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 third quarter ended
September 27, 2020.
Mark A. Parkey, Chief Executive Officer of J. Alexander’s
Holdings, Inc., stated, “I’m beyond pleased at the significant
recovery that we’ve been able to achieve in recent months. In
September and October 2020, our sales averaged nearly 90% of sales
experienced in the same periods of 2019 – all while continuing to
operate at limited capacities for dine-in service at most of our
locations. I would note that none of our accomplishments during the
most recent quarter would have been possible without the valiant
efforts, and incredible creativity, of our talented teams at each
of our 46 restaurants as well as the leadership of industry
veterans that are based out of our headquarters in Nashville.”
Third Quarter 2020 Highlights Compared To The Third Quarter
Of 2019
- Average weekly same store sales per restaurant (1) for the
third quarter of 2020 were down 18.1% to $86,700 for the J.
Alexander’s/Grill restaurants and down 18.2% to $58,800 for the
Stoney River Steakhouse and Grill restaurants compared to the third
quarter of 2019.
- Net sales for the third quarter of 2020 were $46,230,000, down
from $56,867,000 reported in the third quarter of 2019.
- Loss from continuing operations before income taxes totaled
$1,643,000 for the third quarter of 2020. This compares to income
from continuing operations before income taxes of $342,000 in the
third quarter of 2019.
- Results for the third quarter of 2020 included income tax
expense of $64,000 compared to an income tax benefit of $495,000 in
the third quarter of 2019.
- Net loss for the third quarter of 2020 totaled $1,760,000
compared to net income of $771,000 in the third quarter of
2019.
- Basic and diluted loss per share were $0.12 for the third
quarter of 2020 compared to basic and diluted earnings per share of
$0.05 for the third quarter of 2019.
- Adjusted EBITDA (2) was $2,517,000 in the third quarter of 2020
compared to $4,375,000 in the third quarter of 2019.
- Restaurant Operating Profit Margin (3) was 5.8% in the most
recent quarter compared to 8.9% for the third quarter of 2019.
- Food and beverage costs as a percentage of net sales in the
third quarter of 2020 were 30.8% compared to 31.8% in the third
quarter of 2019.
During the third quarter of 2020, the Company continued to
reopen dining rooms and increase capacity as permitted under each
local jurisdiction’s restrictions, including the installation of
booth and pub dividers in certain markets. The Company took a price
increase in August 2020 of approximately 4.1%, which included
non-alcoholic beverages, certain wines by the glass and craft
cocktails, as well as certain entrées and other menu items.
Additionally, in September 2020 the Company successfully closed on
the sale of its Cleveland property.
Chief Executive Officer’s Comments
“The third quarter of fiscal 2020 was a challenging period in
many ways,” stated Parkey. “As we reopened our dining rooms
beginning in June, we did so in an environment where seating was
limited, safety measures for both our employees and our guests were
vital and various products associated with our historical menu
offerings were in short supply, if available at all. In addition,
we had successfully built up a steady volume of carry out business
and wanted to continue to meet the needs of our off-premise guests.
As such, during the quarter we implemented a number of initiatives
designed to respond to these challenges, including the addition of
partitions in both our dining rooms as well as at our pub tops in
many of our restaurants, the streamlining of our menus to make them
more efficient for both guests as well as our employees, the
addition of new and attractive ‘Family Pack’ offerings at all of
our locations and the introduction of a number of new entrees
within the reopened dining rooms.”
“As a result,” Parkey continued, “we were able to steadily build
revenue over the course of the 13-week quarter, from approximately
$2.8 million in the first week of the quarter to approximately $3.9
million during the last week of the period and, in the process,
maintain a consistent range of approximately $600,000 - $700,000 in
carry out business each week. As we enter the fourth quarter, we
estimate that approximately 60% of our seats are available for
dining room guests and are cautiously optimistic that this figure
will continue to increase as select additional states and
municipalities relax existing restrictions. In addition, we
anticipate that selected restaurants will benefit, particularly
with respect to lunch volumes, from certain corporate neighbors
returning to an office setting instead of mandating their employees
work offsite. While the timing of such events is still fluid we
believe that the demand for on-site dining is high and that, as
restrictions are lifted, we will continue to see strong demand for
on-site dining from our guest base. In addition, we are confident
in our ability to grow same store sales once an effective vaccine
is made available to the population and the current government
imposed operating restrictions are removed from our
restaurants.”
