J. Alexander’s/Redlands Grill Posts 24th
Consecutive Quarter of Same Store Sales Increases
Stoney River Records 6th Consecutive
Quarter of Same Store Sales Gains
J. Alexander’s Holdings, Inc. (NYSE: JAX) (the Company) today
reported financial results for the fourth quarter and full year of
fiscal 2015 ended January 3, 2016. Fiscal 2015 included 53 weeks as
compared to 52 weeks in fiscal 2014 and the fourth quarter of
fiscal 2015 included 14 weeks as compared to 13 weeks in the
corresponding period of fiscal 2014. In addition, as a result of
our fiscal year ending on the Sunday closest to December 31, fiscal
2015 included two New Year’s holiday periods, one during the first
quarter and another during the fourth quarter of fiscal 2015, while
fiscal 2014 included one New Year’s holiday period during the first
quarter of that year.
Fourth Quarter 2015 Highlights Compared To The Fourth Quarter
Of 2014
- Net sales increased $5,992,000 to
$59,304,000, or 11.2%. The extra week in the 2015 quarter included
the New Year’s holiday period and contributed $5,030,000 of net
sales, which increased net sales for the quarter by 9.4% compared
to the fourth quarter of 2014.
- Adjusted EBITDA(1) rose $1,778,000 to
$8,382,000, or 26.9%, for the fourth quarter of 2015 from
$6,604,000 during the fourth period of 2014. Approximately $900,000
of the increase during the fourth quarter of 2015 was attributable
to the extra week included in the 2015 period.
- For the J. Alexander’s/Redlands Grill
restaurants, average weekly same store sales per restaurant were up
1.4% to $111,600, and for the Stoney River Steakhouse and Grill
restaurants, average weekly same store sales increased by 6.2% to
$77,300. Excluding the impact of the extra week included in the
fourth quarter of 2015, average weekly same store sales per
restaurant for the J. Alexander’s/Redlands Grill restaurants were
$109,900, representing a 0.2% decrease compared to the average of
$110,100 in the 13 weeks represented by the fourth quarter of 2014,
and average weekly same store sales per restaurant for the Stoney
River Steakhouse and Grill restaurants were $76,200, representing a
4.7% increase compared to the average of $72,800 during the 13
weeks included in the corresponding period of 2014.
- Income from continuing operations
before income taxes reached $4,033,000 during the fourth quarter of
2015 compared to $2,471,000 in the fourth quarter of 2014. The 2015
results include an additional $812,000 in income related to the
impact of the extra week of operations during the fourth quarter.
These results were impacted by non-recurring transaction expenses
associated with a planned initial public offering in 2014 and the
ultimate spin-off from Fidelity National Financial Ventures, LLC
(FNFV) in 2015, of $870,000 and $459,000 in the fourth quarter of
2015 and 2014, respectively.
- Net income for the fourth quarter of
2015 totaled $2,321,000, up 5.9% from net income of $2,192,000 in
the fourth quarter of the prior year.
- Basic and diluted earnings per share
totaled $0.15 for both the fourth quarter of 2015 and 2014,
respectively. In computing earnings per share, weighted average
common shares outstanding are based on the number of shares
outstanding at the date of the Company’s spin-off from FNFV as if
all shares had been outstanding since December 30, 2013.
- Restaurant Operating Profit Margin(2)
was 17.1% for the fourth quarter of 2015 as compared to 15.6% in
the fourth quarter of 2014.
- Cost of sales as a percentage of net
sales in the fourth period of 2015 improved to 31.4% from 32.2%
during the fourth quarter a year ago.
(1) 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. Management uses
Adjusted EBITDA to evaluate operating performance and the
effectiveness of its business strategies.
(2) “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 net income.
Management uses Restaurant Operating Profit to measure operating
performance at the restaurant level.
Stock Repurchase Program
During the fourth quarter of fiscal 2015, the Company’s Board of
Directors authorized a share repurchase program for up to 1.5
million shares of the Company’s outstanding common stock over a
period of three years. The Company expects to fund the share
repurchases from cash on hand and 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 particular amount of stock. To date, no
shares have been repurchased by the Company under this program.
Chief Executive Officer’s Review/Fourth Quarter
“Our fourth quarter results again yielded increased same store
sales in our J. Alexander’s/Redlands Grill restaurants and in
our Stoney River Steakhouse and Grill restaurants,” observed Lonnie
J. Stout, II, President and Chief Executive Officer of the
Company.
