J. Alexander’s Holdings, Inc. (NYSE: JAX) (the Company), owner
and operator of J. Alexander’s, Redlands Grill, Stoney River
Steakhouse and Grill and selected other restaurants, today reported
results for the third quarter ended September 29, 2019.
Third Quarter 2019 Highlights Compared To The Third Quarter
Of 2018
- Net sales for the third quarter of 2019 were $56,867,000
compared to $56,730,000 reported in the third quarter of 2018.
- Income from continuing operations before income taxes totaled
$342,000 for the third quarter of 2019, including the impact of
transaction, contested proxy and other related expenses of
$117,000. This compares to a loss from continuing operations before
income taxes of $713,000 in the third quarter of 2018 which
included profits interest expense of $1,240,000 from the quarterly
valuation of the Black Knight Advisory Services, LLC (Black Knight)
profits interest grant. The Company also incurred consulting fees
of $139,000 in the third quarter of 2018 under its management
consulting agreement with Black Knight. As previously reported,
both the management consulting agreement and the profits interest
grant related to Black Knight have been terminated, and therefore
no such expenses have been recorded in the third quarter of
2019.
- The Company recorded net income of $771,000 in the third
quarter of 2019 compared to a net loss of $633,000 reported in the
third quarter of 2018, which was impacted by the same factors as
previously noted affecting income (loss) from continuing
operations. Results for the most recent quarter included an income
tax benefit of $495,000 compared to an income tax benefit of
$198,000 in the third quarter of 2018.
- Basic and diluted earnings per share were $0.05 for the third
quarter of 2019 compared to a loss of $0.04 for the third quarter
of 2018.
- Average weekly same store sales per restaurant (1) for the
third quarter of 2019 were down 2.0% to $105,700 for the J.
Alexander’s/Grill restaurants and down 0.7% to $71,100 for the
Stoney River restaurants compared to the third quarter of
2018.
- Adjusted EBITDA (2) was $4,375,000 in the third quarter of
2019, up 6.7% from $4,100,000 in the comparable quarter of
2018.
- Restaurant Operating Profit Margin (3) was 8.9% in the most
recent quarter compared to 9.7% for the corresponding quarter of
2018.
- Cost of sales as a percentage of net sales in the third quarter
of 2019 was 31.8% compared to 31.5% in the third quarter of
2018.
The Company’s restaurant labor and related costs as a percentage
of net sales were 33.1% in the third quarter of 2019 compared to
32.8% of net sales in the third quarter of 2018. Other restaurant
operating expenses were 21.0% of net sales in the third quarter of
2019 compared to 21.1% of net sales in the same quarter of
2018.
The average weekly guest counts within the same store base of
the Company’s J. Alexander’s/Grill collection were down 2.9% in the
third quarter of 2019 compared to the third quarter of 2018. Guest
counts within the same store base at the Company’s Stoney River
Steakhouse and Grill restaurants were down 0.4% for the third
quarter of 2019 compared to the third quarter of 2018. With respect
to average guest checks, which include alcoholic beverage sales,
the average guest check within the J. Alexander’s/Grill same store
base of restaurants during the third quarter of 2019 was $32.17, up
0.9% from $31.87 recorded during the third quarter of 2018. The
average guest check within the same store base of Stoney River
Steakhouse and Grill restaurants was $42.36 during the third
quarter of 2019, down 0.1% from $42.41 recorded in the third
quarter of 2018.
On a consolidated basis, average weekly guest counts within the
Company’s J. Alexander’s/Grill locations in the third quarter of
2019 were down 2.5% from the third quarter of 2018, while average
weekly guest counts within the Company’s Stoney River Steakhouse
and Grill locations increased 1.9% for the third quarter of 2019
compared to the same quarter a year ago. Average guest checks on a
consolidated basis for the J. Alexander’s/Grill restaurants
increased 0.8% from $31.95 in the third quarter of 2018 to $32.19
for the third quarter of 2019. Average guest checks for the Stoney
River Steakhouse and Grill restaurants decreased 1.4% from $42.41
in the third quarter of 2018 to $41.82 in the third quarter of
2019.
