessing the
impact the adoption of the amended guidance will have on the Consolidated Financial Statements.
In April 2015, the FASB
issued amended guidance which requires debt issuance costs to be presented as a direct deduction from the carrying value of
the associated debt liability rather than as separate assets on the balance sheet. The recognition and measurement guidance
for debt issuance costs are not affected by this amendment. This amended guidance will be effective for the Company
beginning fiscal year 2016. Early adoption is permitted, and the new guidance will be applied on a retrospective basis.
The Company does not expect the adoption of this amended guidance to have a significant impact on the Consolidated
Financial Statements.
In July 2015, the FASB
issued guidance which simplifies the measurement of inventory for companies. ASU No. 2015-11 applies to inventory that is
measured using first-in, first-out (“FIFO”) or average cost method and requires measurement of that inventory at
the lower of cost or net realizable value. Net realizable value is defined as the estimated selling prices in the ordinary
course of business, less reasonably predictable costs of completion, disposal and transportation. This guidance will be
effective for the Company beginning fiscal year 2017. Early adoption is permitted. The Company does not expect the adoption
of this guidance to have a significant impact on the Consolidated Financial Statements.
3. Share-based Compensation
Stock options
A summary of stock option activity under
our equity incentive plans as of September 29, 2015, and changes during the 39-week period then ended is presented below (shares
and dollars in thousands):
| |
| | |
| | |
Weighted-
Average | | |
| |
| |
Number of | | |
Weighted-
Average | | |
Contractual
Term | | |
Aggregate | |
| |
Options | | |
Exercise Price | | |
Remaining (years) | | |
Intrinsic Value | |
| |
| | | |
| | | |
| | | |
| | |
Balance at December 30, 2014 | |
| 889 | | |
$ | 10.89 | | |
| 4.74 | | |
$ | 6,110 | |
Granted | |
| 962 | | |
$ | 13.94 | | |
| | | |
| | |
Exercised | |
| (211 | ) | |
$ | 7.35 | | |
| | | |
| | |
Canceled | |
| (62 | ) | |
$ | 17.35 | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
Balance at September 29, 2015 | |
| 1,578 | | |
$ | 12.98 | | |
| 7.18 | | |
$ | 4,532 | |
| |
| | | |
| | | |
| | | |
| | |
Vested and expected to vest—September 29, 2015 | |
| 1,364 | | |
$ | 12.83 | | |
| 6.69 | | |
$ | 4,467 | |
| |
| | | |
| | | |
| | | |
| | |
Exercisable—September 29, 2015 | |
| 617 | | |
$ | 11.83 | | |
| 3.67 | | |
$ | 4,071 | |
During the 13-week and 39-week periods ended
September 29, 2015, stock options of 6,500 and 962,000 were granted under the 2013 Equity Incentive Plan at a weighted-average
grant date fair value of $6.51 and $6.04 per share, respectively. No stock options were granted during the 13-week or 39-week periods
ended September 30, 2014. The fair value of stock options was estimated at the date of grant using the Black-Scholes option pricing
model with the following weighted-average assumptions:
| |
39-Week Period Ended | |
| |
September 29, 2015 | |
| |
| |
Risk-free interest rate | |
| 1.7 | % |
Expected term (in years) | |
| 5.85 | |
Expected volatility | |
| 43.7 | % |
Expected dividend yield | |
| 0.0 | % |
Restricted Stock Units
Information regarding activities during
the 39-week period ended September 29, 2015 for restricted stock units (RSUs) granted under the 2013 Equity Incentive Plan is as
follows (shares in thousands):
| |
| | |
Weighted-Average | |
| |
Number of | | |
Grant Date | |
| |
RSUs | | |
Fair Value | |
| |
| | | |
| | |
RSU's Outstanding at December 30, 2014 | |
| 341 | | |
$ | 11.95 | |
Granted | |
| 39 | | |
$ | 15.64 | |
Vested | |
| (28 | ) | |
$ | 13.82 | |
Forfeited/canceled | |
| (164 | ) | |
$ | 13.98 | |
| |
| | | |
| | |
RSU's Outstanding at September 29, 2015 | |
| 188 | | |
$ | 10.66 | |
During the 13-week and 39-week periods
ended September 29, 2015, RSUs of 4,000 and 39,000 were granted under the 2013 Equity Incentive Plan at a weighted-average grant
date fair value of $13.71 and $15.64 per share, respectively. During the 13-week and 39-week periods ended September 30, 2014,
RSUs of 172,000 and 251,000 were granted under the 2013 Equity Incentive Plan at a weighted-average grant date fair value of $14.04
and $13.26 per share, respectively.
Performance share units
No performance share units (“PSUs”)
were granted during the 13-week or 39-week periods ended September 29, 2015. During the 39-week period ended September 29, 2015,
PSUs of 32,000 were vested and 24,000 were canceled. During the 39-week period ended September 30, 2014, PSUs of 85,000 were granted
under the 2013 Equity Incentive Plan at a weighted-average grant date fair value of $14.04 per share and 30,000 PSUs were canceled.
Share-based compensation expense
included in general and administrative expense was $1.0 million and $3.6 million for the 13-week and 39-week periods ended September
29, 2015, and $0.8 million and $2.2 million for the 13-week and 39-week periods ended September 30, 2014, respectively. At September
29, 2015 unvested share-based compensation for stock options and restricted stock awards, net of forfeitures, totaled $3.6 million.
This expense will be recognized over the remaining weighted-average vesting periods of approximately 3.5 years. There was no income
tax benefit related to share-based compensation expense during the 13-week periods and 39-week periods ended September 29, 2015,
and September 30, 2014.
4. Assets Held For Sale
In November 2014, the
Company announced plans to transition to an asset light model through the refranchising of Company Stores. In connection with
that planned transition, 100 stores comprised of 99 Company Stores and one unopened store, met the criteria as assets held
for sale as of December 30, 2014. During the 39-week period ended September 29, 2015, an additional 124 stores met the
criteria to be classified as assets held for sale. A loss of $1.1 million was recorded in
the first quarter of 2015 as a result of the reclassification of stores to reflect
the adjustment to the lower of the net book value or fair value less costs to sell and $1.6 million was recorded in the
third quarter of 2015 due to a reduction in the estimated selling price for certain locations. As of September 29, 2015 and December
30, 2014 assets held for sale of $4.9 million and $26.6 million, respectively, include goodwill and other intangibles of $0.1
million and $1.4 million, respectively, in the accompanying condensed consolidated balance sheets.
The Company refranchised 110 opened
stores and one unopened store, and 163 opened stores and one unopened store, for total proceeds that includes
note receivables and receipts for inventory and operating fund of $36.1 million and $49.8 million in the 13-week and 39-week
periods ended September 29, 2015, respectively. The Company expects to refranchise substantially all of the remaining 64
Company Stores classified as assets held for sale at September 29, 2015 by the end of the first fiscal quarter of 2016.
Gain or loss on the disposal of assets
held for sale is recorded within gain on disposal of assets in the condensed consolidated statement of operations. The Company
recorded a gain of $16.2 million and $21.5 million from the disposal of assets held for sale relating to refranchising during the
13-week and 39-week periods ended September 29, 2015, respectively.
5. Fair Value Measurement
Financial assets and liabilities
The fair value of the financial liability
accounted for on a recurring basis as of September 29, 2015 and December 30, 2014, relating to contingent consideration associated
with a previous business acquisition, was recorded at $0 and $0.2 million, respectively. The fair value as of December 30,
2014 was included in deferred rent and other long-term liabilities in the condensed consolidated balance sheet. The Company recorded
a gain of $0.2 million during the 39-week period ended September 29, 2015 due to the reversal of the contingent consideration.
As of June 30, 2015 the contingent consideration was no longer deemed probable of payment due to changes in circumstance.
Level
3 Inputs
The fair value of the contingent
consideration was classified as level 3 because it is based on unobservable inputs. Significant inputs and assumptions include
management’s estimate of operating profits from the related business, the timing of the payout and the discount rate used
to calculate the present value of the liability. Significant changes in any level 3 input or assumption would result in increases
or decreases to the related fair value measurements.
Non-financial assets and liabilities
Non-financial assets and liabilities primarily
consist of long-lived assets, trademarks and other intangibles, which are reported at carrying value. These non-financial assets
and liabilities are not required to be measured at fair value on a recurring basis. The Company evaluates long-lived assets for
impairment when facts and circumstances indicate that their carrying values may not be recoverable. Trademarks and other intangibles
are evaluated for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be
impaired.
6. Credit Facility
The
Company has a revolving line of credit of $15.0 million with Wells Fargo, N.A. that expires in July 2016. The credit
facility is collateralized by substantially all of the Company’s assets. The outstanding balance under the credit
facility bears interest at a LIBOR Market Index Rate based upon the rate for one month U.S. dollar deposits, plus 2.50% per
annum. The credit facility requires the Company to maintain maximum consolidated leverage ratios, minimum levels of tangible
net worth and a minimum fixed charge coverage ratio. There were no borrowings outstanding under the credit facility and the
Company was not in compliance with the covenants as of September 29, 2015. The Company was in compliance as of December 30,
2014. The line of credit collateralizes the Company’s outstanding letters of credit of $1.5 million. The unused
borrowing capacity under the Credit Agreement at September 29, 2015 was $13.5 million.
7. Stock Repurchases
In October 2014, the Company’s
Board of Directors authorized the repurchase of up to $25 million of shares of common stock over a period of 18 months (the “2014
Stock Repurchase Program”). The Board of Directors authorized to increase the stock repurchase program by $15 million to
$40 million in May 2015, and by $5 million to $45 million in September 2015, with the authorizations expiring on May 4, 2016. During
the 13-week and 39-week periods ended September 29, 2015, the Company repurchased 1,174,882 and 1,815,467 shares, respectively,
under the 2014 Stock Repurchase Program. The average price per share during the 13-week period was $13.87 for an aggregate cost
of $16.3 million and the average price per share during the 39-week period was $14.39, resulting in an aggregate cost of $26.1
million, leaving $6.9 million available for share repurchase that expires in May 2016. Shares repurchased under the 2014 Stock
Repurchase Program are considered treasury stock until retired.
8. Other Operating, Net
The components of other operating,
net were as follows (in thousands):
| |
13-Week Period Ended | | |
39-Week Period Ended | |
| |
September 29, 2015 | | |
September 30, 2014 | | |
September 29, 2015 | | |
September 30, 2014 | |
| |
| | |
| | |
| | |
| |
Jambacard breakage income | |
$ | (654 | ) | |
$ | (1,008 | ) | |
$ | (2,649 | ) | |
$ | (2,335 | ) |
Jambacard expense | |
| 246 | | |
| 164 | | |
| 484 | | |
| 531 | |
Franchise expense | |
| 273 | | |
| 623 | | |
| 1,688 | | |
| 1,450 | |
Store pre-opening | |
| 287 | | |
| 166 | | |
| 474 | | |
| 586 | |
Impairment of long-lived assets | |
| 1,907 | | |
| - | | |
| 2,202 | | |
| 175 | |
Store lease termination and closure | |
| 207 | | |
| 180 | | |
| 269 | | |
| 237 | |
CPG and JambaGO® direct expense | |
| 474 | | |
| 665 | | |
| 1,717 | | |
| 1,977 | |
Franchise bad debt and trade credit write-off | |
| 213 | | |
| 13 | | |
| 1,011 | | |
| 26 | |
Other | |
| (177 | ) | |
| 18 | | |
| 164 | | |
| (71 | ) |
| |
| | | |
| | | |
| | | |
| | |
Total other operating, net | |
$ | 2,776 | | |
$ | 821 | | |
$ | 5,360 | | |
$ | 2,576 | |
Impairment of long-lived assets for
the 13-week period ended and 39-week period ended September 29, 2015 includes a loss of $1.6 million relating to the impairment
of stores classified as assets held for sale to reflect the adjustment to fair value less costs to sell and $0.3 million relating
to the impairment of assets associated with Talbott Teas due to changes in circumstance.
9. Commitments and Contingencies
The Company is a defendant in litigation
arising in the normal course of business. Although there can be no assurance as to the ultimate disposition of these matters,
it is management’s opinion, based upon the information available at this time, that the expected outcome of these matters,
individually or in the aggregate, will not have a material adverse effect on results of operations, liquidity or financial condition.
10. Subsequent Events
Since September 29, 2015, one refranchising
transaction was closed in which a total of 16 Company Stores were sold for cash proceeds of approximately $3.3 million.
