Attached files
| file | filename |
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| 8-K - FORM 8-K - JAMBA, INC. | v416879_8k.htm |
Exhibit 99.1
JAMBA INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share amounts)
| PRO FORMA ADJUSTMENTS | ||||||||||||||||||||||||||||||||||||||||||||
| Reported | April Disposal | April Disposal | May | June Disposal | June Disposal | July Disposal | July Disposal | Other | Total | Pro Forma | ||||||||||||||||||||||||||||||||||
| December 30, 2014 | 1 | 2 | Disposal | 1 | 2 | 1 | 2 | Disposals | Adjustments | December 30, 2014 | ||||||||||||||||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||||||||||||||||||||
| Current assets: | ||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 17,750 | $ | 1,499 | $ | 2,760 | $ | 2,300 | $ | 1,840 | $ | 370 | $ | 5,834 | $ | 20,620 | $ | 2,406 | $ | 37,630 | (a) | $ | 55,380 | |||||||||||||||||||||
| Receivables, net of allowances of $280 and $291 | 16,977 | - | - | - | - | - | - | - | - | 16,977 | ||||||||||||||||||||||||||||||||||
| Inventories | 2,300 | (83 | ) | (48 | ) | (56 | ) | (67 | ) | (42 | ) | (156 | ) | (444 | ) | (32 | ) | (927 | ) | (c) | 1,373 | |||||||||||||||||||||||
| Prepaid and refundable income taxes | 474 | - | - | - | - | - | - | - | - | - | 474 | |||||||||||||||||||||||||||||||||
| Prepaid rent | 504 | - | - | - | - | - | - | - | - | - | 504 | |||||||||||||||||||||||||||||||||
| Assets held for sale | 11,221 | (2,427 | ) | - | (1,311 | ) | - | - | (8,424 | ) | (191 | ) | (12,353 | ) | (d) | (1,132 | ) | |||||||||||||||||||||||||||
| Prepaid expenses and other current assets | 8,105 | - | (95 | ) | - | - | 1,260 | - | - | - | 1,165 | (b) (c) | 9,270 | |||||||||||||||||||||||||||||||
| Total current assets | 57,331 | (1,011 | ) | 2,617 | 933 | 1,773 | 1,588 | 5,678 | 11,752 | 2,184 | 25,514 | 82,845 | ||||||||||||||||||||||||||||||||
| Property, fixtures and equipment, net | 29,575 | - | (829 | ) | - | (964 | ) | (755 | ) | (3,683 | ) | - | (325 | ) | (6,556 | ) | (d) | 23,019 | ||||||||||||||||||||||||||
| Goodwill | 982 | (7 | ) | (11 | ) | (9 | ) | (8 | ) | (6 | ) | (23 | ) | - | - | (65 | ) | (d) | 917 | |||||||||||||||||||||||||
| Trademarks and other intangible assets, net | 2,360 | - | - | - | - | - | - | - | - | - | 2,360 | |||||||||||||||||||||||||||||||||
| Other long-term assets | 2,241 | - | - | - | - | - | - | 2,000 | - | 2,000 | (e) | 4,241 | ||||||||||||||||||||||||||||||||
| Total assets | $ | 92,489 | $ | (1,018 | ) | $ | 1,777 | $ | 924 | $ | 801 | $ | 827 | $ | 1,972 | $ | 13,752 | $ | 1,859 | $ | 20,894 | $ | 113,383 | |||||||||||||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||||||||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||||||||||||||||||||||||||
| Accounts payable | $ | 3,926 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 3,926 | ||||||||||||||||||||||
| Accrued compensation and benefits | 6,325 | - | - | - | - | - | - | - | - | - | 6,325 | |||||||||||||||||||||||||||||||||
| Workers' compensation and health insurance reserves | 1,311 | - | - | - | - | - | - | - | - | - | 1,311 | |||||||||||||||||||||||||||||||||
| Accrued jambacard liability | 38,184 | - | - | - | - | - | - | - | - | - | 38,184 | |||||||||||||||||||||||||||||||||
| Other current liabilities | 16,454 | - | - | - | - | - | - | - | - | - | 16,454 | |||||||||||||||||||||||||||||||||
| Total current liabilities | 66,200 | - | - | - | - | - | - | - | - | - | 66,200 | |||||||||||||||||||||||||||||||||
| Deferred revenue and other long-term liabilities | 9,544 | 210 | - | 295 | - | - | - | 694 | - | 1,199 | (f) | 10,743 | ||||||||||||||||||||||||||||||||
| Total liabilities | 75,744 | 210 | 0 | 295 | - | - | - | 694 | 0 | 1,199 | 76,943 | |||||||||||||||||||||||||||||||||
| Stockholders' equity: | ||||||||||||||||||||||||||||||||||||||||||||
| Common stock | $ | 17 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 17 | ||||||||||||||||||||||
| Additional paid-in-capital | 396,629 | - | - | - | - | - | - | - | - | - | 396,629 | |||||||||||||||||||||||||||||||||
| Treasury Shares at cost | (11,991 | ) | - | - | - | - | - | - | - | - | - | (11,991 | ) | |||||||||||||||||||||||||||||||
| Accumulated deficit | (368,041 | ) | (1,228 | ) | 1,908 | 629 | 801 | 827 | 1,972 | 13,058 | 1,859 | 19,826 | (g) | (348,215 | ) | |||||||||||||||||||||||||||||