The effect of menu pricing for the third quarter of 2019 was
estimated to be a 0.5% increase for the J. Alexander’s/Grill
restaurants and a 0.9% increase for the Stoney River Steakhouse and
Grill restaurants compared to the third quarter of 2018. For the J.
Alexander’s/Grill restaurants, management estimated that inflation
in total food costs was 0.8% for the third quarter of 2019 compared
to the same quarter in 2018, and beef costs were determined to have
increased by an estimated 4.7% compared to the same quarter of the
prior year. For the Stoney River Steakhouse and Grill restaurants,
inflation for the third quarter of 2019 was estimated to total
2.8%, with beef costs up by 6.2% from the comparable quarter of
2018.
Stock Repurchase Program
During the fourth quarter of 2018, the Company’s board of
directors authorized a share repurchase program, replacing the
program that had been in place since October 29, 2015. The board
authorized the Company to purchase up to $15,000,000 of its common
stock in the aggregate over a three‐year period ending November 1,
2021. Any share repurchases under this program are expected to be
made solely from cash on hand and available operating cash flow.
Repurchases will be made in accordance with applicable securities
laws and may be made from time to time in the open market. The
timing, prices and amount of repurchases will depend upon
prevailing market prices, general economic and market conditions
and other considerations. The repurchase program does not obligate
the Company to acquire any amount of stock. No shares were
purchased by the Company in the third quarter of 2019.
Chief Executive Officer’s Comments
“We continue to be encouraged by the results posted by our newer
J. Alexander’s/Grill restaurants,” said Mark A. Parkey, President
and Chief Executive Officer of J. Alexander’s Holdings, Inc.
“Significantly increased guest counts and improved sales from these
restaurants during the third quarter are evidence that the focused
efforts to increase awareness, generate guest trial, and turn
first-time guests into loyal regulars are producing the desired
effects. Indications are that these trends will continue through
the holiday season to finish out fiscal 2019 with positive momentum
from all three of these newest J. Alexander’s/Grill
restaurants.”
Parkey continued, “However, we were confronted by several
external issues during the third quarter that affected guest counts
and sales within our same store base, particularly at the J.
Alexander’s/Grill restaurants, including continued competitive
intrusion into certain markets, weather-related disturbances,
significant disruption of traffic patterns in certain locations
related to ongoing road construction, and other outside factors.”
Additionally, the Company completed the switchover of its
reservation system to Resy during the third quarter. Parkey said
the Company expected some short-term interruption in guest counts
from the switchover in certain markets, but that the new platform
is expected to result in significant long-term margin expansion
from the related cost savings.
With regard to the third quarter Stoney River results, Parkey
said that while the same store sales and guest count decreases were
somewhat disappointing, it was worth noting that the concept was up
against a 5.6% increase in same store sales in the comparable
quarter a year ago. “We continue to emphasize achievement of
operational excellence at each of our Stoney River Steakhouse and
Grill restaurants, and are confident that this focus will help our
Stoney River locations continue to build on their success during
the upcoming holiday season.”
Parkey said that beef input prices were up during the third
quarter of 2019 as compared to prior year’s third quarter for both
the J. Alexander’s/Grill and Stoney River concepts. “We are
experiencing pressure on certain commodity prices, specifically
beef, which has contributed to increased cost of sales during the
third quarter. While we believe that these input costs are
manageable, we will continue to closely monitor commodity pricing
through the balance of the year.
“Our outlook for the remainder of 2019 continues to be positive
for both our J. Alexander’s/Grill and Stoney River Steakhouse and
Grill collections. However, given the year-to-date sales
performance, we are revising guidance for our sales metrics for the
full year as discussed further below,” Parkey said. “We took a
price increase toward the end of the second quarter of 2019,”
Parkey continued “and do not expect to take any additional
significant increases in the final quarter of the year. Beginning
in November of the fourth quarter, we will be lapping some of our
easier comparative sales, and we expect that this will favorably
impact same store sales results.”
Highlights For The First Nine Months of 2019
For the nine months ended September 29, 2019, the Company
recorded net sales of $183,830,000, up 2.7% from $179,059,000
posted in the first three quarters of 2018. Within the J.
