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 fourth quarter and
year ended January 3, 2021. Fiscal 2020 included 53 weeks as
compared to 52 weeks in fiscal 2019, and the fourth quarter of
fiscal 2020 included 14 weeks as compared to 13 weeks in the
corresponding period of fiscal 2019.
Mark A. Parkey, Chief Executive Officer of J. Alexander’s
Holdings, Inc., stated, “As we approach the one-year anniversary of
the mid-March 2020 mandated dining room closures after the onset of
the novel coronavirus (COVID-19) pandemic, I want to take this
opportunity to reflect on the resilience and perseverance that our
restaurant management and hourly teams have demonstrated over the
last twelve months- all while adapting to a new business model that
includes carry-out, restricted indoor seating capacities, daily
sanitation protocols, enhanced technology features, rapid product
development and deployment, and staffing challenges. They have
consistently risen to the occasion, and I could not be prouder of
the accomplishments that we have collectively achieved over this
past year.” Parkey continued, “I am also encouraged by our sales
recovery in the first two periods of 2021. In January and February
2021, our sales reached approximately 75% and 85%, respectively, of
sales for the same periods of 2020 and approximately 78% and 88% of
the same periods of 2019. Given the recent announcements easing
capacity restrictions in various states, we are optimistic that
sales will continue to build toward pre-pandemic levels.”
Fourth Quarter 2020 Highlights Compared To The Fourth Quarter
Of 2019
- Cash flow from operations for the fourth quarter of 2020 was
$7,603,000 as compared to cash flow from operations in the fourth
quarter of 2019 of $6,501,000.
- Net sales for the fourth quarter of 2020 were $52,569,000, down
from $63,439,000 reported in the fourth quarter of 2019. The fourth
quarter of fiscal 2020 included 14 weeks, as compared to 13 weeks
included in the fourth quarter of 2019. This extra week in the 2020
fourth quarter included the New Year’s holiday period, and
management estimates that it contributed approximately $4,300,000
to net sales for the quarter.
- Average weekly same store sales per restaurant (1) for the
fourth quarter of 2020 were down 21.4% to $90,500 for the J.
Alexander’s/Grill restaurants and down 24.9% to $63,100 for the
Stoney River Steakhouse and Grill restaurants compared to the
fourth quarter of 2019.
- Income from continuing operations before income taxes totaled
$1,257,000 for the fourth quarter of 2020. This compares to income
from continuing operations before income taxes of $1,753,000 in the
fourth quarter of 2019. Management estimates that the extra week
contributed approximately $770,000 in income from continuing
operations before income taxes to fourth quarter 2020 results.
Additionally, during the fourth quarter of 2020, the Company
recorded $1,082,000 in estimated Employee Retention Credits
(discussed further below) which increased income from continuing
operations before income taxes by the same amount.
- Results for the fourth quarter of 2020 included an income tax
benefit of $2,707,000 compared to an income tax benefit of $330,000
in the fourth quarter of 2019.
- Net income for the fourth quarter of 2020 totaled $3,921,000
compared to net income of $2,030,000 in the fourth quarter of
2019.
- Basic and diluted earnings per share were $0.27 for the fourth
quarter of 2020 compared to basic and diluted earnings per share of
$0.14 for the fourth quarter of 2019.
- Adjusted EBITDA (2) was $4,493,000 in the fourth quarter of
2020 compared to $6,960,000 in the fourth quarter of 2019.
Management estimates that the 53rd week included in the fourth
quarter of 2020 contributed approximately $820,000 to Adjusted
EBITDA.
- Restaurant Operating Profit Margin (3) was 11.2% in the fourth
quarter of 2020 compared to 12.2% for the fourth quarter of
2019.
- Food and beverage costs as a percentage of net sales in the
fourth quarter of 2020 were 30.8% compared to 32.9% in the fourth
quarter of 2019.