| Total equity attributable to Jamba, Inc. | 16,614 | (1,228 | ) | 1,908 | 629 | 801 | 827 | 1,972 | 13,058 | 1,859 | 19,826 | 36,440 | ||||||||||||||||||||||||||||||||
| Noncontrolling interest | 131 | - | (131 | ) | - | - | - | - | - | - | (131 | ) | (h) | - | ||||||||||||||||||||||||||||||
| Total stockholders' equity | 16,745 | (1,228 | ) | 1,777 | 629 | 801 | 827 | 1,972 | 13,058 | 1,859 | 19,695 | 36,440 | ||||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 92,489 | $ | (1,018 | ) | $ | 1,777 | $ | 924 | $ | 801 | $ | 827 | $ | 1,972 | $ | 13,752 | $ | 1,859 | $ | 20,894 | $ | 113,383 | |||||||||||||||||||||
JAMBA INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
| PRO FORMA ADJUSTMENTS | |||||||||||||||||||||||||||||||||||||||||||
| Reported Fiscal Year Ended December 30, | April Disposal | April Disposal | May | June Disposal | June Disposal | July Disposal | July Disposal | Other | Total | Pro Forma Fiscal Year Ended December 30, | |||||||||||||||||||||||||||||||||
| 2014 | 1 | 2 | Disposal | 1 | 2 | 1 | 2 | Disposals | Adjustments | 2014 | |||||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||||||||||
| Company Stores | $ | 198,737 | $ | (9,563 | ) | $ | (6,551 | ) | $ | (7,219 | ) | $ | (6,543 | ) | $ | (6,039 | ) | $ | (7,032 | ) | $ | (54,747 | ) | $ | (3,996 | ) | (101,690 | ) | A | $ | 97,047 | ||||||||||||
| Franchise and other revenue | 19,311 | 526 | 360 | 397 | 360 | 332 | 387 | 3,011 | 220 | 5,593 | B | 24,904 | |||||||||||||||||||||||||||||||
| Total revenue | 218,048 | (9,037 | ) | (6,191 | ) | (6,822 | ) | (6,183 | ) | (5,707 | ) | (6,645 | ) | (51,736 | ) | (3,776 | ) | (96,097 | ) | 121,951 | |||||||||||||||||||||||
| Costs and operating expenses (income): | |||||||||||||||||||||||||||||||||||||||||||
| Cost of sales | 52,236 | (2,418 | ) | (1,634 | ) | (1,851 | ) | (1,677 | ) | (1,601 | ) | $ | (1,883 | ) | $ | (13,754 | ) | (1,032 | ) | (25,850 | ) | C | 26,386 | ||||||||||||||||||||
| Labor | 61,749 | (3,164 | ) | (1,808 | ) | (2,198 | ) | (2,002 | ) | (1,871 | ) | (2,089 | ) | (16,735 | ) | (1,157 | ) | (31,024 | ) | C | 30,725 | ||||||||||||||||||||||
| Occupancy | 27,630 | (1,192 | ) | (813 | ) | (843 | ) | (824 | ) | (807 | ) | (937 | ) | (5,978 | ) | (370 | ) | (11,764 | ) | C | 15,866 | ||||||||||||||||||||||
| Store operating | 33,089 | (1,473 | ) | (846 | ) | (1,106 | ) | (1,024 | ) | (880 | ) | (1,047 | ) | (7,954 | ) | (554 | ) | (14,884 | ) | C | 18,205 | ||||||||||||||||||||||
| Depreciation and amortization | 10,084 | (501 | ) | (149 | ) | (323 | ) | (279 | ) | (201 | ) | (243 | ) | (1,622 | ) | (91 | ) | (3,409 | ) | C | 6,675 | ||||||||||||||||||||||
| General and administrative | 37,278 | - | - | - | - | - | - | - | - | - | 37,278 | ||||||||||||||||||||||||||||||||
| Other operating, net | (718 | ) | - | - | - | - | - | - | - | - | - | (718 | ) | ||||||||||||||||||||||||||||||
| Total costs and operating expenses | 221,348 | (8,748 | ) | (5,250 | ) | (6,321 | ) | (5,806 | ) | (5,360 | ) | (6,199 | ) | (46,043 | ) | (3,204 | ) | (86,931 | ) | 134,417 | |||||||||||||||||||||||
| Loss from operations | (3,300 | ) | (289 | ) | (941 | ) | (501 | ) | (377 | ) | (347 | ) | (446 | ) | (5,693 | ) | (572 | ) | (9,166 | ) | (12,466 | ) | |||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||||||||||||||||||||||
| Interest income | 74 | - | - | - | - | - | - | - | - | - | 74 | ||||||||||||||||||||||||||||||||
| Interest expense | (195 | ) | - | - | - | - | - | - | - | - | - | (195 | ) | ||||||||||||||||||||||||||||||
| Total other expense, net | (121 | ) | - | - | - | - | - | - | - | - | - | (121 | ) | ||||||||||||||||||||||||||||||
| Loss before income taxes | (3,421 | ) | (289 | ) | (941 | ) | (501 | ) | (377 | ) | (347 | ) | (446 | ) | (5,693 | ) | (572 | ) | (9,166 | ) | (12,587 | ) | |||||||||||||||||||||
| Income tax expense | (168 | ) | - | - | - | - | - | - | - | - | - | (168 | ) | ||||||||||||||||||||||||||||||
| Net loss | (3,589 | ) | (289 | ) | (941 | ) | (501 | ) | (377 | ) | (347 | ) | (446 | ) | (5,693 | ) | (572 | ) | (9,166 | ) | (12,755 | ) | |||||||||||||||||||||
| Less: Net income attributable to noncontrolling interest | 43 | - | (43 | ) | - | - | - | - | - | - | (43 | ) | D | - | |||||||||||||||||||||||||||||
| Net loss attributable to common stockholders | $ | (3,632 | ) | $ | (289 | ) | $ | (898 | ) | $ | (501 | ) | (377 | ) | (347 | ) | (446 | ) | (5,693 | ) | $ | (572 | ) | $ | (9,123 | ) | $ | (12,755 | ) | ||||||||||||||
Jamba, Inc.