Alexander’s/Grill restaurants, average weekly same store sales per
restaurant were $113,100 for the nine months ended September 29,
2019, a decrease of 0.4% from the first nine months of 2018. For
the Stoney River Steakhouse and Grill restaurants, average weekly
same store sales per restaurant increased 0.8% to $78,100 in the
first three quarters of 2019.
Income from continuing operations before income taxes for the
first nine months of 2019 increased to $6,732,000 from $3,332,000
reported in the same nine months of 2018. The primary factor
driving the increase relates to the non‐cash profits interest
expense of $3,094,000 and consulting fees of $587,000 recorded in
2018 related to the management consulting agreement with Black
Knight, with no such corresponding expenses being recorded in
fiscal 2019. As previously reported, both the management consulting
agreement and the profits interest grant related to Black Knight
are now terminated. Additionally, during the first nine months of
2018, the Company recorded transaction, contested proxy, and other
related expenses of $933,000 compared to $768,000 of such expenses
incurred in the first three quarters of 2019.
The Company recorded net income of $6,787,000 in the first nine
months of 2019, up from $3,065,000 reported in the first nine
months of 2018. Adjusted EBITDA(2) for the first nine months of
2019 totaled $18,656,000, up 2.2% from $18,258,000 recorded in the
first nine months a year earlier. Basic and diluted earnings per
share totaled $0.46 in the first three quarters of 2019 compared to
$0.21 of both basic and diluted earnings per share in the first
three quarters of 2018. See attached “Adjusted EBITDA
Reconciliation” for our definition of Adjusted EBITDA and a
reconciliation to net income.
The average weekly guest counts within the same store base of J.
Alexander’s/Grill restaurants decreased by 1.7% for the first nine
months of 2019 and increased by 0.4% within the Stoney River
Steakhouse and Grill restaurants during the same three quarters.
The average guest check within the same store base at the J.
Alexander’s/Grill restaurants increased 1.4% from $31.79 for the
first nine months of 2018 to $32.23 in the first nine months of
2019. The average guest check within the same store base at the
Stoney River Steakhouse and Grill restaurants increased by 0.3%
from $42.32 in the first three quarters of 2018 to $42.44 in the
first three quarters of 2019. The effect of menu price increases
for the first nine months of 2019 was estimated to be 0.5% at J.
Alexander’s/Grill restaurants as well as the Stoney River
Steakhouse and Grill restaurants compared to the first three
quarters of 2018.
Cost of sales as a percentage of net sales for the first nine
months of 2019 was 31.8% compared to 31.6% for the first nine
months of 2018. The estimated effect of inflation in food costs for
the first three quarters of 2019 was 0.9% for the J.
Alexander’s/Grill restaurants, with beef costs up by 2.9% compared
to the same three quarters of 2018. For the Stoney River Steakhouse
and Grill restaurants, the effect of inflation in food costs for
the first three quarters of 2019 was estimated to be 2.0% with beef
costs up by 4.6% compared to the first three quarters of 2018.
Restaurant Development
The Company has previously announced the signing of leases for
two new restaurants, one in Houston, TX and the other in San
Antonio, TX. The Houston upscale restaurant marks the first
location opened by the Company operating under the name Merus
Grill. The new Merus Grill, located in Uptown Park, is scheduled to
open on November 18, 2019. Construction is underway on a new
Redlands Grill in San Antonio, with an opening set for 2020.
Strategic Alternatives Evaluation
The Company announced on August 9, 2019, that it had engaged
Piper Jaffray & Co. as its financial advisor to assist in the
ongoing evaluation of strategic alternatives. The Company will not
be providing updates to the process until the conclusion of such
review.
Guidance For 2019
The Company’s performance outlook is based on current
information as of November 7, 2019. The Company does not expect to
update its 2019 guidance before the end of fiscal 2019. However,
the information on which the outlook is based is subject to change,
and the Company may update its full business outlook or any portion
thereof at any time for any reason.