On October 1, 2015, the
Company announced James D. White, the Chief Executive Officer, will be retiring and it is anticipated that he will continue
in his role with the Company until his successor is found. In accordance with his employment agreement the severance and
bonus of $0.8 million were accrued at September 29, 2015 as they were considered probable of payment and an obligation of the
Company. Compensation expense related to the accelerated vesting of options also in accordance with his employment agreement
may be recorded when a separation date is determined. The Executive Transition Services Agreement resulted in modifications
to outstanding stock options, which will be accounted for in the fourth quarter.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion
and analysis in conjunction with our financial statements and related notes included elsewhere in this Quarterly Report on Form
10-Q (“Form 10-Q”). Except for historical information, the discussion in this Form 10-Q contains certain forward-looking
statements that involve risks and uncertainties. We have based these forward-looking statements on our current expectations and
assumptions about future events. In some cases, you can identify forward-looking statements by terminology, such as “may,”
“should,” “could,” “predict,” “potential,” “continue,” “expect,”
“anticipate,” “future,” “intend,” “plan,” “believe,” “estimate,”
“forecast” and similar expressions (or the negative of such expressions). Forward-looking statements include, but are
not limited to, statements concerning the effect of our refranchising initiative, projected new store openings, store refranchising,
revenue growth rates, and capital expenditures. Forward-looking statements are based on our beliefs as well as assumptions based
on information currently available to us, including financial and operational information, the volatility of our stock price and
current competitive conditions. As a result, these statements are subject to various risks and uncertainties. For a discussion
of material risks and uncertainties that the Company faces, see the discussion titled “Risk Factors” below and in our
Annual Report on Form 10-K for the fiscal year ended December 30, 2014.
Overview
Jamba, Inc. and its wholly-owned subsidiary,
Jamba Juice Company, is a healthy, active lifestyle brand with a robust expanding global business driven by a portfolio of franchised
and company-owned Jamba Juice® stores and licensed JambaGO® and Jamba Juice ExpressTM formats. The
Jamba® brand includes innovative product platforms and both licensed and company driven consumer packaged goods.
We are a leading restaurant retailer of “better-for-you” specialty food and beverage offerings which include great
tasting, whole fruit smoothies, fresh squeezed juices and juice blends, Energy BowlsTM, hot teas, and a variety of
food items including, hot oatmeal, breakfast wraps, sandwiches, Artisan FlatbreadsTM, baked goods and snacks. We continue
to expand the Jamba brand by direct selling of consumer packaged goods (“CPG”), and by licensing our trademarks for
CPG products sold through retail channels such as grocery stores, warehouse clubs, and convenience stores.
EXECUTIVE OVERVIEW
Key Overall Strategies
Our BLEND Plan, launched in 2009, is our
strategic roadmap to transform Jamba into a global lifestyle brand and a best-in-class franchisor, as well as guiding our commitment
to creating greater shareholder value through a number of strategic initiatives. Our BLEND Plan priorities include driving the
expansion of our franchise base on a global basis, increasing store level profitability through cost optimization plans, continuing
to develop our brand equity and becoming the clear leader in product platforms like smoothies, juices and bowls.
In addition, during fiscal 2015 we continue
to focus on accelerating our move to an asset-light model through our refranchising initiatives, with a goal to bring us to a greater
than 90% franchise system by the end of the current fiscal year.
2015 Third Quarter Financial Summary
| · | Company Stores comparable sales increased 6.6% for the quarter compared to the prior year. System-wide
comparable sales increased 5.6% and Franchise Store comparable sales increased 5.3% for the quarter compared to the prior year.
System-wide and Franchise Store comparable store sales are non-GAAP financial measures and represent the change in year-over-year
sales for all Company and Franchise Stores (system-wide) and for all Franchise Stores, respectively, opened for at least one full
fiscal year. |
| · | Net income was $13.1 million for the 13 week period ended September 29, 2015 and a net loss
of $(1.7) million for the 13-week period ended September 30, 2014. |
| · | Total revenue for the quarter decreased 39.1% to $35.5 million from $58.3 million for the
prior year, primarily due to the reduction in the number of Company Stores as part of our refranchising initiative,
partially
offset by the 5.6% increase in system-wide comparable sales and net new global franchise locations. The number of company owned stores
at the end of
the third
quarter of
2015 was 94,
compared to 272 at the end of the same period in 2014. |
| · | Income from operations was $13.3 million for the quarter, due primarily to the gain on disposal
of assets relating to our refranchising initiative, and operating margin was 37.5%. |
| · | General and administrative expenses for the 13-week period ended September 29, 2015 decreased
5.1% to $9.0 million compared with $9.5 million for the prior year period. |
| · | Shares repurchased during 13-week period ended September 29, 2015 were 1,174,882, utilizing
$16.3 million under the $45 million 2014 Stock Repurchase Program. Cumulatively, from inception through the end of the third quarter,
2,726,280 shares were repurchased for $38.1 million under this program. |
| · | We closed three refranchising transactions during the 13-week period ended September 29, 2015
for proceeds of approximately $36.1 million, including $34.1 million of cash. |
| · | Franchisees opened 23 new Jamba Juice stores globally. At September 29, 2015, there were 884
stores globally; 94 Company Stores, 720 Franchise Stores and 70 International Stores. |
Fiscal 2015 Third Quarter Business Highlights
Brand activation and leadership
Through our ongoing efforts
to build total brand value we continue to position Jamba as a leading global health and wellness brand. As we move to our new asset-light
model, we are also building the brand on a local level through multi-channel brand marketing, including the expansion of consumer
loyalty programs, the development of engaging local marketing promotions and robust social media communications. By providing our
franchisees with tools and technologies that target their customers through email, social media, radio and out-of-home advertising,
we are helping them target consumers in their immediate trade areas. In the third quarter, we piloted a television ad campaign
in key markets, our first-ever television ads.
We are building the brand on both a national
and global level through innovative product development as we continue to meet the needs of today’s increasingly health-conscious
consumer. We are addressing our customers’ health and wellness needs by our offerings centered on “Whole Food Nutrition,”
which encompass blending juices and combining whole fruits and vegetables into nutritious and convenient beverages and product
offerings across all day-parts. During the third quarter, we launched our organic, non-GMO cold pressed juice line, available in
stylish bottles for consumers who are on-the-go or who wish to stock up with multiple purchases. We are now also offering consumers
a great-tasting and nutritious alternative with our new Almond Milk Smoothies. Awareness of both products was generated via in-store
point of purchase, online and social media and through a robust public relations campaign in major media markets.
By leveraging technology and online services
and partners, including Yelp®, ApplePay®, Google, Cardlytics and others, we connect with today’s
tech-savvy, time-constrained consumers. We recently launched our new Jamba Juice mobile application (app), helping customers locate
stores, order ahead, speed up transactions and improve the online and in-store experience. We see markedly increased engagement
in our social media platforms and on the improved Jamba website, which we launched earlier in the year. With over 2 million members,
our Jamba Insider Rewards (JIR) program provides incentives for our most loyal customers to make increased visits to Jamba stores.
Through JIR, we distribute monthly emails to our members informing them of new products and promotions.
We also continue to enhance our presence
on social media through engaging content and the power of influencers who actively promote Jamba to their own followers in Facebook,
YouTube and other social media platforms. These influencers post about Jamba product nutritional benefits in an authentic voice,
exponentially amplifying our own marketing communications and reaching more consumers most interested in health and wellness. We
also continue to command a strong following on Facebook, Twitter and Instagram with postings that receive increasing favor with
Jamba fans. Jamba was again noted for outpacing all competitors in social media postings during several weeks in the third quarter.
Our YouTube channel continues to attract fans and increase awareness with the addition of fun and informative videos leveraging
registered dieticians who sit on the Jamba Healthy Living Council and NFL star Vernon Davis. Our high-profile influencers and celebrity
athletes post in support of our products and promotions on an ongoing basis.
Continuing in our mission to serve the
community, we launched our fall grant program, partnering with the National Gardening Association and their Kid’s Gardening
program. We continued to drive awareness of the need to encourage better dietary and fitness habits in kids through our Team Up
For a Healthy America program and through partnerships with the American Heart Association, National Gardening Association and
the GenYouth Foundation. Our recently launched fundraising card helps support schools in Jamba markets across the country.
We launched several successful marketing
campaigns, including a promotional offer centered on Labor Day that yielded over 40 million impressions and drove significant traffic
into Jamba stores. We worked with local franchisees on numerous local promotions designed to increase trial and awareness. Our
continued efforts to support our juice platform focused on our new Cold Pressed Juice in key markets in California and New York.
Leverage an innovative in-store experience
to drive profitability
As we move towards a greater than 90% franchise
model, our primary focus will be on franchisee profitability. Areas that we will highlight are driving
profitable traffic and continuing to find ways to reduce cost of goods used in our product platforms. We will continue to
improve Company Store margins, although as we move to the franchise model, the profitability of the enterprise will be governed
by franchisee unit growth, cost containment and franchisee profitability.
Early in the second quarter, we launched
operational initiatives to help improve speed of service and throughput across all stores. These initiatives were tested in pilot
stores during the first quarter of 2015 and deployed during the second quarter. The third quarter of 2015 was the first full quarter
with the operational initiatives deployed.
Our speed of service continues to improve with a decrease to 3.41 minutes, a greater than 11% improvement since September 2014
in the average time to prepare a customer’s order. We expect to see improvement in the labor line for the full year of 2015.
Cost of goods sold improved in the third quarter by 390 basis points due to an increase in sales mix of lower cost of good smoothies,
lower discounting activity, retail price increases, new fresh produce contracts, and lower cost juice recipe formulations. We believe
that these initiatives will improve our costs of goods sold for the full fiscal year of 2015.
As our innovative juice and bowls platforms
continue to show strong performance, we believe that with these course-corrections, these product introductions will be key drivers
toward the transformation of the brand and continued positive growth.
Expand retail footprint on a global basis
As part of the new business model,
unit growth will be the primary driver of our enterprise growth. Domestically, we plan on our franchisees opening 500 new
units over the next four to five years, in both traditional and small format venues. We have a variety of formats to expand
our global footprint, including traditional and non-traditional stores, smaller footprint Jamba Juice Express™ and the
JambaGO® formats. As of September 29, 2015, we had 814 Jamba® stores system-wide in the United
States, of which 720 are Franchise Stores, including 42 non-traditional Jamba Juice ExpressTM, and 94 Company
Stores, and 70 International Stores. The system is comprised of approximately 89% Franchise and International Store locations
and 11% Company Store locations at the end of the third quarter. Our franchisees opened 17 domestic
Franchise Stores and 6 International Stores during the third quarter of 2015. They have opened 46 global store locations
by the end of the third quarter of 2015 and expect to open approximately 80-90 global store locations by the end
of fiscal 2015.
The Company entered into two separate master
development agreements with international partners in June 2015. One master development agreement was with one of Indonesia’s
leading lifestyle retailers to develop 70 Jamba Juice® stores in Indonesia over the next ten years. The second master
development agreement was with a seasoned operator of food and beverage concepts in Thailand to develop 30 Jamba Juice®
stores in Thailand over the next ten years. The first Jamba Juice® stores in Indonesia and Thailand are expected
to open in 2016.
Our JambaGO® business consists
of over 2,000 units deployed across the United States. Typical venues that utilize our JambaGo® technology include
Target Cafes, K-12 schools, colleges, universities and other captive venues where speed of services and through-put are critical.
New products - leadership in smoothies, juices
and bowls
During fiscal 2014, we launched our made-to-order,
fresh fruit and vegetable juice platform in over 500 locations, and currently operate this platform in 550 locations with additional
units to be added throughout fiscal 2015. This platform is primarily comprised of made-to-order juices and smoothies blended with
fresh whole fruits and vegetables like kale, apples, cucumbers, ginger and chia seeds. We believe that we are in the forefront
of the consumer trend towards healthier beverage options.
In addition, we now have 527 total locations
in 24 states showcasing our new line of ready-to-drink, organic cold-pressed juices. These juices are made from fresh fruits and
vegetables and are available exclusively at Jamba Juice® Stores in 12 oz. bottles for easy, on-the-go convenience
and multiple-unit purchases to support routine consumption at home or the office. Our cold-pressed juices undergo high pressure
processing (HPP) to extend their shelf life while protecting the nutrients and flavor of the fresh ingredients.