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
December 30, 2014
| 1. | Description of Refranchising Transactions |
Beginning in January, 2015, Jamba Juice Company, a California corporation and wholly-owned subsidiary of Jamba, Inc. (the “Company”) began refranchising Company-owned stores located in the San Francisco Bay Area and Southern California as part of the Company’s refranchising initiative in multiple transactions.
April Disposal 1
In connection with the first refranchising transaction, the Company transferred to M5 Partners, Inc. all machinery, equipment, computer hardware (including point of sale equipment), furniture, fixtures, tools, signs, vehicles, other tangible personal property and all goodwill associated with the stores for a purchase price of $1,850,000. M5 Partners, Inc. agreed to enter into the Company’s standard franchise agreement with a ten-year term in connection with entering into the transaction.
April Disposal 2
In another refranchising transaction completed on April 28, 2015, the Company sold its 88% membership interest in Jamba Juice Southern California LLC (“JJSC”) to Strategic Marketing Sciences, Inc., its minority partner in the joint venture. JJSC was formed to operate a group of stores in Southern California. The purchase price for the membership interest was $3,000,000 plus payment for all marketable inventory and cash on hand at each of the stores. Strategic Marketing Sciences, Inc. agreed to enter into the Company’s standard franchise agreement with a ten-year term in connection with entering into the transaction.
May Disposal
On May 19, 2015, the Company completed the refranchising of a group of Company-owned stores located in the San Francisco Bay Area. In connection with the refranchising transaction, the Company transferred to Blended Star NorCal, Inc. all machinery, equipment, computer hardware (including point of sale equipment), furniture, fixtures, tools, signs, vehicles, other tangible personal property and all goodwill associated with the stores for a purchase price of $2,500,000 plus payment for all marketable inventory and cash on hand at each of the stores. Blended Star NorCal, Inc. agreed to enter into the Company’s standard franchise agreement with a ten-year term in connection with entering into the transaction.
June Disposal 1
On June 9, 2015, the Company completed the refranchising of a group of Company-owned stores located in Southern California as part of its refranchising initiative. In connection with the refranchising transaction, the Company transferred to J’s Juice Masters, Inc. all machinery, equipment, computer hardware (including point of sale equipment), furniture, fixtures, tools, signs, other tangible personal property, all marketable inventory and all goodwill associated with the stores for a purchase price of $2,100,000 plus payment for cash on hand at each of the stores. J’s Juice Masters, Inc. agreed to enter into the Company’s standard franchise agreement with a ten-year term in connection with entering into the transaction.
June Disposal 2
On June 30, 2015, the Company completed the refranchising of a group of Company-owned stores located in Southern California as part of its refranchising initiative. In connection with the refranchising transaction, the Company transferred to CMCS 2 Juice, LP and CMCS 3 Juice, LP all machinery, equipment, computer hardware (including point of sale equipment), furniture, fixtures, tools, signs, other tangible personal property, all marketable inventory and all goodwill associated with the stores for a purchase price of $1,800,000 plus payment for cash on hand at each of the stores. Payment of the purchase price was comprised of $540,000 in cash and two promissory notes of $542,079 and $717,921, both with an interest rate of four and one-quarter percent (4.25%) per annum and maturity dates of July 30, 2015. CMCS 2 Juice, LP and CMCS 3 Juice, LP agreed to enter into the Company’s standard franchise agreement with a ten-year term in connection with entering into the transaction.
July Disposal 1
On July 7, 2015, the Company completed the refranchising of a group of Company-owned stores located in Southern California as part of its refranchising initiative. In connection with the refranchising transaction, the Company transferred to one owner operating five separate entities - Brea Juice Company, LLC, Fresh Juice Development, LLC, Grab N Go Juice, LLC, Juice To Go, LLC and LA Juice Company, LLC - all machinery, equipment, computer hardware (including point of sale equipment), furniture, fixtures, tools, signs, other tangible personal property, all marketable inventory and all goodwill associated with the stores for a purchase price of $6,600,030 plus payment of $30,000 for cash on hand at each of the stores. Brea Juice Company, LLC, Fresh Juice Development, LLC, Grab N Go Juice, LLC, Juice To Go, LLC and LA Juice Company, LLC, agreed to enter into the Company’s standard franchise agreement with a ten-year term in connection with entering into the transaction.
