Jamba Juice 2007 Annual Report Download - page 37

Table of Contents
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The results of operations for Jamba Juice Company are presented for the 22 Week Period, which coincides with the twenty-two week period from the
completion of Jamba Juice Company’s most recent fiscal year end, which was June 27, 2006, to consummation of its merger with Jamba, Inc., which
occurred on November 29, 2006. Jamba Juice Company’s store revenue is seasonal with a disproportionate amount of sales occurring during the Summer
months. The 22 Week Period encompasses a significant portion of the Summer selling season.
Revenue for Jamba Juice Company is comprised of revenue from Jamba Juice Company owned stores (“Company Stores”) and royalties and fees from
franchised locations. For the 22 Week Period, revenue from Company Stores and fees from franchised locations represented 96.0% and 4.0% of total revenue,
respectively, which compare to 96.3% and 3.7% of total revenue, respectively for fiscal 2006.
Revenue, primarily from smoothie and juice sales, was $121.9 million for the 22 Week Period and was driven primarily from $102.8 million in
comparable store revenue for Company Stores. Also contributing was $14.1 million from new Company Store revenue, which resulted from net unit growth of
18 stores at the end of the period up from 342 Company Stores as of June 27, 2006.
Franchise and other revenue for the 22 Week Period was $4.9 million, which resulted primarily from franchise royalties of $2.6 million related to fees
from Jamba Juice Company’s franchisees, and $1.8 million received for franchise employee support provided during the period. The $1.8 million is a
reimbursement for employment services that Jamba Juice Company provided to a Midwest franchisee and a joint venture in Florida, known as JJC Florida
LLC. The number of franchise stores as of November 28, 2006 was 227, up from 217 as of June 27, 2006.
Jamba Juice Company has also entered into an agreement with Safeway Corporation in which 21 Jamba Juice Company kiosks are to be opened within
Safeway-owned grocery stores. Jamba Juice Company kiosks within Safeway-owned stores will be operated by Safeway employees. As of November 28,
2006, 13 of the 21 kiosks were open.
Cost of sales of $30.0 million for the 22 Week Period is comprised of fruit, dairy, and other products used to make smoothies and juices, as well as
paper products. As a percentage of Company Store revenue, these costs were 25.6% compared to 25.0% for fiscal 2006.
Labor costs consist of store management salaries and bonuses, hourly team member payroll and training costs, and other payroll-related items. Labor
costs for the 22 Week Period were $37.1 million, and as a percentage of Company Store revenue were 31.7% compared to 32.7% for fiscal 2006. This decrease
in percentage was a result of higher summer seasonal sales that allowed Jamba Juice Company to leverage its fixed labor costs.
Occupancy costs include both fixed and variable portions of rent, real estate taxes, property insurance, and common area maintenance charges for all
store locations. Occupancy costs for the 22 Week Period were $12.7 million, primarily consisting of $10.3 million in rent and $1.9 million in common area
maintenance, real estate taxes, and insurance. As a percentage of Company Store revenue, these costs were 10.8% compared to 11.1% for fiscal 2006. This
decrease in percentage was attributable to seasonal sales leverage.
Store operating expenses consist primarily of various store-level costs such as regional general and administrative cost for store supervision, recruiting,
training, human resources, and local marketing personnel, as well as repairs and maintenance, marketing, utilities, blender charges, supplies, and bank
charges. Store operating expenses for the 22 Week Period were $13.2 million and as a percentage of Company Store revenue were 11.3% compared to 11.9%
for fiscal 2006. This balance was composed primarily of $3.7 million in utilities, $1.9 million
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