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 provided a
business update and reported results for the second quarter ended
July 4, 2021.
Mark A. Parkey, Chief Executive Officer of the Company, stated,
“Our sales momentum in 2021 continues to be impressive, with sales
for the second quarter of 2021 representing nearly 110% of sales in
the second quarter of 2019. Further, our profit margins continue to
be solid despite recent pressure on input costs. We’re optimistic
at this point that we’ve managed through the worst of the supply
chain uncertainty and continue to expect strong demand for the
dining experience that we provide daily to our loyal guests.”
Second Quarter 2021 Highlights Compared To The Second Quarter
Of 2020
- Cash provided by operating activities for the first half of
2021 was $15,280,000 as compared to cash used in operating
activities in the first half of 2020 of $3,764,000.
- Average weekly same store sales per restaurant(1) for the
second quarter of 2021 were $121,600 for the J. Alexander’s/Grill
restaurants, up 135.7% as compared to $51,600 for the second
quarter of 2020. For the Stoney River restaurants average weekly
same store sales per restaurant were $88,000 for the second quarter
of 2021 as compared to $34,300 for the second quarter of 2020, for
an increase of 156.6%.
- Net sales for the second quarter of 2021 were $68,101,000, up
from $27,602,000 reported in the second quarter of 2020. The second
quarter of 2020 saw the COVID-19 pandemic at its peak, and dining
room closures and capacity restrictions were pervasive throughout
the Company’s restaurants. In the second quarter of 2021, the
majority of the Company’s locations were operating at full capacity
for the entire quarter, while a limited number of locations
(primarily those in Michigan and Illinois) continued to have some
level of capacity restrictions into late June 2021. However, all
restaurants were fully reopened as of the end of the second quarter
of 2021.
- Income from continuing operations before income taxes totaled
$2,232,000 for the second quarter of 2021. This compares to a loss
from continuing operations before income taxes of $11,352,000 in
the second quarter of 2020, which included the impact of
approximately $1,100,000 in expenses related to emergency and other
vacation and sick leave benefits related to the COVID-19 pandemic
and approximately $321,000 related to severance and other
restaurant closing costs. The second quarter of 2021 was impacted
by approximately $1,888,000 of transaction costs related to the
Company’s evaluation of strategic alternatives and the merger
agreement entered into on July 2, 2021, as further discussed
below.
- Results for the second quarter of 2021 included income tax
benefit of $24,000 compared to an income tax benefit of $4,419,000
in the second quarter of 2020.
- Net income for the second quarter of 2021 totaled $2,253,000
compared to a net loss of $6,988,000 in the second quarter of
2020.
- Basic and diluted earnings per share were $0.15 for the second
quarter of 2021 compared to basic and diluted loss per share of
$0.48 for the second quarter of 2020.
- Adjusted EBITDA (2) was $7,788,000 in the second quarter of
2021 compared to $(7,363,000) in the second quarter of 2020.
- Restaurant Operating Profit (Loss) Margin (3) was 14.2% in the
second quarter of 2021 compared to (25.4)% for the second quarter
of 2020.
- Food and beverage costs as a percentage of net sales in the
second quarter of 2021 were 33.6% compared to 37.9% in the second
quarter of 2020.
The Company has seen positive trends in its sales recovery
throughout 2021. Net sales in April, May and June 2021 reached
approximately 106%, 107% and 115%, respectively, of sales
experienced in the comparable periods of 2019, which was partially
due to the new restaurant opening in La Cantera at the end of March
2021. On a 2-year comparative basis, average weekly same store
sales were up 6.2% for the J. Alexander’s / Grills restaurants and
up 10.6% for the Stoney River restaurants for the second quarter of
2021 as compared to the second quarter of 2019. Off-premise net
sales for the second quarter of 2021 represented approximately
10.5% of total net sales for the quarter. Sales results for the
second quarter of 2021 were aided by a price increase of
approximately 3% taken during June 2021, as well as the continuing
benefit of the price increase and packaging fee that were
implemented in the second half of 2020.
Chief Executive Officer’s Comments
“We continue to be extremely encouraged by the resilience and
pace of recovery of our restaurants as they each returned to full
operating capacity over the course of the first half of 2021,”
stated Parkey. “Further, our newest restaurant in the La Cantera
Heights development in San Antonio has performed well above our
original expectations during its first full quarter of operations,
generating $105,800 in average weekly sales for the quarter. While
the second quarter presented us with challenges on both the
commodity cost front as well as from a labor sourcing and retention
standpoint, we were able to navigate through those challenges and
turn in strong operating results for the quarter.”
