Jamba Juice 2007 Annual Report Download - page 70

Table of Contents



Jamba Juice Company has a store value card program, known as jambacard, where customers can purchase gift cards. When these cards are
purchased, Jamba Juice Company records an accrued store value card liability (deferred revenue). As of the Merger Date, Jamba Juice Company had an
outstanding balance of $17.7 million in accrued store value cards, which have been adjusted to fair value by discounting the projected cash flows to present
value, which are calculated as the costs to service deferred revenue, plus an estimated profit margin of 6%. The estimated fair value of the accrued store value
card liability as of November 28, 2006 was $14.8 million.

As of the Merger Date, Jamba Juice Company had a deferred rent liability of $10.6 million, which represented deferred rent arising from the difference
between the straight-line rent expense charged to operations and the cash paid under the Jamba Juice Company leases, as well as the unamortized construction
allowances received from landlords. In accordance with SFAS No. 141, these deferred amounts have not been recorded by the Company.

Because the purchase price allocated to assets acquired and liabilities assumed differs for financial reporting and tax purposes, the Company has, in
accordance with SFAS No. 109, , recognized deferred tax assets or liabilities for the deferred tax effects of those temporary
differences. As a result, the Company has recognized net deferred tax liabilities of $58.2 million.

The unaudited pro forma financial information in the table below summarizes the combined results of operations of the Company and Jamba Juice
Company as though the companies had been combined as of the beginning of the earliest period presented. The pro forma financial information is presented
for informational purposes only and is not indicative of the results of operations that would have been achieved if the Merger had taken place at the beginning
of the earliest period presented or that may result in the future. The pro forma financial information for all periods presented also includes the pro forma
amortization charges from acquired intangible assets, stock-based compensation charges for unvested options assumed, and related tax effects.
The unaudited pro forma financial information for fiscal 2006 combines the historical results of the Company and Jamba Juice Company for the period
from January 11, 2006 to January 9, 2007. The unaudited pro forma financial information for fiscal 2005 combines the historical results of the Company for
fiscal 2005, with the historical results of Jamba Juice Company for the period from January 12, 2005 to January 10, 2006.





Total revenues $269,045 $238,011
Operating income 460 4,002
Net (loss) income (52,367) 6,960
Basic net (loss) income per share (1.01) 0.16
Diluted net (loss) income per share (1.01) 0.14
70