“While we were satisfied with our overall performance, sales in
the fourth quarter were impacted somewhat by a slowdown in sales at
certain J. Alexander’s/Redlands Grill restaurants located near
malls and in heavy retail areas. Historically during the holiday
season, which runs from Thanksgiving through Christmas Eve, we have
benefitted from guests having late lunches and early dinners as a
result of shopping trips. The frequency of guest visits to our
restaurants was high. However, in recent years, we have noticed a
softening in sales during the late weeks of the fourth quarter as
online retail shopping has increased. This trend had an unfavorable
impact on guest counts and on holiday sales this past year at some
J. Alexander’s/Redlands Grill restaurants operating in heavy retail
traffic areas.”
Stout said that the Company was also pleased with the continued
improvement in restaurant operating profit during the most recent
quarter. “This is another important measure of operating efficiency
and includes restaurant profits after all occupancy costs, but
before any corporate general and administrative expenses.”
Restaurant operating profit climbed to $10,166,000 in the fourth
quarter of 2015 from $8,306,000 in the final quarter of the
previous year. This was a 22.4% increase and included an extra
week, which had an estimated favorable impact of $1,167,000.
For the quarter ended January 3, 2016, the Company continued to
reduce its cost of sales as a percent of net sales, which were down
from 32.2% in the final quarter of 2014 to 31.4% in the most recent
quarter. Restaurant labor and related costs as a percent of net
sales were also down to 29.3% as compared to 29.6% in the fourth
period a year earlier, while other restaurant operating expenses
decreased to 18.6% of net sales as compared to 19.0% percent of net
sales in the final quarter of 2014.
Stout said that average weekly guest counts within the same
store base for the Company’s Stoney River Steakhouse and Grill
restaurants were up 5.9% for the fourth quarter of 2015. Guest
counts within the same store base at the Company’s combined J.
Alexander’s/Redlands Grill concepts decreased 0.9% in the most
recent quarter and reflected the previously mentioned slowdown in
retail traffic in mall and heavy retail areas during the
traditionally busy holiday season.
Average guest checks, which include alcoholic beverage sales,
for the combined J. Alexander’s/Redlands Grill concepts increased
2.3% to $31.08 in the fourth quarter of 2015. Average guest checks
for the Stoney River Steakhouse and Grill concept were up 0.3% to
$47.12 in the fourth quarter of 2015. The effect of menu price
increases for the quarter just ended was estimated to be 1.7% for
the J. Alexander’s/Redlands Grill restaurants and 2.4% for the
Stoney River Steakhouse and Grill restaurants compared to the same
period a year earlier.
Fiscal 2015 Performance
For the 53 weeks of fiscal 2015, the Company posted net sales of
$217,914,000, up 7.8% from $202,233,000 reported during the 52
weeks of fiscal 2014. Income from continuing operations before
income taxes was $7,339,000 for 2015 compared to $9,286,000 for
2014. Excluding non-recurring transaction expenses of $7,181,000
and $785,000 in 2015 and 2014, respectively, income from continuing
operations before income taxes would have totaled $14,520,000 for
2015 compared to $10,071,000 for 2014. The Company recorded net
income of $5,355,000 for 2015 compared to $8,515,000 in 2014.
Adjusted EBITDA for 2015 totaled $26,125,000, an increase of
$3,767,000, or 16.8%, from $22,358,000 recorded in 2014. Basic and
diluted earnings per share totaled $0.36 for 2015 compared to $0.57
for 2014.
Average weekly same store sales per restaurant for 2015 were up
3.7% to $111,000 for the J. Alexander’s/Redlands Grill restaurants,
and for the Stoney River Steakhouse and Grill restaurants, average
weekly same store sales increased by 6.0% to $70,200. Excluding the
impact of the extra week in 2015, average weekly same store sales
per restaurant totaled $110,600 for the J. Alexander’s/Redlands
Grill restaurants, an increase of 3.4%, and $69,700 for the Stoney
River Steakhouse and Grill restaurants, an increase of 5.3%,
compared to the corresponding periods of 2014, respectively.
