OREANDA-NEWS. Jamba, Inc. (NASDAQ:JMBA) today reported unaudited financial results for the fourth quarter and fiscal year ended December 29, 2015.

Financial Highlights

  • Company-owned comparable store sales increased 5.4% for the quarter. System-wide comparable sales(1) increased 3.9% and Franchise comparable store sales(1) increased 3.7% for the quarter.
  • Total revenue for the quarter decreased 55.5% to $19.5 million from $43.9 million for the prior year, primarily due to the reduction in the number of Company stores as part of the Company’s refranchising initiative, partially offset by the 3.9% increase in System-wide comparable store sales and net new global Franchise locations.
  • Total Company-owned stores at the end of the fourth quarter of 2015 was 70, compared to 263 at the end of the fourth quarter of 2014.
  • GAAP net loss attributable to Jamba, Inc. was $(8.3) million for the fourth quarter or $(0.55) loss per share compared to $(8.0) million, or $(0.47) loss per share for the prior year. Non-GAAP net loss attributable to Jamba, Inc.(2), adjusted for refranchising and severance costs associated with the shift to the asset-light business model, charges taken for the early closure of eight stores and the gain associated with refranchising was $(4.2) million for the fourth quarter, or $(0.28) loss per share compared to $(4.7) million, or $(0.27) loss per share for the prior year.
  • General and administrative expenses for the quarter increased 6.3% to $10.5 million compared with $9.9 million for the prior year period. Non-GAAP adjusted general and administrative expense(2) for the quarter was $8.0 million compared with $7.8 million for the prior year.
  • Adjusted EBITDA(3) was $(0.1) million for the fourth quarter of 2015 and $10.4 million for fiscal 2015.
  • Shares repurchased during the fourth quarter of 2015 were 132,537, utilizing $1.9 million under the current $45 million Stock Repurchase Program. Cumulatively, from inception through the end of the fourth quarter, 2,858,817 shares were repurchased for $40 million under this program.
  • Jamba closed one refranchising transaction for 16 stores during the fourth quarter for proceeds of approximately $3.3 million.
  • Franchisees opened 27 new Jamba Juice stores globally during the quarter. At December 29, 2015, Jamba’s global store base consisted of 70 Company Stores, 748 Franchise Stores and 75 International Stores.

Refranchising Completed

  • During 2015, 12 refranchising transactions closed totaling 179 company-owned stores and one unopened company owned store. Jamba received total proceeds of $53.1 million from refranchising transactions, slightly below earlier guidance due to the Company’s decision to retain 43 stores in the San Diego, CA and Chicago, IL markets.

Capital Allocation Update

  • The Company’s board of directors authorized a $25 million share repurchase program in October 2014, with increases to $40 million in May 2015 and to $45 million in September 2015.
  • During the quarter, the Company repurchased 132,537 shares of common stock on the open market at an average price of $14.31 per share.
  • Cumulatively through the end of fiscal 2015, 2,858,817 shares have been repurchased under this plan for a total cost of $40.0 million, reducing share count by approximately 15.9% since inception of plan.
  • There is $5.0 million of capacity left under the current repurchase authorization.

“2015 was a productive year for the Company. We ended the year reporting System-wide same store sales growth of 2.3% and Adjusted EBITDA(3) of $10.4 million, both in line with our expectations. We also continued our transition to an asset-light model in 2015, refranchising a total of 179 stores for proceeds totaling $53.1 million. Finally, we rewarded our shareholders with our ongoing share repurchase program,” said Richard L. (Rick) Federico, Chairman of the Board of Directors of the Company.

“I could not be more excited to start my new position at Jamba and truly believe that the best days for the Company are to come,” said David A. Pace, Chief Executive Officer of the Company. “In the year ahead I look forward to further enhancing our already phenomenal brand and working with our engaged franchisees and a talented team to further accelerate Jamba’s success to benefit our customers, employees, and shareholders.”

Fourth Quarter Fiscal 2015 Results

Revenue

The Company ended fiscal 2015 with a total of 70 company locations and 823 franchise locations, as a result of the completion of the Company’s shift to an asset light franchise business model through a refranchising initiative that included the sale of 179 company locations. The comparisons to the prior year will be skewed due to the significant number of Company locations that were sold.