July Disposal 2
On July 28, 2015, the Company completed the refranchising of a group of Company-owned stores located in Northern and Southern California as part of its refranchising initiative. In connection with the refranchising transaction, the Company transferred to Vitaligent, LLC through its two wholly owned subsidiaries, Vitaligent-East Bay, LLC and Vitaligent-NorCal, LLC, all machinery, equipment, computer hardware (including point of sale equipment), furniture, fixtures, tools, signs, other tangible personal property, cash on hand at each of the stores, all marketable inventory and all goodwill associated with the stores for a purchase price of $25,000,000. The purchase price comprises a $23,000,000 cash payment and a promissory note for $2,000,000 that matures on February 1, 2021. The promissory note bears basic interest at a rate of 3% per annum, plus payment-in-kind interest at a rate of 5.5% per annum. The payment-in-kind interest compounds quarterly beginning October 28, 2015. In addition to a $50,000 escrow account at closing for store repairs/upgrades, there is a reduction in gain for contingent payables of $694,000 for designated repairs and fixed asset additions. Vitaligent-East Bay, LLC and Vitaligent-NorCal, LLC agreed to enter into the Company’s standard franchise agreement with a ten-year term in connection with entering into the transaction.
Other Disposals
In addition to the transactions mentioned above, the Company entered into multiple individually immaterial agreements and refranchised a small group of stores located in Southern California and in the San Francisco Bay Area during the 13 week periods ended March 31, 2015 and June 30, 2015. In connection with the refranchising transactions, the Company received aggregate proceeds of $2,412,000 and the purchasers entered into the Company’s standard franchise agreements with ten-year terms in connection with entering into the transactions.
| 2. | Basis of Presentation |
The effect of the refranchising transactions on a cumulative basis is reflected in the unaudited pro forma condensed consolidated financial statements.
The unaudited pro forma condensed consolidated financial statements were prepared in accordance with U.S. GAAP and pursuant to U.S. Securities and Exchange Commission Regulation S-X Article 11, and present the pro forma financial position and results of operations of the Company based upon the historical information after giving effect to the disposal and adjustments described in the notes to the unaudited pro forma condensed consolidated financial statements. The unaudited pro forma condensed consolidated balance sheet is presented as if the refranchising had occurred on December 30, 2014, and the unaudited pro forma condensed consolidated statement of operations for the fiscal year ended December 30, 2014 is presented as if the disposal had occurred on January 1, 2014.
The unaudited pro forma condensed consolidated financial information is presented for informational purposes only and is not indicative of the Company’s financial results or financial position as if the transactions reflected herein had occurred, or been in effect during the pro forma periods. This unaudited pro forma condensed consolidated financial information should not be viewed as indicative of the Company’s expected financial results for future periods.
| 3. | Adjustments to Unaudited Pro Forma Condensed Consolidated Balance Sheet |
Adjustments in the columns titled “Pro Forma Adjustments” represent the following:
(a) - Represents the pro forma adjustments for the proceeds received offset by related expenses and store-related cash balances at the end of the fiscal year (in thousands).
| Amount | ||||
| Proceeds received | $ | 42,146 | ||
| Cost to sell | (4,327 | ) | ||
| Store-related cash on hand | (189 | ) | ||
| $ | 37,630 | |||
(b) - Represents the pro forma adjustments for the one month promissory notes given as consideration included in the purchase price (in thousands):
| Amount | ||||
| CMCS 2 Juice, LP | $ | 542 | ||
| CMCS 3 Juice, LP | 718 | |||
| $ | 1,260 | |||
(c) - Represents the pro forma adjustments for the assets that will no longer be on the Company’s balance sheet as a result of the disposal of the stores to franchise partners.
(d) - Represents the pro forma adjustments for the estimated net book value of the assets purchased by the franchise partners from the Company.
(e) - Represents the pro forma adjustments for a long-term promissory note given as consideration included in the purchase price (in thousands):
| Amount | ||||
| Vitaligent, LLC | $ | 2,000 | ||
(f) - Represents the pro forma adjustments for the effect of amounts refundable to purchasers contingent upon landlords not extending the lease terms for certain store locations.
(g) - Represents the pro forma adjustments for the impact of the refranchising transaction on the Company’s accumulated deficit (in thousands):
| Amount | ||||
| Proceeds received | $ | 42,146 | ||
| Promissory Notes | 3,260 | |||
| Less: Cost to sell | (4,327 | ) | ||
| Assets held for sale | (12,352 | ) | ||
| Property, fixtures and equipment, net | (6,556 | ) | ||
| Goodwill and current assets | (1,276 | ) | ||
| Amounts contingently refundable | (505 | ) | ||
| Amounts contingently payable | (694 | ) | ||
| Noncontrolling interest | 131 | |||
| $ | 19,826 | |||
(h) - Represents the pro forma adjustment to eliminate the 12% noncontrolling interest in JJSC, since the purchaser is acquiring the remaining interest on the JJSC stores.
| 4. | Adjustments to Unaudited Pro Forma Condensed Consolidated Statement of Operations |
A - Reflects the pro forma adjustments for the revenue during the fiscal year ended December 30, 2014 from the stores sold to franchise partners.
B - Reflects the pro forma adjustments for estimated royalty income that would have been earned had the stores been owned by franchisees for the 2014 fiscal year.
C - Reflects the pro forma adjustments for the expenses related to the stores sold to franchise partners.
D - Reflects the pro forma adjustments to eliminate the 12% noncontrolling interest in JJSC, since the owner of the noncontrolling interest is acquiring the remaining interest on the JJSC stores.