We also introduced a new line of made-to-order
bowls in stores nationwide during late fiscal 2014. Jamba Energy Bowls, served in convenient, portable servings, are a nutritious
blend of real, whole fruit and soymilk or fresh Greek yogurt, topped with an assortment of dry toppings and fresh fruits. Jamba
Energy Bowls™ are a convenient way to get fruit, antioxidants like Vitamin C, and protein and will satisfy consumers looking
for a meal replacement they can eat with a spoon.
Drive the asset-light business model to enhance
shareholder value
We
are committed to moving aggressively to an asset-light business model that will focus on becoming a greater than 90%
franchise system by the end of fiscal year 2015. During the third quarter, we completed three refranchising transactions
involving a total of 111 stores, comprised of 110 operating Company Stores and one unopened store, bringing us to an
approximately 89% franchise system. We closed a refranchise deal subsequent to the end of the quarter for 16 Company Stores,
which will increase our franchise owned base to 91%. We anticipate having approximately 865-875 Franchise Stores and 50-60
Company Stores by the end of fiscal 2015. We project total proceeds of approximately $60 million from our
refranchising transactions.
To further accelerate our move to an asset-light
business model, and to enhance shareholder value, we continue to seek ways to further reduce costs as our Company Store base shrinks
due to our refranchising initiative.
Results of Operations
13-Week Period Ended September 29, 2015 as Compared to 13-Week
Period Ended September 30, 2014
(Unaudited)
(in thousands)
| |
| 13-Week Period Ended September 29, 2015 | | |
| %(1) | | |
| 13-Week Period Ended September 30, 2014 | | |
| %(1)
| |
Revenue: | |
| | | |
| | | |
| | | |
| | |
Company stores | |
$ | 28,213 | | |
| 79.5 | % | |
$ | 53,377 | | |
| 91.6 | % |
Franchise and other revenue | |
| 7,284 | | |
| 20.5 | % | |
| 4,907 | | |
| 8.4 | % |
| |
| | | |
| | | |
| | | |
| | |
Total revenue | |
| 35,497 | | |
| 100.0 | % | |
| 58,284 | | |
| 100.0 | % |
| |
| | | |
| | | |
| | | |
| | |
Costs and operating expenses: | |
| | | |
| | | |
| | | |
| | |
Cost of sales | |
| 6,626 | | |
| 23.5 | % | |
| 14,611 | | |
| 27.4 | % |
Labor | |
| 8,843 | | |
| 31.3 | % | |
| 16,793 | | |
| 31.5 | % |
Occupancy | |
| 3,980 | | |
| 14.1 | % | |
| 6,917 | | |
| 13.0 | % |
Store operating | |
| 5,901 | | |
| 20.9 | % | |
| 9,400 | | |
| 17.6 | % |
Depreciation and amortization | |
| 1,143 | | |
| 3.2 | % | |
| 2,617 | | |
| 4.5 | % |
General and administrative | |
| 9,003 | | |
| 25.4 | % | |
| 9,487 | | |
| 16.3 | % |
Gain on disposal of assets | |
| (16,076 | ) | |
| (45.3 | )% | |
| (555 | ) | |
| (1.0 | )% |
Other operating, net | |
| 2,776 | | |
| 7.8 | % | |
| 821 | | |
| 1.4 | % |
| |
| | | |
| | | |
| | | |
| | |
Total costs and operating expenses | |
| 22,196 | | |
| 62.5 | % | |
| 60,091 | | |
| 103.1 | % |
| |
| | | |
| | | |
| | | |
| | |
Income (loss) from operations | |
| 13,301 | | |
| 37.5 | % | |
| (1,807 | ) | |
| (3.1 | )% |
| |
| | | |
| | | |
| | | |
| | |
Other income (expense), net: | |
| | | |
| | | |
| | | |
| | |
Interest income | |
| 49 | | |
| 0.1 | % | |
| 21 | | |
| 0.0 | % |
Interest expense | |
| (53 | ) | |
| (0.1 | )% | |
| (49 | ) | |
| (0.1 | )% |
| |
| | | |
| | | |
| | | |
| | |
Total other expense, net | |
| (4 | ) | |
| (0.0 | )% | |
| (28 | ) | |
| (0.1 | )% |
| |
| | | |
| | | |
| | | |
| | |
Income (loss) before income taxes | |
| 13,297 | | |
| 37.5 | % | |
| (1,835 | ) | |
| (3.2 | )% |
Income tax (expense) benefit | |
| (194 | ) | |
| (0.5 | )% | |
| 156 | | |
| 0.3 | % |
| |
| | | |
| | | |
| | | |
| | |
Net income (loss) | |
| 13,103 | | |
| 36.9 | % | |
| (1,679 | ) | |
| (2.9 | )% |
Less: Net income attributable to noncontrolling interest | |
| - | | |
| 0.0 | % | |
| 22 | | |
| 0.0 | % |
| |
| | | |
| | | |
| | | |
| | |
Net income (loss) attributable to Jamba, Inc. | |
$ | 13,103 | | |
| 36.9 | % | |
$ | (1,701 | ) | |
| (2.9 | )% |
(1) |
Cost of sales, labor, occupancy and store operating percentages are calculated using Company stores revenue. All other line items are calculated using total revenue. |
Revenue
(in thousands)
| |
13-Week Period Ended September 29, 2015 | | |
% of Total Revenue | | |
13-Week Period Ended September 30, 2014 | | |
% of Total Revenue | |
Revenue: | |
| | |
| | |
| | |
| |
Company stores | |
$ | 28,213 | | |
| 79.5 | % | |
$ | 53,377 | | |
| 91.6 | % |
Franchise and other revenue | |
| 7,284 | | |
| 20.5 | % | |
| 4,907 | | |
| 8.4 | % |
| |
| | | |
| | | |
| | | |
| | |
Total revenue | |
$ | 35,497 | | |
| 100.0 | % | |
$ | 58,284 | | |
| 100.0 | % |
Total revenue is comprised of
revenue from Company Stores, royalties and fees from Franchise Stores in the U.S. and from International Stores, income from
JambaGO® locations, license income from sales of Jamba-branded CPG products and direct sales of CPG products.
Total revenue for the 13-week period ended September 29, 2015 was $35.5 million, a decrease of $22.8 million, or 39.1%,
compared to $58.3 million for the 13-week period ended September 30, 2014. The decrease in total revenue was primarily due to
178 fewer Company Stores, 168 as a result of our refranchising activity and 10 store closures partially offset by an increase
in system-wide comparable sales of 5.6%.
Company Store revenue
Company Store revenue for the 13-week period
ended September 29, 2015 was $28.2M million, a decrease of $25.2 million or 47.1%, compared to Company Store revenue of $53.4 million
for the 13-week period ended September 30, 2014. The decrease in Company Store revenue was primarily due to 178 fewer Company Stores,
offset by an increase in Company Store comparable sales of 6.6% as illustrated by the following table:
| |
Company Store Decrease in Revenue | |
| |
(in thousands) | |
Third Quarter 2015 vs. Third Quarter 2014: | |
| |
Company Stores comparable sales increase | |
$ | 1,732 | |
Reduction in number of Company Stores, net | |
| (26,896 | ) |
| |
| | |
Total change in Company Store revenue | |
$ | (25,164 | ) |
Company Store comparable sales increased
by $1.7 million for the 13-week period ended September 29, 2015, or 6.6%, attributable to an increase of 7.4% in average check,
partially offset by a decrease in transaction count of 0.8% as compared to the same period in the prior year. Company Store comparable
sales represents the change in year-over-year sales for all Company Stores opened for at least a full fiscal year. As of September
29, 2015, 100% of our Company Stores had been open for at least one full year.
Franchise and other revenue
Franchise and other revenue was $7.3 million,
an increase of $2.4 million or 48.4% for the 13-week period ended September 29, 2015 compared to $4.9 million for the 13-week period
ended September 30, 2014. The increase was primarily due to an increase in royalties associated with an increase in the number
of Franchise Stores and an increase in Franchise Store comparable store sales of 5.3%.
The aggregate number of Franchise and International
Stores as of September 29, 2015 and September 30, 2014 was 790 and 590, respectively.
Cost of Sales
Cost of sales is primarily comprised of
produce, dairy, and other products used to make smoothies and juices, paper products, and delivery fees. As a percentage of Company
Store revenue, cost of sales decreased to 23.5% for the 13-week period ended September 29, 2015, compared to 27.4% for the 13-week
period ended September 30, 2014. The decrease in cost of sales as a percentage of Company Store revenue was primarily due
to more favorable sales mix between smoothies and juices (approximately 1.5%), lower sales discounts (approximately 1.5%), retail
price changes (approximately 1.2%), and partially offset by a small increase in waste (approximately 0.2%). Cost of sales for the
13-week period ended September 29, 2015 was $6.6 million, a decrease of $8.0 million, or 54.7%, compared to $14.6 million for the
13-week period ended September 30, 2014. The decrease in dollars is also driven by a decrease in net sales of $25.2 million,
or 47.1%, primarily resulting from our refranchising initiative.
Labor
Labor costs are comprised of store management
salaries and bonuses, hourly team member payroll, training costs and other associated fringe benefits. As a percentage of Company
Store revenue, labor costs were 31.3% for the 13-week period ended September 29, 2015 compared to 31.5% for the 13-week period
ended September 30, 2014.
The comparison of labor compared to the
third quarter of prior year is summarized below in the following table:
Third Quarter 2015 vs. Third Quarter 2014: |
% of
Company Store Revenue |
Decreases to Labor |
|
|
Leverage on higher sales volume and implementation of operational optimization |
2.8% |
|
Product mix |
1.0% |
|
Increased staffing efficiencies |
0.6% |
|
Total decrease |
4.4% |
|
|
|
Increases to Labor |
|
|
Average wage impact at California stores |
1.4% |
|
Sales deleverage attributed to Chicago stores |
0.7% |
|
Non-recurring workers' compensation and health insurance costs on refranchised stores |
1.2% |
|
Non-recurring paid time-off costs incurred at refranchised stores |
0.9% |
|
Total increase |
4.2% |
Labor costs for the 13-week period ended
September 29, 2015 were $8.8 million, a decrease of $8.0 million, or 47.3%, compared to $16.8 million for the 13-week period ended
September 30, 2014, which is primarily due to fewer Company Stores resulting from our refranchising initiative.
Occupancy
Occupancy costs include both fixed and
variable portions of rent, common area maintenance charges, property taxes, licenses and property insurance for all Company Store
locations. As a percentage of Company Store revenue, occupancy costs increased to 14.1% for the 13-week period ended September
29, 2015, compared to 13.0% for the 13-week period ended September 30, 2014. The increase in occupancy costs as a percentage of
Company Store revenue was primarily due to the refranchising of Company Stores that carried a lower rent base. Occupancy costs
for the 13-week period ended September 29, 2015 were $4.0 million compared to $6.9 million for the 13-week period ended September
30, 2014, which is primarily due to fewer Company Stores resulting from our refranchising initiative.
Store Operating
Store operating expenses consist primarily
of various store-level costs such as utilities, marketing, repairs and maintenance, credit card fees and other store operating
expenses. As a percentage of Company Store revenue, total store operating expenses increased to 20.9% for the 13-week period ended
September 29, 2015, compared to 17.6% for the 13-week period ended September 30, 2014. The increase in total store operating expenses
as a percentage of Company Store revenue was primarily due to an increase in advertising costs (approximately 2.7%), Software/Hardware
(approximately 0.2%) and repairs for refranchising transactions (approximately 0.5%). Total store operating expenses for the 13-week
period ended September 29, 2015 were $5.9 million, a decrease of $3.5 million, or 37.2%, compared to $9.4 million for the 13-week
period ended September 30, 2014 primarily due to fewer Company Stores resulting from our refranchising initiative.
Depreciation and Amortization
Depreciation and amortization expenses
include the depreciation of fixed assets and the amortization of intangible assets. As a percentage of total revenue, depreciation
and amortization decreased to 3.2% for the 13-week period ended September 29, 2015, compared to 4.5% for the 13-week period ended
September 30, 2014. The decrease in depreciation and amortization as a percentage of total revenue was primarily due to reclassification
from property, fixtures and equipment to assets held for sale for stores prior to their refranchising and the resulting discontinuation
of depreciation on those assets. Depreciation and amortization for the 13-week period ended September 29, 2015 was $1.1 million,
resulting in a decrease of $1.5 million, or 56.3%, compared to $2.6 million for the 13-week period ended September 30, 2014.
