Jamba Juice 2007 Annual Report Download - page 44

Table of Contents
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As of January 9, 2007, Jamba Inc.’s liquidity and capital resources included cash and cash equivalents of $87.4 million compared to $1.0 million as
of January 10, 2006. In November 2006, the Company received approximately $224.9 million (net of $6.8 million of transaction costs) from the private sale
of approximately 30.9 million shares of common stock. The proceeds from the private placement, together with existing cash and cash equivalents, were used
to purchase Jamba Juice Company for approximately $240.7 million. Cash provided by operating activities were $4.1 million. Cash used for investing
activities, primarily related to the Company’s acquisitions were $130.9 million.
Prior to the Merger, Jamba Juice Company maintained a line of credit in the amount of up to $35 million. A discussion of the terms of Jamba Juice
Company’s existing line of credit is provided below, under “Capital Resources.” In connection with the Merger, the existing line of credit was paid down to
zero. As of January 9, 2007, the revolving line of credit remains outstanding and available for use by the Company’s wholly owned subsidiary, Jamba Juice
Company, in the amount of $32.2 million.
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On January 9, 2007, the Company had cash and cash equivalents of $87.4 million, and its wholly owned subsidiary, Jamba Juice Company, was the
beneficiary of a line of credit totaling $35 million. Additionally, the Company has 18.3 million warrants and 750,000 units outstanding, with each “unit”
consisting of one share of common stock plus one warrant. Although there can be no assurances the warrants and units will be exercised, if exercised, the
Company would realize approximately $118.2 million in proceeds.
The Company intends to use its available cash resources, including any borrowings under Jamba Juice Company’s revolving line of credit described
below, to invest in its core business, primarily through building out new locations or upgrading existing locations and other new business opportunities related
to its core business. The Company may also use its available cash resources to purchase larger ownership interests in joint venture partnerships, such as JJC
Florida, LLC and JJC Hawaii, LLC, both of which are accounted for under the equity method of accounting.
The Company has initiated discussions with several financial institutions to replace and expand the current Jamba Juice Company line of credit. Other
than normal operating expenditures, cash requirements for fiscal 2007 are expected to consist primarily of capital expenditures for new Company Stores and
the remodeling and refurbishment of existing Company Stores. For the remainder of calendar year 2007, management expects capital expenditures to be in the
range of $40 million to $47 million, relating to the opening of approximately 90 Company Stores, remodeling certain existing stores, enhancing the Company’s
information systems, and leasehold improvement at our new support center.
Jamba Juice Company has a revolving line of credit (the “Line”) for a maximum principal of up to $35 million or 1.5 times trailing earnings before
interest, taxes, depreciation and amortization (“EBITDA”), as defined by the agreement for the Line. Borrowings bear interest at either the London Inter Bank
Offering Rate (LIBOR) plus a margin of 2.00% to 3.25% or a Base Rate (determined by certain base rates such as Prime, Federal Funds Effective Rate or Base
CD rate) plus a margin of 0% to 1.5%, depending on Jamba Juice Company’s adjusted leverage ratio (as defined by the Line). The Line is secured by
substantially all of the assets of Jamba Juice Company and requires compliance with certain quarterly financial covenants. The Line expires December 2007.
As of January 9, 2007 the Company was in compliance with these covenants. No amounts were outstanding on the Line as of January 9, 2007. In addition to
requiring that Jamba Juice Company maintain certain minimum ratios such as a fixed charge coverage ratio and an adjusted leverage ratio, Jamba Juice
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