John Appel's  Instablog

Jamba Inc. (JMBA) announced its first quarter 2009 results, and issued its 10-Q, after the market’s close yesterday. Management has made solid progress on its “BLEND” plan to reduce costs, expand its in-store food offerings, license the brand for packaged food items, and shift its mix of company-owned versus franchised stores. Sales were in-line with my expectations.  Costs were better than expected.  Below is a summary of my initial take-aways.  For more details, please see the complete article at www.johnappel.com.

Based on the first quarter results, I plan to revise my March 27th financial projections.  I expect to revise my 2009 sales forecast to $300-$305 million from $317 (assuming 50 more stores refranchised in H2); to revise store-level EBITDA to $48-$50 million from $42.5 million; and to revise total adjusted EBITDA to $13-$15 million from $7.6 million. These figures do not include any impact from the potential sale of development agreements in connection with the company’s refranchising efforts.

Given my new estimates of 2009 store-level EBITDA and adjusted EBITDA, I am increasing my near-term share price target to $1.50 from $0.95. I am targeting $1.75 per share in the second half of 2009. The $1.50 price target implies an enterprise value of approximately 6.5x 2009 forecast EBITDA. The $1.75 price target implies an enterprise value of approximately 7.5x 2009 forecast EBITDA.  I would expect this discount versus comparable company multiples to persist until the company’s menu expansion efforts begin to translate into improvements in same-store sales.

JDA Software Group, Inc. (JDAS) reported its first quarter earnings on April 20th.  Particularly notable on the earnings call was management’s renewed confidence in the company’s sales pipeline.  I am keeping my 12-month price target at $18.00, but I have more confidence in this figure now, and believe there is more upside than downside.

This was a much better call than the Q4 call.  On the Q4 call, given the lack of visibility into 2009, management said they would no longer provide annual guidance – just guidance on the coming quarter.

Management sounded much more confident this time around, stating that they have now “rebuilt” their “large deal pipeline.”  In a bit of chest thumping, JDA’s CEO twice made a point of bashing the competition, going so far as to say that they believe the quarter was a “disaster” for a number of their competitors.