General and Administrative
General and administrative (G&A) expenses
include costs associated with our corporate headquarters in Emeryville, CA, field supervision, performance related incentives,
outside and contract services, accounting and legal fees, travel and travel-related expenses, share-based compensation and other.
As a percentage of total revenue, G&A expenses increased to 25.4% for the 13-week period ended September 29, 2015, compared
to 16.3% for the 13-week period ended September 30, 2014. Total G&A expenses for the 13-week period ended September 29, 2015
were $9.0 million, a decrease of $0.5 million, or 5.1%, compared to $9.5 million for the 13-week period ended September 30, 2014.
The decrease of total G&A expenses was primarily due to reduced payroll as a result of reduced general and administrative headcount
(approximately $1.0 million) and decreased professional fees (approximately $0.2 million) offset by the Chief Executive Officer’s
severance and bonus (approximately $0.8 million).
Gain on Disposal of Assets
Gain on disposal of assets includes gains
from the refranchising of Company Stores and sales of furniture, fixtures and equipment. For the 13-week period ended September
29, 2015, gain on disposal of assets was $16.1 million compared to $0.6 million for the 13-week period ended September 30, 2014,
an increase of $15.5 million. The increase was primarily due to the gain on refranchising of Company Stores relating to our refranchising
initiative in 2015.
Other Operating, Net
Other operating, net
consists primarily of income from jambacard breakage, impairment charges, store lease termination and closure costs,
jambacard related fees, impairment of long-lived assets, pre-opening expense, expenses related to our franchise, CPG
and JambaGO® activities, and franchise bad debt and trade credit write-off. For the 13-week period ended
September 29, 2015, other operating, net was an expense of $2.8 million compared to an expense of $0.8 million for the
13-week period ended September 30, 2014, an increase of $2.0 million. Changes in the components of other operating, net
include an increase in impairment loss relating to stores classified as assets held for sale and Talbott Teas (both totalling
approximately $1.9 million), and a decrease in jambacard breakage (approximately $0.4 million), partially offset by a
decrease in franchise expense relating to store operation programs that occurred in the third quarter of 2014 and not in 2015
(approximately $0.4 million).
Income Tax Expense
We have recorded income tax expense for
both the 13-week period ended September 29, 2015 and September 30, 2014, respectively. Our effective income tax rates were
2.0% and 8.5% for the 13-week period ended September 29, 2015 and September 30, 2014, respectively. For the 13-week period ended
September 29, 2015 and September 30, 2014, the effective tax rates were primarily affected by pretax income, a change in the valuation
allowance related to deductible temporary differences originating during the current year, the alternative minimum tax and foreign
withholding taxes of the respective periods.
39-Week Period Ended September 29, 2015 as Compared to 39-Week
Period Ended September 30, 2014 (Unaudited)
(in thousands)
| |
| 39-Week Period Ended September 29, 2015 | | |
| %(1) | | |
| 39-Week Period Ended September 30, 2014 | | |
| %(1) | |
Revenue: | |
| | | |
| | | |
| | | |
| | |
Company stores | |
$ | 124,301 | | |
| 87.5 | % | |
$ | 159,281 | | |
| 91.5 | % |
Franchise and other revenue | |
| 17,826 | | |
| 12.5 | % | |
| 14,834 | | |
| 8.5 | % |
| |
| | | |
| | | |
| | | |
| | |
Total revenue | |
| 142,127 | | |
| 100.0 | % | |
| 174,115 | | |
| 100.0 | % |
| |
| | | |
| | | |
| | | |
| | |
Costs and operating expenses: | |
| | | |
| | | |
| | | |
| | |
Cost of sales | |
| 30,507 | | |
| 24.5 | % | |
| 39,780 | | |
| 25.0 | % |
Labor | |
| 39,807 | | |
| 32.0 | % | |
| 47,366 | | |
| 29.7 | % |
Occupancy | |
| 16,946 | | |
| 13.6 | % | |
| 20,783 | | |
| 13.0 | % |
Store operating | |
| 21,994 | | |
| 17.7 | % | |
| 25,297 | | |
| 15.9 | % |
Depreciation and amortization | |
| 4,360 | | |
| 3.1 | % | |
| 7,915 | | |
| 4.5 | % |
General and administrative | |
| 26,393 | | |
| 18.6 | % | |
| 27,419 | | |
| 15.7 | % |
Gain on disposal of assets | |
| (21,334 | ) | |
| (15.0 | )% | |
| (1,601 | ) | |
| (0.9 | )% |
Other operating, net | |
| 5,360 | | |
| 3.8 | % | |
| 2,576 | | |
| 1.5 | % |
| |
| | | |
| | | |
| | | |
| | |
Total costs and operating expenses | |
| 124,033 | | |
| 87.3 | % | |
| 169,535 | | |
| 97.4 | % |
| |
| | | |
| | | |
| | | |
| | |
Income from operations | |
| 18,094 | | |
| 12.7 | % | |
| 4,580 | | |
| 2.6 | % |
| |
| | | |
| | | |
| | | |
| | |
Other income (expense), net: | |
| | | |
| | | |
| | | |
| | |
Interest income | |
| 78 | | |
| 0.1 | % | |
| 55 | | |
| 0.0 | % |
Interest expense | |
| (162 | ) | |
| (0.1 | )% | |
| (143 | ) | |
| (0.1 | )% |
| |
| | | |
| | | |
| | | |
| | |
Total other expense, net | |
| (84 | ) | |
| (0.1 | )% | |
| (88 | ) | |
| (0.1 | )% |
| |
| | | |
| | | |
| | | |
| | |
Income before income taxes | |
| 18,010 | | |
| 12.7 | % | |
| 4,492 | | |
| 2.6 | % |
Income tax expense | |
| (277 | ) | |
| (0.2 | )% | |
| (62 | ) | |
| (0.0 | )% |
| |
| | | |
| | | |
| | | |
| | |
Net income | |
| 17,733 | | |
| 12.5 | % | |
| 4,430 | | |
| 2.5 | % |
Less: Net income attributable to noncontrolling interest | |
| 52 | | |
| 0.0 | % | |
| 39 | | |
| 0.0 | % |
| |
| | | |
| | | |
| | | |
| | |
Net income attributable to Jamba, Inc. | |
$ | 17,681 | | |
| 12.4 | % | |
$ | 4,391 | | |
| 2.5 | % |
(1) |
Cost of sales, labor, occupancy and store operating percentages are calculated using Company stores revenue. All other line items are calculated using total revenue. |
Revenue
(in thousands)
| |
39-Week Period Ended September 29, 2015 | | |
% of Total Revenue | | |
39-Week Period Ended September 30, 2014 | | |
% of Total Revenue | |
Revenue: | |
| | |
| | |
| | |
| |
Company stores | |
$ | 124,301 | | |
| 87.5 | % | |
$ | 159,281 | | |
| 91.5 | % |
Franchise and other revenue | |
| 17,826 | | |
| 12.5 | % | |
| 14,834 | | |
| 8.5 | % |
| |
| | | |
| | | |
| | | |
| | |
Total revenue | |
$ | 142,127 | | |
| 100.0 | % | |
$ | 174,115 | | |
| 100.0 | % |
Total revenue is comprised of revenue from
Company Stores, royalties and fees from Franchise Stores in the U.S. and from International Stores, income from JambaGO®
locations, license income from sales of Jamba-branded CPG products and direct sales of CPG products. Total revenue for the 39-week
period ended September 29, 2015 was $142.1 million, a decrease of $32.0 million, or 18.4%, compared to $174.1 million for
the 39-week period ended September 30, 2014. The decrease in total revenue was primarily due to 178 fewer Company Stores, 168 as
a result of our refranchising activity and 10 store closures, since September 30, 2014.
Company Store revenue
Company Store revenue for the 39-week period
ended September 29, 2015 was $124.3 million, a decrease of $35.0 million or 22.0%, compared to Company Store revenue of $159.3
million for the 39-week period ended September 30, 2014.
The decrease in total revenue was primarily
due to 178 fewer Company Stores as a result of 168 refranchises and 10 store closures, partially offset by an increase in Company
Store comparable sales as illustrated by the following table:
| |
Company Store Decrease in Revenue | |
| |
(in thousands) | |
Year-To-Date Q3 2015 vs. Year-To-Date Q3 2014: | |
| |
Company Stores comparable sales increase | |
$ | 1,359 | |
Reduction in number of Company Stores, net | |
| (36,339 | ) |
| |
| | |
Total change in Company Store revenue | |
$ | (34,980 | ) |
Company Store comparable
sales increased by $1.4 million for the 39-week period ended September 29, 2015, or 1.1%, attributable to an increase of 5.5% in
average check, partially offset by a decrease in transaction count of 4.4% as compared to the same period in the prior year. Company
Store comparable sales represents the change in year-over-year sales for all Company Stores opened for at least a full fiscal year.
As of September 29, 2015, 100% of our Company Stores had been open for at least one full year.
Franchise and other revenue
Franchise and other revenue was $17.8 million,
an increase of $3.0 million or 20.2% for the 39-week period ended September 29, 2015 compared to $14.8 million for the 39-week
period ended September 30, 2014. The increase was primarily due to an increase in royalties associated with an increase in the
number of Franchise Stores and an increase in Franchise Store comparable store sales of 2.5%.
Cost of Sales
Cost of sales is primarily comprised of
fruit, dairy, and other products used to make smoothies and juices, paper products, and delivery fees. As a percentage of Company
Store revenue, cost of sales decreased to 24.5% for the 39-week period ended September 29, 2015, compared to 25.0% for the 39-week
period ended September 30, 2014. The decrease in cost of sales as a percentage of Company Store revenue was primarily due
to retail price changes (approximately 0.9%), partially offset by product mix due to higher sales of Bowls (approximately 0.3%).
Cost of sales for the 39-week period ended September 29, 2015 was $30.5 million, a decrease of $9.3 million, or 23.3%, compared
to $39.8 million for the 39-week period ended September 30, 2014. The decrease in dollars is driven by a decrease in net
sales of $35.0 million, or 22.0%, primarily as a result of our refranchising initiative and decrease in Company Store sales.
Labor
Labor costs are comprised of store management
salaries and bonuses, hourly team member payroll, training costs and other associated fringe benefits. As a percentage of Company
Store revenue, labor costs were 32.0% for the 39-week period ended September 29, 2015 compared to 29.7% for the 39-week period
ended September 30, 2014.
The comparison of labor compared to the first three quarters
of prior year is summarized below in the following table:
Year-To-Date Q3 2015 vs. Year-To-Date Q3 2014: |
% of
Company Store Revenue |
Increases to Labor |
|
|
Minimum wage impact at California stores |
1.3% |
|
Sales deleverage attributed to Chicago stores |
0.2% |
|
Non-recurring workers compensation and health insurance costs on refranchised stores |
0.8% |
|
Non-recurring paid time-off costs incurred at refranchised stores |
0.3% |
|
Product mix |
0.4% |
|
Total increase |
3.0% |
|
|
|
Decreases to Labor |
|
|
Leverage on higher sales volume and implementation of operational optimization |
0.6% |
|
Total decrease |
0.6% |
Labor costs for the 39-week period ended
September 29, 2015 were $39.8 million, a decrease of $7.6 million, or 16.0%, compared to $47.4 million for the 39-week period ended
September 30, 2014, which is primarily due to fewer stores resulting from our refranchising initiative.
Occupancy
Occupancy costs include both fixed and
variable portions of rent, common area maintenance charges, property taxes, licenses and property insurance for all Company Store
locations. As a percentage of Company Store revenue, occupancy costs increased to 13.6% for the 39-week period ended September
29, 2015, compared to 13.0% for the 39-week period ended September 30, 2014. The increase in occupancy costs as a percentage of
Company Store revenue was primarily due to the refranchising of Company Stores with lower rent base. Occupancy costs for the 39-week
period ended September 29, 2015 were $16.9 million, a decrease of $3.8 million, or 18.5%, compared to $20.8 million for the 39-week
period ended September 30, 2014, which is primarily due to fewer stores resulting from our refranchising initiative.
Store Operating
Store operating expenses consist primarily
of various store-level costs such as utilities, marketing, repairs and maintenance, credit card fees and other store operating
expenses. As a percentage of Company Store revenue, total store operating expenses increased to 17.7% for the 39-week period ended
September 29, 2015, compared to 15.9% for the 39-week period ended September 30, 2014. The increase in total store operating expenses
as a percentage of Company Store revenue was primarily due to repairs and maintenance costs incurred to prepare stores for refranchising
(approximately 0.3%), increased advertising (approximately 0.9%), and increased uniform costs related to the new-look roll-out
(approximately 0.2%). Total store operating expenses for the 39-week period ended September 29, 2015 were $22.0 million, a decrease
of $3.3 million, or 13.1%, compared to $25.3 million for the 39-week period ended September 30, 2014, primarily due to fewer Company Stores resulting from our refranchising initiative.