Liquidity and Business Update
As of July 4, 2021, the Company’s cash and cash equivalents
totaled $22,611,000, and total outstanding indebtedness was
$12,917,000, including $10,000,000 outstanding on the Company’s
lines of credit facilities. On April 30, 2021, the Company repaid
$6,000,000 on its outstanding lines of credit and on July 1, 2021,
the Company borrowed $5,000,000 on its lines of credit. As of
August 15, 2021, the Company has available capacity under its
various revolving lines of credit totaling $26,000,000. The Company
was in compliance with all required debt covenants as of July 4,
2021, and expects to be in compliance with its financial covenants
for at least the next twelve months and to continue to meet
conditions required to access its lines of credit.
As of August 15, 2021, the Company had cash on hand of
approximately $22,060,000. The Company anticipates that, based on
current business levels, it will have adequate liquidity for fiscal
2021 from operating cash flows and available borrowings.
Restaurant Development
Earlier in fiscal 2021, the Company began construction of a new
J. Alexander’s Restaurant in Madison, AL, which is expected to open
early in the first quarter of fiscal 2022.
Announced Agreement and Plan of Merger with SPB Hospitality,
LLC
On July 2, 2021, the Company announced it entered into a merger
agreement under which SPB Hospitality, LLC will acquire the Company
in an all cash transaction valued at approximately $220 million,
with shareholders receiving $14.00 in cash per share of common
stock. The transaction is subject to customary closing conditions
and is expected to be completed early in the fourth quarter of
2021.
2021 Outlook
The Company is not providing guidance for fiscal 2021 in light
of the pending merger transaction and the continuing uncertainty
surrounding governmental restrictions on restaurant capacity.
(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 when compared to the immediately
preceding year. On a 2-year comparative basis, locations that were
open during both periods of comparison are included in the average
weekly same store sales calculations. 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 (Loss) Margin is the ratio of
Restaurant Operating Profit (Loss), 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 (Loss) and a
reconciliation of operating income (loss) to Restaurant Operating
Profit (Loss). Management uses Restaurant Operating Profit (Loss)
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
47 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
on our operations, operating restaurants at increased capacity,
consumer demand, our sales and off-premise sales, cash position,
liquidity, input costs, financial results, compliance with
financial covenants in our loan agreement, borrowing availability,
and our ability to manage through the COVID-19 pandemic. 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; availability and acceptance of
effective vaccines and treatments for COVID-19 including any new
variants; government restrictions on indoor and outdoor dining and
the Company’s ability to operate its restaurants at normal
capacities, 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 financial covenants under its loan
agreement with its lender and to access available borrowing
capacity; the impact of any impairment of our long-lived assets,
including tradename; 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; changes in laws, including possible
changes in the federal minimum wage rates; the uncertainties
concerning the recently announced SPB Hospitality merger
transaction, including the following: uncertainties as to whether
the requisite approval of the J. Alexander’s shareholders will be
obtained; the risk of shareholder litigation in connection with the
transaction and any related significant costs of defense, and
indemnification and liability; the possibility that various closing
conditions for the transaction may not be satisfied or waived; the
occurrence of any event, change or other circumstances that could
give rise to the termination of the merger agreement, including
circumstances that may give rise to the payment of a termination
fee; the effects of possible disruptions to business operations of
the Company prior to the closing; 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 18, 2021, as
amended on April 29, 2021, 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.
Additional Information and Where to Find it
In connection with the proposed merger, on August 9, 2021, the
Company filed with the Securities and Exchange Commission (the
“SEC”) a preliminary proxy statement on Schedule 14A. In addition,
the Company expects to file with the SEC and furnish to its
shareholders a definitive proxy statement on Schedule 14A, as well
as other relevant documents concerning the proposed merger.
Promptly after filing its definitive proxy statement with the SEC,
J. Alexander’s will mail the definitive proxy statement and a proxy
card to each shareholder of J. Alexander’s entitled to vote at the
special meeting relating to the proposed merger. The preliminary
proxy statement and definitive proxy statement will contain
important information about the proposed merger and related
matters. SHAREHOLDERS OF J. ALEXANDER’S ARE URGED TO READ THESE
MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY
OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE MERGER THAT J.
ALEXANDER’S WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT J.
