Jamba Juice 2014 Annual Report Download - page 52

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The following table summarizes our cash flows for each of the past three full fiscal years (in thousands):
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Net cash provided by operating activities $ 3,543 $ 10,470 $ 17,568
Net cash used in investing activities (9,417) (10,234) (4,498)
Net cash (used in) provided by financing activities (8,762) 664 (1,191)
Net (decrease) increase in cash and cash equivalents $ (14,636) $ 900 $ 11,879
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As of December 30, 2014, we had cash and cash equivalents of $17.8 million compared to $32.4 million in cash and cash equivalents as of December 31,
2013. As of December 30, 2014 and December 31, 2013, we had no short term or long term debt. Our primary sources of liquidity are cash flows provided by
operating activities. In addition, we have a revolving line of credit with Wells Fargo Bank, National Association for $15.0 million, which we may utilize as
described below. In the future, we may enter equipment leasing arrangements and incur additional indebtedness as necessary and as permitted under our
credit agreement. We cannot assure, however, that such financing will be available on favorable terms or at all.
The $14.6 million decrease in cash and cash equivalents in fiscal 2014 was primarily attributable to capital expenditures and the repurchase of common
stock. We expect that our cash on hand and future cash flows provided by operating activities will be sufficient to fund our working capital and general
corporate needs and the non-discretionary capital expenditures for the foreseeable future. For fiscal 2015, our primary liquidity and capital requirements are
for working capital, repurchase of common stock, general corporate needs and the planned capital expenditures. As previously disclosed, our November 2014
announcement about our accelerated refranchising initiative includes the sale of up to 114 company stores in the California market. We anticipate that the
gross proceeds from the refranchising of the 114 Company stores will be in the range of $30- $40 million. The use of cash to fund discretionary capital
expenditures will be based on the need to conserve our capital.
On February 14, 2012, the Company entered into a Credit Agreement with Wells Fargo Bank, National Association (the “Lender”), which, as amended on
November 1, 2012, July 22, 2013, November 4, 2013 and December 30, 2014 (as amended, the “Credit Agreement”), makes available to the Company a
revolving line of credit in the amount of $15.0 million. The outstanding balance under the amended credit facility bears interest at a LIBOR Market Index
Rate based upon the rate for one month U.S. dollar deposits, plus 2.50% per annum. Under the terms of the Credit Agreement, the Company is required to
either maintain minimum cash and consolidated EBITDA levels or maintain maximum consolidated leverage ratios, minimum levels of tangible net worth
and a minimum fixed charge coverage ratio. The Credit Agreement terminates July 22, 2016 or may be terminated earlier by the Company or by the Lender.
This credit facility is subject to customary affirmative and negative covenants for credit facilities of this type, including limitations on the Company with
respect to liens, indebtedness, guaranties, investments, distributions, mergers and acquisitions and dispositions of assets. The credit facility is evidenced by a
revolving note made by the Company in favor of the Lender, is guaranteed by the Company and is secured by substantially all of its assets including the
assets of its subsidiaries and a pledge of stock of its subsidiaries. In addition, the Credit Agreement replaced restricted cash requirements established in prior
periods, as the line of credit also collateralizes the Company’s outstanding letters of credit of $1.7 million as of December 30, 2014.
During fiscal 2014, there were no borrowings under the Credit Agreement. To acquire the credit facility, the Company incurred upfront fees, which are
being amortized over the term of the Credit Agreement. As of December 30, 2014 and December 31, 2013, the unamortized commitment fee amount was not
material and is recorded in prepaid expenses and other current assets on the consolidated balance sheet. As of December 30, 2014, the Company was in
compliance with the financial covenants to the Credit Agreement. The unused borrowing capacity under the agreement on December 30, 2014, was $13.3
million.
The adequacy of our available funds will depend on many factors, including the macroeconomic environment, the operating performance of our
Company Stores, the successful expansion of our franchise and licensing programs and the successful rollout and consumer acceptance of our new beverage
and food initiatives. Given these factors, our foremost priorities for the near term continue to be preserving and generating cash sufficient to fund our
liquidity needs.
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