Average weekly guest counts within the same store base of
restaurants increased by 0.1% within the J. Alexander’s/Redlands
Grill restaurants and by 4.4% within the Stoney River Steakhouse
and Grill restaurants in 2015 compared to 2014. The average guest
check at the combined J. Alexander’s/Redlands Grill locations
increased by 3.7% to $30.77 during 2015 and the Stoney River
average guest check increased by 1.5% to $45.99. Management
estimates that the effect of menu price increases for 2015 totaled
2.9% at J. Alexander’s/Redlands Grill locations and 2.8% at the
Stoney River restaurants for 2015.
Cost of sales as a percent of net sales for 2015 was 31.6%, down
from 31.9% in 2014. Restaurant labor and related costs for 2015
decreased to 30.2% of net sales from 30.4% of net sales in 2014,
and other restaurant operating expenses decreased to 19.8% of net
sales during 2015 from 20.0% of net sales in 2014. Restaurant
operating margins for 2015 totaled 14.7%, up from 13.9% in
2014.
Cash flow from operations totaled $16,010,000 during 2015
compared to $17,955,000 in 2014. Capital expenditures for 2015
totaled $11,431,000 compared to $10,536,000 during fiscal 2014.
Outlook For 2016/Guidance
The following business performance outlook is based on current
information as of March 9, 2016. The Company does not expect to
update the guidance provided below before next quarter’s earnings
release. However, the information on which this 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.
“As fiscal 2016 begins, we are addressing sales softness in some
of our small and mid-market J. Alexander’s/Redlands Grill
restaurants due to increases in check averages,” Stout continued.
“We have implemented value-oriented programs with lunch and dinner
features in an effort to increase the frequency of our aspirational
and more casual dining guests. We believe it will take a quarter or
two before these plans produce beneficial results. Thus, when
combined with the timing of the New Year’s holiday period, as well
as the unfavorable impact of the Easter weekend which will be
included in the first quarter of 2016 but was the first week of
last year’s second quarter, we anticipate our first quarter average
weekly same store sales per restaurant for the J.
Alexander’s/Redlands Grill restaurants will be 3% – 4% below the
average for the first quarter of 2015, with approximately half of
the anticipated decrease attributable to the timing of the holidays
noted above. For the 2016 year, we anticipate our weekly same store
sales averages will improve approximately 1% - 2%.”
Stout said management believes the performance of its Stoney
River Steakhouse and Grill restaurants will remain strong because
fewer restaurants are located in price-sensitive markets.
Stout also noted that fiscal 2016 will be a year of continued
transition for the Company. “As a public company once again, there
are certain fees and expenses which we will incur that were not
present during the years we were a majority-owned subsidiary of
FNFV,” Stout stated. “We estimate such fees will run approximately
$1.1 million annually and that our results for the last quarter of
2015 included between $200,000 and $250,000 of such expenses.”
Stout also noted that in conjunction with the spin-off from FNFV,
the Company entered into a management agreement with Black Knight
Advisory Services, LLC which will result in additional general and
administrative expenses of approximately $800,000 for fiscal 2016
compared to similar fees totaling $262,000 during the fourth
quarter of fiscal 2015.
Based upon current information, the guidance for the 52-week
2016 fiscal year is as follows:
Same Store Sales Increase: J.
Alexander’s/Redlands Grill 1% - 2% Stoney River Steakhouse and
Grill 2% - 3% Redlands Grill Conversions 2 to 4 locations Capital
Expenditures $20MM- $21.5MM Total Revenue $ 222MM - $226MM Adjusted
EBITDA $ 25.1MM - $26.1MM Net Income $ 5.7MM - $6.4MM Effective tax
rate 30% Basic EPS Range $
0.38 - $0.43
Restaurant Development
On January 25, 2016, the Company opened a new Stoney River
Steakhouse and Grill in Germantown, TN, a suburb of Memphis. The
concept’s last new restaurant opening prior to the Germantown
location was in Towson, Maryland during 2009 and the Germantown
restaurant represents the first new Stoney River Steakhouse and
Grill opened subsequent to the concept’s being contributed to J.
Alexander’s Holdings, LLC in early 2013. “Our newest Stoney River
has been extremely well-received within the Germantown community
and has significantly exceeded both our current system weekly sales
average as well as our targeted weekly sales average of $85,000
once a restaurant reaches maturity,” Stout noted. “While we don’t
typically single out individual restaurants for analysis, we feel
it is noteworthy that the Germantown location has gotten off to an
exceptionally strong start and we feel that such performance
validates the potential that we believe exists within the Stoney
River concept.”