All guidance not updated herein is unchanged from previous
guidance issued. Based upon current information and giving
consideration to the softness in guest counts in our concepts
during the three quarters of 2019 which has continued into October,
we are adjusting our guidance ranges for average weekly same store
sales and total revenue as follows:
Prior
Guidance
Revised
Full Year 2019 Guidance
Average Weekly Same Store Sales:
J. Alexander’s/Grill
+0.5% - 1.5%
-0.5% - +0.5%
Stoney River Steakhouse and Grill
+1.5% - 2.5%
+0.5% - +1.5%
Revenue
$251.0MM - $253.0MM
$248.0MM - $250.0MM
(1)Average weekly same store sales per restaurant is computed by
dividing total restaurant same store sales for the period by the
total number of days all same store restaurants were open for the
period to obtain a daily sales average. The daily same store sales
average is then multiplied by seven to arrive at average weekly
same store sales per restaurant. Days on which restaurants are
closed for business for any reason other than scheduled closures on
Thanksgiving and Christmas are excluded from this calculation.
Sales and sales days used in this calculation and amounts of other
“same store” figures in this release include only those for
restaurants in operation at the end of the period which have been
open for more than 18 months. Revenue associated with reduction in
liabilities for gift cards, which is recognized in proportion to
guest redemptions based on historical redemption rates and commonly
referred to as gift card breakage, is not included in the
calculation of average weekly same store sales per restaurant.
Average weekly same store sales are computed from sales amounts
that have been determined in accordance with U.S. generally
accepted accounting principles (GAAP).
(2)Please refer to the financial information accompanying this
release for our definition of and a reconciliation of the non-GAAP
financial measure Adjusted EBITDA to net income (loss). Management
uses Adjusted EBITDA to evaluate operating performance and the
effectiveness of its business strategies.
(3)“Restaurant Operating Profit Margin” is the ratio of
Restaurant Operating Profit, a non-GAAP financial measure, to net
sales. Please refer to the financial information accompanying this
release for our definition of and a reconciliation of the non-GAAP
financial measure Restaurant Operating Profit to Operating Income.
Management uses Restaurant Operating Profit to measure operating
performance at the restaurant level.
About J. Alexander’s Holdings, Inc.
J. Alexander’s Holdings, Inc. is a collection of restaurants
that focus on providing high quality food, outstanding professional
service and an attractive ambiance. The Company presently operates
46 restaurants in 16 states. The Company has its headquarters in
Nashville, TN.
For additional information, visit
www.jalexandersholdings.com.
Forward-Looking Statements
This press release issued by J. Alexander’s Holdings, Inc.
contains forward-looking statements, which include all statements
that do not relate solely to historical or current facts, such as
statements regarding our expectations, intentions or strategies
regarding the future. These forward-looking statements are based on
management's beliefs, as well as assumptions made by, and
information currently available to, management. Because such
statements are based on expectations as to future financial and
operating results and are not statements of fact, actual results
may differ materially from those projected and are subject to a
number of known and unknown risks and uncertainties, including the
Company’s ability to maintain satisfactory guest count levels and
maintain or increase sales and operating margins in its restaurants
under varying economic conditions; the effect of higher commodity
prices, unemployment and other economic factors on consumer demand;
increases in food input costs or product shortages and the
Company’s response to them; the number and timing of new restaurant
openings and the Company’s ability to operate them profitably;
competition within the casual dining industry and within the
markets in which our restaurants are located; adverse weather
conditions in regions in which the Company’s restaurants are
located; factors that are under the control of third parties,
including government agencies; as well as other risks and
uncertainties described under the headings "Forward-Looking
Statements," "Risk Factors" and other sections of the Company’s
Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 14, 2019, as amended on April 29, 2019, and
subsequent filings. The Company undertakes no obligation to update
any forward-looking statements, whether as a result of new
information, future events or otherwise.