Parkey noted that procurement in general has become much more
dependable than it was during the second quarter of 2020, and
management anticipates that there will be adequate product
available for the upcoming holiday season.
Parkey continued, “Against a backdrop characterized by
uncertainty at almost every turn, our folks have displayed an
amazing resolve to meet the needs of our guests and to do so in a
hospitable manner consistent with the experience that we’ve
cultivated since the original J. Alexander’s restaurant opened for
business in May of 1991. While our balance sheet appropriately
quantifies our various assets as a company, I believe that our
greatest assets are the people that walk through our doors every
day of the week and endeavor to make each guest’s visit a memorable
experience.”
Business Update and 2020 Outlook
Average weekly same store sales1 by month for the third quarter
and October of 2020 compared to the same monthly periods of 2019
are as follows:
July
August
September
October
(4
weeks)
(4
weeks)
(5
weeks)
(4
weeks)
J. Alexander’s/Grill Restaurants
(25.8)%
(20.0)%
(10.8)%
(11.2)%
Stoney River Steakhouse and Grill
(25.2)%
(20.6)%
(10.4)%
(10.3)%
As a result of the ongoing novel coronavirus (“COVID-19”)
pandemic, the Company continues to operate its restaurants in
accordance with various governmental guidance and restrictions on a
limited-capacity basis for dine-in service at all of its locations,
with the exception of those locations in the State of Illinois that
are currently temporarily closed for dine-in service, and also
continues to offer a robust carry-out service at each of its 46
restaurants. Currently, the Company is operating at approximately
60% capacity of available seats across its 46 locations. During the
third quarter, the Company saw steady recovery of guest counts and
increasing sales across its restaurant base.
Off-premise sales have continued to represent a meaningful
portion of total sales since dining rooms have reopened with
restricted capacity. For instance, off-premise sales during the
third quarter of 2020 averaged 15% - 20% of total sales on a weekly
basis, which represents approximately $625,000 on average in
off-premise sales weekly. In October 2020, the Company implemented
upgraded reusable and recyclable carry-out packaging to enhance the
off-premise guest experience, and a portion of the added cost for
the new packaging is now passed along to the guest in the form of a
packaging fee. The Company expects that the upgraded carryout
packaging will help drive long-term off-premise sales, and the
Company expects this trend of approximately $600,000 to $700,000 of
off-premise sales per week to continue through the fourth quarter
of 2020.
The Company is not providing full guidance for fiscal 2020 in
light of the current uncertain consumer environment, uncertainty
concerning government restrictions on restaurant capacity and
unprecedented global market and economic conditions.
Liquidity
As of September 27, 2020, the Company’s cash and cash
equivalents totaled $17,184,000, and total outstanding indebtedness
was $25,722,000, including $21,000,000 outstanding on the Company’s
lines of credit facilities. In October 2020, the Company repaid
$10,000,000 of the outstanding borrowings on its development line
of credit. As of November 4, 2020, the Company has available
capacity under its revolving line of credit (which was expanded in
June 2020 via an amendment to its loan agreement) of $15,000,000
and under its development line of credit of $10,000,000 due to the
October 2020 repayment.
Additionally, on October 28, 2020, the Company entered into the
Fourth Amended and Restated Loan Agreement (the “Amended Loan
Agreement”) with its lender, which extended the term of the
Company’s development line of credit, revolving line of credit, and
the larger of the two term loans outstanding from September 3, 2021
to January 1, 2023 (which is the end of the Company’s 2022 fiscal
year). The smaller of the Company’s two term loans (which has a
balance outstanding of $556,000) will amortize over the remaining
months of fiscal 2020. The Amended Loan Agreement also modifies the
rates for each of the outstanding term loans and lines of credit to
a floating rate equal to 30-day LIBOR plus 2.5%, with a LIBOR floor
of 1.5%.
