EXHIBIT 99.1
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FOR IMMEDIATE RELEASE
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Contact: R. Gregory Lewis |
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615-269-1900 |
J. ALEXANDER’S CORPORATION REPORTS
RESULTS FOR THIRD QUARTER OF 2006
Company Signs Lease For New Restaurant
In South Florida
NASHVILLE, TN., Oct. 25, 2006 -— J. Alexander’s Corporation (AMEX: JAX) today announced
operating results for the third quarter and first nine months ending October 1, 2006.
Highlights for the most recent quarter compared to the third quarter of 2005 were as follows:
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Net sales increased 9.5% to $32,891,000 from $30,044,000. |
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Weekly average same store sales per restaurant rose 4.6% to $89,600 from $85,700. |
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Net income reached $436,000, or $.06 per diluted share, up from $402,000, also
$.06 per diluted share. |
Commenting on the most recent quarter, J. Alexander’s Corporation chairman, president and
chief executive officer Lonnie J. Stout II said, “Overall we were pleased with our results for the
quarter. Although cost of sales increased and was higher than planned, we met or exceeded our
performance expectations in most other areas and achieved our business plan target. We were also
pleased with the same store sales increase in what has been a rather difficult operating
environment and encouraged that
J. Alexander’s Corporation Reports Results for Third Quarter of 2006 — Page 2
sales trends in most of our restaurants in our Midwestern markets improved during the
quarter.”
Stout said the Company’s average guest check, including alcoholic beverage sales, increased by
approximately 6% in the third quarter of 2006 over the corresponding period a year earlier.
Average guest counts, after adjustment for the estimated effect of hurricanes on 2005 guest counts,
decreased on a same store basis by an estimated 1.6%. Average weekly sales per restaurant for the
third period of 2006 rose 5.4% to $90,300 from $85,700 reported in the third quarter of 2005. The
calculations of both average weekly sales and weekly average same store sales for the third quarter
of 2005 exclude the effect of a total of eleven sales days the Company’s restaurants were closed
due to hurricanes during that period.
During the third quarter, the cost of sales as a percentage of net sales climbed to 33.4% from
32.7% in the comparable quarter a year earlier and 32.6% in the second quarter of this year. The
higher cost of sales, which added pressure to restaurant margins, was due primarily to increases in
commodity prices for salmon, chicken and certain produce items. Restaurant labor and related costs
in the most recent period were 32.7% of net sales, up slightly from 32.6% in the same period of
2005. Restaurant margins (net sales minus total restaurant operating expenses) for the quarter
decreased to 10.0% of net sales from 10.6% in the corresponding period of 2005.
For the first three quarters of 2006, J. Alexander’s Corporation recorded net sales of
$101,470,000, up 8.9% from $93,151,000 reported in the first nine months of 2005. Net income for
the first nine months of 2006 rose 10.7% to $2,584,000, or $.38 per
J. Alexander’s Corporation Reports Results for Third Quarter of 2006 — Page 3
diluted share, from $2,335,000, or $.34 per diluted share, recorded in the corresponding three
quarters of 2005.
J. Alexander’s Corporation had weekly average same store sales per restaurant of $92,200
through the first three quarters of 2006, up 4.3% over $88,400 reported in the comparable nine
months a year ago. The Company had average weekly sales per restaurant of $92,800 in the first
three quarters of 2006, up 5% from $88,400 posted in the same period a year earlier. The average
guest check, including alcoholic beverage sales, advanced 5.6% in the first three quarters of 2006
over the first three periods of 2005 while average guest counts declined on a same store basis by
approximately 1.6%.
Stout said J. Alexander’s Corporation recently increased menu prices in its restaurants by
approximately 2.5% to 3%. “We believe these increases, combined with expected reductions in the
cost of some food products, should bring the cost of sales to a more acceptable level as the year
winds down. Based on the expected improvement in cost of sales and continued strong same store
sales trends experienced in October thus far, we believe the fourth quarter will be a period of
solid financial performance,” Stout noted.
In another announcement, Stout said J. Alexander’s Corporation has executed a lease for a new
J. Alexander’s restaurant to be located in Palm Beach Gardens, Florida. “We are excited about the
opportunity to be a part of the new upscale Main Street at Midtown development on PGA Boulevard in
Palm Beach Gardens,” Stout added. “Adding new restaurants in our existing large markets has been a
development priority for us and we are looking forward to expanding our presence in South Florida.”
