J. Alexander’s/Redlands Grill Posts
23rd Consecutive Quarter Of Same Store Sales
Increases
Stoney River Records 5th
Consecutive Quarter Of Same Store Sales
Improvement
Board Authorizes Share Repurchase
Program
J. Alexander’s Holdings, Inc. (NYSE: JAX) (the Company), the
sole managing member of J. Alexander’s Holdings, LLC, today
reported financial results for J. Alexander’s Holdings, LLC (JAH)
for the third quarter and first nine months of fiscal 2015 ended
September 27, 2015. As previously announced, on September 28, 2015,
the Company completed its spin-off from Fidelity National Financial
Ventures, LLC (NYSE: FNFV). As a result of the spin-off and related
reorganization transactions, the Company became an independent
public company and the sole managing member of JAH.
Third Quarter 2015 Highlights Compared To The Third Quarter
Of 2014
- Adjusted EBITDA(1) rose 36.5% to
$4,426,000 for the third quarter of 2015 from $3,243,000 during the
corresponding period of 2014.
- Net sales increased 5.6% to $49,335,000
from $46,725,000.
- For the J. Alexander’s/Redlands Grill
restaurants, average weekly same store sales per restaurant were up
3.0% to $103,500 and for the Stoney River Steakhouse and Grill
restaurants, average weekly same store sales increased by 5.0% to
$60,800.
- The loss from continuing operations
before income taxes totaled $2,437,000 compared to income from
continuing operations before income taxes of $16,000 in the third
quarter of 2014. Excluding non-recurring transaction expenses
associated with a planned initial public offering during 2014 and
the ultimate spin-off from FNFV of $4,197,000 and $224,000 in the
third quarter of 2015 and 2014, respectively, income from
continuing operations before income taxes would have totaled
$1,760,000 for the third quarter of 2015 compared to $240,000 for
the third quarter of 2014.
- The net loss of $2,477,000 compared to
a net loss of $215,000 in the third quarter a year ago.
- Restaurant operating margins (2) were
10.8% for the 2015 quarter as compared to 10.3% in the third
quarter of 2014.
- Cost of sales as a percentage of net
sales, improved to 31.6% during the third quarter of 2015 compared
to 32.3% during the third quarter a year ago.
(1) Please refer to the financial information accompanying this
release for reconciliation of Adjusted EBITDA, a financial measure
that management uses to evaluate operating performance and the
effectiveness of its business strategies.
(2) Net sales minus total restaurant operating expenses divided
by net sales. Please refer to the financial information
accompanying this release for reconciliation of Restaurant
Operating Profit, a financial measure that management uses to
measure operating performance at the restaurant level.
The J. Alexander’s Holdings, Inc. Board of Directors has
authorized a share repurchase program for up to 1.5 million shares
of the Company’s outstanding common stock over the next three
years. 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 sizes 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 particular amount of
stock.
Chief Executive Officer’s Review
“We were pleased with our overall performance in the third
quarter,” said Lonnie J. Stout, II, President and Chief Executive
Officer of J. Alexander’s Holdings, Inc. “The quarter closing
September 27, 2015 marked the 23rd consecutive period of positive
same store sales for our J. Alexander’s/Redlands Grill restaurants,
and the 5th consecutive period of same store sales improvement for
our Stoney River restaurants.”
Stout said another positive measure of the Company’s most recent
results included a reduction in cost of sales. “The decrease in
cost of sales was particularly encouraging in light of fresh beef
prices, which moderated somewhat during the third quarter but have
exceeded prior year prices on a comparative basis during each of
the 2015 quarters thus far. Restaurant labor and related costs as a
percent of sales were also down slightly to 32.1% as compared to
32.2% in the corresponding period a year earlier while other
restaurant operating expenses increased to 21.3% of net sales as
compared to 21.1% of net sales in the third quarter of 2014.”
Stout said that average weekly guest counts (same store base)
for the Company’s Stoney River Steakhouse and Grill restaurants
were up 4.3% for the third quarter of 2015. At the same time, he
said guest counts at the Company’s J. Alexander’s/Redlands Grill
concepts declined slightly in the past quarter. For the most recent
quarter, average weekly guest counts (same store base) of the
combined J. Alexander’s/Redlands Grill restaurant base were down
1.2%.
Average guest checks, which include alcoholic beverage sales,
for the combined J. Alexander’s/Redlands Grill concepts and Stoney
River Steakhouse and Grill concept in the third quarter of 2015
both increased, as J. Alexander’s/Redlands Grill climbed 4.1% to
$30.63 while Stoney River rose 0.7% to $45.89. The effect of menu
price increases for the quarter just ended was estimated to be 2.8%
for the J. Alexander’s/Redlands Grill restaurants and 1.9% for the
Stoney River Steakhouse and Grill restaurants compared to the same
period a year earlier.
