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Jamba Inc. (JMBA): Juicing up Juicy Returns?

Jamba (JMBA) owns and franchises Jamba Juice stores throughout the United States. As of January 1, 2008, the company owned 501 stores and franchisees held 206 stores. Jamba operates as a retailer of blended-to-order fruit smoothies, squeezed-to-order juices, blended beverages, and snacks. Earlier this month, Jamba announced a financing agreement for a $25-million, two-year senior secured term note. Units managed by Victory Park Capital Advisors LLC were the only investors in the deal, according to media reports.

Last month, the company said it is changing its focus from corporate stores to franchised outlets and changing its management structure in an effort to rein in costs and return value to shareholders after losing more than $89 million during the second quarter. California-based Jamba also said it would reduce its workforce and shut down 20 stores.

Jamba’s stores are primarily in California, but it entered new markets last year, including Florida, Nevada and Oregon, and the company has said sales have been brisk in the new markets. The company is also trying to compete for breakfast business with larger rivals from the fast food and coffee arenas by offering granola-topped smoothies. Jamba’s primary competitors include American Dairy Queen Corp., Maui Wowi Inc. and Smoothie King Franchises Inc., all of which are privately held. Jamba had sales of $338.4 million for 2007.

Shares of Jamba closed at 96 cents on Wednesday and have traded between 90 cents and $7.74 over the past 52 weeks. Jamba has a market capitalization of $50.5 million. Insiders own 10 percent of Jamba shares and institutional ownership is at 33 percent, with 62 institutions holding Jamba shares.

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