The restaurant is expected to open in late 2007.
J. Alexander’s Corporation Reports Results for Third Quarter of 2006 — Page 4
J. Alexander’s Corporation operates its 28 J. Alexander’s restaurants in Alabama, Colorado,
Florida, Georgia, Illinois, Kansas, Kentucky, Louisiana, Michigan, Ohio, Tennessee and Texas. J.
Alexander’s is an upscale, contemporary American restaurant known for its wood-fired cuisine. The
Company’s menu features a wide selection of American classics, including steaks, prime rib of beef
and fresh seafood, as well as a large assortment of interesting salads, sandwiches and desserts.
J. Alexander’s also has a full-service bar that features an outstanding selection of wines by the
glass and bottle.
J. Alexander’s Corporation is headquartered in Nashville, Tennessee.
This press release contains forward-looking statements that involve risks and
uncertainties. Actual results, performance or developments could differ materially from those
expressed or implied by those forward-looking statements as a result of known or unknown risks,
uncertainties and other factors. These risks, uncertainties and factors include the Company’s
ability to increase sales and operating margins in its restaurants; changes in business or economic
conditions, including rising food costs and product shortages; the effect of higher gasoline prices
on consumer demand; availability of qualified employees; increased cost of utilities, insurance and
other restaurant operating expenses; potential fluctuations of quarterly operating results due to
seasonality and other factors; the effect of hurricanes and other weather disturbances which are
beyond the control of the Company; the number and timing of new restaurant openings and the
Company’s ability to operate them profitably; competition within the casual dining industry, which
is very intense; competition by the Company’s new restaurants with its existing restaurants in the
same vicinity; changes in consumer spending, consumer tastes, and consumer attitudes toward
nutrition and health; expenses incurred if the Company is the subject of claims or litigation or
increased governmental regulation; changes in accounting standards, which may affect the Company’s
reported results of operations; and expenses the Company may incur in order to comply with changing
corporate governance and public disclosure requirements of the Securities and Exchange Commission
and the American Stock Exchange. These as well as other factors are discussed in detail in the
Company’s filings made with the Securities and Exchange Commission and other communications.
J. Alexander’s Corporation Reports Results for Third Quarter of 2006 — Page 5
J. Alexander’s Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited in thousands, except per share amounts)
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Quarter Ended |
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Nine Months Ended |
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Oct. 1 |
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Oct. 2 |
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Oct. 1 |
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Oct. 2 |
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2006 |
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2005 |
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2006 |
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2005 |
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Net sales |
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$ |
32,891 |
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$ |
30,044 |
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$ |
101,470 |
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$ |
93,151 |
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Costs and expenses: |
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Cost of sales |
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10,973 |
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9,830 |
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33,392 |
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30,698 |
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Restaurant labor and related costs |
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10,764 |
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9,803 |
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32,573 |
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29,584 |
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Depreciation and amortization of restaurant
property and equipment |
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1,308 |
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1,194 |
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3,913 |
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3,580 |
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Other operating expenses |
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6,565 |
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6,036 |
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19,913 |
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18,123 |
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Total restaurant operating expenses |
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29,610 |
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26,863 |
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89,791 |
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81,985 |
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General and administrative expenses |
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2,343 |
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2,129 |
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7,222 |
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6,745 |
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Pre-opening expense |
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— |
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115 |
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— |
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115 |
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Operating income |
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938 |
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937 |
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4,457 |
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4,306 |
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Other income (expense): |
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Interest expense, net |
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(391 |
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(421 |
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(1,216 |
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(1,330 |
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Other, net |
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16 |
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12 |
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67 |
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98 |
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Total other expense |
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(375 |
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(409 |
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(1,149 |
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(1,232 |
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Income before income taxes |
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563 |
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528 |
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3,308 |
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3,074 |
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Income tax provision |
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(127 |
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(126 |
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(724 |
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(739 |
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Net income |
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$ |
436 |
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$ |
402 |
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$ |
2,584 |
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$ |
2,335 |
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Earnings per share: |
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Basic earnings per share |
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$ |
.07 |
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$ |
.06 |
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$ |
.39 |
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$ |
.36 |
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Diluted earnings per share |
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$ |
.06 |
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$ |
.06 |
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$ |
.38 |
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$ |
.34 |
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Weighted average number of shares: |
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Basic earnings per share |
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6,559 |
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6,501 |
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6,545 |
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6,477 |
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Diluted earnings per share |
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6,844 |
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6,827 |
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6,834 |
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6,791 |
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J. Alexander’s Corporation Reports Results for Third Quarter of 2006 — Page 6
J. Alexander’s Corporation and Subsidiaries
Consolidated Statements of Income
Percentages of Net Sales (Unaudited)
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Quarter Ended |
