J. Alexander’s Holdings, Inc. (NYSE: JAX) (the “Company”), owner
and operator of J. Alexander’s, Redlands Grill, Stoney River
Steakhouse and Grill and other restaurants, today reported results
for the first quarter ended March 29, 2020.
Business Update and 2020 Outlook
Average weekly same store sales1 for fiscal 2020 compared to
monthly periods of 2019 are as follows:
January
February
March
April
May
(4
weeks)
(4
weeks)
(5
weeks)
(4
weeks)
(4
weeks)
J. Alexander’s/Grill Restaurants
+3.0%
+1.3%
(37.0)%
(81.0)%
(61.5)%
Stoney River Steakhouse and Grill
+0.5%
(3.1)%
(37.2)%
(78.3)%
(62.0)%
When governmental restrictions on dine-in service began during
March 2020 as a result of the novel coronavirus (“COVID-19”)
pandemic, the Company quickly shifted its service model to a
carry-out platform, under which management projected that average
weekly sales would likely range between 10-20% of historical
volumes. During the period from mid-March 2020 through the end of
April 2020, prior to the reopening of dining rooms on a limited
basis in certain markets, the Company experienced sales volumes
that were approximately 18% of the sales recorded during the same
period in the prior year, with sales growing steadily on a weekly
basis during that timeframe. Since the week beginning April 27,
2020 when the Company has been able to begin to reopen dining rooms
with limited capacities in Tennessee, Georgia, Florida, Texas,
Ohio, and other markets, sales volumes have continued to increase,
and for the week ended May 31, 2020 totaled approximately 61% of
sales recorded during the same period in the prior year.
As of June 9, 2020, the Company has reopened dining rooms on a
limited capacity basis at all of its restaurant locations while
continuing to also offer carry-out service at all of its locations.
Off-premise sales have grown significantly since the Company began
operating on the new service model in March 2020. Specifically,
off-premise sales only during the week ended May 31, 2020 totaled
approximately 29% of total sales and were up approximately 35% over
the week ended March 29, 2020, which was the first full week of
primarily carry-out only sales. This increase is being driven by
increased digital marketing and email campaigns to drive guest
awareness, the addition of curbside service, investments that the
Company has made in its online ordering platform partnership with
ChowNow, and through menu innovation to include family-style meals
(offering a complete meal for larger parties including salad,
entrée, side items and dessert) and butcher shop sales of
cook-at-home, hand-cut steaks. The Company is also offering bottles
of wine to-go in most markets and is testing delivery in a limited
number of markets.
The Company is not providing guidance for fiscal 2020 in light
of the current uncertain consumer environment and unprecedented
global market and economic conditions.
First Quarter 2020 Highlights Compared To The First Quarter
Of 2019
- Restaurant dining room closures started on March 16, 2020, with
all restaurants moved to a carry-out only model by March 24,
2020.
- Net sales for the first quarter of 2020 were $56,972,000, down
from $64,734,000 reported in the first quarter of 2019.
- Loss from continuing operations before income taxes totaled
$18,979,000 for the first quarter of 2020, which included a
goodwill impairment charge of $15,737,000, a fixed asset impairment
charge associated with the planned closure of one of the Company’s
restaurants of $689,000, and the impact of transaction expenses of
$689,000 related to the ongoing evaluation of strategic
alternatives. This compares to income from continuing operations
before income taxes of $4,146,000 in the first quarter of
2019.
- Results for the first quarter of 2020 included an income tax
benefit of $1,387,000 compared to income tax expense of $239,000 in
the first quarter of 2019.
- Net loss for the first quarter of 2020 totaled $17,644,000
compared to net income of $3,848,000 in the first quarter of
2019.
- Basic and diluted loss per share were $1.20 for the first
quarter of 2020 compared to basic and diluted earnings per share of
$0.26 for the first quarter of 2019.
- Average weekly same store sales per restaurant (1) for the
first quarter of 2020 were down 12.8% to $102,300 for the J.
Alexander’s/Grill restaurants and down 14.6% to $72,200 for the
Stoney River Steakhouse and Grill restaurants compared to the first
quarter of 2019.