The Company has also executed leases to develop two new J.
Alexander’s restaurants, one in Raleigh, NC, with an anticipated
opening during the early portion of the fourth quarter of 2016, and
one in Lexington, KY, which we anticipate will open later during
the fourth quarter of 2016. Finally, the Company expects to open
the 12th Stoney River Steakhouse and Grill restaurant during the
fourth quarter of 2016 at a site to be determined. The Company is
also continuing its program to transition selected J. Alexander’s
restaurants to Redlands Grill restaurants. A total of 12 such
transitions were initiated in 2015 and another two to four are
anticipated to commence during 2016. This transition process is
expected to be completed by year end 2016.
Conference Call
The Company will hold a conference call on Thursday, March 10,
at 10 a.m. Central time to discuss its financial results for the
fourth quarter and fiscal year ended January 3, 2016. The
conference call can be accessed live over the phone by dialing
1-877-407-0789 (Toll-Free) or 1-201-689-8562 (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=117505.
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=117505, as well as by dialing
1-877-870-5176 or 1-858-384-5517 and providing the access code
13626459. The replay will be accessible through March 17, 2016 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. presently operates 42 restaurants
in 14 states. The Company has its headquarters in Nashville,
TN.
Forward-Looking Statements
This press release issued by J. Alexander’s Holdings, Inc. and
the related earnings call contain 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; the effect of volatile
retail area traffic patterns; increases in food input costs or
product shortages and the Company’s response to them; the number
and timing of new restaurant openings and concept conversions and
the Company’s ability to operate them profitably; competition
within the casual dining industry; the effect of public company
costs and other requirements, including our management agreement
with Black Knight Advisory Services, LLC; 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, Inc. and Subsidiaries Condensed Consolidated
Statements of Income (Unaudited in thousands, except per
share amounts) Quarter ended Year
ended January 3 December 28 January 3
December 28 2016 2014
2016 2014 (14 weeks) (13 weeks)
(53 weeks) (52 weeks) Net sales
$ 59,304 $
53,312
$ 217,914 $ 202,233 Costs and expenses: Cost
of sales
18,629 17,151
68,806 64,591 Restaurant labor
and related costs
17,405 15,796
65,860 61,539
Depreciation and amortization of
restaurant property and equipment
2,094 1,949
8,222 7,652 Other operating expenses
11,010 10,110
43,076 40,440 Total restaurant
operating expenses
49,138 45,006
185,964 174,222
Transaction and integration expenses
870 459
7,181
785 General and administrative expenses
4,851 4,179
16,091 14,450
Asset impairment charges and restaurant
closing costs
1 1
3 5 Pre-opening expense
252
519
275 681 Total
operating expenses
55,112 50,164
209,514 190,143 Operating income
4,192 3,148
8,400
12,090 Other income (expense): Interest
expense
(188 ) (685 )
(1,158 ) (2,908 )
Other, net
29 8
97
104 Total other expense
(159
) (677 )
(1,061 ) (2,804
)
Income from continuing operations before
income taxes
4,033 2,471
7,339 9,286 Income tax expense
(1,600 ) (167 )
(1,555 ) (328 ) Loss
from discontinued operations, net
(112 )
(112 )
(429 ) (443 ) Net income
$ 2,321 $ 2,192
$ 5,355
$ 8,515 Adjusted EBITDA(1)
$
8,382 $ 6,604
$ 26,125 $
22,358 Basic Earnings per share: Income from
continuing operations, net of tax
$ 0.16 $ 0.15 $
0.39 $ 0.60 Loss from discontinued operations, net
(0.01 ) $ (0.01 )
(0.03 )
(0.03 ) Basic earnings per share
$ 0.15 $ 0.15
$ 0.36 $ 0.57 Diluted
Earnings per share: Income from continuing operations, net of tax
$ 0.16 $ 0.15
$ 0.38 $ 0.60 Loss from
discontinued operations, net
(0.01 )
(0.01 )
(0.03 ) (0.03 ) Diluted
earnings per share
$ 0.15 $ 0.15
$ 0.36 $ 0.57 Weighted average
common shares outstanding(2): Basic
15,000 15,000
15,000 15,000 Diluted
15,147 15,000
15,037
15,000
(1)
- See definitions and reconciliation
attached.