Year-To-Date Performance
For the first nine months of 2015, JAH recorded net sales of
$158,610,000, up 6.5% from $148,921,000 reported in the first nine
months of 2014. Income from continuing operations before income
taxes totaled $3,306,000 for the 2015 period compared to $6,815,000
for the first nine months of 2014. Excluding non-recurring
transaction expenses of $6,311,000 and $326,000 in the first nine
months of 2015 and 2014, respectively, income from continuing
operations before income taxes would have totaled $9,617,000 for
the first nine months of 2015 compared to $7,141,000 for the
comparable period of 2014. JAH recorded net income of $3,034,000
for the first three quarters of 2015 compared to $6,323,000 during
the same period of 2014. Adjusted EBITDA for the first nine months
of 2015 totaled $17,743,000, an increase of $1,988,000, or 12.6%,
from $15,755,000 recorded during the first nine months of 2014.
Average weekly same store sales per restaurant for the first
nine months of 2015 were up 4.5% to $110,800 for the J.
Alexander’s/Redlands Grill restaurants, and for the Stoney River
Steakhouse and Grill restaurants, average weekly same store sales
increased by 5.6% to $67,600.
Average weekly guest counts within the same store base of
restaurants increased by 0.4% within the J. Alexander’s/Redlands
Grill restaurants and by 3.7% within the Stoney River Steakhouse
and Grill restaurants during the first nine months of 2015 compared
to the corresponding period of 2014. The average guest check at J.
Alexander’s/Redlands Grill locations increased by 4.1% to $30.67
during the year-to-date 2015 period and the Stoney River average
guest check increased by 1.9% to $45.54. Management estimates that
the effect of menu price increases for the year-to-date period
totaled 3.3% at J. Alexander’s/Redlands Grill locations and 3.1% at
the Stoney River restaurants during the first nine months of
2015.
Cost of sales for the first nine months of 2015 was 31.6%, down
from 31.9% in the comparable nine month period of 2014. Restaurant
labor and related costs for the first three quarters of 2015
decreased to 30.5% of net sales from 30.7% of net sales in the same
three quarters of 2014, and other restaurant operating expenses
decreased to 20.2% of net sales during the 2015 period from 20.4%
of net sales in the comparable prior year period. Restaurant
operating margins for the first nine months of 2015 totaled 13.7%,
up from 13.2% in the first three quarters of 2014.
“We expect our same store sales for the fourth quarter will be
up on a comparative basis,” Stout said. “Our previously released
guidance for 2015 remains unchanged. It can be found on page 33 of
the September 2015 Investor Presentation located in the investor
section of our website under the “Events and Presentations”
tab.”
Restaurant Development
During the third quarter of 2015, leases to develop two new J.
Alexander’s restaurants were executed, with one in Raleigh, NC and
one in Lexington, KY. These two new restaurants are expected to
open in the second and fourth quarters, respectively, of 2016. The
Company also announced plans in the third quarter to develop a new
Stoney River Steakhouse and Grill in Germantown, TN, near Memphis.
The new Stoney River restaurant is set to open in the first quarter
of 2016. Finally during the third quarter, the Company continued
its program to transition selected J. Alexander’s restaurants to
Redlands Grill restaurants, with 12 such transitions in progress at
September 27, 2015. The Company expects the transition process will
be completed during 2016.
J. Alexander’s Holdings, Inc. presently operates 41 restaurants
across 14 states.
Conference Call
J. Alexander’s Holdings, Inc. will hold a conference call on
Friday, November 6, at 10 a.m. Central time to discuss its
financial results for the third quarter ended September 27, 2015.
The conference call can be accessed live over the phone by dialing
1-877-407-4018 (Toll-Free) or 1-201-689-8471 (Toll/International).
To access the call via the internet, go to J. Alexander’s website
at investor.jalexandersholdings.com or
http://public.viavid.com/index.php?id=116818.
A replay of the conference call will be available shortly
following the conclusion of the call at
investor.jalexandersholdings.com and
http://public.viavid.com/index.php?id=116818, as well as by dialing
1-877-870-5176 or 1-858-384-5517 and providing the access code
13623097. The replay will be accessible through December 6, 2015
via telephone and for 30 days on the internet.
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
three complementary restaurant concepts: J. Alexander’s, Redlands
Grill and Stoney River Steakhouse and Grill.
J. Alexander’s Holdings, Inc. has its headquarters in Nashville,
TN.