For the 13 weeks ended December 29, 2015, total revenue decreased 55.5% to $19.5 million from $43.9 million for the 13 week period ended December 30, 2014. The decrease is primarily due to the reduction in the number of company-owned stores pursuant to the company’s refranchising strategy, partially offset by increases in system-wide comparable store sales(1) of 3.9%. The increase in company-owned comparable store sales(1) of 5.4% was primarily due to an increase in average check of 380 basis points and an increase in transaction count of 160 basis points.

Franchise and other revenue increased 52.4% to $6.8 million from $4.5 million in the prior year period, primarily due to increased royalties resulting from the increase in franchise operated stores and the increase in franchise-operated comparable store sales(1) of 3.7%. Other revenue, which includes JambaGO® and CPG, was $1.6 million and $1.4 million in the fourth quarter of 2015 and fourth quarter of 2014, respectively. The increase in revenue was primarily due to the Company’s cold-pressed RTD juice business along with higher royalty revenue from the Company’s international business.

Loss from Operations

Loss from Operations was $(7.8) million for the fourth quarter of 2015 compared to a loss from operations of $(7.9) million for the fourth quarter of 2014. On a non-GAAP basis, Loss from Operations(2) which excludes costs associated with refranchising and severance related to the shift to the asset-light business model, charges taken for the early closure of eight stores and the gain associated with refranchising, was approximately $(3.8) million, compared to $(4.6) million in the prior year.

Retail Growth

As of December 29, 2015, there were 893 Jamba® stores system-wide, of which 823 are franchise-operated stores, and 70 are Company-owned. Franchise-operated stores include 42 express formats. During the quarter, Jamba opened 20 new domestic franchise-operated stores and seven international stores, and purchased two stores from a franchisee. No new Company-owned stores opened during the quarter. During the quarter, 18 stores were closed globally. Growth continues at JambaGO® with units in operation exceeding 2,000.

Results for Fiscal Year 2015

Revenue

For the 52 weeks ended December 29, 2015, total revenue decreased 25.9% to $161.7 million from $218.0 million for the 52 week period ended December 30, 2014. The decrease is primarily due to the reduction in the number of company-owned stores pursuant to the Company’s refranchising strategy, partially offset by increases in system-wide comparable store(1) sales of 2.3%. The increase in company-owned comparable store sales(1) of 1.5% was primarily due to an increase in average check of 500 basis points offset by a decrease in transaction count of 350 basis points.

Franchise and other revenue increased 27.7% to $24.7 million from $19.3 million in the prior year period, primarily due to increased royalties resulting from the increase in franchise operated stores and the increase in franchise-operated comparable store sales(1) of 2.7% during the 52-week period ended December 29, 2015. Other revenue, which includes JambaGO® and CPG, was $5.4 million and $5.1 million in fiscal year 2015 and fiscal 2014, respectively. The increase revenue was primarily due to the Company’s cold-pressed RTD juice business along with higher royalty revenue from the Company’s international business.

Income (Loss) from Operations and Adjusted EBITDA(3)

Income from Operations was $10.3 million for fiscal year 2015 compared to a loss from operations of $(3.3) million in fiscal year 2014. Included in the results are gains on disposal of assets of $21.6 million related to the refranchising initiative. On a non-GAAP basis, Income (Loss) from Operations(2) which excludes costs associated with refranchising and severance related to the shift to the asset-light business model, charges taken for the early closure of eight stores and the gain associated with refranchising, was approximately $(1.3) million compared to $3.8 million from the prior year.

Adjusted EBITDA(3) for the fiscal year 2015 was $10.4 million.

Retail Growth

During the fiscal year, Jamba opened 51 new domestic franchise-operated stores and 22 international store locations and purchased two stores from a franchisee. During the fiscal year, 48 stores were closed globally. No new company-owned stores opened during the year. As of December 29, 2015 there were 75 international store locations, all of which are franchise-operated.

Liquidity

As of December 29, 2015, the Company held $19.7 million in cash and cash equivalents as compared to $17.8 million cash and cash equivalents at December 30, 2014. As of December 29, 2015 and December 30, 2014, the Company did not have any restricted cash.