- Adjusted EBITDA (2) was $1,964,000, or 3.4% of net sales, in
the first quarter of 2020, compared to $7,712,000, or 11.9% of net
sales, in the first quarter of 2019.
- Restaurant Operating Profit Margin (3) was 5.3% in the most
recent quarter compared to 14.0% for the first quarter of
2019.
- Cost of sales as a percentage of net sales in the first quarter
of 2020 was 32.6% compared to 31.7% in the first quarter of
2019.
In March 2020, the Company implemented its Emergency Sick Leave
Policy (“ESLP”) for hourly team members which provided for up to
two weeks of paid leave for hourly team members who are either
infected by COVID-19 or employed at a restaurant that closed its
dining rooms in response to the COVID-19 pandemic. During the first
quarter of 2020, the Company incurred approximately $2,050,000 in
pre-tax charges related to continuing benefits and ESLP pay for its
furloughed staff members as a result of the COVID-19 pandemic.
Additionally, the impact of COVID-19 on the Company’s business has
resulted in the need to perform impairment assessments of the
Company’s long-lived assets, goodwill and other intangible assets.
As a result, the Company determined it was necessary to record a
non-cash impairment charge for the first quarter of 2020 of
$15,737,000, representing the entire balance of the Company’s
goodwill. Additionally, the Company has determined that it will not
reopen one of its locations which closed in March 2020 due to the
COVID-19 pandemic, and in the first quarter of 2020 the Company
recorded an impairment charge of $689,000 in order to present the
related long-lived assets at this location at their estimated fair
value. The Company has subsequently entered into an agreement to
sell this location for an amount equivalent to the fair value of
the property, and the sale is expected to close in the third
quarter of 2020, subject to customary closing conditions. Neither
of these impairment charges had an impact on the Company’s cash
flows or debt covenants for the first quarter of 2020. See “Other
Financial and Performance Data” at the end of this release for
additional information on guest counts and other metrics.
Liquidity
As of March 29, 2020, the Company’s cash and cash equivalents
totaled $24,818,000, and total outstanding indebtedness equaled
$25,722,000, including $21,000,000 outstanding on the Company’s
lines of credit facilities. On June 5, 2020, the Company entered
into the Third Amended and Restated Loan Agreement with its lender,
which increased availability under the existing $1,000,000
revolving credit facility to a maximum of $16,000,000 by adding an
accordion feature, subject to compliance with minimum revenue
requirements. The Company pledged additional collateral under this
agreement, including mortgages on five additional restaurant
properties which were previously unencumbered by the Company’s debt
obligations. In April 2020, the Company also entered into certain
letter agreements and a modification agreement with its lender to
defer interest and principal payments for April, May and June
2020.
Additionally, effective May 6, 2020, the Company obtained a
waiver of its existing credit facility financial covenants through
the period ending July 4, 2021, the end of the Company’s second
quarter of fiscal 2021. This waiver also implemented new financial
covenants, as previously disclosed in the Company’s Current Report
on Form 8-K filed on May 8, 2020, requiring minimum revenues and
maximum debt ratios. The Company was in compliance with the
existing financial covenants for the period ended March 29, 2020,
and expects to be in compliance with the new financial covenants
through the waiver period.
Further, the Company has undertaken various measures to preserve
liquidity in the current economic environment, including engaging
in ongoing negotiations with landlords to restructure rental
obligations, securing delayed payment terms with certain vendors,
and delaying or cancelling significant capital expenditure projects
for the balance of fiscal 2020.
As of June 1, 2020, the Company had cash on hand of
approximately $14,600,000. During April 2020, the Company used cash
of approximately $7,600,000, for a weekly cash burn rate of
approximately $1,900,000. As most of the Company’s vendors are on
30-day payment terms, many payments funded in April 2020 were for
March 2020 purchases which were more consistent with historical
volumes, which negatively impacted the April 2020 cash burn rate.
The Company has undertaken significant steps to reduce expenses
since March 2020, and these steps, coupled with the growth in sales
levels, have allowed the Company to reduce its weekly cash burn
rate to approximately $480,000 during the month of May 2020. The
Company continues to work to maximize restaurant operating margin
at reduced sales levels and to negotiate agreements with certain
landlords to abate or defer rental payments beginning in June 2020.