As previously disclosed, the Company’s 2020 fourth quarter
results were negatively impacted by dining room closures and
increased capacity restrictions that began in mid-November 2020 and
carried into January of 2021. As a result of those capacity
constraints and the ongoing pandemic, the Company experienced
downward trends in its average weekly same store sales(1) during
the fourth quarter of 2020. Average weekly same store sales(1)
comparisons by month for the fourth quarter of 2020 as compared to
the same periods of 2019 are as follows:
October 2020
(4 weeks)
November 2020
(4 weeks)
December 2020
(6 weeks)
J. Alexander’s / Grill Restaurants
(11.2)%
(20.4)%
(28.9)%
Stoney River Steakhouse and Grill
(10.3)%
(21.1)%
(36.2)%
Off-premise sales continued to represent a meaningful portion of
the Company’s business during the fourth quarter of 2020,
comprising approximately 20% of total net sales for the quarter,
which represents approximately $730,000 on average in off-premise
sales weekly. As previously disclosed, off-premise sales were
particularly robust during the holiday season and averaged
approximately $850,000 weekly during the final six weeks of 2020
(i.e. the December 2020 accounting period).
As mentioned above, an additional item impacting fourth quarter
2020 results is the anticipated impact of the Employee Retention
Credit available to the Company under the CARES Act, which was
recorded as a reduction to “restaurant labor and related costs”
totaling $1,082,000, which was the amount deemed probable of
realization by the Company related to payroll costs incurred during
the first three quarters of 2020. The Company has treated this as a
reduction to Adjusted EBITDA(2) for the fourth quarter of 2020
given its unusual nature. An analysis of the payroll costs incurred
by the Company during the fourth quarter of 2020 with regard to any
potential Employee Retention Credits is ongoing and will be
recorded if and when realization of such credits is deemed
probable.
Chief Executive Officer’s Comments
“New operational challenges in the fourth quarter of 2020
required us to think outside the box and adapt yet again to
evolving circumstances, including serving our guests for a period
of time in newly-erected temporary outdoor dining structures in
certain markets where governments disallowed indoor dining.
Overall, we experienced satisfactory pricing of input costs in the
fourth quarter, which along with active menu and recipe management,
recent menu price increases and the implementation of the packaging
charge for carry-out sales, helped our food and beverage costs,
which were 30.8% of net sales in the quarter as compared to 32.9%
of net sales in the fourth quarter of the prior year. We did not
encounter any significant interruptions to our supply chain during
the holiday season and were able to manage through minor supply
shortages on the carry-out packaging front,” stated Parkey.
Parkey continued, “In a year where our sales declined by over 25
percent from the prior year, our net debt at year end only
increased by approximately $1,200,000. We remained diligent in
controlling our expenses and even funded the construction of a
brand new restaurant that will open at the end of March 2021. We’ve
learned a lot from the last year, and we believe that the
investments that we’ve made in our people, our technology
platforms, and most importantly, in our guest experience will
position us well to achieve our operational and financial goals for
fiscal 2021.”
Parkey also noted that the Company experienced severe winter
weather during February 2021, beginning on Valentine’s Day
(historically one of the busiest days of the year) and lasting
throughout the week that followed. “These winter storms required us
to close our restaurants, in some cases for multiple days, in
several of our markets including in Alabama, Illinois, Kentucky,
Louisiana, Missouri, Ohio, Tennessee and Texas resulting in a total
of 54 closed days, and we estimate that the impact of those storms
cost us approximately $500,000 in lost sales for February 2021,”
Parkey stated. Despite the weather impact, the Company is excited
about the sales trends in February and expects that momentum to
continue.
“As of March 12, 2021, our restaurants are currently operating
at an average of approximately 70% capacity of available seats,”
Parkey further noted. “We are optimistic that in 2021 after the
vaccines become broadly available to the general public, consumer
confidence continues to build, and governmental restrictions are
rolled back, our restaurants will return to serving dining rooms
filled with loyal guests. While we are excited to continue and
further develop our off-premise business, we certainly look forward
to the days when each of our 46 locations will once again be
operating at full capacity.”