J. Alexander's Holdings, Inc. and Subsidiaries Condensed
Consolidated Statements of Operations (Unaudited in
thousands, except per share amounts)
Quarter Ended
Nine Months Ended
September 29,
September 30,
September 29,
September 30,
2019
2018
2019
2018
Net sales
$
56,867
$
56,730
$
183,830
$
179,059
Costs and expenses: Cost of sales
18,110
17,876
58,441
56,570
Restaurant labor and related costs
18,835
18,603
57,542
55,610
Depreciation and amortization of restaurant property and equipment
2,968
2,758
8,847
8,023
Other operating expenses
11,916
11,965
37,028
35,926
Total restaurant operating expenses
51,829
51,202
161,858
156,129
Transaction, contested proxy and other related expenses
117
-
768
933
General and administrative expenses
4,288
5,876
13,816
17,123
Pre-opening expense
211
194
357
1,024
Total operating expenses
56,445
57,272
176,799
175,209
Operating income (loss)
422
(542
)
7,031
3,850
Other income (expense): Interest expense
(135
)
(177
)
(490
)
(537
)
Other, net
55
6
191
19
Total other expense
(80
)
(171
)
(299
)
(518
)
Income (loss) from continuing operations before income taxes
342
(713
)
6,732
3,332
Income tax benefit
495
198
238
72
Loss from discontinued operations, net
(66
)
(118
)
(183
)
(339
)
Net income (loss)
$
771
$
(633
)
$
6,787
$
3,065
Basic earnings (loss) per share: Income (loss) from
continuing operations, net of tax
$
0.06
$
(0.04
)
$
0.47
$
0.23
Loss from discontinued operations, net
(0.00
)
(0.01
)
(0.01
)
(0.02
)
Basic earnings (loss) per share
$
0.05
$
(0.04
)
$
0.46
$
0.21
Diluted earnings (loss) per share: Income (loss) from
continuing operations, net of tax
$
0.06
$
(0.04
)
$
0.47
$
0.23
Loss from discontinued operations, net
(0.00
)
(0.01
)
(0.01
)
(0.02
)
Diluted earnings (loss) per share
$
0.05
$
(0.04
)
$
0.46
$
0.21
Weighted average common shares outstanding: Basic
14,695
14,695
14,695
14,695
Diluted
14,808
14,695
14,746
14,919
J. Alexander's Holdings, Inc. and Subsidiaries Condensed
Consolidated Statements of Operations Data as a Percentage of Net
Sales and Other Financial and Performance Data
(Unaudited)
Quarter Ended
Nine Months Ended
September 29,
September 30,
September 29,
September 30,
2019
2018
2019
2018
Net sales
100.0
%
100.0
%
100.0
%
100.0
Costs and expenses: Cost of sales
31.8
31.5
31.8
31.6
Restaurant labor and related costs
33.1
32.8
31.3
31.1
Depreciation and amortization of restaurant property and equipment
5.2
4.9
4.8
4.5
Other operating expenses
21.0
21.1
20.1
20.1
Total restaurant operating expenses
91.1
90.3
88.0
87.2
Transaction, contested proxy and other related expenses
0.2
-
0.4
0.5
General and administrative expenses
7.5
10.4
7.5
9.6
Pre-opening expense
0.4
0.3
0.2
0.6
Total operating expenses
99.3
101.0
96.2
97.8
Operating income (loss)
0.7
(1.0
)
3.8
2.2
Other income (expense): Interest expense
(0.2
)
(0.3
)
(0.3
)
(0.3
)
Other, net
0.1
0.0
0.1
0.0
Total other expense
(0.1
)
(0.3
)
(0.2
)
(0.3
)
Income (loss) from continuing operations before income taxes
0.6
(1.3
)
3.7
1.9
Income tax benefit
0.9
0.3
0.1
0.0
Loss from discontinued operations, net
(0.1
)
(0.2
)
(0.1
)
(0.2
)
Net income (loss)
1.4
%
(1.1
)%
3.7
%
1.7
Note: Certain percentage totals do not sum due to rounding.
Other Financial and Performance Data: Adjusted
EBITDA(1)
$
4,375
$
4,100
$
18,656
$
18,258
As a % of net sales
7.7
%
7.2
%
10.1
%
10.2
%
Average weekly sales per restaurant: J.