JAMBA INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share amounts)
| PRO FORMA ADJUSTMENTS | |||||||||||||||||||||||||||||||||||||||||||||
| Reported | April Disposal | April Disposal | May | June Disposal | June Disposal | July Disposal | July Disposal | Other | Total | Pro Forma | |||||||||||||||||||||||||||||||||||
| March 31, 2015 | 1 | 2 | Disposal | 1 | 2 | 1 | 2 | Disposals | Adjustments | March 31, 2015 | |||||||||||||||||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||||||||||||||||||||||
| Current assets: | |||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 8,116 | $ | 1,499 | $ | 2,760 | $ | 2,300 | $ | 1,840 | $ | 370 | $ | 5,834 | $ | 20,620 | $ | 60 | $ | 35,284 | (a) | 43,400 | |||||||||||||||||||||||
| Receivables, net of allowances of $272 and $280 | 16,226 | - | - | - | - | - | - | - | - | - | 16,226 | ||||||||||||||||||||||||||||||||||
| Inventories | 2,267 | (90 | ) | (44 | ) | (63 | ) | (62 | ) | (48 | ) | (181 | ) | (421 | ) | (7 | ) | (915 | ) | (c) | 1,352 | ||||||||||||||||||||||||
| Prepaid and refundable income taxes | 329 | - | - | - | - | - | - | - | - | - | 329 | ||||||||||||||||||||||||||||||||||
| Prepaid rent | 2,931 | - | - | - | - | - | - | - | - | - | 2,931 | ||||||||||||||||||||||||||||||||||
| Assets held for sale | 22,875 | (2,427 | ) | (804 | ) | (1,311 | ) | (846 | ) | - | (3,533 | ) | (8,900 | ) | - | (17,821 | ) | (d) | 5,054 | ||||||||||||||||||||||||||
| Prepaid expenses and other current assets | 7,554 | - | (95 | ) | - | - | 1,260 | - | - | - | 1,165 | (b)(c) | 8,719 | ||||||||||||||||||||||||||||||||
| Total current assets | 60,298 | (1,018 | ) | 1,817 | 926 | 932 | 1,582 | 2,120 | 11,299 | 54 | 17,712 | 78,010 | |||||||||||||||||||||||||||||||||
| Property, fixtures and equipment, net | 16,002 | - | - | - | - | - | - | - | (114 | ) | (114 | ) | (d) | 15,888 | |||||||||||||||||||||||||||||||
| Goodwill | 897 | (7 | ) | (11 | ) | (9 | ) | (8 | ) | (6 | ) | (23 | ) | - | - | (65 | ) | (d) | 832 | ||||||||||||||||||||||||||
| Trademarks and other intangible assets, net | 1,295 | - | - | - | - | - | - | - | - | - | 1,295 | ||||||||||||||||||||||||||||||||||
| Other long-term assets | 1,969 | - | - | - | - | - | - | 2,000 | - | 2,000 | (e) | 3,969 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 80,461 | $ | (1,025 | ) | $ | 1,806 | $ | 917 | $ | 924 | $ | 1,576 | $ | 2,097 | $ | 13,299 | $ | (60 | ) | $ | 19,534 | $ | 99,995 | |||||||||||||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||||||||||||||||||||||||||||
| Current liabilities: | |||||||||||||||||||||||||||||||||||||||||||||
| Accounts payable | $ | 2,310 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 2,310 | |||||||||||||||||||||||
| Accrued compensation and benefits | 4,813 | - | - | - | - | - | - | - | - | - | 4,813 | ||||||||||||||||||||||||||||||||||
| Workers' compensation and health insurance reserves | 1,680 | - | - | - | - | - | - | - | - | - | 1,680 | ||||||||||||||||||||||||||||||||||
| Accrued jambacard liability | 32,368 | - | - | - | - | - | - | - | - | - | 32,368 | ||||||||||||||||||||||||||||||||||
| Other current liabilities | 21,005 | - | - | - | - | - | - | - | - | - | 21,005 | ||||||||||||||||||||||||||||||||||
| Total current liabilities | 62,176 | - | - | - | - | - | - | - | - | - | 62,176 | ||||||||||||||||||||||||||||||||||
| Deferred revenue and other long-term liabilities | 8,643 | 210 | - | 295 | - | - | - | 694 | - | 1,199 | (f) | 9,842 | |||||||||||||||||||||||||||||||||
| Total liabilities | 70,819 | 210 | - | 295 | - | - | - | 694 | - | 1,199 | 72,018 | ||||||||||||||||||||||||||||||||||
| Stockholders' equity: | |||||||||||||||||||||||||||||||||||||||||||||
| Common stock | $ | 18 | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 18 | |||||||||||||||||||||||
| Additional paid-in-capital | 397,928 | - | - | - | - | - | - | - | - | - | 397,928 | ||||||||||||||||||||||||||||||||||
| Treasury Shares at cost | (18,674 | ) | - | - | - | - | - | - | - | - | - | (18,674 | ) | ||||||||||||||||||||||||||||||||
| Accumulated deficit | (369,792 | ) | (1,235 | ) | 1,968 | 622 | 924 | 1,576 | 2,097 | 12,605 | (60 | ) | 18,496 | (g) | (351,296 | ) | |||||||||||||||||||||||||||||
| Total equity attributable to Jamba, Inc. | 9,480 | (1,235 | ) | 1,968 | 622 | 924 | 1,576 | 2,097 | 12,605 | (60 | ) | 18,496 | 27,976 | ||||||||||||||||||||||||||||||||