Additionally, the Amended Loan Agreement retains the financial
covenants from the Third Amended and Restated Loan Agreement
entered into in June 2020, and also adds a fixed coverage charge
ratio covenant that applies beginning in the third quarter of
fiscal 2021. The details of the financial covenants were previously
disclosed in a Current Report on Form 8-K filed on November 2,
2020. The Company was in compliance with all required debt
covenants as of September 27, 2020 and expects to be in compliance
with its financial covenants for at least the next twelve
months.
As of November 1, 2020, the Company had cash on hand of
approximately $9,025,000. Cash flow from operations for the third
quarter of 2020 was positive $2,225,000, and total cash flow was
nearly breakeven for the third quarter of 2020. In the business
update press release dated September 17, 2020, the Company
estimated that it would be cash flow positive in the range of
$400,000 to $450,000 per week for the fourth quarter of 2020 (which
contains 14 weeks due to fiscal 2020 being a 53-week fiscal year),
and that the Company will have adequate liquidity for 2020. These
estimates included required debt service payments and capital
expenditure commitments, including the construction of one new
location scheduled to be completed in the fourth quarter of 2020
and opened in the first quarter of 2021. However, these cash flow
estimates did not contemplate the voluntary $10,000,000 repayment
of outstanding borrowings in October 2020. The Company continues to
estimate positive cash flow in the range of $400,000 to $450,000
weekly for the fourth quarter of 2020, excluding the $10,000,000
repayment of line of credit borrowings. When the $10,000,000
repayment of outstanding borrowings is factored into the fourth
quarter cash flow estimates, the cash burn rate anticipated is
approximately $265,000 to $315,000 per week. The Company also
anticipates that it will have adequate liquidity for the balance of
fiscal 2020 and fiscal 2021, based on current business levels.
Restaurant Development
The Company is currently constructing a Redlands Grill
restaurant in San Antonio, TX which is scheduled to be completed in
late 2020. Due to the current restrictions associated with the
COVID-19 pandemic in Texas, coupled with the lead time associated
with preparing a new location for opening, the Company has
scheduled this restaurant to open in the first quarter of fiscal
2021. Additionally, the Company anticipates that in January 2021 it
will begin construction of a new J. Alexander’s Restaurant in
Madison, AL which is expected to open in the latter part of the
third quarter of 2021.
(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 (loss) income to
Adjusted EBITDA. Management uses Adjusted EBITDA to evaluate
operating performance and the effectiveness of its business
strategies.