Depreciation and Amortization
Depreciation and amortization expenses
include the depreciation of fixed assets and the amortization of intangible assets. As a percentage of total revenue, depreciation
and amortization decreased to 3.1% for the 39-week period ended September 29, 2015, compared to 4.5% for the 39-week period ended
September 30, 2014. The decrease in depreciation and amortization as a percentage of total revenue was primarily due to reclassification
from property, fixtures and equipment to assets held for sale of stores prior to their refranchising and the resulting discontinuation
of depreciation on those assets. Depreciation and amortization for the 39-week period ended September 29, 2015 was $4.4 million,
a decrease of $3.6 million, or 44.9%, compared to $7.9 million for the 39-week period ended September 30, 2014.
General and Administrative
General and administrative (G&A) expenses
include costs associated with our corporate headquarters in Emeryville, CA, field supervision, performance related incentives,
outside and contract services, accounting and legal fees, travel and travel-related expenses, share-based compensation and other.
As a percentage of total revenue, G&A expenses increased to 18.6% for the 39-week period ended September 29, 2015, compared
to 15.7% for the 39-week period ended September 30, 2014. Total G&A expenses for the 39-week period ended September 29, 2015
were $26.4 million, a decrease of $1.0 million, or 3.7%, compared to $27.4 million for the 39-week period ended September 30, 2014.
The decrease of total G&A expenses was primarily due to a decrease in payroll as a result of reduced general and administrative
headcount (approximately $3.9 million) partially offset by an increase in professional fees (approximately $1.6 million), the Chief
Executive Officer’s severance and bonus (approximately $0.8 million) and increase in occupancy/office expenses (approximately
$0.4 million).
Gain
on Disposal of Assets
Gain on disposal of assets includes gains
from the refranchising of Company Stores, fixed asset retirements and sales of furniture, fixtures and equipment. For the 39-week
period ended September 29, 2015, gain on disposal of assets was $21.3 million compared to $1.6 million for the 39-week period ended
September 30, 2014, an increase of $19.7 million. The increase was primarily due to the increased gains on refranchising of Company
Stores in 2015.
Other Operating, Net
Other operating, net
consists primarily of income from jambacard breakage, impairment charges, store lease termination and closure costs,
jambacard-related fees, pre-opening expense, expenses related to our franchise, CPG and JambaGO® activities,
and franchise bad debt and trade credit write-off. For the 39-week period ended September 29, 2015, other operating, net was
an expense of $5.4 million compared to an expense of $2.6 million for the 39-week period ended September 30, 2014, an
increase of $2.8 million. Changes in the components of other operating, net include an increase in impairment loss relating
to stores classified as assets held for sale and Talbott Teas (both totalling approximately $2.0 million) and an increase in
bad debt related to the write-off of barter credits for marketing services due to vendor insolvency (approximately $1.0
million), partially offset by an increase in jambacard breakage income (approximately $0.3 million).
Income Tax Expense
We have recorded income tax expense for
both the 39-week period ended September 29, 2015 and September 30, 2014, respectively. Our effective income tax rates were
1.6% and 1.3% for the 39-week period ended September 29, 2015 and September 30, 2014, respectively. For the 39-week period ended
September 29, 2015 and September 30, 2014, the effective tax rates were primarily affected by pretax income, a change in the valuation
allowance related to deductible temporary differences originating during the current year, the alternative minimum tax and foreign
withholding taxes of the respective periods.
Key Financial Metrics and Non-GAAP Measures
We review and discuss our operations based
on both financial and non-financial metrics. Among the key financial metrics upon which we focus is reviewing our performance based
on our consolidated GAAP results, including Company Store comparable sales. We also use certain supplemental, non-GAAP financial
metrics in evaluating financial results, including Franchise Store comparable sales and system-wide comparable sales.
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.
System-wide comparable store sales do not include International Stores, JambaGO® units and Jamba Juice ExpressTM.
Company Stores sold in refranchising transactions
are included in the store base for each accounting period of the fiscal quarter in which the store was sold to the extent the sale
is consummated at least three days prior to the end of such accounting period, but only for the days such stores have been company-owned.
Thereafter, such stores are excluded from the store base until such stores have been franchise-operated for at least one full fiscal
period at which point such stores are included in the store base and compared to sales in the comparable period of the prior year.
Comparable store sales exclude closed locations.
We review the increase or decrease in Company
Store comparable sales, Franchise Store comparable sales and system-wide comparable sales compared with the same period in the
prior year to assess business trends and make certain business decisions. We believe that Franchise Store comparable sales and
system-wide comparable sales data, non-GAAP financial measures, are useful in assessing the overall performance of the Jamba brand
and, ultimately, the performance of the Company.
The following table sets forth operating
data that do not otherwise appear in our condensed consolidated financial statements as of, and for, the 13-week and 39-week periods
ended September 29, 2015 and September 30, 2014:
| |
13-Week Period Ended | | |
39-Week Period Ended | |
| |
September 29, 2015 | | |
September 30, 2014 | | |
September 29, 2015 | | |
September 30, 2014 | |
| |
| | |
| | |
| | |
| |
Percentage change in Company Store comparable sales(1) | |
| 6.6 | % | |
| 3.7 | % | |
| 1.1 | % | |
| 2.3 | % |
Percentage change in Franchise Store comparable sales(2) | |
| 5.3 | % | |
| 3.9 | % | |
| 2.5 | % | |
| 2.1 | % |
Percentage change in system-wide comparable sales(2) | |
| 5.6 | % | |
| 3.8 | % | |
| 2.0 | % | |
| 2.2 | % |
Total Company Stores | |
| 94 | | |
| 272 | | |
| 94 | | |
| 272 | |
Total Franchise Stores | |
| 720 | | |
| 535 | | |
| 720 | | |
| 535 | |
Total International Stores | |
| 70 | | |
| 55 | | |
| 70 | | |
| 55 | |
|
(1) |
Percentage change in Company Store comparable sales compares the sales of Company Stores during the 13-week and 39-week periods in 2015 to the sales from the same Company Stores for the equivalent period in the prior year. A Company Store is included in this calculation after one full year of operations. Sales from Franchise Stores are not included in Company Store comparable sales. |
|
(2) |
Percentage change in system-wide comparable sales compares the combined sales of Company and Franchise Stores during the 13-week and 39-week periods in 2015 to the combined sales from the same Company Stores and Franchise Stores for the equivalent period in the prior year. A Company Store or Franchise Store is included in this calculation after one full year of operations. |
The following table sets forth certain
data relating to Company Stores, Franchise and International Stores for the periods indicated:
| |
39-Week Period Ended September 29, 2015 | | |
39-Week Period Ended September 30, 2014 | |
| |
Domestic | | |
International | | |
Domestic | | |
International | |
| |
| | |
| | |
| | |
| |
Company Stores: | |
| | | |
| | | |
| | | |
| | |
Beginning of period | |
| 263 | | |
| - | | |
| 268 | | |
| - | |
Company Stores opened | |
| - | | |
| - | | |
| - | | |
| - | |
Company Stores closed | |
| (6 | ) | |
| - | | |
| (6 | ) | |
| - | |
Company Stores acquired from franchisees | |
| - | | |
| - | | |
| 23 | | |
| - | |
Company Stores sold to franchisees | |
| (163 | ) | |
| - | | |
| (13 | ) | |
| - | |
| |
| | | |
| | | |
| | | |
| | |
Total Company Stores | |
| 94 | | |
| - | | |
| 272 | | |
| - | |
| |
| | | |
| | | |
| | | |
| | |
Franchise and International Stores: | |
| | | |
| | | |
| | | |
| | |
Beginning of period | |
| 543 | | |
| 62 | | |
| 535 | | |
| 48 | |
Franchise Stores opened | |
| 31 | | |
| 15 | | |
| 34 | | |
| 17 | |
Franchise Stores closed | |
| (17 | ) | |
| (7 | ) | |
| (24 | ) | |
| (10 | ) |
Franchise Stores acquired by the Company | |
| - | | |
| - | | |
| (23 | ) | |
| - | |
Franchise Stores purchased from the Company | |
| 163 | | |
| - | | |
| 13 | | |
| - | |
| |
| | | |
| | | |
| | | |
| | |
Total Franchise and International Stores | |
| 720 | | |
| 70 | | |
| 535 | | |
| 55 | |
Refranchising Initiative
In November 2014, we announced an accelerated
refranchising initiative that includes the sale of up to 114 Company Stores as part of our transition to an asset-light business
model. Our accelerated refranchising initiative is a key driver to reduce general and administrative costs, accelerate growth,
and to achieve certain operational efficiencies. As a part of our accelerated refranchising strategy, we completed the refranchising
of 164 stores, comprised of 163 Company Stores and one unopened store during the 39-week period ended September 29, 2015.
We subsequently expanded the scope of
our refranchising initiative and anticipate completing the refranchising of approximately 200 stores by the end of fiscal
year 2015. At the end of the third quarter of 2015, we included the fair value of 64 stores as assets held for sale on the
face of the consolidated balance sheets. Prior year balances were also reclassified to
match the current year presentation. These stores met the six criteria as described in Note 1 to the condensed consolidated
financial statements and are classified as assets held for sale.
In the majority of refranchising transactions,
we enter into development agreements committing buyers to build additional Franchise Stores in regions their purchased stores occupy.
In addition, as part of these refranchising transactions, buyers of mature Company Stores are obligated to refresh and refurbish
these stores.
Liquidity and Capital Resources
Cash Flows Summary
The following table summarizes our cash
flows for the 39-week period ended September 29, 2015 and September 30, 2014 (in thousands):
| |
39-Week Period Ended | |
| |
September 29, 2015 | | |
September 30, 2014 | |
| |
| | |
| |
Net cash (used in) provided by operating activities | |
$ | (10,896 | ) | |
$ | 5,677 | |
Net cash provided by (used in) investing activities | |
| 43,019 | | |
| (9,367 | ) |
Net cash (used in) provided by financing activities | |
| (24,637 | ) | |
| 1,738 | |
| |
| | | |
| | |
Net increase (decrease) in cash and cash equivalents | |
$ | 7,486 | | |
$ | (1,952 | ) |
Liquidity
As of September 29, 2015, we had cash and
cash equivalents of $25.2 million compared to $17.8 million as of December 30, 2014. As of
September 29, 2015 and December 30, 2014, we had no outstanding borrowings against our revolving credit facility. Our primary sources
of liquidity are cash provided by operating activities and proceeds from our refranchising activities. In addition, we have a revolving
line of credit with Wells Fargo, N.A. of $15.0 million that expires in July 2016. In the future, we may enter equipment leasing
arrangements and incur additional indebtedness as necessary and as permitted under our credit facility. We cannot assure, however,
that such financing will be available on favorable terms or at all.
We expect that our cash on hand and future
cash provided by operating activities and our refranchising initiative will be sufficient to fund our working capital and general
corporate needs and the non-discretionary capital expenditures for the foreseeable future. Our primary liquidity and capital requirements
are for working capital and general corporate needs and the planned fiscal 2015 capital expenditures. The use of cash to fund discretionary
capital expenditures will be based on the need to conserve our capital.
The adequacy of our available funds will
depend on many factors, including the macroeconomic environment, the operating performance of our Company Stores, the successful
expansion of our franchise and licensing programs and the successful rollout and consumer acceptance of our new beverage and food
initiatives. Given these factors, our foremost priorities for the near term continue to be preserving and generating cash sufficient
to fund our liquidity needs.
Operating Activities
Net cash used in operating activities was $10.9 million for
the 39-week period ended September 29, 2015, compared to net cash provided by operating activities of $5.7 million in the 39-week
period ended September 30, 2014, reflecting a net increase in cash flows used in operating activities of $16.6 million.
This increase in cash used in operating activities was primarily due to an increase in net loss after adjustments for noncash
items (approximately $11.4 million) and a net increase in cash used in operating assets and liabilities (approximately $5.2 million).
Net loss after adjustments for noncash items increased primarily due to a decrease in cash flows driven by a decline in Company
Store revenue, pursuant to our refranchising initiative. Cash flows relating to operating assets and liabilities declined compared
to prior year primarily due to our refranchising initiative and an increase in redemption of jambacards. The Company expects that
operating cash flow will be generated through a combination of company store profitability and franchise royalty fees, offset by
a reduced General and Administrative cost structure.
