Jamba Juice 2008 Annual Report Download - page 42

Table of Contents
move of the support center from San Francisco, CA to Emeryville, CA, legal and accounting costs associated with the preparation of first-time post-merger
public company filings with the Securities and Exchange Commission and costs associated with the internal control requirements of the Sarbanes-Oxley Act of
2002. In addition, we also experienced decreased leverage due to lower California Company Store comparable store sales, partially offset by menu price
increases taken during fiscal 2007. On a reported basis, general and administrative expense as a percentage of total revenue decreased in fiscal 2007 as
compared to fiscal 2006 as a result of prior year deleverage resulting from lower sales in the slower Winter months, which include the six week period from the
Merger to the end of fiscal 2006, and as a result of transaction costs associated with the Merger in the prior year. We anticipate general and administrative
expenses as a percentage of total revenue will decrease in fiscal 2008.

(in 000’s)
 











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


Store pre-opening expense $5,863 1.8% $285 1.2% $2,687 1.0%
Store pre-opening costs are largely expenses incurred for training new store personnel and pre-opening marketing costs. The increase in store pre-opening
costs as a percentage of total revenue on a proforma basis is primarily associated with 99 new Company Stores openings in fiscal 2007, decreased leverage
due to lower California Company Store comparable store sales, partially offset by menu price increases taken during fiscal 2007.

(in 000’s)
 











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
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
Other operating expense $6,567 2.1% $675 2.9% $ 7,874 2.9%
Other operating expenses consist primarily of franchise support expenses, losses on disposals, asset impairment and store closures, amortization of
jambacard liability, offset by income from jambacard breakage. These amounts include $2.8 million for fiscal 2007 and $0.7 million (reported) and $4.0
million (proforma) for fiscal 2006, for franchise support expenses, which are costs associated with franchise employee support provided to JJC Florida LLC,
which owns 13 stores, and a Midwest franchisee whose stores we acquired in the fourth quarter of fiscal 2006. Franchise support expenses are offset by
franchise support revenue, which is recorded in franchise and other revenue. Also contributing to other operating expenses were losses on disposal of assets of
$1.2 million in fiscal 2007 and $0.6 million (reported) and $1.9 million (proforma) in fiscal 2006, asset impairment of $1.6 million in fiscal 2007 and $0
(reported) and $1.2 million (proforma) in fiscal 2006, and amortization of jambacard liability of $2.1 million in fiscal 2007 and $0 (reported) and $0 million
(proforma) in fiscal 2006. Offsetting these costs was $1.5 million in fiscal 2007 and $0.3 million (reported) and $1.1 million (proforma) in fiscal 2006 of
income recognized from unredeemed jambacards.

Goodwill impairment of $111.0 million and other intangible asset impairment of $89.6 million was recorded in fiscal 2007 to reflect the impairment
losses related to the difference between the fair value and recorded value
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