| Noncontrolling interest | 162 | - | (162 | ) | - | - | - | - | - | - | (162 | ) | (h) | - | |||||||||||||||||||||||||||||||
| Total stockholders' equity | 9,642 | (1,235 | ) | 1,806 | 622 | 924 | 1,576 | 2,097 | 12,605 | (60 | ) | 18,334 | 27,976 | ||||||||||||||||||||||||||||||||
| Total liabilities and stockholders' equity | $ | 80,461 | $ | (1,025 | ) | $ | 1,806 | $ | 917 | $ | 924 | $ | 1,576 | $ | 2,097 | $ | 13,299 | $ | (60 | ) | $ | 19,533 | $ | 99,994 | |||||||||||||||||||||
JAMBA INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
| PRO FORMA ADJUSTMENTS | ||||||||||||||||||||||||||||||||||||||||||||||||
| Reported
13 week period ended March 31, |
April Disposal | April Disposal | May | June Disposal | June Disposal | July Disposal | July Disposal | Other | Total | Pro
Forma 13 week period ended March 31, |
||||||||||||||||||||||||||||||||||||||
| 2015 | 1 | 2 | Disposal | 1 | 2 | 1 | 2 | Disposals | Adjustments | 2015 | ||||||||||||||||||||||||||||||||||||||
| Revenue: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Company Stores | $ | 47,728 | $ | (2,350 | ) | $ | (1,644 | ) | $ | (1,737 | ) | $ | (1,681 | ) | $ | (1,550 | ) | $ | (1,774 | ) | $ | (29,859 | ) | $ | (814 | ) | (41,410 | ) | A | $ | 6,318 | |||||||||||||||||
| Franchise and other revenue | 4,776 | 129 | 90 | 96 | 92 | 85 | 92 | 1,642 | 45 | 2,272 | B | 7,048 | ||||||||||||||||||||||||||||||||||||
| Total revenue | 52,504 | (2,221 | ) | (1,554 | ) | (1,641 | ) | (1,589 | ) | (1,465 | ) | (1,682 | ) | (28,217 | ) | (769 | ) | (39,137 | ) | 13,367 | ||||||||||||||||||||||||||||
| Costs and operating expenses (income): | ||||||||||||||||||||||||||||||||||||||||||||||||
| Cost of sales | 12,407 | (585 | ) | (428 | ) | (428 | ) | (431 | ) | (412 | ) | $ | (469 | ) | $ | (7,146 | ) | (216 | ) | (10,115 | ) | C | 2,292 | |||||||||||||||||||||||||
| Labor | 16,088 | (822 | ) | (477 | ) | (557 | ) | (518 | ) | (498 | ) | $ | (530 | ) | $ | (9,015 | ) | (288 | ) | (12,704 | ) | C | 3,384 | |||||||||||||||||||||||||
| Occupancy | 6,835 | (301 | ) | (207 | ) | (222 | ) | (211 | ) | (213 | ) | $ | (252 | ) | $ | (3,144 | ) | (58 | ) | (4,608 | ) | C | 2,227 | |||||||||||||||||||||||||
| Store operating | 8,034 | (376 | ) | (224 | ) | (244 | ) | (239 | ) | (216 | ) | $ | (244 | ) | $ | (4,182 | ) | (76 | ) | (5,801 | ) | C | 2,233 | |||||||||||||||||||||||||
| Depreciation and amortization | 1,873 | (51 | ) | (32 | ) | (68 | ) | (55 | ) | (37 | ) | $ | (45 | ) | $ | - | (81 | ) | (368 | ) | C | 1,505 | ||||||||||||||||||||||||||
| General and administrative | 8,963 | - | - | - | - | - | - | - | - | - | 8,963 | |||||||||||||||||||||||||||||||||||||
| Other operating, net | (28 | ) | - | - | - | - | - | - | - | 1,924 | 1,924 | D | 1,896 | |||||||||||||||||||||||||||||||||||
| Total costs and operating expenses | 54,172 | (2,135 | ) | (1,368 | ) | (1,519 | ) | (1,454 | ) | (1,375 | ) | (1,540 | ) | (23,486 | ) | 1,205 | (31,672 | ) | 22,500 | |||||||||||||||||||||||||||||
| Loss from operations | (1,668 | ) | (86 | ) | (186 | ) | (122 | ) | (135 | ) | (90 | ) | (142 | ) | (4,730 | ) | (1,974 | ) | (7,465 | ) | (9,133 | ) | ||||||||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||||||||||||||||||||||||
| Interest income | 15 | - | - | - | - | - | - | - | - | - | 15 | |||||||||||||||||||||||||||||||||||||
| Interest expense | (41 | ) | - | - | - | - | - | - | - | - | - | (41 | ) | |||||||||||||||||||||||||||||||||||
| Total other expense, net | (26 | ) | - | - | - | - | - | - | - | - | - | (26 | ) | |||||||||||||||||||||||||||||||||||
| Loss before income taxes | (1,694 | ) | (86 | ) | (186 | ) | (122 | ) | (135 | ) | (90 | ) | (142 | ) | (4,730 | ) | (1,974 | ) | (7,465 | ) | (9,159 | ) | ||||||||||||||||||||||||||
| Income tax expense | (26 | ) | - | - | - | - | - | - | - | - | - | (26 | ) | |||||||||||||||||||||||||||||||||||
| Net loss | (1,720 | ) | (86 | ) | (186 | ) | (122 | ) | (135 | ) | (90 | ) | (142 | ) | (4,730 | ) | (1,974 | ) | (7,465 | ) | (9,185 | ) | ||||||||||||||||||||||||||
| Less: Net income attributable to noncontrolling interest | 31 | - | (31 | ) | - | - | - | - | - | - | (31 | ) | E | - | ||||||||||||||||||||||||||||||||||
| Net loss attributable to common stockholders | $ | (1,751 | ) | $ | (86 | ) | $ | (155 | ) | $ | (122 | ) | $ | (135 | ) | $ | (90 | ) | $ | (142 | ) | $ | (4,730 | ) | $ | (1,974 | ) | $ | (7,434 | ) | $ | (9,185 | ) | |||||||||||||||
Jamba, Inc.
Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
March 31, 2015
| 1. | Description of Refranchising Transactions |
Beginning in January, 2015, Jamba Juice Company, a California corporation and wholly-owned subsidiary of Jamba, Inc. (the “Company”) began refranchising Company-owned stores located in the San Francisco Bay Area and Southern California as part of the Company’s refranchising initiative in multiple transactions.
April Disposal 1
In connection with the first refranchising transaction, the Company transferred to M5 Partners, Inc. all machinery, equipment, computer hardware (including point of sale equipment), furniture, fixtures, tools, signs, vehicles, other tangible personal property and all goodwill associated with the stores for a purchase price of $1,850,000. M5 Partners, Inc. agreed to enter into the Company’s standard franchise agreement with a ten-year term in connection with entering into the transaction.
April Disposal 2
In another refranchising transaction completed on April 28, 2015, the Company sold its 88% membership interest in Jamba Juice Southern California LLC (“JJSC”) to Strategic Marketing Sciences, Inc., its minority partner in the joint venture. JJSC was formed to operate a group of stores in Southern California. The purchase price for the membership interest was $3,000,000 plus payment for all marketable inventory and cash on hand at each of the stores. Strategic Marketing Sciences, Inc. agreed to enter into the Company’s standard franchise agreement with a ten-year term in connection with entering into the transaction.
May Disposal
On May 19, 2015, the Company completed the refranchising of a group of Company-owned stores located in the San Francisco Bay Area. In connection with the refranchising transaction, the Company transferred to Blended Star NorCal, Inc. all machinery, equipment, computer hardware (including point of sale equipment), furniture, fixtures, tools, signs, vehicles, other tangible personal property and all goodwill associated with the stores for a purchase price of $2,500,000 plus payment for all marketable inventory and cash on hand at each of the stores. Blended Star NorCal, Inc. agreed to enter into the Company’s standard franchise agreement with a ten-year term in connection with entering into the transaction.
June Disposal 1
On June 9, 2015, the Company completed the refranchising of a group of Company-owned stores located in Southern California as part of its refranchising initiative. In connection with the refranchising transaction, the Company transferred to J’s Juice Masters, Inc. all machinery, equipment, computer hardware (including point of sale equipment), furniture, fixtures, tools, signs, other tangible personal property, all marketable inventory and all goodwill associated with the stores for a purchase price of $2,100,000 plus payment for cash on hand at each of the stores. J’s Juice Masters, Inc. agreed to enter into the Company’s standard franchise agreement with a ten-year term in connection with entering into the transaction.
June Disposal 2
On June 30, 2015, the Company completed the refranchising of a group of Company-owned stores located in Southern California as part of its refranchising initiative. In connection with the refranchising transaction, the Company transferred to CMCS 2 Juice, LP and CMCS 3 Juice, LP all machinery, equipment, computer hardware (including point of sale equipment), furniture, fixtures, tools, signs, other tangible personal property, all marketable inventory and all goodwill associated with the stores for a purchase price of $1,800,000 plus payment for cash on hand at each of the stores. Payment of the purchase price was comprised of $540,000 in cash and two promissory notes of $542,079 and $717,921, both with an interest rate of four and one-quarter percent (4.25%) per annum and maturity dates of July 30, 2015. CMCS 2 Juice, LP and CMCS 3 Juice, LP agreed to enter into the Company’s standard franchise agreement with a ten-year term in connection with entering into the transaction.
July Disposal 1
On July 7, 2015, the Company completed the refranchising of a group of Company-owned stores located in Southern California as part of its refranchising initiative. In connection with the refranchising transaction, the Company transferred to one owner operating five separate entities - Brea Juice Company, LLC, Fresh Juice Development, LLC, Grab N Go Juice, LLC, Juice To Go, LLC and LA Juice Company, LLC - all machinery, equipment, computer hardware (including point of sale equipment), furniture, fixtures, tools, signs, other tangible personal property, all marketable inventory and all goodwill associated with the stores for a purchase price of $6,600,030 plus payment of $30,000 for cash on hand at each of the stores. Brea Juice Company, LLC, Fresh Juice Development, LLC, Grab N Go Juice, LLC, Juice To Go, LLC and LA Juice Company, LLC, agreed to enter into the Company’s standard franchise agreement with a ten-year term in connection with entering into the transaction.