The Company is currently forecasting the weekly cash burn rate to
be approximately $550,000 to $580,000 under the current operating
model commencing in June 2020 through the end of the third quarter.
This amount includes capital expenditure commitments including the
construction of one new location expected to open in the fourth
quarter of 2020.
Chief Executive Officer’s Comments
“We entered fiscal 2020 with high expectations,” stated Mark A.
Parkey, President and Chief Executive Officer of J. Alexander’s
Holdings, Inc. “Same store sales during the first two months of the
year were encouraging and then we encountered the COVID-19
pandemic, which required us to close our dining rooms at all of our
restaurants. Unlike a lot of restaurant concepts, we buy all of our
beef fresh and pay a premium to have it aged for us. When the
pandemic hit, we had a surplus of fresh beef at various stages in
our supply chain that we needed to work through. Thus, after almost
30 years of resisting carry-out dining in favor of maximizing the
in-person dining experience, we found ourselves pivoting to an
off-premise only operating platform at 46 restaurant locations. In
an effort to market our premium fresh beef and, at the same time,
provide value to our loyal guests, we not only featured some
attractively priced beef-centered entrees, but we also offered
‘family packs’ utilizing our beef products and sold ‘butcher-shop’
cuts of cook-at-home steaks and whole loins. While the margins we
realized from these beef offerings were lower, we were able to
cover our input costs and work through the pipeline of beef in our
distribution system and, in the process, make a lot of our guests
happy since many of the grocery stores were depleted of beef and
other proteins.
“As we look ahead, we are optimistic that our guests will be out
in force and eager to resume their traditional routines,” Parkey
stated. “We are already seeing a strong level of pent up demand in
various restaurants, with one of our locations recording sales of
$186,000 during Mother’s Day week 2020 with only 50% of the seats
open to the public and no pub seating available. We are closely
monitoring the various government guidelines for reopening our
dining rooms and will do our best to provide meaningful safety
measures to protect our guests as well as our employees, including
by observing social-distancing protocols, employing the use of
personal protective equipment, checking temperatures of employees
daily, routinely sanitizing high-touch surface areas, and other
measures. We are also encouraged by the strong continued response
to our carry-out offerings over the past couple of months. One of
our restaurants generated $35,000 of off-premise revenue on
Mother’s Day 2020, which is a phenomenal amount for a concept that
wasn’t offering such an option three months ago. As such, we are
actively exploring various platforms which will allow us to
continue to meet this demand without sacrificing the guest
experience in our dining rooms that has been foundational to our
success for the past 29 years.”
On the beef front, Parkey noted that the Company is currently
encountering limited supply and higher than normal input costs
relative to all of its beef offerings. “We have a great
relationship with our primary beef supplier and are working closely
with them to get the aging pipeline up and running again as we open
more and more seats in our dining rooms. Unfortunately, there are
operational hurdles at all levels of the supply chain and our focus
is on procuring beef loins from all available sources to the extent
they meet our specifications and, at least for the next several
weeks, doing our best to ensure an ample inventory of other protein
offerings is available for our guests.”
Parkey went on to note that the Company had decided not to
reopen its restaurant in Lyndhurst, Ohio. “We had an incredibly
loyal and talented team at the Lyndhurst Grill,” Parkey noted,
“which was the most difficult part of our decision to close this
location. Unfortunately, we determined that the financial
performance at this restaurant was not adequate to justify its
continued operation.”
Restaurant Development
The Company has plans to open a new Redlands Grill in San
Antonio, TX, during the fourth quarter of 2020, as previously
announced. The Company is continuing construction of this new
Redlands Grill location at a slower pace than previously
anticipated, but still expects to be able to open for business in
San Antonio before the Holiday season of 2020.
Early in the first quarter of 2020, the Company signed a lease
to build and operate a new J. Alexander’s Restaurant in Madison,
AL, one of the fastest growing markets in that state. Although the
Company originally planned to open this location in the fourth
quarter of 2020 as well, construction on this location has been
delayed in an effort to conserve cash resources, and the Company
now expects to open the Madison, AL, restaurant in the second half
of fiscal 2021.