Full Year 2020 Financial Results Highlights
For the full year ended January 3, 2021, the Company recorded
net sales of $183,373,000 as compared to net sales of $247,269,000
recorded in fiscal 2019. As noted above, management estimates that
the inclusion of the 53rd week in fiscal 2020 contributed
approximately $4,300,000 to 2020’s full year sales results and
approximately $770,000 to its full year income from continuing
operations before income taxes.
The net loss for fiscal 2020 totaled $22,471,000 as compared to
net income of $8,817,000 for fiscal 2019. In addition to the impact
that the COVID-19 pandemic had on the Company’s results for fiscal
2020, the net loss for 2020 also includes a $15,737,000 goodwill
impairment charge and $1,047,000 related to a long-lived asset
impairment charge and related restaurant closing costs for the
Company’s Cleveland location that was closed and subsequently sold
during the year. No such charges were recorded during fiscal
2019.
During fiscal 2020, the Company implemented an Emergency Sick
Leave Policy (“ESLP”) for its team members, specially to provide
two weeks of paid leave for those needing time off from work due to
a COVID-19 illness or to cover a portion of the time that their
restaurants were required to be closed for dining. In 2020, the
Company incurred approximately $3,320,000 related to the ESLP and
other sick or vacation leave and continuing benefits paid in
response to the COVID-19 pandemic.
Additionally, during fiscal 2020, the Company recorded an income
tax benefit of $8,449,000 compared to an income tax benefit
recorded in fiscal 2019 of $568,000. The current income tax benefit
recorded in fiscal 2020 includes the impact of anticipated allowed
federal carrybacks of fiscal 2020 net operating losses to prior
years, which the Company anticipates will result in a federal tax
refund of approximately $6,856,000. Fiscal 2020’s net loss also
included the positive impact of the Employee Retention Credits of
$1,082,000 as discussed above.
Adjusted EBITDA(2) for fiscal 2020 totaled $1,611,000 as
compared to $25,616,000 recorded in fiscal 2019.
Liquidity and Business Update
As of January 3, 2021, the Company’s cash and cash equivalents
totaled $12,363,000, and total outstanding indebtedness was
$14,750,000, including $11,000,000 outstanding on the Company’s
lines of credit facilities. In October 2020, the Company repaid
$10,000,000 that was previously outstanding on its development line
of credit. As of March 12, 2021, the Company has available capacity
under its revolving line of credit of $15,000,000 and under its
development line of credit of $10,000,000. The Company was in
compliance with all required debt covenants as of January 3, 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 March 12, 2021, the Company had cash on hand of
approximately $14,900,000. Cash flow from operations for the fourth
quarter of 2020 was positive $7,603,000 and for the full fiscal
2020 year was a positive $6,064,000. 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
The Company will open its first ground-up build of a Redlands
Grill restaurant in San Antonio, TX on March 29, 2021.
Additionally, the Company anticipates that early in the second
quarter of 2021, it will begin construction of a new J. Alexander’s
Restaurant in Madison, AL, which is expected to open early in the
fourth quarter of 2021.
2021 Outlook
The Company is not providing guidance for fiscal 2021 in light
of the ongoing pandemic, current uncertain consumer environment,
uncertainty concerning governmental restrictions on restaurant
capacity and current market and economic conditions.
(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 income (loss) to
Adjusted EBITDA. Management uses Adjusted EBITDA to evaluate
operating performance and the effectiveness of its business
strategies.
(3)“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 the non-GAAP financial measure
Restaurant Operating Profit and a reconciliation of operating
income (loss) to Restaurant Operating Profit. Management uses
Restaurant Operating 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, reopening restaurants at increased capacity, our
sales, off-premise sales, cash position, liquidity, financial
results, compliance with financial covenants in our loan agreement,
our ability to manage through the COVID-19 pandemic and emerge in a
strong position. 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 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 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
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 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.