(2)
- Weighted average common shares
outstanding are based on the number of shares outstanding at the
date of the Company's spin-off from Fidelity National Financial
Ventures, LLC as if all shares had been outstanding since December
30, 2013.
J. Alexander's
Holdings, Inc. and Subsidiaries Condensed Consolidated
Statements of Income Percentages of Sales (Unaudited)
Quarter ended Year ended January
3 December 28
January 3
December 28 2016 2014 2016 2014
Net sales
100.0
%
100.0
%
100.0
%
100.0
%
Costs and expenses: Cost of sales
31.4 32.2
31.6 31.9
Restaurant labor and related costs
29.3 29.6
30.2
30.4
Depreciation and amortization of
restaurant property and equipment
3.5 3.7
3.8 3.8 Other operating expenses
18.6 19.0
19.8
20.0 Total restaurant operating expenses
82.9
84.4
85.3 86.1 Transaction and integration expenses
1.5 0.9
3.3 0.4 General and administrative expenses
8.2 7.8
7.4 7.1
Asset impairment charges and restaurant
closing costs
0.0 0.0
0.0 0.0 Pre-opening expense
0.4
1.0
0.1 0.3
Total operating expenses
92.9 94.1
96.1 94.0 Operating
income
7.1 5.9
3.9
6.0 Other income (expense): Interest expense
(0.3
)
(1.3
)
(0.5
)
(1.4
)
Other, net
0.0 0.0
0.0 0.1 Total other expense
(0.3
)
(1.3
)
(0.5
)
(1.4
)
Income from continuing operations before
income taxes
6.8 4.6
3.4 4.6 Income tax expense
(2.7
)
(0.3
)
(0.7
)
(0.2
)
Loss from discontinued operations, net
(0.2
)
(0.2
)
(0.2
)
(0.2
)
Net income
3.9
%
4.1
%
2.5
%
4.2
%
Adjusted EBITDA
14.1
%
12.4
%
12.0
%
11.1
%
Note: Certain percentage totals do not sum
due to rounding.
Average weekly sales per restaurant: J.
Alexander’s Restaurant/Redlands Grill
$ 111,000 $
110,000
$ 110,400 $ 107,000 Percent increase
0.9
%
3.2
%
Average weekly same store sales per restaurant:
J. Alexander’s Restaurant/Redlands Grill
$
111,600 $ 110,100
$ 111,000 $ 107,000 Percent
increase
1.4
%
3.7
%
Stoney River Steakhouse and Grill (1)
$ 77,300
$ 72,800
$ 70,200 $ 66,200 Percent increase
6.2
%
6.0
%
(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, Inc. and Subsidiaries Condensed
Consolidated Balance Sheets (Unaudited in thousands)
January 3 December 28 2016
2014 Assets Current assets: Cash and cash equivalents
$ 13,424 $ 13,301 Other current assets
5,555 5,559 Total current assets
18,979 18,860
Other assets
6,388 4,405 Property and equipment, net
89,313 86,263 Goodwill
15,737 15,737 Tradename and
other indefinite-lived intangibles
25,155 25,155 Deferred
Charges, net
621 488
$ 156,193 $
150,908
Liabilities and Membership Equity / Stockholders'
Equity Current liabilities
22,553 22,962
Long term debt and obligations under
capital leases, net of portion classified as current
19,583 11,250 Long term debt due to related party
-
10,000 Deferred compensation obligations
5,715 5,555
Deferred income taxes
5,002 - Other long-term liabilities
4,537 4,252 Membership equity
- 96,889 Stockholders'
equity
98,803 -
$ 156,193 $
150,908
J. Alexander's
Holdings, Inc. and Subsidiaries Condensed Consolidated
Statements of Cash Flows (Unaudited in thousands)
January 3
December 28
2016
2014
(53 weeks)
(52 weeks)
Cash flows from operating activities: Net income
$
5,355
$
8,515
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization of property and
equipment
8,523
7,946
Amortization of lease assets and liabilities and deferred charges
339
348
Equity-based compensation expense
1,256
-
Deferred income taxes
334
(277
)
Other, net
256
172
Changes in assets and liabilities, net
(53 )
1,251
Net cash provided by operating activities
16,010
17,955
Cash flows from investing activities:
Purchase of property and equipment
(11,431 )
(10,536
)
Rabbi trust contribution
(2,415 )
-
Other investing activities
(140 )
(157
)
Net cash used in investing activities
(13,986 )
(10,693
)
Cash flows from financing activities: Proceeds from
borrowing under long-term debt agreement
10,000
-