Strategic Alternatives Evaluation
As part of the Company’s Board of Directors’ (the “Board”)
previously announced review of strategic alternatives, the Company
retained the investment banking firm of Piper Sandler in August
2019 to assist the Company in its evaluation of strategic
alternatives, with a particular focus on a sale of the entire
Company. The Board believed, and took into account the views of
shareholders, that the small size of the Company made it
inefficient to be a standalone publicly traded company. Piper
Sandler ultimately contacted over 125 potential interested parties,
and through an exhaustive process, three interested parties emerged
as serious potential acquirers. One of those parties was in
advanced negotiations with the Company for an acquisition at a
premium to the then-current market price. The initial impacts of
the COVID-19 pandemic led the potential acquirer to reduce its
proposed purchase price twice and to insist on conditions relating
to the performance of the Company. Ultimately, when government
entities mandated the closure of the Company’s restaurants, except
for limited carry-out, the Board determined that no transaction at
a price that reflected the long-term value of the Company would be
able to be consummated until the resolution of uncertainties about
the COVID-19 pandemic and the return of the Company’s business to
satisfactory levels. For the near term, the Company intends to
focus on rebuilding its sales base as its restaurants are able to
reopen and increase capacity by providing an outstanding dining
experience for its guests. The Board currently believes it will be
sometime in 2021 before the Company can conclude its evaluation of
strategic alternatives, focusing on the potential sale of the
Company.
(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 the non‐GAAP financial measure
Adjusted EBITDA and a reconciliation of net income (loss) to
Adjusted EBITDA. 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 the non‐GAAP financial measure
Restaurant Operating Profit and a reconciliation of operating
income (loss) to Restaurant Operating Profit. 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, including the impact of the COVID-19 pandemic
and the Company’s plans to continue its review of strategic
alternatives and its efforts to enhance shareholder value. 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 other events 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 health and financial
effects of the COVID-19 pandemic; the Company’s ability to reopen
its restaurants for in-person dining, and thereafter to reestablish
and maintain satisfactory guest count levels and maintain or
increase sales and operating margin 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 Company’s ability to obtain access
to additional capital as needed; the Company’s ability to comply
with new financial covenants under its loan agreement with its
lender; the impact of any impairment of our long-lived assets,
including tradename; the Company’s ability to defer lease or
contract payments or otherwise obtain concessions from landlords,
vendors and other parties in light of the impact of the COVID-19
pandemic; 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; the
Company’s evaluation of strategic alternatives; 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 SEC on
March 13, 2020, as amended on April 17, 2020, and subsequent
filings, including under the heading “Risk Factor” in its Current
Report on Form 8-K filed with the SEC on May 8, 2020. 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 March 29, March 31,
2020
2019
Net sales
$
56,972
$
64,734
Costs and expenses: Cost of sales
18,567
20,528
Restaurant labor and related costs
20,338
19,550
Depreciation and amortization of restaurant property and equipment
3,094
2,929
Other operating expenses
11,954
12,684
Total restaurant operating expenses
53,953
55,691
Transaction expenses
689
-
General and administrative expenses
4,740
4,756
Goodwill impairment charge
15,737
-
Long-lived asset impairment charges and restaurant closing costs
689
-
Pre-opening expense
19
21
Total operating expenses
75,827
60,468
Operating (loss) income
(18,855
)
4,266
Other income (expense): Interest expense
(116
)
(186
)
Other, net
(8
)
66
Total other expense
(124
)
(120
)
(Loss) income from continuing operations before income taxes
(18,979
)
4,146
Income tax benefit (expense)
1,387
(239
)
Loss from discontinued operations, net
(52
)
(59
)
Net (loss) income
$
(17,644
)
$
3,848
Basic (loss) earnings per share: (Loss) income from
continuing operations, net of tax
$
(1.20
)
$
0.27
Loss from discontinued operations, net
(0.00
)
(0.00
)
Basic (loss) earnings per share
$
(1.20
)
$
0.26
Diluted (loss) earnings per share: (Loss) income from
continuing operations, net of tax
$
(1.20
)
$
0.27
Loss from discontinued operations, net
(0.00
)
(0.00
)
Diluted (loss) earnings per share
$
(1.20
)
$
0.26
Weighted average common shares outstanding: Basic
14,695
14,695
Diluted
14,695
14,695
Note: Per share amounts may not sum due to rounding.