J. Alexander's Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited in thousands, except per share amounts)
Quarter Ended
Year Ended
January 3,
December 29,
January 3,
December 29,
2021
2019
2021
2019
Net sales
$
52,569
$
63,439
$
183,373
$
247,269
Costs and expenses: Food and beverage costs
16,210
20,897
59,499
79,338
Restaurant labor and related costs
15,676
19,363
64,160
76,905
Depreciation and amortization of restaurant property and equipment
2,903
3,027
12,094
11,874
Other operating expenses
11,892
12,423
43,048
49,451
Total restaurant operating expenses
46,681
55,710
178,801
217,568
Transaction, contested proxy and other related expenses
10
410
645
1,178
General and administrative expenses
4,312
4,934
16,958
18,750
Goodwill impairment charge
-
-
15,737
-
Long-lived asset impairment charges and restaurant closing costs
7
-
1,047
-
Pre-opening expense
75
502
238
859
Total operating expenses
51,085
61,556
213,426
238,355
Operating income (loss)
1,484
1,883
(30,053
)
8,914
Other income (expense): Interest expense
(236
)
(90
)
(824
)
(580
)
Other, net
9
(40
)
160
151
Total other expense
(227
)
(130
)
(664
)
(429
)
Income (loss) from continuing operations before income taxes
1,257
1,753
(30,717
)
8,485
Income tax benefit
2,707
330
8,449
568
Loss from discontinued operations, net
(43
)
(53
)
(203
)
(236
)
Net income (loss)
$
3,921
$
2,030
$
(22,471
)
$
8,817
Basic earnings (loss) per share: Income (loss) from
continuing operations, net of tax
$
0.27
$
0.14
$
(1.51
)
$
0.62
Loss from discontinued operations, net
(0.00
)
(0.00
)
(0.01
)
(0.02
)
Basic earnings (loss) per share
$
0.27
$
0.14
$
(1.53
)
$
0.60
Diluted earnings (loss) per share: Income (loss) from
continuing operations, net of tax
$
0.27
$
0.14
$
(1.51
)
$
0.61
Loss from discontinued operations, net
(0.00
)
(0.00
)
(0.01
)
(0.02
)
Diluted earnings (loss) per share
$
0.27
$
0.14
$
(1.53
)
$
0.60
Weighted average common shares outstanding: Basic
14,729
14,695
14,720
14,695
Diluted
14,760
14,728
14,720
14,741
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
Year Ended
January 3,
December 29,
January 3,
December 29,
2021
2019
2021
2019
Net sales
100.0
%
100.0
%
100.0
%
100.0
%
Costs and expenses: Food and beverage costs
30.8
32.9
32.4
32.1
Restaurant labor and related costs
29.8
30.5
35.0
31.1
Depreciation and amortization of restaurant property and equipment
5.5
4.8
6.6
4.8
Other operating expenses
22.6
19.6
23.5
20.0
Total restaurant operating expenses
88.8
87.8
97.5
88.0
Transaction, contested proxy and other related expenses
0.0
0.6
0.4
0.5
General and administrative expenses
8.2
7.8
9.2
7.6
Goodwill impairment charge
-
-
8.6
-
Long-lived asset impairment charges and restaurant closing costs
0.0
-
0.6
-
Pre-opening expense
0.1
0.8
0.1
0.3
Total operating expenses
97.2
97.0
116.4
96.4
Operating income (loss)
2.8
3.0
(16.4
)
3.6
Other income (expense): Interest expense
(0.4
)
(0.1
)
(0.4
)
(0.2
)
Other, net
0.0
(0.1
)
0.1
0.1
Total other expense
(0.4
)
(0.2
)
(0.4
)
(0.2
)
Income (loss) from continuing operations before income taxes
2.4
2.8
(16.8
)
3.4
Income tax benefit
5.1
0.5
4.6
0.2
Loss from discontinued operations, net
(0.1
)
(0.1
)
(0.1
)
(0.1
)
Net income (loss)
7.5
%
3.2
%
(12.3
)%
3.6
%
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
Year Ended
January 3,
December 29,
January 3,
December 29,
2021
2019
