Activist Glenn Welling Further Ups His Ante In Jamba, Inc. (JMBA)

Jamba, Inc. (NASDAQ:JMBA)’s financial results for the second quarter didn’t help matters much, as the reported EPS of $0.19 was way lower than the projected $0.39, and revenues of $54.13 million missed the estimated mark by $1.27 million and marked a fall of 15.7% from the same quarter a year earlier. CEO James White blamed the unseasonably poor weather and reduced promotional activity for the company’s disappointing performance. There were some positive aspects about the quarter as well, such as the company managing to reduce its service speed to 3.1 minutes, which was the lowest in two years. Moreover, Jamba, Inc. (NASDAQ:JMBA)’s management also accelerated the execution of its plan to have more than 90% of the company’s stores franchised by the end of this year. The management expects the new model to drive up the company’s profitability, since the elimination of the hybrid franchise will significantly drive down the G&A cost as well as the capital expenditure in the coming year. Annual G&A cost is expected to fall in the $25 million to $26 million range by the end of 2016 as compared to $38 million two years ago. Similarly, annual capital expenditure is expected to fall from $8 million-to-$9 million to the $4 million-to-$6 million range.

Jamba, Inc. (NASDAQ:JMBA)’s Board of Directors also recently increased its share repurchase program to $45 million from $40 million. Since the authorization of the plan in November 2014 the company has already repurchased about $34.2 million worth of outstanding stock.

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