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, including
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; as well as other
risks and uncertainties described under the headings
"Forward-Looking Statements," "Risk Factors" and other sections of
the Company’s Registration Statement on Form 10 filed with the
Securities and Exchange Commission. 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, LLC and
Subsidiaries
Consolidated Statements of
Operations
(Unaudited in thousands)
Quarter Ended
Nine Months Ended
Sept. 27
Sept. 28
Sept. 27
Sept. 28
2015
2014
2015
2014 Net sales
$
49,335
$ 46,725
$
158,610
$ 148,921 Costs and expenses: Cost of sales
15,581
15,101
50,177
47,440 Restaurant labor and related costs
15,819
15,032
48,455
45,743
Depreciation and amortization of
restaurant property and equipment
2,088
1,926
6,128
5,703 Other operating expenses
10,516
9,839
32,066
30,330 Total restaurant operating expenses
44,004
41,898
136,826
129,216 Transaction and integration expenses
4,197
224
6,311
326 General and administrative expenses
3,377
3,734
11,240
10,271
Asset impairment charges and restaurant
closing costs
1
-
2
4 Pre-opening expenses
21
141
23
162 Total operating expenses
51,600
45,997
154,402
139,979 Operating income (loss)
(2,265
)
728
4,208
8,942 Other income (expense): Interest expense
(193
)
(732 )
(970
)
(2,223 ) Other, net
21
20
68
96 Total other expense
(172
)
(712 )
(902
)
(2,127 )
Income (loss) from continuing operations
before income taxes
(2,437
)
16
3,306
6,815 Income tax (expense) benefit
66
(124 )
45
(161 ) Loss from discontinued operations, net
(106
)
(107 )
(317
)
(331 ) Net income (loss)
$
(2,477
)
$ (215 )
$
3,034
$ 6,323 Adjusted EBITDA*
$
4,426
$ 3,243
$
17,743
$ 15,755 * - See reconciliation attached.
J. Alexander's Holdings, LLC and
Subsidiaries
Consolidated Statements of
Operations
Percentages of Net Sales
(Unaudited)
Quarter Ended
Nine Months Ended
Sept. 27
Sept. 28
Sept. 27
Sept. 28
2015
2014
2015
2014 Net sales
100.0
%
100.0 %
100.0
%
100.0 % Costs and expenses: Cost of sales
31.6
32.3
31.6
31.9 Restaurant labor and related costs
32.1
32.2
30.5
30.7
Depreciation and amortization of
restaurant property and equipment
4.2
4.1
3.9
3.8
Other operating expenses
21.3
21.1
20.2
20.4 Total restaurant operating expenses
89.2
89.7
86.3
86.8 Transaction and integration expenses
8.5
0.5
4.0
0.2 General and administrative expenses
6.8
8.0
7.1
6.9
Asset impairment charges and restaurant
closing costs
0.0
0.0
0.0
0.0 Pre-opening expenses
0.0
0.3
0.0
0.1 Total operating expenses
104.6
98.4
97.3
94.0 Operating income (loss)
(4.6
)
1.6
2.7
6.0 Other income (expense): Interest expense
(0.4
)
(1.6 )
(0.6
)
(1.5
)
Other, net
0.0
0.0
0.0
0.1
Total other expense
(0.3
)
(1.5 )
(0.6
)
(1.4
)
Income (loss) from continuing operations
before income taxes
(4.9
)
0.0
2.1
4.6
Income tax (expense) benefit
0.1
(0.3 )
0.0
(0.1
)
Loss from discontinued operations, net
(0.2
)
(0.2 )
(0.2
)
(0.2 ) Net income (loss)
(5.0
)%
(0.5 )%
1.9
%
4.2 % Adjusted EBITDA
9.0
%
6.9 %
11.2
%
10.6 %
Note: Certain percentage totals do not sum
due to rounding.
Average weekly sales per
restaurant:
J. Alexander’s Restaurant/Redlands Grill
$
102,800
$ 100,500
$
110,200
$ 106,000 Percent increase
2.3
%
4.0
%
Average weekly same store sales per
restaurant:
J. Alexander’s Restaurant/Redlands Grill
$
103,500
$ 100,500
$
110,800
$ 106,000 Percent increase
3.0
%
4.5
%
Stoney River Steakhouse and Grill (1)
$
60,800
$ 57,900
$
67,600
$ 64,000 Percent increase
5.0
%
5.6
%
(1) The Company includes restaurants in
the same store sales base after they have been in operation for
more than 18 months. Because no new restaurants have been opened
during the 18 months preceding the comparable periods, average
weekly same store sales per restaurant are the same as average
weekly sales per restaurant for the periods presented.