(3)“Restaurant Operating (Loss) Profit Margin” is the ratio of
Restaurant Operating (Loss) 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 (Loss) Profit and a
reconciliation of operating (loss) income to Restaurant Operating
(Loss) Profit. Management uses Restaurant Operating (Loss) 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
on our operations, cash needs, liquidity and financial results, and
cost-containment efforts. 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 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 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, under the heading “Risk Factors” in its Quarterly Report
on Form 10-Q filed with the SEC on August 6, 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
Nine Months Ended
September 27,
September 29,
September 27,
September 29,
2020
2019
2020
2019
Net sales
$
46,230
$
56,867
$
130,804
$
183,830
Costs and expenses: Food and beverage costs
14,251
18,110
43,289
58,441
Restaurant labor and related costs
15,592
18,835
48,484
57,542
Depreciation and amortization of restaurant property and equipment
3,037
2,968
9,191
8,847
Other operating expenses
10,666
11,916
31,156
37,028
Total restaurant operating expenses
43,546
51,829
132,120
161,858
Transaction, contested proxy and other related expenses
12
117
635
768
General and administrative expenses
3,811
4,288
12,646
13,816
Goodwill impairment charge
-
-
15,737
-
Long-lived asset impairment charges and restaurant closing costs
173
-
1,040
-
Pre-opening expense
72
211
163
357
Total operating expenses
47,614
56,445
162,341
176,799
Operating (loss) income
(1,384
)
422
(31,537
)
7,031
Other income (expense): Interest expense
(283
)
(135
)
(588
)
(490
)
Other, net
24
55
151
191
Total other expense
(259
)
(80
)
(437
)
(299
)
(Loss) income from continuing operations before income taxes
(1,643
)
342
(31,974
)
6,732
Income tax (expense) benefit
(64
)
495
5,742
238
Loss from discontinued operations, net
(53
)
(66
)
(160
)
(183
)
Net (loss) income
$
(1,760
)
$
771
$
(26,392
)
$
6,787
Basic (loss) earnings per share: (Loss) income from
continuing operations, net of tax
$
(0.12
)
$
0.06
$
(1.78
)
$
0.47
Loss from discontinued operations, net
(0.00
)
(0.00
)
(0.01
)
(0.01
)
Basic (loss) earnings per share
$
(0.12
)
$
0.05
$
(1.79
)
$
0.46
Diluted (loss) earnings per share: (Loss) income from
continuing operations, net of tax
$
(0.12
)
$
0.06
$
(1.78
)
$
0.47
Loss from discontinued operations, net
(0.00
)
(0.00
)
(0.01
)
(0.01
)
Diluted (loss) earnings per share
$
(0.12
)
$
0.05
$
(1.79
)
$
0.46
Weighted average common shares outstanding: Basic
14,729
14,695
14,706
14,695
Diluted
14,729
14,808
14,706
14,746
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
Nine Months Ended
September 27,
September 29,
September 27,
September 29,
2020
2019
2020
2019
Net sales
100.0
%
100.0
%
100.0
%
100.0
%
Costs and expenses: Food and beverage costs
30.8
31.8
33.1
31.8
Restaurant labor and related costs
33.7
33.1
37.1
31.3
Depreciation and amortization of restaurant property and equipment
6.6
5.2
7.0
4.8
Other operating expenses
23.1
21.0
23.8
20.1
Total restaurant operating expenses
94.2
91.1
101.0
88.0
Transaction, contested proxy and other related expenses
0.0
0.2
0.5
0.4
General and administrative expenses
8.2
7.5
9.7
7.5
Goodwill impairment charge
-
-
12.0
-
Long-lived asset impairment charges and restaurant closing costs
0.4
-
0.8
-
Pre-opening expense
0.2
0.4
0.1
0.2
Total operating expenses
103.0
99.3
124.1
96.2
Operating (loss) income
(3.0
)
0.7
(24.1
)
3.8
Other income (expense): Interest expense
(0.6
)
(0.2
)
(0.4
)
(0.3
)
Other, net
0.1
0.1
0.1
0.1
Total other expense
(0.6
)
(0.1
)
(0.3
)
(0.2
)
(Loss) income from continuing operations before income taxes
(3.6
)
0.6
(24.4
)
3.7
Income tax (expense) benefit
(0.1
)
0.9
4.4
0.1
Loss from discontinued operations, net
(0.1
)
(0.1
)
(0.1
)
(0.1
)
Net (loss) income
(3.8
)
%
1.4
%
(20.2
)
%
3.7
%
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
Nine Months Ended
September 27,
September 29,
September 27,
September 29,
2020
2019
2020
2019
Other Financial and Performance Data: Adjusted
EBITDA(1) (in thousands)
$
2,517
$
4,375
$
(2,882
)
$
18,656
As a % of net sales
5.4
%
7.7
%
(2.2
)%
10.1
%
All
Stores Basis Operating Metrics:
Average weekly sales per restaurant: J. Alexander’s /
Grill Restaurants
$
85,200
$
104,500
$
79,300
$
111,800
Percent change
(18.5
)%
(29.1
)%
Stoney River Steakhouse and Grill
$
58,800
$
71,900
$
55,200
$
78,800
Percent change
(18.2
)%
(29.9
)%
Average weekly guest counts: J. Alexander’s /
Grill Restaurants
(23.2
)%
(2.5
)%
(29.3
)%
(1.9
)%
Stoney River Steakhouse and Grill
(18.3
)%
1.9
%
(28.1
)%
2.5
%
Average guest check per restaurant (including alcoholic
beverages): J. Alexander’s / Grill Restaurants
$
34.15
$
32.19
$
32.38
$
32.25
Percent change
6.1
%
0.4
%
Stoney River Steakhouse and Grill
$
41.92
$
41.82
$
40.81
$
41.99
Percent change
0.2
%
(2.8
)%
Estimated inflation: J. Alexander’s / Grill
Restaurants (total food costs)
0.4
%
0.8
%
J. Alexander’s / Grill Restaurants (beef costs)
0.8
%
4.7
%
Stoney River Steakhouse and Grill (total food costs)
(0.7
)%
2.8
%
Stoney River Steakhouse and Grill (beef costs)
(0.1
)%
6.2
%
Same
Store Basis Operating Metrics:
Average weekly same store sales per restaurant: J.
Alexander’s / Grill Restaurants
$
86,700
$
105,900
$
80,500
$
113,300
Percent change
(18.1
)%
(28.9
)%
Stoney River Steakhouse and Grill
$
58,800
$
71,900
$
55,100
$
78,400
Percent change
(18.2
)%
(29.7
)%
Average weekly same store guest counts: J.
Alexander’s / Grill Restaurants
(22.7
)%
(2.9
)%
(28.9
)%
(1.7
)%
Stoney River Steakhouse and Grill
(18.3
)%
(0.4
)%
(27.7
)%
0.4
%
Average same store guest check per restaurant (including
alcoholic beverages): J. Alexander’s / Grill Restaurants
$
34.12
$
32.26
$
32.35
$
32.32
Percent change
5.8
%
0.1
%
Stoney River Steakhouse and Grill
$
41.92
$
41.82
$
40.95
$
42.15
Percent change
0.2
%
(2.8
)%
____________________________ (1) See definitions and reconciliation
attached.
J. Alexander's Holdings, Inc. and
Subsidiaries Condensed Consolidated Balance Sheets
(Unaudited in thousands)
September 27,
December 29,
2020
2019
Assets Current assets: Cash and cash equivalents
$
17,184
$
8,803
Other current assets
5,448
9,289
Total current assets
22,632
18,092
Other assets
6,002
5,698
Deferred income taxes, net
7,808
2,918
Property and equipment, net
103,461
109,303
Right-of-use lease assets, net
73,689
70,277
Goodwill
-
15,737
Tradename and other indefinite-lived intangibles
25,648
25,648
Deferred charges, net
198
239
$
239,438
$
247,912
Liabilities and Stockholders' Equity Current
liabilities
$
30,948
$
31,226
Long-term debt, net of portion classified as current and
unamortized deferred loan costs
13,092
2,845
Long-term lease liabilities
80,196
75,883
Deferred compensation obligations
7,252
7,103
Other long-term liabilities
2,256
138
Stockholders' equity
105,694
130,717
$
239,438
$
247,912
J. Alexander's Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited in thousands)
Nine Months Ended
September 27,
September 29,
2020
2019
Cash flows from operating activities: Net (loss) income
$
(26,392
)
$
6,787
Adjustments to reconcile net (loss) income to net cash (used in)
provided by operating activities: Depreciation and amortization of
property and equipment
9,340
9,034
Equity-based compensation expense
1,388
1,030
Asset impairment charges
16,426
-
Other, net
(4,475
)
(783
)
Changes in assets and liabilities, net
2,174
(5,314
)
Net cash (used in) provided by operating activities
(1,539
)
10,754
Cash flows from investing activities: Purchase of property
and equipment
(6,082
)
(7,757
)
Proceeds from sale of property and equipment
1,070
-
Other investing activities
(290
)
(122
)
Net cash used in investing activities
(5,302
)
(7,879
)
Cash flows from financing activities: Proceeds from
borrowings under debt agreement
32,100
-
Payments on long-term debt
(16,350
)
(3,750
)
Other financing activities
(528
)
(43
)
Net cash provided by (used in) financing activities
15,222
(3,793
)
Increase (decrease) in cash and cash equivalents
8,381
(918
)
Cash and cash equivalents at beginning of the period
8,803
8,783
Cash and cash equivalents at end of the period
$
17,184
$
7,865
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
490
2,669
Cash paid for interest
405
467
Cash paid for income taxes
84
718
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,
contested proxy and other related expenses, non-cash compensation,
loss from discontinued operations, and pre-opening costs.
