I noticed while at the emeryville Jamba that their were a lot suits and big wigs messing around behind the counter. A little inquiry revealed that Jamba has been actively recruiting large investors, and from what I saw the prospective purchasers were very pleased. I'll post if I see more of this activity, but from what I gather management may be initiating a new campaign to increase investment awareness.
but i see cash flow from operations in Q4'08 of negative $2.7M, not negative $12.3M?
Regarding cost cutting, I think there will still be noticeable cost cuts realized in Q4'09 on a YOY basis. It just won't be as dramatic as Q1 and Q2. You may be correct about the refranchising. As a shareholder, this is what concerns me most. Essentially jmba has told us they've identified approx. 150 $$ losing stores they want to get rid of. They've "sold" 19 so far...ultimately, who wants to buy/take over $$ losing stores in this economy?
I'm not worried about the poison pill. I would hope the BOD would be smart enough to lift that provision should they receive a decent offer.
You might want to re-evaluate labor costs if you weighted them heavily on historical numbers. In recent months Jamba began a new labor restructuring at the store level...
...from: staff->trainer->shift lead->Ast GM->GM
...to: staff->shift manager-> GM
While this conversion is mostly underway (I know that some of the stores in the bay area, at least, have promoted shift managers; most have already removed the Ast GM position a while ago- I think they needed to fill some GM gaps after some firings) it should be significant in reducing cost of labor as this dramatically reduces the support and coverage needed at stores. Each of the previous positions resulted in significant pay increases (well back in '08. Lately I've been hearing most promotional raises have been highly reduced, for obvious reasons).
Case in point: The Emeryville Jamba went from 1 GM, 1 AGM, 7 SL, and 2 Trnrs to 1 GM, 2 SM, 3 SL and 0 Trnrs. They're still in the process of phasing out/promoting SL to SM. That's almost a %50 reduction in middle management at a store with roughly 25-35 workers (Emeryville is a bit overmanned due to their location/status), and the program isn't even complete.
They're just trying to find another cash infusion to keep from going under as they continue to lose money. They know that they've almost completely pissed away the $35M they got from Mistral and Coolbrands, and with SSS continuing to struggle as their "busy" season ends they know they need another "sugar daddy" if they have any hope of getting through Q4 2009 and Q1 2010.
A review of your posts would make it appear you are very negative in your outlook for JMBA. That is fine, each of us has a right to our opinion.
Only problem is; I'm having trouble aligning your assertions with published, easily verifiable, facts.
You say they've "almost completely pissed away the $35M they got from Mistral." Yet, the statement of cash flows on page 5 of their most recent 10-Q reveals exactly where the money went. The bulk of it was used to retire the previous $25M term loan with its onerous terms and draconian interest rate. Yes, they had to incur some charges to do so, but that is hardly what I would call "pissing away the $35M." After these items, the remainder of the $35M actually increased their cash balance $4.1M as of the end of Q2.
I have posted my concern with their SSS elsewhere, so I am not going to disagree with you that they need to get their revenue up. However, you assert that they "need another "sugar daddy" if they have any hope of getting through Q4 2009 and Q1 2010." In actuality, they were $4M cash flow positive from operations in Q2, and have a cash balance of almost $29M.
My guess is that they will likely be slightly cash flow positive (from operations) in Q3, and in the worst case slightly cash flow negative in Q4 and Q1 2010. This is, in my view, a pessimistic position assuming the new food items do not have much positive impact, no new items are introduced for the winter, and none of the effects of the branding deals have kicked in yet.
Can you elaborate on your belief that they "don't have any hope" of getting through these quarters?
The Journal did not carry press about Jamba with what was going on, of course Starbucks got some news. I'm concerned going forward that when they bring to market a hot drink it will be done right. Went to Mcdonalds and drank one of their new lines of expresso drinks (yuk),Peets, Starbucks, or whoever will have no problem from a quality product standpoint. Yes I have hope Jamba can pull things together, White seems to going forward with the right stuff it takes to run a successful business.