J. Alexander's Holdings, LLC and
Subsidiaries
Condensed Consolidated Balance
Sheets
(Unaudited in thousands)
September 27
December 28
2015
2014
ASSETS
Current assets Cash and cash equivalents
$
12,765
$ 13,301 Other current assets
4,923
5,559 Total current assets
17,688
18,860 Other assets
4,094
4,405 Property and equipment, net
86,815
86,263 Goodwill
15,737
15,737 Tradename and other indefinite-lived assets
25,155
25,155 Deferred charges, net
581
488
$
150,070
$ 150,908
LIABILITIES AND MEMBERSHIP
EQUITY
Current liabilities
$
19,720
$ 22,962
Long-term debt and capital lease
obligations, net of current portion
20,000
11,250 Long-term debt due to related party
-
10,000 Deferred compensation obligations
5,745
5,555 Other long-term liabilities
4,362
4,252 Membership equity
100,243
96,889
$
150,070
$ 150,908
J. Alexander's Holdings, LLC and SubsidiariesAdjusted
EBITDA Reconciliation(Unaudited in thousands)
Adjusted EBITDA is a financial measure that management uses to
evaluate operating performance and the effectiveness of its
business strategies. Adjusted EBITDA is defined as net income
(loss) before interest expense, income tax expense (benefit),
depreciation and amortization, and adding transaction and
integration costs, loss on disposals of fixed assets, asset
impairment charges and restaurant closing costs, non-cash
compensation, loss from discontinued operations, pre-opening
expenses and certain unusual items. Management believes Adjusted
EBITDA is a useful metric for investors because it provides a
comparative assessment of our operating performance relative to our
performance based on our results under GAAP, while isolating the
effects of some items that vary from period to period without any
correlation to core operating performance. Specifically, Adjusted
EBITDA allows for an assessment of our operating performance
without the effect of non-cash depreciation and amortization
expenses or our ability to service or incur indebtedness. The
following table presents a reconciliation of Adjusted EBITDA to net
income (loss) for all periods presented:
Quarter
Ended Nine Months Ended Sept. 27 Sept.
28
Sept. 27 Sept. 28
2015
2014 2015 2014 Net
income (loss)
$ (2,477 ) $ (215 )
$
3,034 $ 6,323 Income tax expense (benefit)
(66
)
124
(45
)
161 Interest expense
193 732
970 2,223 Depreciation
and amortization
2,179
2,013 6,398
5,955 EBITDA
(171 ) 2,654
10,357 14,662 Transaction and integration expenses
4,197 224
6,311 326 Loss on disposal of fixed assets
103 75
224 148 Asset impairment charges and
restaurant closing costs
1 -
2 4 Non-cash
compensation
169 42
509 122 Loss from discontinued
operations, net
106 107
317 331 Pre-opening expenses
21 141
23 162
Adjusted EBITDA
$ 4,426
$ 3,243
$ 17,743
$ 15,755
J. Alexander's Holdings, LLC and
SubsidiariesRestaurant Operating Profit
Reconciliation(Unaudited in thousands)
Restaurant Operating Profit is a metric used by management to
measure operating performance at the restaurant level. Restaurant
Operating Profit represents net income (loss) before losses from
discontinued operations, income tax expense (benefit), interest
expense, general and administrative expenses, asset impairment
charges and restaurant closing costs, transaction and integration
expenses, pre-opening expenses, and other, net non-operating income
or expense. Management believes this measure is useful to investors
because it allows for an assessment of our operating performance
without the effect of general and administrative expenses and other
non-operating or unusual costs incurred at the corporate level. The
following table presents a reconciliation of Restaurant Operating
Profit to net income (loss) for all periods presented:
Quarter Ended Nine
Months Ended Sept. 27 Sept. 28
Sept.
27 Sept. 28
2015
2014 2015 2014 Net
income (loss)
$ (2,477 ) $ (215 )
$
3,034 $ 6,323 Loss from discontinued operations, net
106 107
317 331 Income tax expense (benefit)
(66 ) 124
(45 ) 161 Interest expense
193 732
970 2,223 Other, net
(21 ) (20
)
(68 ) (96 ) General and administrative expenses
3,377 3,734
11,240 10,271 Asset impairment charges
and restaurant closing costs
1 -
2 4 Transaction and
integration expenses
4,197 224
6,311 326 Pre-opening
expenses
21
141 23
162 Restaurant Operating Profit
$ 5,331
$ 4,827 $
21,784 $
19,705 Note: “Restaurant
Operating Profit Margin” is the ratio of Restaurant Operating
Profit to net sales.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151105006992/en/
J. Alexander’s Holdings, Inc.Mark Parkey, 615-269-1900Chief
Financial Officer
J Alexanders (NYSE:JAX)
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