The amount of cash provided by our operating
activities during any particular fiscal year is highly subject to variations in the seasons. The first and fourth quarters of the
fiscal year encompass the winter and holiday seasons when we traditionally generate our lowest revenue, and our second and third
quarters of the fiscal year encompass the warmer seasons where a significant portion of our revenue and cash flows are realized.
For more information on seasonality, refer to the section below entitled “Seasonality and Quarterly Results.”
We also expect to have increased expenditures during the first part of the fiscal year as we invest in product development and
domestic expansion with the goal to have new products released and new stores open by mid-year to take advantage of the busier
summer months.
Investing Activities
Net cash provided by investing activities
was $43.0 million for the 39-week period ended September 29, 2015, compared to net cash used in investing activities of $9.4 million
for the 39-week period ended September 30, 2014. The $52.4 million increase in net cash provided by investing activities during
the 39-week period ended September 29, 2015 was primarily due to an increase in proceeds from disposal of assets (approximately
$44.2 million) resulting from our refranchising activities, a decrease in capital expenditure payments (approximately $7.6 million)
and business acquisition costs in the third quarter of 2014 that did not occur in 2015 (approximately $0.6 million).
In fiscal 2015, we expect capital expenditures
to be approximately $9.0 to $10.0 million depending on our liquidity needs, including store refreshes and redesigns
to facilitate fresh-squeezed juice and whole food nutrition offerings, investing in improvements to our technology infrastructure
as well as maintenance capital. We have embarked on a significant refresh of all Jamba Juice® stores to provide
a contemporary and fresh experience for our customers and that supports our whole food nutrition and fresh-squeezed platform.
Financing Activities
Net cash used in financing activities was
$24.6 million for the 39-week period ended September 29, 2015, compared to net cash provided by financing activities of $1.7 million
for the 39-week period ended September 30, 2014. The $26.4 million increase in net cash used in financing activities was primarily
due to the repurchase of the shares of the Company's common stock (approximately $26.1 million) under the stock repurchase plan
approved by our Board of Directors in 2014 and proceeds from sale of noncontrolling interest
in JJSC in the second quarter of 2014 that did not recur in 2015 (approximately $0.8 million) partially offset by an increase in
receipts from our stock issuance plans, including from the exercise of stock options (approximately $0.5 million).
Contractual Obligations
There have been no significant changes
to our contractual obligations as disclosed in our Annual Report on Form 10-K for the year ended December 30, 2014.
COMMODITY PRICES, AVAILABILITY AND GENERAL RISK CONDITIONS
We contract for significant amounts of
individually quick frozen fruit, fruit concentrate and dairy products to support the needs of both our Company Stores and Franchise
Stores. The price and availability of these commodities directly impacts our results of operations and can be expected to impact
our future results of operations.
SEASONALITY AND QUARTERLY RESULTS
Our business is subject to seasonal fluctuations.
We expect to realize significant portions of our revenue during the second and third quarters of the fiscal year, which align with
the warmer summer season. In addition, quarterly results are affected by the timing of the opening of new stores and weather conditions.
However, geographic diversification of our store locations may conceal or diminish the financial statement impact of such seasonal
influences. Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that
may be achieved for the full fiscal year or any subsequent quarter.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of financial statements
in accordance with accounting principles generally accepted in the United States of America requires management to adopt accounting
policies and make significant judgments and estimates to develop amounts reflected and disclosed in the financial statements. In
many cases, there are alternative policies or estimation techniques that could be used. We maintain a process to review the
application of our accounting policies and to evaluate the appropriateness of the many estimates that we are required to make in
order to prepare the financial statements. However, even under optimal circumstances, estimates routinely require adjustment
based on changing circumstances and the receipt of new or better information. There have
been no significant changes to the policies and estimates as discussed in our Annual Report on Form 10-K for the year ended December
30, 2014.
Recent Accounting Pronouncements
See Recent Accounting Pronouncements section
of Note 1 to our Notes to Condensed Consolidated Financial Statements for information about new accounting standards.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
The following discussion of market risks
contains forward-looking statements. Actual results may differ materially from the following discussion based on general conditions
in the financial and commodity markets.
We purchase fruit based on short-term seasonal
pricing agreements. These short-term agreements generally set the price of procured frozen fruit and 100% fruit juice concentrates
for less than one year based on estimated annual requirements. In order to mitigate the effects of price changes in any one commodity
on its cost structure, we contract with multiple suppliers both domestically and internationally. These agreements typically set
the price for some or all of our estimated annual fruit requirements, protecting us from short-term volatility. Nevertheless, these
agreements typically contain a force majeure clause, which, if utilized (such as when hurricanes in 2004 destroyed the Florida
orange crop and more recently with the freeze that affected California citrus), may subject us to significant price increases.
Our pricing philosophy is not to attempt
to change consumer prices with every move up or down of the commodity market, but to take a longer-term view of managing margins
and the value perception of our products in the eyes of our customers. Management’s objective is to maximize our revenue
through increased customer frequency. However, management has the ability to increase certain menu prices in response to food commodity
prices.
We do not purchase derivative instruments
on the open market.
We are subject to changes in the risk free
interest rate in connection with the cash we hold in interest bearing accounts.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Jamba Juice’s management, including
the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures,
as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based on this review, management, including the Chief Executive
Officer and the Chief Financial Officer, has concluded that our disclosure controls and procedures were not effective as of September
29, 2015, due to the existence of a material weakness. A material weakness is a deficiency, or a combination of deficiencies, in
internal control over reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim
financial statements will not be prevented or detected on a timely basis.
The material weakness we identified relates
to an insufficient complement of finance and accounting resources within the organization, in part attributable to employee
turnover related to recently implemented cost reductions and infrastructure changes, to ensure the proper application of U.S. GAAP
with respect to the Company’s non-routine transactions. Specifically, our controls over non-routine transactions were not
designed to capture all non-routine activities and our controls were not designed to ensure that non-routine transactions are adequately
analyzed and accounted for in accordance with GAAP.
Despite the existence of this material
weakness, management believes that the financial statements included in this report fairly present, in all material respects, our
financial condition, results of operations and cash flows for the periods presented.
Remedial Actions
We plan to address the material weaknesses
identified as follows:
|
· |
Augmentation of our finance and accounting staff with additional personnel and evaluation of our personnel in all key finance and accounting positions. |
|
· |
Documentation of key policies and internal control procedures for significant accounting areas with an emphasis on implementing additional procedures to identify and properly account for complex non-routine transactions. |
Management believes the foregoing efforts,
which we began to implement as described below, will effectively remediate the material weakness. As we continue to evaluate and
work to improve our internal control over financial reporting, management may determine to take additional measures to address
control deficiencies or determine to modify the remediation plan described above. We cannot assure you, however, when we will remediate
such weakness, nor can we be certain of whether additional actions will be required or the costs of any such actions.
Changes in Internal Control over Financial Reporting
The following change in our internal control
over financial reporting was completed during the quarter ended September 29, 2015 and has materially affected, or is reasonably
likely to materially affect, our internal control over financial reporting:
|
· |
We have hired additional professional accounting resources to assist with the preparation and review of accounting policies and procedures and financial reporting with knowledge, experience and training in the application of GAAP. |
We have also initiated the following corrective
actions, which management believes is reasonably likely to materially affect our controls and procedures as they are designed to
remediate the material weaknesses as described above:
|
· |
We are in the process of further enhancing, our internal finance and accounting organizational structure, which includes hiring additional resources. |
|
· |
We are in the process of further enhancing, the supervisory procedures that will include additional levels of analysis and quality control reviews within the accounting and financial reporting functions. |
We do not expect to have fully remediated
these material weaknesses until management has tested those internal controls and found them to have been remediated. We expect
to complete this process during our annual testing for fiscal 2015.
We are taking actions to remediate the
material weakness related to our internal control over non-routine transactions, as described above. Other than the material weakness
referenced above, there have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and
15d-15(f) under the Securities Exchange Act of 1934) during the fiscal quarter ended September 29, 2015 that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
We are party to various legal proceedings
arising in the ordinary course of our business. Based on the information currently available, we are not currently a party to any
legal proceeding that management believes would have a material adverse effect on our consolidated financial position or results
of operations.
Item 1A. Risk Factors
Our risk factors are included in our Annual
Report on Form 10-K for the fiscal year ended December 30, 2014 and have not materially changed other than as follows:
RISKS RELATED TO OUR BUSINESS
The loss of our Chief Executive Officer
could adversely affect our business.
On October 1, 2015, we
announced that James D. White will retire as President, Chief Executive Officer and as Chairman of the Board of Directors of
the Company, and that he would remain in his current position to help oversee the operations until a successor has been
identified. Our success depends substantially on the contributions and abilities of our executive management team as
well as other key employees. We believe that these individuals understand our operational strategies and priorities and the
steps necessary to drive our long-term growth and stockholder value. Competition in our industry is strong and our
ability to retain key employees, including a Chief Executive Officer, can be difficult. Our failure to recruit, retain, and
motivate executive management, key employees and a successor Chief Executive Officer sufficient to maintain a competitive
position within our industry, and to implement our strategic priorities, would adversely affect our results of
operations.
Our revenue is subject to volatility
based on weather and varies by season and our operational results may be subject to unusual weather conditions.
Seasonal factors cause our revenue to fluctuate
from quarter to quarter. Because the majority of our revenue results from the sale of smoothies, our revenue is typically lower
during the winter months and the holiday season, and during periods of inclement weather (because fewer people choose cold beverages)
and higher during the spring, summer and fall months (for the opposite reason). Unusual weather conditions, which may or
may not result from climate change or other changes in global meteorological conditions, may add to this volatility. Unusual
weather conditions may also have an adverse impact on agriculture, result in increased ingredients and raw materials costs and
adversely affect our results of operations.
Our financial results depend upon the operating results
of our franchisees.
Following the implementation of our significant
refranchising initiative, we receive a substantial portion of our revenues in the form of royalties and other franchise revenues,
which are generally based on development fees, initial franchise fees and a percentage of sales at franchise-operated stores, Jamba
Juice Expresses™ and JambaGO® units. Accordingly, our financial results to a large extent are dependent upon
the operational and financial success of our franchisees. If sales trends or economic conditions worsen for our franchisees, their
financial results may deteriorate and our royalty and other revenues may decline and our accounts receivable from franchisees and
related allowance for doubtful accounts for our franchisees may increase.
RISKS RELATED TO OUR FRANCHISE BUSINESS
Termination of an arrangement with a master developer
could adversely impact our revenues.
We enter into relationships with “master
developers” to develop and operate restaurants in defined international geographic areas. Master developers are granted exclusivity
rights with respect to larger territories than our typical franchisees. The termination of an arrangement with a master developer
or a lack of expansion by certain master developers could result in the delay of the development and expansion of our business
in our targeted international markets. Any such delay or interruption could result in lower revenues for us, particularly if we
were to choose to close International Stores following the termination of an arrangement with a master developer.
Item 2. Unregistered Sales of Equity Securities and
Use of Proceeds
On October 29, 2014, the Company’s
Board of Directors authorized the repurchase of up to $25 million of shares of common stock over a period of 18 months. The Company’s
Board of Directors authorized to increase the Company’s stock repurchase program by $15 million to $40 million in May 2015,
and by $5 million to $45 million in September 2015, with the authorizations expiring on May 4, 2016. During the 13-week and 39-week
periods ended September 29, 2015, the Company repurchased 1,174,882 and 1,815,467 shares, respectively, under the 2014 Stock Repurchase
Program. The average price per share during the 13-week period was $13.87 for an aggregate of $16.3 million and the average price
per share during the 39-week period was $14.39, resulting in an aggregate cost of $26.1 million, leaving $6.9 million available
for share repurchase that expires in May 2016. Shares repurchased under the 2014 Stock Repurchase Program are considered treasury
stock until retired. The following table presents information related to repurchases of shares of the Company's common stock
during the third quarter of 2015 (in thousands except share and per share amounts):
Period | |
Total Number of Shares Purchased | | |
Average Price Paid per Share | | |
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | |
Maximum
Amount That May Yet Be Purchased Under the Plans or Programs(1) (in thousands) | |
| |
| | |
| | |
| | |
| |
July 1, 2015 — July 28, 2015 | |
| 15,500 | | |
$ | 14.83 | | |
| 15,500 | | |
$ | 17,950 | |
July 29, 2015 — August 25, 2015 | |
| 558,369 | | |
| 13.55 | | |
| 558,369 | | |
| 10,390 | |
August 26, 2015 — September 29, 2015 | |
| 601,013 | | |
| 14.15 | | |
| 601,013 | | |
| 6,887 | |
| |
| | | |
| | | |
| | | |
| | |
Total | |
| 1,174,882 | | |
$ | 13.87 | | |
| 1,174,882 | | |
$ | 6,887 | |
(1) The amounts exclude commission costs.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
Cash Retention Bonus Plan
Effective November 9, 2015, the Board adopted
a cash retention bonus plan under which up to $0.6 million would be available to the Company’s employees, including each
of the Company’s named executive officers, for retention purposes to the extent the participant remains employed by the Company
on June 30, 2016. The cash retention bonus plan is in addition to any amounts payable to participants under the Company’s
2015 incentive compensation plan. All of the Company’s named executive officers, other than James White, are eligible to
receive retention bonuses under the retention plan in amounts to be subsequently determined by the Compensation Committee of the
Board of Directors.
