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 an
update on its business and its strategic evaluation.
Business Update As mentioned in its business update on
December 14, 2020, the Company was impacted during its fourth
quarter of fiscal 2020 by a second wave of required dining room
closures and increased capacity restrictions in certain of the
markets in which it operates arising from the novel coronavirus
pandemic (COVID-19). As a result of those capacity constraints, the
Company experienced downward trends in its sales recovery
experience during the fourth quarter of 2020. As previously stated,
the Company’s sales were nearly 90% and 80% of prior year sales for
the months of October and November 2020, respectively. For December
2020, which consisted of six weeks, sales were slightly higher than
80% of prior year. However, when excluding the additional week in
December 2020 the sales replacement figure was approximately
65%.
Although restrictions on indoor dining continue to be fluid in
many of the locations in which the Company operates, capacity
restrictions began to ease in late December 2020 and January 2021,
resulting in more favorable results for the first period of fiscal
2021. In January 2021, sales were just under 75% of 2020’s January
sales and nearly 78% of January sales in 2019. Further, management
estimates that these metrics would have been approximately two to
three percentage points higher for January 2021 but were impacted
by the fact that New Year’s Eve week was included in both January
of 2020 and 2019 but not in January of 2021. This represents a 10%
- 15% improvement over the December sales recovery rate.
As of February 7, 2021, the Company is operating at
approximately 60% capacity of available seats across its 46
locations, and anticipates that capacity to increase over the
remaining weeks of February as additional restrictions are eased.
Additionally, the Company continues to offer a robust carryout menu
at each of its locations, with off-premise sales averaging
approximately $850,000 weekly in the last month of fiscal 2020.
The Company estimates that, excluding the impact of the
$10,000,000 voluntary repayment of outstanding borrowings in
October 2020, it generated approximately $370,000 per week in
positive cash flow for the fourth quarter of 2020 (which contained
14 weeks due to fiscal 2020 being a 53-week fiscal year). When
factoring in the $10,000,000 voluntary repayment of outstanding
borrowings, the Company estimates that the weekly cash burn rate
for the fourth quarter of 2020 was approximately $344,000. The
Company continues to believe that, at current business levels, it
will have adequate liquidity for fiscal 2021 from cash on hand and
available borrowings.
Mark A. Parkey, President and Chief Executive Officer of J.
Alexander’s Holdings, Inc. stated, “We are encouraged by the
progress that we’ve seen over the first few weeks of 2021, and
we’re excited by the upcoming opening of our first ground-up build
of a Redlands Grill restaurant, which is set to open on March 29,
2021 in the La Cantera Heights area of San Antonio, TX.” The
Company is also set to open a new J. Alexander’s restaurant in
Madison, AL, a suburb of Huntsville, in the fourth quarter of
fiscal 2021.
As of February 7, 2021, the Company’s cash on hand totaled
approximately $11.5 million. The Company is not providing guidance
for fiscal 2021 in light of the ongoing pandemic, current uncertain
consumer environment, uncertainty concerning government
restrictions on restaurant capacity and current market and economic
conditions.
Strategic Alternatives Evaluation Executive Chairman of
the Board of Directors of J. Alexander’s Holdings, Inc., Lonnie J.
Stout II, commented, “We are heartened by the strength and
resilience of our business and appreciate the efforts of our team
members and the loyalty of our guests during these challenging
times. Our Board and management team remain committed to completing
our previously announced review of strategic alternatives. We will
pursue completing that process prudently this year, as our
restaurants move toward reopening at full capacity and the results
of our business reflect our potential. We believe that this path
will allow us to maximize the Company’s full and fair value for our
shareholders.”
The Company does not intend to provide periodic updates as to
the status of the evaluation process unless or until it determines
that further disclosure is appropriate or necessary.
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,
reopening restaurants at increased capacity, our sales, off-premise
sales, cash needs, liquidity, financial results, our ability to
manage through the COVID-19 pandemic and emerge in a strong
position and evaluation of strategic alternatives. 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; government restrictions on indoor
and outdoor dining and 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 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
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; completion of our financial
statement audit and confirmation of preliminary sales results;
changes in laws, including possible changes in the federal minimum
wage rates; the Company’s evaluation of strategic alternatives; as
well as other risks and uncertainties described under the headings
“Forward-Looking Statements,” “Risk Factors” and other sections of
the Company’s Annual Report on Form 10-K filed with the SEC on
March 13, 2020, as amended on April 17, 2020, and subsequent
filings, including under the heading “Risk Factors” in its
Quarterly Report on Form 10-Q filed with the SEC on November 5,
2020. The Company undertakes no obligation to update any
forward-looking statements, whether as a result of new information,
future events or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20210209006201/en/
J. Alexander’s Holdings, Inc. Jessica Hagler Chief Financial
Officer (615) 269-1900
J Alexanders (NYSE:JAX)
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