J.
Alexander's Holdings, Inc. and Subsidiaries Condensed
Consolidated Statements of Operations Data as a Percentage
of Net Sales (Unaudited) Quarter Ended March 29,
March 31,
2020
2019
Net sales
100.0
%
100.0
%
Costs and expenses: Cost of sales
32.6
31.7
Restaurant labor and related costs
35.7
30.2
Depreciation and amortization of restaurant property and equipment
5.4
4.5
Other operating expenses
21.0
19.6
Total restaurant operating expenses
94.7
86.0
Transaction expenses
1.2
-
General and administrative expenses
8.3
7.3
Goodwill impairment charge
27.6
-
Long-lived asset impairment charges and restaurant closing costs
1.2
-
Pre-opening expense
0.0
0.0
Total operating expenses
133.1
93.4
Operating (loss) income
(33.1
)
6.6
Other income (expense): Interest expense
(0.2
)
(0.3
)
Other, net
(0.0
)
0.1
Total other expense
(0.2
)
(0.2
)
(Loss) income from continuing operations before income taxes
(33.3
)
6.4
Income tax benefit (expense)
2.4
(0.4
)
Loss from discontinued operations, net
(0.1
)
(0.1
)
Net (loss) income
(31.0
)
%
5.9
%
Note: Certain percentage totals do not sum due to rounding.
J. Alexander's Holdings, Inc. and Subsidiaries
Other Financial and Performance Data (Unaudited)
Quarter Ended March 29, March 31,
2020
2019
Other Financial and Performance Data: Adjusted
EBITDA(1) (in thousands)
$
1,964
$
7,712
As a % of net sales
3.4
%
11.9
%
All Stores Basis Operating
Metrics: Average weekly sales per restaurant:
J. Alexander’s / Grill Restaurants
$
101,400
$
117,300
Percent change
(13.6
)%
Stoney River Steakhouse and Grill
$
72,400
$
85,200
Percent change
(15.0
)%
Average weekly guest counts: J. Alexander’s / Grill
Restaurants
(15.5
)%
(2.3
)%
Stoney River Steakhouse and Grill
(15.3
)%
3.1
%
Average guest check per restaurant (including alcoholic
beverages): J. Alexander’s / Grill Restaurants
$
33.09
$
32.40
Percent change
2.1
%
Stoney River Steakhouse and Grill
$
42.67
$
42.67
Percent change
0.0
%
Estimated menu pricing impact:(2) J. Alexander’s /
Grill Restaurants
1.9
%
0.3
%
Stoney River Steakhouse and Grill
2.5
%
0.3
%
Estimated inflation: J. Alexander’s / Grill
Restaurants (total food costs)
(1.1
)%
1.9
%
J. Alexander’s / Grill Restaurants (beef costs)
(0.4
)%
5.7
%
Stoney River Steakhouse and Grill (total food costs)
(0.8
)%
3.2
%
Stoney River Steakhouse and Grill (beef costs)
(1.2
)%
7.2
%
Same Store Basis Operating
Metrics: Average weekly same store sales per
restaurant: J. Alexander’s / Grill Restaurants
$
102,300
$
117,300
Percent change
(12.8
)%
Stoney River Steakhouse and Grill
$
72,200
$
84,500
Percent change
(14.6
)%
Average weekly same store guest counts: J.
Alexander’s / Grill Restaurants
(14.6
)%
(1.1
)%
Stoney River Steakhouse and Grill
(15.0
)%
1.2
%
Average same store guest check per restaurant (including
alcoholic beverages): J. Alexander’s / Grill Restaurants
$
33.02
$
32.40
Percent change
1.9
%
Stoney River Steakhouse and Grill
$
43.18
$
43.10
Percent change
0.2
%
(1) See definitions and reconciliation attached. (2) Menu
pricing impact for quarter ended March 29, 2020 reflects first 11
weeks of activity only.
