Jamba Juice 2013 Annual Report Download - page 50

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TABLE OF CONTENTS
(approximately $2.4 million), a decrease in jambacard breakage income (approximately $1.1 million), a decrease in gain on sale of
investment (approximately $0.5 million) and an increase in expenses related to domestic and international franchise activities (approximately
$0.5 million).
Fiscal Year 2012 to Fiscal Year 2011
For fiscal 2012, other operating, net was $1.8 million of income, compared to expense of $0.2 million for fiscal 2011. The increase in
income of $2.0 million is primarily due to lower loss on disposal of fixed assets as sale of Company Stores pursuant to our refranchising
initiative ended in April 2011 (approximately $1.4 million), a reduction in international franchise expense (approximately $0.6 million),
gain on sale of our investment in our Hawaiian joint venture (approximately $0.5 million) and an increase in jambacard breakage income for
fiscal 2012, (approximately $0.6 million), partially offset by an increase in expenses related to our CPG business and JambaGO
(approximately $0.6 million), and an increase in jambacard and franchise-related expense (approximately $0.5 million).
Interest expense
Fiscal Year 2013 to Fiscal Year 2012
Interest expense in fiscal 2013 and fiscal 2012 was $0.2 million.
Fiscal Year 2012 to Fiscal Year 2011
Interest expense in fiscal 2012 was $0.2 million compared to $0.5 million in fiscal 2011 primarily due to lower lease termination
obligations. In addition, during fiscal 2012 and fiscal 2011, we paid cash dividends on the Series B Preferred Stock totaling $1.3 million
and $1.6 million, respectively. During the third quarter of fiscal 2012, holders of 93,500 shares of outstanding Series B-1 Preferred Stock
and 2,000 shares of outstanding Series B-2 Preferred Stock converted such stock into an aggregate of 1,910,000 shares of common stock
resulting in related accelerated accretion charges or deemed dividends of $0.7 million.
Income tax expense/benefit
Fiscal Year 2013 to Fiscal Year 2012
Income tax expense in fiscal 2013 was $(0.1) million compared to an income tax expense of $(0.2) million for fiscal 2012. The decrease
in income tax expense was primarily due to the change in valuation allowance related to deductible temporary differences originating during
the current year, the foreign withholding taxes and a favorable adjustment of our federal alternative minimum tax liability in the current year.
The increase in foreign withholding taxes was primarily due to the increase in our franchise and royalty income in foreign countries in fiscal
2013.
Fiscal Year 2012 to Fiscal Year 2011
Income tax expense in fiscal 2012 was $(0.2) million compared to an income tax benefit of $0.3 million for fiscal 2011. The increase in
income tax expense was primarily due to the change in valuation allowance related to deductible temporary differences originating during the
current year, the alternative minimum taxes and foreign withholding taxes. We started to have U.S. taxable income in fiscal 2012 and due to
the net operating loss carryforwards which can offset regular taxable income, we began to be subject to the alternative minimum taxes. The
increase in foreign withholding taxes was primarily due to the increase in our franchise and royalty income in the foreign countries in fiscal
2012.
Known Events, Trends or Uncertainties Impacting or Expected to Impact Comparisons of Reported or Future Results
Management reviews and discusses its operations based on both financial and non-financial metrics. Among the key financial metrics
upon which management focuses is reviewing the performance based on the Company’s consolidated GAAP results, including Company
Store comparable sales. Management also uses certain supplemental, non-GAAP financial metrics in evaluating financial results, including
Franchise Store comparable sales and system-wide comparable sales.
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