Alexander’s / Grill Restaurants
$
104,500
$
106,300
$
111,800
$
112,500
Percent change
(1.7
)%
(0.6
)%
Stoney River Steakhouse and Grill
$
71,900
$
71,600
$
78,800
$
77,500
Percent change
0.4
%
1.7
%
Average weekly same store sales per restaurant:
J. Alexander’s / Grill Restaurants
$
105,700
$
107,900
$
113,100
$
113,500
Percent change
(2.0
)%
(0.4
)%
Stoney River Steakhouse and Grill
$
71,100
$
71,600
$
78,100
$
77,500
Percent change
(0.7
)%
0.8
%
(1) See definitions and reconciliation attached.
J.
Alexander's Holdings, Inc. and Subsidiaries Condensed
Consolidated Balance Sheets (Unaudited in thousands)
September 29,
December 30,
2019
2018
Assets Current assets: Cash and cash equivalents
$
7,865
$
8,783
Other current assets
6,535
8,682
Total current assets
14,400
17,465
Other assets
5,521
5,557
Deferred income taxes, net
1,971
539
Property and equipment, net
109,798
109,332
Right-of-use lease assets, net
71,344
-
Goodwill
15,737
15,737
Tradename and other indefinite-lived intangibles
25,648
25,647
Deferred charges, net
244
272
$
244,663
$
174,549
Liabilities and Stockholders' Equity Current
liabilities
$
29,794
$
33,778
Long-term debt, net of portion classified as current and
unamortized deferred loan costs
3,250
5,866
Long-term lease liabilities
76,954
-
Deferred compensation obligations
6,297
6,251
Other long-term liabilities
149
6,995
Stockholders' equity
128,219
121,659
$
244,663
$
174,549
J. Alexander's Holdings, Inc. and Subsidiaries Condensed
Consolidated Statements of Cash Flows (Unaudited in
thousands)
Nine Months Ended
September 29,
September 30,
2019
2018
Cash flows from operating activities: Net income
$
6,787
$
3,065
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization of property and
equipment
9,034
8,244
Share-based compensation expense
1,030
3,919
Other, net
(783
)
(225
)
Changes in assets and liabilities, net
(5,314
)
(198
)
Net cash provided by operating activities
10,754
14,805
Cash flows from investing activities: Purchase of property
and equipment
(7,757
)
(15,230
)
Other investing activities
(122
)
(493
)
Net cash used in investing activities
(7,879
)
(15,723
)
Cash flows from financing activities: Payments on long-term
debt and obligations under capital leases
(3,750
)
(3,750
)
Other financing activities
(43
)
-
Net cash used in financing activities
(3,793
)
(3,750
)
Decrease in cash and cash equivalents
(918
)
(4,668
)
Cash and cash equivalents at beginning of the period
8,783
10,711
Cash and cash equivalents at end of the period
$
7,865
$
6,043
Supplemental disclosures: Property and equipment obligations
accrued at beginning of the period
$
819
$
1,854
Property and equipment obligations accrued at end of the period
2,669
1,656
Cash paid for interest
467
606
Cash paid for income taxes
718
644
J. Alexander's Holdings, Inc. and Subsidiaries
Non-GAAP Financial Measures and Reconciliations
(Unaudited in thousands) Non-GAAP Financial
Measures Within this press release, we present the
following non-GAAP financial measures which we believe are useful
to investors as key measures of our operating performance:
We define Adjusted Earnings Before Interest, Taxes,
Depreciation and Amortization, or “Adjusted EBITDA”, as net income
(loss) before interest expense, income tax expense (benefit),
depreciation and amortization, and adding asset impairment charges
and restaurant closing costs, loss on disposals of fixed assets,
transaction, contested proxy and other related expenses, non-cash
compensation, loss from discontinued operations, and pre-opening
costs. Adjusted EBITDA is a non-GAAP financial
measure that we believe is useful to investors because it provides
information regarding certain financial and business trends
relating to our operating results and excludes certain items that
are not indicative of our operations. Adjusted EBITDA does not
fully consider the impact of investing or financing transactions as
it specifically excludes depreciation and interest charges, which
should also be considered in the overall evaluation of our results
of operations. We define “Restaurant Operating
Profit” as net sales less restaurant operating costs, which are
cost of sales, restaurant labor and related costs, depreciation and
amortization of restaurant property and equipment, and other
operating expenses. Restaurant Operating Profit is a non-GAAP
financial measure that we believe is useful to investors because it
provides a measure of profitability for evaluation that does not
reflect corporate overhead and other non-operating or unusual
costs. “Restaurant Operating Profit Margin” is the ratio of
Restaurant Operating Profit to net sales. Our
management uses Adjusted EBITDA and Restaurant Operating Profit to
evaluate the effectiveness of our business strategies. We caution
investors that amounts presented in accordance with the above
definitions of Adjusted EBITDA or Restaurant Operating Profit may
not be comparable to similar measures disclosed by other companies,
because not all companies calculate these non-GAAP financial
measures in the same manner. Adjusted EBITDA and Restaurant
Operating Profit should not be assessed in isolation from, or
construed as a substitute for, net income (loss), operating income
(loss) or other measures presented in accordance with GAAP.
