Jamba Juice 2008 Annual Report Download - page 101
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Table of Contents
Estimated amortization expense for the next three years is approximately $50,000 per year until 2009, when the estimated amortization expense will total
approximately $35,000 for fiscal years 2010 through 2015.
Loss on asset impairment, store closures and disposals of fixed assets consisted of the following (in thousands):
Asset impairment $ 182 $1,065 $ 397
Loss on store closures 78 1,027 6
Loss on disposal of other assets 846 676 616
Total $1,106 $2,768 $1,019
—Due to declining market conditions, competition, insufficient occupancy rates in neighboring businesses and other factors, Jamba
Juice Company recorded non-cash impairment charges of $0.2 million, $1.1 million and $0.4 million in the 22 Week Period and fiscal 2006 and 2005,
respectively, to write down a portion of the leasehold improvements, furniture and fixtures, and equipment values of certain stores to their estimated fair
values.
Jamba Juice Company considered several factors when estimating the future operating cash flows of the stores, including quality of the local market and
real estate, the store’s historical cash flows, local competition, saturation of markets due to proximity of other stores, general economic conditions and other
trends.
—During the 22 Week Period and fiscal 2006 and 2005, Jamba Juice Company closed one, three and two stores, respectively. Jamba
Juice Company recorded losses related to store closures of $78,000, $1,027,000 and $6,000 in the 22 Week Period and fiscal 2006 and 2005, respectively. Of
these charges, $59,000, $856,000 and $8,000 were noncash. In the year of closure, revenue for the stores that have closed was $146,000, $892,000 and
$543,000 and net operating losses, which include the losses on store closure, were $3,000, $1,898,000 and $71,000 in the 22 Week Period and fiscal 2006
and 2005, respectively.
The following is a reconciliation of the store closure accrual (in thousands):
Balance as of June 30, 2005 $—
Provision for estimated net future cash flows of closed stores and buyout costs 543
Balance as of June 30, 2006 543
Payments on liability (9)
Balance as of November 28, 2006 $534
—During the 22 Week Period and fiscal 2006 and 2005, Jamba Juice Company wrote off the net book value of
certain assets that were abandoned due to store remodels or upgrades of equipment.
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