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Nine Months Ended |
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Oct. 1 |
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Oct. 2 |
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Oct. 1 |
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Oct. 2 |
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2006 |
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2005 |
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2006 |
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2005 |
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Net sales |
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100.0 |
% |
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100.0 |
% |
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100.0 |
% |
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100.0 |
% |
Costs and expenses: |
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Cost of sales |
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33.4 |
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32.7 |
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32.9 |
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33.0 |
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Restaurant labor and related costs |
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32.7 |
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32.6 |
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32.1 |
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31.8 |
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Depreciation and amortization of restaurant
property and equipment |
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4.0 |
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4.0 |
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3.9 |
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3.8 |
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Other operating expenses |
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20.0 |
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20.1 |
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19.6 |
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19.5 |
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Total restaurant operating expenses |
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90.0 |
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89.4 |
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88.5 |
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88.0 |
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General and administrative expenses |
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7.1 |
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7.1 |
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7.1 |
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7.2 |
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Pre-opening expense |
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— |
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0.4 |
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— |
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0.1 |
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Operating income |
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2.9 |
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3.1 |
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4.4 |
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4.6 |
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Other income (expense): |
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Interest expense, net |
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(1.2 |
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(1.4 |
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(1.2 |
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(1.4 |
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Other, net |
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— |
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— |
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0.1 |
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0.1 |
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Total other expense |
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(1.1 |
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(1.4 |
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(1.1 |
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(1.3 |
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Income before income taxes |
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1.7 |
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1.8 |
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3.3 |
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3.3 |
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Income tax provision |
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(0.4 |
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(0.4 |
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(0.7 |
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(0.8 |
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Net income |
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1.3 |
% |
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1.3 |
% |
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2.5 |
% |
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2.5 |
% |
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Note: Certain percentage totals do not sum due
to rounding. |
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Average Weekly Sales Information: |
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Average weekly sales per restaurant |
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$ |
90,300 |
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$ |
85,700 |
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$ |
92,800 |
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$ |
88,400 |
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Percent increase |
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+5.4 |
% |
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+5.0 |
% |
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Same store weekly sales per restaurant (1) |
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$ |
89,600 |
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$ |
85,700 |
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$ |
92,200 |
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$ |
88,400 |
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Percent increase |
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+4.6 |
% |
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+4.3 |
% |
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(1) Includes the twenty-seven restaurants open for more than eighteen months.
J. Alexander’s Corporation Reports Results for Third Quarter of 2006 — Page 7
J. Alexander’s Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited dollars in thousands)
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October 1 |
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January 1 |
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2006 |
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2006 |
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ASSETS |
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Current Assets
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Cash and cash equivalents |
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$ |
9,666 |
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$ |
8,200 |
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Deferred income taxes |
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|
964 |
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964 |
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Other current assets |
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3,984 |
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4,542 |
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Total current assets |
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14,614 |
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13,706 |
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Other assets |
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1,234 |
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1,164 |
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Property and equipment, net |
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72,332 |
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74,187 |
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Deferred income taxes |
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4,510 |
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4,510 |
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Deferred charges, net |
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696 |
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733 |
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$ |
93,386 |
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$ |
94,300 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities |
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$ |
9,487 |
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$ |
12,897 |
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Long-term debt and capital lease obligations |
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22,534 |
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|
23,193 |
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Other long-term liabilities |
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5,459 |
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|
5,103 |
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Stockholders’ equity |
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55,906 |
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|
53,107 |
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$ |
93,386 |
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$ |
94,300 |
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###