A reconciliation of these non-GAAP financial measures to the
closest GAAP measure is set forth in the following tables:
Quarter Ended
Nine Months Ended
September 29,
September 30,
September 29,
September 30,
2019
2018
2019
2018
Net income (loss)
$
771
$
(633
)
$
6,787
$
3,065
Income tax benefit
(495
)
(198
)
(238
)
(72
)
Interest expense
135
177
490
537
Depreciation and amortization
3,039
2,842
9,076
8,275
EBITDA
3,450
2,188
16,115
11,805
Transaction, contested proxy and other related expenses
117
-
768
933
Loss on disposal of fixed assets
60
26
107
122
Asset impairment charges and restaurant closing costs
-
4
(2
)
14
Non-cash compensation
471
1,570
1,128
4,021
Loss from discontinued operations, net
66
118
183
339
Pre-opening expense
211
194
357
1,024
Adjusted EBITDA
$
4,375
$
4,100
$
18,656
$
18,258
Note: For purposes of computing Adjusted EBITDA, the $0 and $1,240
for the quarters ended September 30, 2019 and September 29, 2018,
respectively, and $0 and $3,094 for the nine months ended September
29, 2019 and September 30, 2018, respectively, in non-cash
compensation associated with a profits interest grant issued to
Black Knight Advisory Services, LLC ("BKAS") on October 6, 2015 has
been included in "Non-cash compensation" above. Additional expenses
associated with the Company's now terminated management agreement
with BKAS totaling $0 and $139 for the quarters ended September 29,
2019 and September 30, 2018, respectively, and totaling $0 and $587
for the nine months ended September 29, 2019 and September 30,
2018, respectively, are included in general and administrative
expenses and have not been included in the reconciliation set forth
above. The management agreement was terminated during the fourth
quarter of 2018 as disclosed in the Company's Form 8-K filed
Securities and Exchange Commission on November 30, 2018.
J.
Alexander's Holdings, Inc. and Subsidiaries Non-GAAP
Financial Measures and Reconciliations (Unaudited in
thousands)
Quarter Ended
Nine Months Ended
September 29,
September 30,
September 29,
September 30,
2019
2018
2019
2018
Amount
Percent of Net Sales
Amount
Percent of Net Sales
Amount
Percent of Net Sales
Amount
Percent of Net Sales
Operating income (loss)
$
422
0.7
%
$
(542
)
-1.0
%
$
7,031
3.8
%
$
3,850
2.2
%
General and administrative expenses
4,288
7.5
%
5,876
10.4
%
13,816
7.5
%
17,123
9.6
%
Transaction, contested proxy and other related expenses
117
0.2
%
-
0.0
%
768
0.4
%
933
0.5
%
Pre-opening expense
211
0.4
%
194
0.3
%
357
0.2
%
1,024
0.6
%
Restaurant Operating Profit
$
5,038
8.9
%
$
5,528
9.7
%
$
21,972
12.0
%
$
22,930
12.8
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191107006086/en/
J. Alexander’s Holdings, Inc. Jessica Hagler Chief Financial
Officer (615) 269-1900
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