2021
2019
Other Financial and Performance Data: Adjusted
EBITDA(1) (in thousands)
$
4,493
$
6,960
$
1,611
$
25,616
As a % of net sales
8.5
%
11.0
%
0.9
%
10.4
%
All Stores Basis Operating
Metrics: Average weekly sales per restaurant:
J. Alexander’s / Grill Restaurants
$
89,100
$
113,100
$
81,900
$
112,100
Percent change
(21.2
)%
(26.9
)%
Stoney River Steakhouse and Grill
$
63,100
$
84,000
$
57,300
$
80,100
Percent change
(24.9
)%
(28.5
)%
Average weekly guest counts: J. Alexander’s /
Grill Restaurants
(26.6
)%
(2.8
)%
(28.6
)%
(2.2
)%
Stoney River Steakhouse and Grill
(26.3
)%
(2.2
)%
(28.1
)%
1.2
%
Average guest check per restaurant (including alcoholic
beverages): J. Alexander’s / Grill Restaurants
$
35.54
$
33.10
$
33.23
$
32.46
Percent change
7.4
%
2.4
%
Stoney River Steakhouse and Grill
$
44.16
$
43.42
$
42.05
$
42.35
Percent change
1.7
%
(0.7
)%
Estimated inflation: J. Alexander’s / Grill
Restaurants (total food costs)
1.9
%
1.9
%
J. Alexander’s / Grill Restaurants (beef costs)
2.0
%
7.6
%
Stoney River Steakhouse and Grill (total food costs)
2.2
%
2.3
%
Stoney River Steakhouse and Grill (beef costs)
3.1
%
8.6
%
Same Store Basis Operating
Metrics: Average weekly same store sales per
restaurant: J. Alexander’s / Grill Restaurants
$
90,500
$
115,200
$
83,200
$
113,800
Percent change
(21.4
)%
(26.9
)%
Stoney River Steakhouse and Grill
$
63,100
$
84,000
$
57,200
$
79,800
Percent change
(24.9
)%
(28.3
)%
Average weekly same store guest counts: J.
Alexander’s / Grill Restaurants
(26.7
)%
(2.2
)%
(28.4
)%
(1.9
)%
Stoney River Steakhouse and Grill
(26.3
)%
(1.6
)%
(27.3
)%
(0.2
)%
Average same store guest check per restaurant (including
alcoholic beverages): J. Alexander’s / Grill Restaurants
$
35.50
$
33.15
$
33.20
$
32.52
Percent change
7.1
%
2.1
%
Stoney River Steakhouse and Grill
$
44.16
$
43.42
$
41.86
$
42.49
Percent change
1.7
%
(1.5
)%
__________________________ (1) See definitions and reconciliation
attached.
J. Alexander's Holdings, Inc. and
Subsidiaries Condensed Consolidated Balance Sheets
(Unaudited in thousands)
January 3,
December 29,
2021
2019
Assets Current assets: Cash and cash equivalents
$
12,363
$
8,803
Other current assets
13,399
9,289
Total current assets
25,762
18,092
Other assets
6,195
5,698
Deferred income taxes, net
4,627
2,918
Property and equipment, net
102,188
109,303
Right-of-use lease assets, net
72,515
70,277
Goodwill
-
15,737
Tradename and other indefinite-lived intangibles
25,648
25,648
Deferred charges, net
184
239
$
237,119
$
247,912
Liabilities and Stockholders' Equity Current
liabilities
$
25,425
$
31,226
Long-term debt, net of portion classified as current and
unamortized deferred loan costs
12,746
2,845
Long-term lease liabilities, net of portion classified as current
78,968
75,883
Deferred compensation obligations
7,973
7,103
Other long-term liabilities
1,902
138
Stockholders' equity
110,105
130,717
$
237,119
$
247,912
J. Alexander's Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited in thousands)
Year Ended
January 3,
December 29,
2021
2019
Cash flows from operating activities: Net (loss) income
$
(22,471
)
$
8,817
Adjustments to reconcile net (loss) income to net cash provided by
operating activities: Depreciation and amortization of property and
equipment
12,290
12,123
Equity-based compensation expense
1,878
1,498
Asset impairment charges
