Jamba Q1 Revenue Drops 12.5%

Emeryville, Calif., May 28 - Jamba, Inc. today reported unaudited financial results for the fiscal first quarter ended April 21, 2009.

Financial and Operational Highlights

Highlights for the 16 weeks ended April 21, 2009, compared to the 16 weeks ended April 22, 2008:

• Consolidated EBITDA improved $5.7 million to $0.4 million from $(5.3) million for 1Q08.*
• Store-level EBITDA increased 21.9% to $12.2 million from $10.0 million for 1Q08.*
• Total revenue for 1Q09 decreased 12.5% to $88.9 million from $101.6 million for 1Q08.
• Net loss for 1Q09 of $(10.2) million compared to a net loss for 1Q08 of $(6.4) million. Included in the net loss for 1Q09 is a non-cash, derivative liability gain of $0.2 million associated with a change in the fair value of the Company’s warrants and derivatives. Included in the net loss for 1Q08 is a non-cash derivative liability gain of $5.6 million associated with a change in the fair value of the Company’s warrants.
• Diluted loss per share for 1Q09 of $(0.19) compared to a diluted loss per share for 1Q08 of $(0.12).
• Company-owned comparable store sales for 1Q09 decreased 13.8%⁽¹⁾.
• No new company-owned stores were opened in fiscal first quarter of 2009, compared to 17 new company-owned stores in fiscal first quarter of 2008. The sale of 10 company stores in Arizona, to an existing franchisee, was completed on March 10, 2009. Six new franchise stores were opened in the first quarter of 2009, including four non-traditional franchise stores. The total number of stores increased to 732, comprised of 499 company-owned stores and 233 franchise stores.

“We continue to make solid progress on each of our strategic priorities and we’re very pleased that these efforts produced positive consolidated quarterly EBITDA in the first quarter, for the first time since 2006. In furtherance of our strategic priorities, we also announced earlier today the expansion of our re-franchising initiative. We believe that an aggressive re-franchising strategy will better position Jamba for growth and increased brand presence,” stated James D. White, president and chief executive officer, Jamba, Inc.

“While the economic environment remains challenging, we remain focused on in-store initiatives like oatmeal, which has been well received. In addition, our brand licensing activities remain robust as we are actively working with Nestle on our Ready-To-Drink re-launch and we just announced our licensing alliance with Oregon Ice Cream and Think Wow Toys, which demonstrates the potential the Company has to extend the Jamba Juice brand into the retail market,” continued Mr. White.

Outlook

The Company continues to expect negative comparable sales trends based on the current environment and has targeted 2009 expense goals as follows:

• Cost of sales at or below 26% of company store revenue;
• Labor costs at or below 34% of company store revenue;
• Other controllable expenses included in store operating, at or below 3.5% of company store revenue; and
• General and administrative costs at or below $35 million, before share-based compensation expense.

In addition, the Company has planned minimal, if any, Company store development and up to 50 new franchise stores in 2009.

Liquidity

On April 21, 2009, the Company held $26.2 million in cash, equivalents and restricted cash. Our restricted cash balance was $7.7 million and we had a total outstanding debt balance of $23.2 million.

The Company is subject to a number of customary covenants under its senior term note financing agreement, including limitations on additional indebtedness, liens, asset sales, acquisitions, dividend payments, and requirements to maintain certain financial covenants. The two financial covenants the Company is required to maintain are to retain $3 million of cash in the bank and a trailing 13 period of store-level EBITDA of $35 million. As of April 21 2009, the Company was in compliance with all debt covenants and expects to remain in compliance through fiscal year 2009.

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