Jamba Juice 2009 Annual Report Download - page 38

Table of Contents
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• Consolidated revenue growth of 8.1% to $342.9 million driven primarily by new Company Store openings and acquisitions.
• Comparable Company Store sales decreased 8.1% for the year with a declining trend over the course of the year.
• Loss from operations of $155.6 million. Loss from operations includes loss of $27.8 million from impairment of long-lived assets, loss of $84.0
million from impairment of goodwill, trademark and other intangibles, loss of $10.0 million from store lease termination and closure costs and
$4.2 million in non-cash share-based compensation.
• Net loss of $149.2 million.
• Diluted loss per share of $(2.80).
• General and administrative expense as a percent of total revenue was 14.0%. General and administrative expense include a restructuring charge of
$2.2 million associated with severance payable as a result of a reduction of the Company’s workforce and $2.1 million related to the acceleration
of stock options.
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During 2008, we experienced significant declines in our overall business results. We believe such declines have occurred as recent events such as the
housing and financial market crisis, rising unemployment, higher costs for consumer staples, and the general decline in consumer confidence all contributed
to a deepening economic recession, which has driven a significant adverse impact in consumer discretionary spending and, as a result, in reduced consumer
traffic in our stores. Decreases in consumer traffic not only adversely affect our revenue, but caused a de-leveraging of our fixed expenses such as occupancy
costs, thereby negatively affecting our operating margins. In addition to the challenging economic conditions, we continued to suffer weather-driven sales
volatility and strong competition, particularly in selected markets.
We also believe several operational factors contributed to our operating results in fiscal 2008. Our business model and growth strategy of heavy focus on
Company Stores with less emphasis on Franchise Stores, and the associated cost structure of operating Company Stores caused a disproportionate effect with
fiscal 2008’s adverse economic conditions. We were also disappointed with the performance of many of our 99 newer stores, which we attribute, in part, to
site selection decisions which also compromised our existing Company Stores. These factors, when combined with the unprecedented economic turmoil
experienced in fiscal 2008, led to significant profitability challenges and disappointing financial results.
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Since August 2008, when Steven R. Berrard, the Company’s Chairman of the Board, served as interim President and Chief Executive Officer of the
Company, we have embarked on several revitalization activities to position the Company for future success. Through fiscal 2008, our revitalization strategy
focused on:
Enhancing and managing our liquidit y. In September 2008, we completed a $25 million senior debt financing which strengthened our financial
position. We also took several cost-cutting actions to improve our working capital position. We also reduced our capital expenditures and moved toward for the
short-term, making future capital expenditures discretionary in nature.
Changing our business model. We announced a goal of becoming more evenly weighted between Company Stores and Franchise Stores. We also
implemented more stringent site selection criteria for future Company Store development. We also increased the priority to leverage the Jamba brand through
consumer products licensing.
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