16,426
-
Other, net
(1,181
)
(1,675
)
Changes in assets and liabilities, net
(878
)
(3,508
)
Net cash provided by operating activities
6,064
17,255
Cash flows from investing activities: Purchase of property
and equipment
(7,382
)
(11,937
)
Proceeds from sale of property and equipment
1,070
-
Other investing activities
(417
)
(255
)
Net cash used in investing activities
(6,729
)
(12,192
)
Cash flows from financing activities: Proceeds from
borrowings under debt agreement
32,100
-
Payments on long-term debt
(27,322
)
(5,000
)
Other financing activities
(553
)
(43
)
Net cash provided by (used in) financing activities
4,225
(5,043
)
Increase in cash and cash equivalents
3,560
20
Cash and cash equivalents at beginning of the year
8,803
8,783
Cash and cash equivalents at end of the year
$
12,363
$
8,803
Supplemental disclosures: Property and equipment obligations
accrued at beginning of the year
$
1,116
$
819
Property and equipment obligations accrued at end of the year
879
1,116
Cash paid for interest
604
578
Cash (refunds received from) paid for income taxes
(230
)
1,072
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 benefit, depreciation and
amortization, and adding asset impairment charges and restaurant
closing costs, loss on disposals of fixed assets, employee
retention credits, 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 ” 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
Year Ended
January 3,
December 29,
January 3,
December 29,
2021
2019
2021
2019
Net income (loss)
$
3,921
$
2,030
$
(22,471
)
$
8,817
Income tax benefit
(2,707
)
(330
)
(8,449
)
(568
)
Interest expense
236
90
824
580
Depreciation and amortization
2,964
3,106
12,345
12,182
EBITDA
4,414
4,896
(17,751
)
21,011
Transaction, contested proxy and other related expenses
10
410
645
1,178
Loss on disposal of fixed assets
5
28
68
135
Asset impairment charges and restaurant closing costs
7
-
16,784
(2
)
Non-cash compensation
1,021
1,071
2,506
2,199
Loss from discontinued operations, net
43
53
203
236
Pre-opening expense
75
502
238
859
Employee retention credits
(1,082
)
-
(1,082
)
-
Adjusted EBITDA
$
4,493
$
6,960
$
1,611
$
25,616
J. Alexander's Holdings, Inc. and Subsidiaries
Non-GAAP Financial Measures and Reconciliations
(Unaudited in thousands)
Quarter Ended
Year Ended
January 3,
December 29,
January 3,
December 29,
2021
2019
2021
2019
Amount
Percent of Net Sales
Amount
Percent of Net Sales
Amount
Percent of Net Sales
Amount
Percent of Net Sales
Operating income (loss)
$
1,484
2.8
%
$
1,883
3.0
%
$
(30,053
)
(16.4
)%
$
8,914
3.6
%
General and administrative expenses
4,312
8.2
%
4,934
7.8
%
16,958
9.2
%
18,750
7.6
%
Transaction, contested proxy and other related expenses
10
0.0
%
410
0.6
%
645
0.4
%
1,178
0.5
%
Goodwill impairment charge
-
0.0
%
-
0.0
%
15,737
8.6
%
-
0.0
%
Long-lived asset impairment charges and restaurant closing costs
7
0.0
%
-
0.0
%
1,047
0.6
%
-
0.0
%
Pre-opening expense
75
0.1
%
502
0.8
%
238
0.1
%
859
0.3
%
Restaurant Operating Profit
$
5,888
11.2
%
$
7,729
12.2
%
$
4,572
2.5
%
$
29,701
12.0
%
Note: Certain percentage totals do not sum due to rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210315005408/en/
J. Alexander’s Holdings, Inc. Jessica Hagler Chief Financial
Officer (615) 269-1900
J Alexanders (NYSE:JAX)
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