J. Alexander's Holdings, Inc. and
Subsidiaries Condensed Consolidated Balance Sheets
(Unaudited in thousands) March 29, December
29,
2020
2019
Assets Current assets: Cash and cash equivalents
$
24,818
$
8,803
Other current assets
5,835
9,289
Total current assets
30,653
18,092
Other assets
5,661
5,698
Deferred income taxes, net
4,230
2,918
Property and equipment, net
106,868
109,303
Right-of-use lease assets, net
74,241
70,277
Goodwill
-
15,737
Tradename and other indefinite-lived intangibles
25,648
25,648
Deferred charges, net
224
239
$
247,525
$
247,912
Liabilities and Stockholders' Equity Current
liabilities
$
26,313
$
31,226
Long-term debt, net of portion classified as current and
unamortized deferred loan costs
20,411
2,845
Long-term lease liabilities
80,182
75,883
Deferred compensation obligations
6,968
7,103
Other long-term liabilities
123
138
Stockholders' equity
113,528
130,717
$
247,525
$
247,912
J. Alexander's Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited in thousands) Quarter Ended March
29, March 31,
2020
2019
Cash flows from operating activities: Net (loss) income
$
(17,644
)
$
3,848
Adjustments to reconcile net (loss) income to net cash provided by
operating activities: Depreciation and amortization of property and
equipment
3,146
2,993
Equity-based compensation expense
455
296
Asset impairment charges
16,426
-
Other, net
(1,241
)
(394
)
Changes in assets and liabilities, net
688
(5,874
)
Net cash provided by operating activities
1,830
869
Cash flows from investing activities: Purchase of property
and equipment
(1,416
)
(1,614
)
Other investing activities
(149
)
(90
)
Net cash used in investing activities
(1,565
)
(1,704
)
Cash flows from financing activities: Proceeds from
borrowings under debt agreement
17,000
-
Payments on long-term debt
(1,250
)
(1,250
)
Other financing activities
-
(6
)
Net cash provided by (used in) financing activities
15,750
(1,256
)
Increase (decrease) in cash and cash equivalents
16,015
(2,091
)
Cash and cash equivalents at beginning of the period
8,803
8,783
Cash and cash equivalents at end of the period
$
24,818
$
6,692
Supplemental disclosures: Property and equipment obligations
accrued at beginning of the period
$
1,116
$
819
Property and equipment obligations accrued at end of the period
1,145
869
Cash paid for interest
93
171
Cash paid for income taxes
30
27
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 (loss)
income 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 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 (loss) income,
operating (loss) income 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 March 29, March
31,
2020
2019
Net (loss) income
$
(17,644
)
$
3,848
Income tax (benefit) expense
(1,387
)
239
Interest expense
116
186
Depreciation and amortization
3,160
3,008
EBITDA
(15,755
)
7,281
Transaction expenses
689
-
Loss on disposal of fixed assets
46
23
Asset impairment charges and restaurant closing costs
16,426
-
Non-cash compensation
487
328
Loss from discontinued operations, net
52
59
Pre-opening expense
19
21
Adjusted EBITDA
$
1,964
$
7,712
J. Alexander's Holdings, Inc. and Subsidiaries
Non-GAAP Financial Measures and Reconciliations
(Unaudited in thousands) Quarter Ended March
29, March 31,
2020
2019
Amount Percent of NetSales Amount Percent
of NetSales Operating (loss) income
$
(18,855
)
(33.1
)%
$
4,266
6.6
%
General and administrative expenses
4,740
8.3
%
4,756
7.3
%
Transaction expenses
689
1.2
%
-
0.0
%
Goodwill impairment charge
15,737
27.6
%
-
0.0
%
Long-lived asset impairment charges and restaurant closing costs
689
1.2
%
-
0.0
%
Pre-opening expense
19
0.0
%
21
0.0
%
Restaurant Operating Profit
$
3,019
5.3
%
$
9,043
14.0
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200609005442/en/
J. Alexander’s Holdings, Inc. Jessica Hagler Chief Financial
Officer (615) 269‐1900
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