Adjusted EBITDA is a non-GAAP financial measure that we believe
is useful to investors because it provides information regarding
certain financial and business trends relating to our operating
results and excludes certain items that are not indicative of our
operations. Adjusted EBITDA does not fully consider the impact of
investing or financing transactions as it specifically excludes
depreciation and interest charges, which should also be considered
in the overall evaluation of our results of operations.
We define “Restaurant Operating Profit (Loss) ” 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 (Loss) 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 (Loss) Margin” is the ratio of
Restaurant Operating Profit (Loss) to net sales.
Our management uses Adjusted EBITDA and Restaurant Operating
Profit (Loss) 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 (Loss) 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 (Loss) 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
Nine Months Ended
September 27,
September 29,
September 27,
September 29,
2020
2019
2020
2019
Net (loss) income
$
(1,760
)
$
771
$
(26,392
)
$
6,787
Income tax expense (benefit)
64
(495
)
(5,742
)
(238
)
Interest expense
283
135
588
490
Depreciation and amortization
3,097
3,039
9,381
9,076
EBITDA
1,684
3,450
(22,165
)
16,115
Transaction, contested proxy and other related expenses
12
117
635
768
Loss on disposal of fixed assets
10
60
63
107
Asset impairment charges and restaurant closing costs
173
-
16,777
(2
)
Non-cash compensation
513
471
1,485
1,128
Loss from discontinued operations, net
53
66
160
183
Pre-opening expense
72
211
163
357
Adjusted EBITDA
$
2,517
$
4,375
$
(2,882
)
$
18,656
J. Alexander's Holdings, Inc. and Subsidiaries
Non-GAAP Financial Measures and Reconciliations
(Unaudited in thousands)
Quarter Ended
Nine Months Ended
September 27,
September 29,
September 27,
September 29,
2020
2019
2020
2019
Amount
Percent of Net Sales
Amount
Percent of Net Sales
Amount
Percent of Net Sales
Amount
Percent of Net Sales
Operating (loss) income
$
(1,384
)
(3.0
)%
$
422
0.7
%
$
(31,537
)
(24.1
)%
$
7,031
3.8
%
General and administrative expenses
3,811
8.2
%
4,288
7.5
%
12,646
9.7
%
13,816
7.5
%
Transaction, contested proxy and other related expenses
12
0.0
%
117
0.2
%
635
0.5
%
768
0.4
%
Goodwill impairment charge
-
0.0
%
-
0.0
%
15,737
12.0
%
-
0.0
%
Long-lived asset impairment charges and restaurant closing costs
173
0.4
%
-
0.0
%
1,040
0.8
%
-
0.0
%
Pre-opening expense
72
0.2
%
211
0.4
%
163
0.1
%
357
0.2
%
Restaurant Operating Profit (loss)
$
2,684
5.8
%
$
5,038
8.9
%
$
(1,316
)
(1.0
)%
$
21,972
12.0
%
Note: Certain percentage totals do not sum due to rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201105005638/en/
J. Alexander’s Holdings, Inc. Jessica Hagler Chief Financial
Officer (615) 269-1900
J Alexanders (NYSE:JAX)
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