ALEXANDER’S, THE MERGER AND THE OTHER TRANSACTIONS CONTEMPLATED BY
THE MERGER AGREEMENT THAT HOLDERS OF THE COMPANY’S SECURITIES
SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING VOTING. This
press release is not a substitute for the preliminary proxy
statement, definitive proxy statement, or any other document that
J. Alexander’s may file with the SEC and send to its shareholders
in connection with the proposed merger. The proposed merger will be
submitted to J. Alexander’s shareholders for their
consideration.
Shareholders of J. Alexander’s will be able to obtain the
preliminary proxy statement, definitive proxy statement, as well as
other filings containing information about J. Alexander’s and the
proposed merger, without charge, at the SEC’s website
(http://www.sec.gov ). Copies of the proxy statements (when
available) and the filings with the SEC that will be incorporated
by reference therein can also be obtained, without charge, by going
to J. Alexander’s Investor Relations page on its website at
https://investor.jalexandersholdings.com.
Participants in Solicitation
J. Alexander’s and certain of its directors, executive officers
and employees may be deemed to be participants in the solicitation
of proxies in respect of the proposed merger. Information regarding
the interests of the Company’s directors and executive officers and
their ownership of shares of the Company’s common stock is set
forth in the Company’s proxy statement on Schedule 14A filed with
the SEC on May 13, 2021. Additional information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests in the proposed merger, by security
holdings or otherwise, are contained in the preliminary proxy
statement and will be contained in the definitive proxy statement
and other relevant materials to be filed with the SEC in connection
with the proposed merger when they become available. Free copies of
these documents may be obtained as described in the preceding
paragraph.
J. Alexander's Holdings, Inc. and Subsidiaries Condensed
Consolidated Statements of Operations (Unaudited in
thousands, except per share amounts) Quarter Ended
Six Months Ended July 4, June 28, July
4, June 28,
2021
2020
2021
2020
Net sales
$ 68,101
$
27,602
$
125,476
$
84,574
Costs and expenses: Food and beverage costs
22,899
10,471
39,986
29,038
Restaurant labor and related costs
19,046
12,554
35,721
32,892
Depreciation and amortization of restaurant property and equipment
2,988
3,060
5,871
6,154
Other operating expenses
13,479
8,536
25,201
20,490
Total restaurant operating expenses
58,412
34,621
106,779
88,574
Transaction expenses
1,888
(66
)
1,934
623
General and administrative expenses
5,442
4,095
10,595
8,835
Goodwill impairment charge
-
-
-
15,737
Long-lived asset impairment charges and restaurant closing costs
(1
)
178
2
867
Pre-opening expense
71
72
516
91
Total operating expenses
65,812
38,900
119,826
114,727
Operating income (loss)
2,289
(11,298
)
5,650
(30,153
)
Other income (expense): Interest expense
(141
)
(189
)
(294
)
(305
)
Other, net
84
135
38
127
Total other expense
(57
)
(54
)
(256
)
(178
)
Income (loss) from continuing operations before income taxes
2,232
(11,352
)
5,394
(30,331
)
Income tax benefit (expense)
24
4,419
(343
)
5,806
(Loss) income from discontinued operations, net
(3
)
(55
)
592
(107
)
Net income (loss)
$ 2,253
$
(6,988
)
$
5,643
$
(24,632
)
Basic earnings (loss) per share: Income (loss) from
continuing operations, net of tax
$ 0.15
$
(0.47
)
$
0.34
$
(1.67
)
Income (loss) from discontinued operations, net
(0.00
)
(0.00
)
0.04
(0.01
)
Basic earnings (loss) per share
$ 0.15
$
(0.48
)
$
0.38
$
(1.68
)
Diluted earnings (loss) per share: Income (loss) from