Item 6. Exhibits
Exhibit
Number |
|
Description |
|
Form |
|
File No. |
|
Exhibit |
|
Filing Date |
|
Filed
Herewith |
|
|
|
|
|
|
|
|
|
|
|
|
|
10.1 |
|
First Amendment, dated July 28, 2015, to the Asset Purchase Agreement, dated April 1, 2015. |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
31.1 |
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
31.2 |
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended. |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
32.1 |
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
32.2 |
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
|
|
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS XBRL Instance Document |
|
|
|
|
|
|
|
|
|
X |
101.SCH XBRL Taxonomy Extension Schema Document |
|
|
|
|
|
|
|
|
|
X |
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
|
|
|
|
|
|
|
X |
101.DEF XBRL Taxonomy Extension Definition Linkbase Document |
|
|
|
|
|
|
|
|
|
X |
101.LAB XBRL Taxonomy Extension Label Linkbase Document |
|
|
|
|
|
|
|
|
|
X |
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
|
|
|
|
|
|
|
X |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, on the 9th day of November, 2015.
|
JAMBA, INC. |
|
|
|
By: |
/s/ James D. White |
|
|
James D. White |
|
|
Chairman of the Board, Chief Executive |
|
|
Officer |
|
|
and President (Duly Authorized Officer) |
|
|
|
|
By: |
/s/ Karen L. Luey |
|
|
Karen L. Luey |
|
|
Chief Financial Officer, Chief Administrative
Officer, Executive Vice President and Secretary |
|
|
(Principal Financial Officer and Chief |
|
|
Accounting Officer) |
Exhibit 10.1
First
Amendment
to
Asset Purchase Agreement
This
First Amendment to Asset Purchase Agreement (this “Amendment”) is made and entered into as of July 28,
2015, by and among Jamba Juice Company, a California corporation (“Seller”), and Vitaligent, LLC, a Delaware
limited liability company, or its permitted assigns (“Buyer”).
RECITALS
WHEREAS, Buyer and
Seller are all of the parties to that certain Asset Purchase Agreement dated as of April 1st, 2015 (the “Agreement”);
and
WHEREAS, the Closing
of the transactions contemplated in the Asset Purchase Agreement has not yet occurred; and
WHEREAS, the parties
have engaged in further discussions and negotiations concerning the terms and conditions of the transactions contemplated by the
Agreement; and
WHEREAS, the parties
now wish to enter into this Amendment to modify the terms and conditions concerning the transactions contemplated by the Agreement.
NOW, THEREFORE, in
consideration of the premises, the mutual promises made herein, and other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged and agreed, the parties hereby agree as follows:
Agreement
1.
Defined Terms. Unless otherwise defined in this Amendment, all capitalized terms shall have the meanings ascribed
to such terms in the Agreement, as modified hereby.
2.
Purchased Assets.
a.
Seller represents and warrants that the revised Section 4.8 of the Disclosure Schedule attached hereto as Exhibit
A constitutes the true, complete and accurate list of the Stores.
b.
The final period in Section 2.1(ii) is hereby deleted and replaced with “; and” and the following new
subsection 2.1(iii) is added to the Agreement immediately thereafter:
(iii) The
Change Fund, in an amount equal to $1,200.00, on hand at each Store as of the Effective Time. Seller shall ensure that there is
at least $1,200.00 in each Store register at the Effective Time.
3.
Purchase Price and Payment. Section 3.1 of the Agreement is hereby deleted in its entirety and replaced with
the following:
3.1 Consideration.
(a) The
purchase price (the “Purchase Price”) for the Purchased Assets shall be Twenty-Five Million Dollars ($25,000,000).
The Purchase Price includes the Initial Fee for each of the Stores otherwise due under any Franchise Agreement.
(b) The
Purchase Price shall be paid by Buyer as follows:
(i) An
amount equal to $50,000, shall be paid to the Escrow Agent to cover defects in and replacements to the Fixed Assets at these Stores
as further described in Section 12.3 (“Fixed Assets Escrow”).
(ii) The
delivery by Buyer to Seller of a promissory note, in substantially the form attached hereto as Exhibit 3.1(b), in the original
principal amount of Two Million Dollars ($2,000,000) (the “Promissory Note”).
(iii) The
balance of the Purchase Price, after the payment in (i) above is made, and reduced by $2,000,000 represented by the original principal
amount of the Promissory Note delivered pursuant to (ii) above, shall be paid to Seller by wire transfer of immediately available
funds to an account designated by Seller at Closing. The balance shall be adjusted to account for any deficiencies in the Change
Fund.
4.
Store Refreshes. Section 3.2 of the Disclosure Schedule, as attached to the Agreement, is hereby deleted in
its entirety and replaced with the form of Section 3.2 of the Disclosure Schedule attached hereto as Exhibit A.
5.
Conditions to Closing. Sections 8.1(e) and 8.1(f) of the Agreement are hereby deleted in their entirety
and replaced as follows:
(e) [Intentionally
Omitted].
(f) The
financing conditions precedent set forth in Section 7.3 shall have been completed as provided in that Section.
6.
Closing.
a.
Section 10.1 of the Agreement is hereby deleted in its entirety and replaced with the following:
10.1 Time
and Place. The parties shall undertake reasonable good faith commercial efforts to effect the transfer of the Purchased Assets
by Seller to Buyer (the “Closing”) on or before July 28, 2015, or such other date to which the parties mutually
agree (the “Closing Date”), with the Closing to be deemed effective as of 11:59 p.m., Pacific Daylight Time,
on the Closing Date (the “Effective Time”). The obligations of the Parties to close or effect the transactions
contemplated by this Agreement will be subject to satisfaction, unless duly waived, of the applicable conditions set forth in this
Agreement, and, subject to the parties’ termination rights expressly set forth herein, if any said condition is not satisfied
or waived, the Closing Date shall be extended until satisfaction of such condition. Notwithstanding the foregoing, if the Closing
has not occurred on or before August 31, 2015 (the “Walkaway Date”), then Seller and Buyer shall each have the
right at any time after the Walkaway Date, but prior to Closing, to terminate this Agreement pursuant to Section 13.1.
First Amendment to Asset Purchase Agreement | | Page 2 |
b.
Section 10.3(a) of the Agreement is hereby deleted in its entirety and replaced with the following:
(a) (i)
The cash portions of the Purchase Price pursuant to Sections 3.1(b)(i) and 3.1(b)(iii), by wire transfer of immediately
available funds to accounts designated by Seller and the Escrow Agent, and (ii) the executed Promissory Note; and
c.
The reference to the Letter of Credit in Section 10.3(b) of the Agreement is hereby deleted.
7.
Post-Closing Matters. The last sentence of Section 12.3 of the Agreement is hereby deleted in its entirety and replaced,
Section 12.4 of the Agreement is hereby deleted in its entirety and replaced, and a new Section 12.5 is hereby added to
the Agreement, in the appropriate order, as follows:
12.3 “The
total amount to be reimbursed to Buyer for defects and replacements of Fixed Assets shall not exceed One Hundred Forty-Four Thousand
Dollars ($144,000) for all Stores combined.”
12.4 [Intentionally
Omitted].
12.5 Easybar
Replacements. Within two days after the Closing Date, Seller will reimburse Buyer the amount of Two Hundred and Fifty Thousand
Dollars ($250,000) for the expected out-of-pocket expenses to be incurred by Buyer in replacing, not later than May 31, 2016 (the
“Deadline”), the Easybar beverage dispensing systems in each of the Stores with sales greater than Seven Hundred
Thousand Dollars ($700,000), which shall be calculated based on the trailing twelve months of sales prior to Closing (as identified
on Section 4.8 of the Disclosure Schedule or otherwise agreed to in writing between Buyer and Seller), with a Crathco
system substantially similar to that used in other stores within the System (as defined in the Franchise Agreement). Such replacement
and expenses shall include refinishing each Store such that it meets the then-applicable standards for appearance of such Store
set forth in the Franchise Agreement and all applicable health and safety standards.
8.
Definitions. Annex 1.1 of the Agreement is hereby amended as follows:
| a. | The definition of “Change Fund” is hereby
deleted in its entirety and replaced as follows: |
“Change
Fund” means the cash on hand at each Store equal to $1,200.00.
| b. | The definition of “Letter of Credit” is hereby
deleted in its entirety. |
| c. | The definition of “Marketable Inventory”
is amended by adding the following at the end thereof: “, and of a quantity that is necessary and appropriate to operate
each Store on a day to day basis.” |
| d. | A definition of “Promissory Note” is added
as follows: |
“Promissory
Note” has the meaning given to it in Section 3.1(b)(ii).
First Amendment to Asset Purchase Agreement | | Page 3 |
9.
Reaffirmation of Representations and Warranties.
a.
Seller hereby reaffirms, and represents and warrants, that the representations and warranties of Seller set forth in Article
IV of the Agreement as written as of the date of the Agreement, were, subject to the qualifications set forth on the Disclosure
Schedule at such time, true and correct as of the date of the Agreement.
b.
Seller hereby represents and warrants that the representations and warranties of Seller set forth in Article IV of the Agreement
as modified by this Amendment, are, subject to the qualifications set forth on the Disclosure Schedule attached hereto, true and
correct as of the date of this Amendment.
c.
Buyer hereby reaffirms, and represents and warrants, that the representations and warranties of Buyer set forth in Article
V of the Agreement were true and correct as of the date of the Agreement and are true and correct as of the date of this Amendment.
10.
Limited Waivers. Seller acknowledges and agrees that the Initial Financing Contingency Requirement set forth in Section 7.2
of the Agreement has been performed and satisfied, and further waives any right to terminate the Agreement based on the conditions
set forth in Section 7.2 of the Agreement. Buyer and Seller further acknowledge and agree that the Agreement has not
terminated pursuant to Section 7.2 or Section 7.3.
11.
Seller Approval of ShowMe Transaction. The parties acknowledge that, in connection with the transactions contemplated
by the Agreement, as modified by this Amendment, at the Closing Buyer desires to acquire direct ownership of ShowMe Smoothie, LLC,
a Missouri limited liability company (“ShowMe”) which, directly or indirectly, is the franchisee of JAMBA JUICE®
stores in the St. Louis, Missouri and Columbia, Missouri areas, and which has certain area development rights for additional JAMBA
JUICE® stores. To the extent required by any agreement(s) by and between Seller and ShowMe or any of ShowMe’s wholly-owned
subsidiaries, Seller hereby consents to, and waives any and all rights arising out of, the acquisition of ShowMe by the Buyer as
of the Closing.
12.
Additional Provisions.
a.
Except to the limited extent expressly provided by this Amendment, nothing herein shall constitute a waiver of any provision
of, or of any right arising under or pursuant to, the Agreement.
b.
Except to the limited extent expressly modified by this Amendment, the Agreement shall remain and continue in full force
and effect without modification hereby, and the Agreement, as amended by this Amendment, is hereby ratified and affirmed in all
respects.
c.
THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF CALIFORNIA AS APPLIED TO
CONTRACTS THAT ARE EXECUTED AND PERFORMED ENTIRELY IN CALIFORNIA. EACH PARTY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS
OF THE STATE OF CALIFORNIA AND THE U.S. FEDERAL COURTS SITTING IN SAN FRANCISCO COUNTY, CALIFORNIA FOR PURPOSES THEREOF. THE PARTIES
AGREE THAT VENUE FOR ANY SUCH PROCEEDING SHALL BE THE STATE AND FEDERAL COURTS LOCATED IN SAN FRANCISCO COUNTY, CALIFORNIA. EACH
PARTY TO THIS AMENDMENT WAIVES AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH ACTION OR PROCEEDING,
ANY CLAIM THAT (A) IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, (B) THE ACTION OR PROCEEDING IS BROUGHT IN
AN INCONVENIENT FORUM OR (C) THE VENUE OF THE ACTION OR PROCEEDING IS IMPROPER.
d.
This Amendment may be executed and delivered, by digital, electronic or manual means, in multiple counterparts, each of
which shall be an original and all of which together shall constitute one and the same instrument.
First Amendment to Asset Purchase Agreement | | Page 4 |
IN WITNESS WHEREOF,
the parties to this Amendment have duly executed it on the day and year first above written.
“SELLER” |
|
“BUYER” |
|
|
|
|
|
JAMBA JUICE COMPANY |
|
VITALIGENT, LLC |
a California corporation |
|
a Delaware limited liability company |
|
|
|
|
|
By: |
/s/ Karen L. Luey |
|
By: |
/s/ H. Dean VandeKamp |
Name: |
Karen L. Luey |
|
Name: |
H. Dean VandeKamp |
Its: |
Chief Financial Officer, |
|
Its: |
President |
|
Chief Administrative Officer, |
|
|
|
|
Executive Vice President and Secretary |
|
|
|
Signature Page
to
First Amendment to Asset Purchase Agreement
Exhibit A
Revised Disclosure Schedule
Section 3.2 – Refresh Stores
Store # |
Entity |
Address |
City |
State |
0325 |
Vitaligent-East Bay, LLC |
3990 El Camino Real |
Palo Alto |
CA |
0391 |
Vitaligent-East Bay, LLC |
415 N. Mary Ave. Ste. 109 |
Sunnyvale |
CA |
0728 |
Vitaligent-East Bay, LLC |
1720 Story Rd., Ste. #46 |
San Jose |
CA |
0779 |
Vitaligent-East Bay, LLC |
1849 East Capitol Expressway |
San Jose |
CA |
1011 |
Vitaligent-East Bay, LLC |
5442 Ygnacio Valley Rd., Ste. 190 |
Concord |
CA |
0062 |
Vitaligent-NorCal, LLC |
2914 Fulton Ave. |
Sacramento |
CA |
0153 |
Vitaligent-NorCal, LLC |
1361 W. Covell Blvd. #115 |
Davis |
CA |
0360 |
Vitaligent-NorCal, LLC |
1021 10th Street Ste. B |
Modesto |
CA |
0361 |
Vitaligent-NorCal, LLC |
13389 Folsom Blvd. #400 |
Folsom |
CA |
0419 |
Vitaligent-NorCal, LLC |
2100 Arden Way #192 |
Sacramento |
CA |
0508 |
Vitaligent-NorCal, LLC |
4640 Natomas Blvd. #120 |
Sacramento |
CA |
0620 |
Vitaligent-NorCal, LLC |
1728 W. Olive Ave. |
Merced |
CA |
0622 |
Vitaligent-NorCal, LLC |
1897 East Gibson Rd., Ste. E |
Woodland |
CA |
0624 |
Vitaligent-NorCal, LLC |
2155 Town Center Plaza, Ste. #140 |
West Sacramento |
CA |
0633 |
Vitaligent-NorCal, LLC |
825 S. Hwy 65, #80 |
Lincoln |
CA |
0956 |
Vitaligent-NorCal, LLC |
2829 W. March Lane, Ste. C7 |
Stockton |
CA |
Section 4.8 – Prime Leases; Stores; Leased Real Properties
Store # |
Address |
City |
State |
4 |
21265 Stevens Creek Blvd. #201 |
Cupertino |
CA |
31 |
1570 South Bascom Ave. |
San Jose |
CA |
35 |
1030 El Paseo de Saratoga |
San Jose |
CA |
48 |
628 Blossom Hill Rd. |
Los Gatos |
CA |
59 |
1037 A. El Monte Ave. |
Mountain View |
CA |
63 |
1140 Lincoln Ave. #A |
San Jose |
CA |
93 |
704 A Bancroft Rd. |
Walnut Creek |
CA |
123 |
1425 Duncan Street |
Walnut Creek |
CA |
155 |
3518 C. Mt. Diablo Blvd. |
Lafayette |
CA |
156 |
65 Crescent Dr. Ste. C |
Pleasant Hill |
CA |
173 |
125 Bernal Rd. B-40 |
San Jose |
CA |
325 |
3990 El Camino Real |
Palo Alto |
CA |
391 |
415 N. Mary Ave. Ste. 109 |
Sunnyvale |
CA |
409 |
2029 Camden Ave. |
San Jose |
CA |
436 |
1704 Oakland Rd. Ste. 200 |
San Jose |
CA |
453 |
2855 Stevens Creek Blvd, Ste. 9180 |
Santa Clara |
CA |
487 |
1450 Travis Blvd. #2 |
Fairfield |
CA |
499 |
2990 E. Capitol Expressway #30 |
San Jose |
CA |
528 |
5779 Lone Tree Way |
Antioch |
CA |
556 |
925 Blossom Hill Rd., Ste. 1593 |
San Jose |
CA |
589 |
4402 Century Boulevard |
Pittsburg |
CA |
First Amendment to Asset Purchase Agreement | | Page A-1 |
Store # |
Address |
City |
State |
616 |
1975 Diamond Blvd., D-5 |
Concord |
CA |
706 |
8630 Brentwood Blvd. |
Brentwood |
CA |
728 |
1720 Story Rd., Ste. #46 |
San Jose |
CA |
739 |
695 Coleman Ave., Ste. 10 |
San Jose |
CA |
779 |
1849 East Capitol Expressway |
San Jose |
CA |
860 |
547 East Calaveras Blvd. |
Milpitas |
CA |
1009 |
91 Curtner Ave., Ste. 80 |
San Jose |
CA |
1011 |
5442 Ygnacio Valley Rd., Ste. 190 |
Concord |
CA |
1129 |
372 North Capitol Ave. |
San Jose |
CA |
40 |
2447 Fair Oaks Blvd. |
Sacramento |
CA |
62 |
2914 Fulton Ave. |
Sacramento |
CA |
153 |
1361 W. Covell Blvd. #115 |
Davis |
CA |
329 |
2030 Douglas Blvd. #24 |
Roseville |
CA |
357 |
2401 E. Orangeburg Ave. |
Modesto |
CA |
360 |
1021 10th Street Ste. B |
Modesto |
CA |
361 |
13389 Folsom Blvd. #400 |
Folsom |
CA |
363 |
1228 Galleria Blvd. #150 |
Roseville |
CA |
406 |
201 Lincoln Center |
Stockton |
CA |
419 |
2100 Arden Way #192 |
Sacramento |
CA |
423 |
7440 Laguna Blvd. #120 |
Elk Grove |
CA |
426 |
2793 E. Bidwell Street, Ste. 300 |
Folsom |
CA |
428 |
6061 Sunrise Blvd. |
Citrus Heights |
CA |
440 |
1127 Alhambra Blvd. |
Sacramento |
CA |
474 |
1429 Broadway #B |
Sacramento |
CA |
493 |
3801 Pelandale Ave., Ste. 101 |
Modesto |
CA |
494 |
3100 Countryside Dr Ste. 100 |
Turlock |
CA |
507 |
9160 W. Stockton Blvd., Ste. 160 |
Elk Grove |
CA |
508 |
4640 Natomas Blvd. #120 |
Sacramento |
CA |
538 |
2600 Gateway Oaks Dr. #300 |
Sacramento |
CA |
554 |
2501 Naglee Rd., Ste. A |
Tracy |
CA |
590 |
3987 Missouri Flat Rd., Ste. 300 |
Placerville |
CA |
592* |
Kettleman Lane, & Lower Sacramento Rd. |
Lodi |
CA |
620 |
1728 W. Olive Ave. |
Merced |
CA |
621 |
10952 Trinity Pkwy, Ste. H |
Stockton |
CA |
622 |
1897 East Gibson Rd., Ste. E |
Woodland |
CA |
623 |
2091-A Harbison Dr. |
Vacaville |
CA |
624 |
2155 Town Center Plaza, Ste. #140 |
West Sacramento |
CA |
625 |
4720 Elk Grove Blvd., Ste. 190 |
Elk Grove |
CA |
627 |
10907 Olson Dr. |
Rancho Cordova |
CA |
631 |
1151 Galleria Blvd., Space 258-A |
Roseville |
CA |
632 |
10305 Fairway Dr. #140 |
Roseville |
CA |
633 |
825 S. Hwy 65, #80 |
Lincoln |
CA |
658 |
1445 Hulsey Way |
Manteca |
CA |
673 |
2625 Sierra Meadows Dr. #100 |
Rocklin |
CA |
736 |
9304 Elk Grove Blvd., Ste. 160 |
Elk Grove |
CA |
768 |
7903 Walerga Rd., #102 |
Antelope |
CA |
775 |
8878 Madison Ave., Space 8890 Bldg C |
Fair Oaks |
CA |
812 |
1689 Arden Way, Ste. 1112 |
Sacramento |
CA |
813 |
1651 E. Monte Vista Ave, Ste. 101 |
Vacaville |
CA |
862 |
2160 Daniels St. |
Manteca |
CA |
880 |
8231 Timberlake Way, Ste. 100 |
Sacramento |
CA |
956 |
2829 W. March Lane, Ste. C7 |
Stockton |
CA |
* Note that this Store
is not yet constructed or open. Sublease shall be executed at Closing and all obligations to construct and operate store shall
pass to Buyer, subject to the terms set forth in the First Amendment to Asset Purchase Agreement.
First Amendment to Asset Purchase Agreement | | Page A-2 |
Exhibit 31.1
CERTIFICATIONS
I, James D. White, certify that:
1. I have reviewed this quarterly report
on Form 10-Q of Jamba, Inc.;
2. Based on my knowledge, this report
does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial
statements, and other financial information included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying
officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure
controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal
control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness
of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report
any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying
officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s
auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies
and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not
material, that involves management or other employees who have a significant role in the registrant’s internal control over
financial reporting.
|
/s/ James D. White |
|
James D. White |
|
Chairman of the Board, Chief Executive |
|
Officer and President |
|
(Principal Executive Officer) |
Date: November 9, 2015
Exhibit 31.2
CERTIFICATIONS
I, Karen L. Luey, certify that:
1. I have reviewed this quarterly report
on Form 10-Q of Jamba, Inc.;
2. Based on my knowledge, this report
does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial
statements, and other financial information included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying
officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))
for the registrant and have:
(a) Designed such disclosure
controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal
control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness
of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report
any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying
officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s
auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies
and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to
adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not
material, that involves management or other employees who have a significant role in the registrant’s internal control over
financial reporting.
|
/s/ Karen L. Luey |
|
Karen L. Luey |
|
Chief Financial Officer, Chief Administrative Officer,
Executive Vice President and Secretary |
|
(Principal Financial Officer) |
Date: November 9, 2015
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT
OF 2002
In connection with the Quarterly Report
of Jamba, Inc. (the “Company”) on Form 10-Q for the quarter ended September 29, 2015, as filed with the Securities
and Exchange Commission on the date hereof (the “Report”), I, James D. White, Chief Executive Officer and President
of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (“Section 906”), that:
(1) The Report fully complies with the
requirements of section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and
(2) The information contained in the Report
fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ James D. White |
|
James D. White |
|
Chairman of the Board, Chief Executive |
|
Officer and President |
Date: November 9, 2015
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT
OF 2002
In connection with the Quarterly Report
of Jamba, Inc. (the “Company”) on Form 10-Q for the quarter ended September 29, 2015, as filed with the Securities
and Exchange Commission on the date hereof (the “Report”), I, Karen L. Luey, Executive Vice President and Chief Financial
Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (“Section 906”), that:
(1) The Report fully complies with the
requirements of section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and
(2) The information contained in the Report
fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Karen L. Luey |
|
Karen L. Luey |
|
Chief Financial Officer, Chief Administrative Officer,
Executive Vice President and Secretary |
Date: November 9, 2015
Jamba, Inc. (delisted) (NASDAQ:JMBA)
Historical Stock Chart
From Aug 2024 to Sep 2024
Jamba, Inc. (delisted) (NASDAQ:JMBA)
Historical Stock Chart
From Sep 2023 to Sep 2024