July Disposal 2
On July 28, 2015, the Company completed the refranchising of a group of Company-owned stores located in Northern and Southern California as part of its refranchising initiative. In connection with the refranchising transaction, the Company transferred to Vitaligent, LLC through its two wholly owned subsidiaries, Vitaligent-East Bay, LLC and Vitaligent-NorCal, LLC, all machinery, equipment, computer hardware (including point of sale equipment), furniture, fixtures, tools, signs, other tangible personal property, cash on hand at each of the stores, all marketable inventory and all goodwill associated with the stores for a purchase price of $25,000,000. The purchase price comprises a $23,000,000 cash payment and a promissory note for $2,000,000 that matures on February 1, 2021. The promissory note bears basic interest at a rate of 3% per annum, plus payment-in-kind interest at a rate of 5.5% per annum. The payment-in-kind interest compounds quarterly beginning October 28, 2015. In addition to a $50,000 escrow account at closing for store repairs/upgrades, there is a reduction in gain for contingent payables of $694,000 for designated repairs and fixed asset additions. Vitaligent-East Bay, LLC and Vitaligent-NorCal, LLC agreed to enter into the Company’s standard franchise agreement with a ten-year term in connection with entering into the transaction.
Other Disposals
In addition to the transactions mentioned above, the Company entered into multiple individually immaterial agreements and refranchised a small group of stores located in Southern California and in the San Francisco Bay Area during the 13 week periods ended March 31, 2015 and June 30, 2015. In connection with the refranchising transactions, the Company received aggregate proceeds of $2,412,000 and the purchasers entered into the Company’s standard franchise agreements with ten-year terms in connection with entering into the transactions.
| 2. | Basis of Presentation |
The unaudited pro forma condensed consolidated financial statements were prepared in accordance with GAAP and pursuant to U.S. Securities and Exchange Commission Regulation S-X Article 11, and present the pro forma financial position and results of operations of the Company based upon the historical information after giving effect to the disposal and adjustments described in the notes to the unaudited pro forma condensed consolidated financial statements. The unaudited pro forma condensed consolidated balance sheet is presented as if the refranchising had occurred on March 31, 2015, and the unaudited pro forma condensed consolidated statement of operations for the 13 week period ended March 31, 2015 is presented as if the disposal had occurred on January 1, 2014 and carried forward through the 13 week period ended on March 31, 2015. As a result, pro forma adjustments for refranchising of the small group of stores completed during the 13 week period ended March 31, 2015 were reflected in the unaudited pro forma condensed consolidated statement of operations only.
The unaudited pro forma condensed consolidated financial information is presented for informational purposes only and is not indicative of the Company’s financial results or financial position as if the transactions reflected herein had occurred, or been in effect during the pro forma periods. This unaudited pro forma condensed consolidated financial information should not be viewed as indicative of the Company’s expected financial results for future periods.
| 3. | Adjustments to Unaudited Pro Forma Condensed Consolidated Balance Sheet |
Adjustments in the columns titled “Pro Forma Adjustments” represent the following:
(a) - Represents the pro forma adjustments for the proceeds received offset by related expenses and store-related cash balances at the end of the 13 week period ended March 31, 2015 (in thousands).
| Amount | ||||
| Proceeds received | $ | 39,794 | ||
| Cost to sell | (4,359 | ) | ||
| Store-related cash on hand | (176 | ) | ||
| $ | 32,259 | |||
(b) - Represents the pro forma adjustments for the one month promissory notes given as consideration included in the purchase price (in thousands):
| Amount | ||||
| CMCS 2 Juice, LP | $ | 542 | ||
| CMCS 3 Juice, LP | 718 | |||
| $ | 1,260 | |||
(c) - Represents the pro forma adjustments for the assets that will no longer be on the Company’s balance sheet as a result of the disposal of the stores to franchise partners.
(d) - Represents the pro forma adjustments for the estimated net book value of the assets purchased by the franchise partners from the Company.
(e) - Represents the pro forma adjustments for a long-term promissory note given as consideration included in the purchase price (in thousands):
| Amount | ||||
| Vitaligent, LLC | $ | 2,000 | ||
(e) - Represents the pro forma adjustments for the effect of amounts refundable to purchasers contingent upon landlords not extending the lease terms for certain store locations.
(f) - Represents the pro forma adjustments for the impact of the refranchising transaction on the Company’s accumulated deficit (in thousands):
| Amount | ||||
| Proceeds received | $ | 39,794 | ||
| Promissory Notes | 3,260 | |||
| Less: Cost to sell | (4,327 | ) | ||
| Assets held for sale | (17,821 | ) | ||
| Property, fixtures and equipment, net | (114 | ) | ||
| Goodwill and current assets | (1,259 | ) | ||
| Amounts contingently refundable | (505 | ) | ||
| Amounts contingently payable | (694 | ) | ||
| Noncontrolling interest | 162 | |||
| $ | 18,496 | |||
(g) - Represents the pro forma adjustment to eliminate the 12% noncontrolling interest in JJSC, since the purchaser is acquiring the remaining interest on the JJSC stores.
Adjustments to Unaudited Pro Forma Condensed Consolidated Statement of Operations
A - Reflects the pro forma adjustments for the revenue during the 13 week period ended March 31, 2015 from the stores sold to franchise partners.
B - Reflects the pro forma adjustments for estimated royalty income that would have been earned had the stores been owned by franchisees for the 13 week period ended March 31, 2015.
C - Reflects the pro forma adjustments for the expenses related to the stores sold to franchise partners.
D - Reflects the pro forma adjustments to remove the effect of the gain on refranchising the small group of stores during the 13 week period ended March 31, 2015.
E - Reflects the pro forma adjustments to eliminate the 12% noncontrolling interest in JJSC, since the owner of the noncontrolling interest is acquiring the remaining interest on the JJSC stores.