continuing operations, net of tax
$ 0.15
$
(0.47
)
$
0.34
$
(1.67
)
Income (loss) from discontinued operations, net
(0.00
)
(0.00
)
0.04
(0.01
)
Diluted earnings (loss) per share
$ 0.15
$
(0.48
)
$
0.37
$
(1.68
)
Weighted average common shares outstanding: Basic
14,757
14,695
14,757
14,695
Diluted
15,285
14,695
15,073
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 Six Months
Ended July 4, June 28, July 4, June
28,
2021
2020
2021
2020
Net sales
100.0
%
100.0
%
100.0
%
100.0
%
Costs and expenses: Food and beverage costs
33.6
37.9
31.9
34.3
Restaurant labor and related costs
28.0
45.5
28.5
38.9
Depreciation and amortization of restaurant property and equipment
4.4
11.1
4.7
7.3
Other operating expenses
19.8
30.9
20.1
24.2
Total restaurant operating expenses
85.8
125.4
85.1
104.7
Transaction expenses
2.8
(0.2
)
1.5
0.7
General and administrative expenses
8.0
14.8
8.4
10.4
Goodwill impairment charge
-
-
-
18.6
Long-lived asset impairment charges and restaurant closing costs
(0.0
)
0.6
0.0
1.0
Pre-opening expense
0.1
0.3
0.4
0.1
Total operating expenses
96.6
140.9
95.5
135.7
Operating income (loss)
3.4
(40.9
)
4.5
(35.7
)
Other income (expense): Interest expense
(0.2
)
(0.7
)
(0.2
)
(0.4
)
Other, net
0.1
0.5
0.0
0.2
Total other expense
(0.1
)
(0.2
)
(0.2
)
(0.2
)
Income (loss) from continuing operations before income taxes
3.3
(41.1
)
4.3
(35.9
)
Income tax benefit (expense)
0.0
16.0
(0.3
)
6.9
(Loss) income from discontinued operations, net
(0.0
)
(0.2
)
0.5
(0.1
)
Net income (loss)
3.3
%
(25.3
)%
4.5
%
(29.1
)%
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 Six Months Ended July 4, June 28,
July 4, June 28,
2021
2020
2021
2020
Other Financial and Performance Data: Adjusted
EBITDA(1) (in thousands)
$
7,788
$
(7,363
)
$
14,980
$
(5,399
)
As a % of net sales
11.4
%
-26.7
%
11.9
%
-6.4
%
All Stores Basis Operating
Metrics: Average weekly sales per restaurant:
J. Alexander’s / Grill Restaurants
$
120,200
$
51,000
$
112,800
$
76,600
Percent change
135.7
%
47.3
%
Stoney River Steakhouse and Grill
$
88,000
$
34,300
$
81,700
$
53,400
Percent change
156.6
%
53.0
%
Average weekly guest counts: J. Alexander’s / Grill
Restaurants
86.4
%
(49.6
)%
27.4
%
(32.1
)%
Stoney River Steakhouse and Grill
103.9
%
(50.3
)%
34.7
%
(31.4
)%
Average guest check per restaurant (including alcoholic
beverages): J. Alexander’s / Grill Restaurants
$
36.32
$
28.66
$
36.31
$
31.42
Percent change
26.7
%
15.6
%
Stoney River Steakhouse and Grill
$
45.28
$
35.89
$
45.14
$
39.69
Percent change
26.2
%
13.7
%
Estimated inflation: J. Alexander’s / Grill
Restaurants (total food costs)
15.2
%
3.8
%
J. Alexander’s / Grill Restaurants (beef costs)
24.1
%
5.1
%
Stoney River Steakhouse and Grill (total food costs)
21.2
%
5.2
%
Stoney River Steakhouse and Grill (beef costs)
37.0
%
5.8
%
Same Store Basis Operating
Metrics (2): Average weekly same store sales per
restaurant: J. Alexander’s / Grill Restaurants
$
121,600
$
51,600
$
114,200
$
77,300
Percent change
135.7
%
47.7
%
Average weekly same store guest counts: J.
Alexander’s / Grill Restaurants
86.1
%
(49.3
)%
27.6
%
(31.6
)%
Average same store guest check per restaurant (including
alcoholic beverages): J. Alexander’s / Grill Restaurants
$
36.16
$
28.62
$
36.20
$
31.35
Percent change
26.3
%
15.5
%
(1) See definitions and reconciliation attached. (2) All
open locations are included in the same store base for Stoney River
for the second quarter and first six months of 2021. As such,
average weekly same store sales, guest counts and check averages
shown above under the heading "All Stores Basis Operating Metrics"
are also representative of the Same Store Basis Operating Metrics
for Stoney River.