Payments on long-term debt and obligations under capital leases
(11,671 )
(11,719
)
Other financing activities
(230 )
(311
)
Net cash used in financing activities
(1,901 )
(12,030
)
Increase (decrease) in cash and cash equivalents
123
(4,768
)
Cash and cash equivalents at beginning of period
13,301
18,069
Cash and cash equivalents at end of period
$
13,424
$
13,301
Supplemental disclosures: Property and equipment
obligations accrued at beginning of period
$ 1,444
$
808
Property and equipment obligations accrued at end of period
1,845
1,444
Cash paid for interest
1,109
5,010
Cash paid for income taxes
445
92
Noncash deferred offering costs accrued at end of period
-
1,520
J. Alexander's Holdings, Inc. and Subsidiaries
Adjusted EBITDA Reconciliation (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 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 and
integration costs, non-cash compensation, loss from discontinued
operations, gain on debt extinguishment, pre-opening costs and
certain unusual items. 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. 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 or net cash provided by operating, investing or financing
activities, each as 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 Year ended January 3 December
28 January 3 December 28 2016 2014
2016 2014 (14 weeks) (13 weeks)
(53
weeks) (52 weeks) Net income
$ 2,321 $ 2,192
$ 5,355 $ 8,515 Income tax expense
1,600 167
1,555 328 Interest expense
188 685
1,158 2,908 Depreciation and amortization
2,186 2,038
8,584 7,992
EBITDA
6,295 5,082
16,652 19,743 Transaction
and integration expenses
870 459
7,181 785 Loss on
disposal of fixed assets
32 31
256 179
Asset impairment charges and restaurant
closing costs
1 1
3 5 Non-cash compensation
820 400
1,329 522 Loss from discontinued operations, net
112
112
429 443 Pre-opening expense
252 519
275 681 Adjusted EBITDA
$
8,382 $ 6,604
$ 26,125 $ 22,358
Note 1: For purposes of computing Adjusted EBITDA, the $661 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 management
agreement with BKAS totaling $262 are included in general and
administrative expenses and have not been included in the
reconciliation set forth above.
Note 2: The quarter and fiscal year ended
January 3, 2016 included 14 weeks and 53 weeks, respectively,
compared to the 13 weeks and 52 weeks which were included in the
quarter and fiscal year ended December 28, 2014, respectively.
Management estimates the additional week in the 2015 periods
resulted in additional Adjusted EBITDA of $900.
J. Alexander's Holdings, Inc. and
Subsidiaries Restaurant Operating Profit Reconciliation
(Unaudited in thousands) Quarter
ended Year ended January 3 December 28
January 3 December 28 2016 2014
2016 2014 (14 weeks) (13 weeks)
(53
weeks) (52 weeks) Net income
$ 2,321 $ 2,192
$ 5,355 $ 8,515 Loss from discontinued
operations, net
112 112
429 443 Income tax expense
1,600 167
1,555 328 Interest expense
188 685
1,158 2,908 Other, net
(29 ) (8 )
(97
) (104 ) General and administrative expenses
4,851
4,179
16,091 14,450
Asset impairment charges and restaurant
closing costs
1 1
3 5 Transaction and integration expenses
870 459
7,181 785 Pre-opening expense
252 519
275
681 Restaurant Operating Profit
$
10,166 $ 8,306
$ 31,950 $
28,011
Note:
The quarter and fiscal year ended January 3, 2016 included 14 weeks
and 53 weeks, respectively, compared to the 13 weeks and 52 weeks
which were included in the quarter and fiscal year ended December
28, 2014, respectively. Management estimates the additional week in
the 2015 periods resulted in additional Restaurant Operating Profit
of approximately $1,167.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160309006362/en/
J. Alexander’s Holdings, Inc.Mark A. Parkey, 615-269-1900Chief
Financial Officer
J Alexanders (NYSE:JAX)
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