J. Alexander's Holdings, Inc. and
Subsidiaries Condensed Consolidated Balance Sheets
(Unaudited in thousands) July 4, January 3,
2021
2021
Assets Current assets: Cash and cash equivalents
$
22,611
$
12,363
Other current assets
14,674
13,399
Total current assets
37,285
25,762
Other assets
6,583
6,195
Deferred income taxes, net
5,738
4,627
Property and equipment, net
99,422
102,188
Right-of-use lease assets, net
73,030
72,515
Tradename and other indefinite-lived intangibles
25,648
25,648
Deferred charges, net
163
184
$
247,869
$
237,119
Liabilities and Stockholders' Equity Current
liabilities
$
31,184
$
25,425
Long-term debt, net of portion classified as current and
unamortized deferred loan costs
11,000
12,746
Long-term lease liabilities
78,960
78,968
Deferred compensation obligations
8,255
7,973
Other long-term liabilities
1,892
1,902
Stockholders' equity
116,578
110,105
$
247,869
$
237,119
J. Alexander's Holdings, Inc. and Subsidiaries Condensed
Consolidated Statements of Cash Flows (Unaudited in
thousands) Six Months Ended July 4, June
28,
2021
2020
Cash flows from operating activities: Net income (loss)
$
5,643
$
(24,632
)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Depreciation and amortization of property and
equipment
5,952
6,256
Equity-based compensation expense
830
908
Asset impairment charges
-
16,426
Other, net
(968
)
(4,117
)
Changes in assets and liabilities, net
3,823
1,395
Net cash provided by (used in) operating activities
15,280
(3,764
)
Cash flows from investing activities: Purchase of property
and equipment
(2,827
)
(3,030
)
Other investing activities
(378
)
(236
)
Net cash used in investing activities
(3,205
)
(3,266
)
Cash flows from financing activities: Proceeds from
borrowings under debt agreement
5,000
32,100
Payments on long-term debt
(6,833
)
(16,350
)
Other financing activities
6
(208
)
Net cash (used in) provided by financing activities
(1,827
)
15,542
Increase in cash and cash equivalents
10,248
8,512
Cash and cash equivalents at beginning of the period
12,363
8,803
Cash and cash equivalents at end of the period
$
22,611
$
17,315
Supplemental disclosures: Property and equipment obligations
accrued at beginning of the period
$
879
$
1,116
Property and equipment obligations accrued at end of the period
1,278
860
Cash paid for interest
277
109
Cash paid for income taxes
1,272
83
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 expenses, non-cash compensation,
(income) loss from discontinued operations, and pre-opening
expense.
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 food and
beverage costs, 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 Six Months Ended July 4, June
28, July 4, June 28,
2021
2020
2021
2020
Net income (loss)
$
2,253
$
(6,988
)
$
5,643
$
(24,632
)
Income tax (benefit) expense
(24
)
(4,419
)
343
(5,806
)
Interest expense
141
189
294
305
Depreciation and amortization
3,042
3,124
5,973
6,284
EBITDA
5,412
(8,094
)
12,253
(23,849
)
Transaction expenses
1,888
(66
)
1,934
623
Loss on disposal of fixed assets
31
7
42
53
Asset impairment charges and restaurant closing costs
(1
)
178
2
16,604
Non-cash compensation
447
485
888
972
(Income) loss from discontinued operations, net
3
55
(592
)
107
Pre-opening expense
71
72
516
91
Employee retention credits
(63
)
-
(63
)
-
Adjusted EBITDA
$
7,788
$
(7,363
)
$
14,980
$
(5,399
)
J. Alexander's Holdings, Inc. and Subsidiaries Non-GAAP
Financial Measures and Reconciliations (Unaudited in
thousands) Quarter Ended Six Months Ended July
4, June 28, July 4, June 28,
2021
2020
2021
2020
Amount Percent of Net Sales Amount Percent
of Net Sales Amount Percent of Net Sales
Amount Percent of Net Sales Operating income
(loss)
$
2,289
3.4
%
$
(11,298
)
-40.9
%
$
5,650
4.5
%
$
(30,153
)
-35.7
%
General and administrative expenses
5,442
8.0
%
4,095
14.8
%
10,595
8.4
%
8,835
10.4
%
Transaction expenses
1,888
2.8
%
(66
)
-0.2
%
1,934
1.5
%
623
0.7
%
Goodwill impairment charge
-
0.0
%
-
0.0
%
-
0.0
%
15,737
18.6
%
Long-lived asset impairment charges and restaurant closing costs
(1
)
0.0
%
178
0.6
%
2
0.0
%
867
1.0
%
Pre-opening expense
71
0.1
%
72
0.3
%
516
0.4
%
91
0.1
%
Restaurant Operating Profit
$
9,689
14.2
%
$
(7,019
)
-25.4
%
$
18,697
14.9
%
$
(4,000
)
-4.7
%
Note: Certain percentage totals do not sum due to rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210817005525/en/
J. Alexander’s Holdings, Inc. Jessica Hagler Chief Financial
Officer (615) 269‐1900
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