EXHIBIT 99.1
J. ALEXANDER'S CORPORATION REPORTS
RESULTS FOR FIRST QUARTER OF 2005
SAME STORE SALES CONTINUE TO INCREASE
NASHVILLE, TN., April 29, 2005 - J.Alexander's Corporation (AMEX: JAX)
today reported operating results for the first quarter ended April 3, 2005.
"Overall, we were pleased with the results we achieved in the first
quarter," said Lonnie J. Stout II, chairman, president and chief executive
officer, in announcing the Company's performance, "but it wasn't easy. These
results were recorded in the face of a very challenging environment in which the
Company continued to experience rising input and operating costs."
Stout also pointed out that because the first fiscal quarter of 2005
began on January 3, 2005, it did not include the favorable effects on sales and
profits of the 2005 New Year's holiday period. As a result, profit comparisons
to the first quarter of 2004, which did include the New Year's holidays for that
year, were negatively affected.
For the most recent quarter, J. Alexander's Corporation recorded net
sales of $32,154,000, up 4.4% from $30,789,000 posted in the first period a year
earlier. Income before income taxes for the first quarter of 2005 reached
$1,250,000, down from income before income taxes of $1,407,000 recorded in the
comparable period of 2004. Net income for the most recent quarter was $949,000,
or $.14 per diluted share, as compared to net income of $948,000, also $.14 per
diluted share, achieved in the same period of the prior year.
J. Alexander's Corporation - First Quarter 2005 - Page 2
"Our same store sales for the first quarter of 2005 improved by more
than 4%," Stout said, "and we estimate the increase would have been 4.8% if the
favorable effect of the New Year's holiday were excluded from the prior year's
results."
For the first quarter of 2005, J. Alexander's Corporation had average
weekly same store sales per restaurant of $93,600, up 4.1% from $89,900 recorded
in the corresponding quarter of 2004. These same store sales results are based
on 25 restaurants open for more than 18 months. The Company's average weekly
sales per restaurant were $91,400 for the first period of 2005, up 4.6% from
$87,400 posted in the comparable quarter of the previous year.
Stout noted that the Company's input costs for the quarter just ended
remained high. He explained that while the increase in cost of sales as a
percentage of sales was largely offset by more efficient labor costs on higher
sales volumes, other operating expenses rose significantly. Included were
increases in credit card processing fees, higher repairs and maintenance costs
and increases in several other operating expense categories.
Stout said that in early April of 2005 the Company raised prices on
several of its menu items and changed its pricing format to modified a la carte
pricing, which includes an extra charge for salads which were formerly included
in the price of beef and seafood entrees. "We have known for some time that
additional price increases were needed to offset higher costs we are
experiencing and improve our operating margins," Stout observed. "However, we
thought the best time to make our changes was in concert with the rollout of our
new Certified Angus Beef(R) program. We had planned to complete this rollout in
March, but because of product availability and other issues, the rollout and
pricing changes were delayed for approximately four weeks. This further
compounded the effect of the cost pressures we experienced in the first quarter.
J. Alexander's Corporation - First Quarter 2005 - Page 3
"Based on initial results, we are encouraged by guest acceptance of
this change in pricing format and the favorable effect it appears to be having
on cost of sales," Stout continued. "As expected, guest counts have been down by
approximately 2%, and we believe that we will continue to see a slight decrease
through the second or third quarter.
"We believe the upward trend in same store sales will continue for the
balance of the year and that check averages will increase as well. We remain
optimistic about the outlook for the remainder of 2005 and believe that the
expected increase in same store sales, supported by excellent execution and our
pricing changes, will allow us to improve our operating margins."
J. Alexander's Corporation presently owns 27 J. Alexander's
contemporary, upscale, American casual dining restaurants which place a special
emphasis on food quality and professional service. The Company's restaurants are
located in Alabama, Colorado, Florida, Georgia, Illinois, Kansas, Kentucky,
Louisiana, Michigan, Ohio, Tennessee and Texas. The Company is based 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 in certain of its restaurants, especially two of the newer
restaurants that are not performing at satisfactory levels; changes in business
or economic conditions, including rising food costs and product shortages; the
number and timing of new restaurant openings and its ability to operate them
profitably; competition within the casual dining industry, which is very
intense; competition by our new restaurants with our 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 - First Quarter 2005 - Page 4
J. ALEXANDER'S CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Quarter Ended
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APRIL 3 March 28
2005 2004
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Net sales ................................................. $ 32,154 $ 30,789
Costs and expenses:
Cost of sales .......................................... 10,764 10,201
Restaurant labor and related costs ..................... 9,990 9,668
Depreciation and amortization of restaurant property and
equipment ............................................ 1,188 1,153
Other operating expenses ............................... 6,221 5,660
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Total restaurant operating expenses .................. 28,163 26,682
General and administrative expenses ....................... 2,290 2,189
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Operating income .......................................... 1,701 1,918
Other income (expense):
Interest expense, net .................................. (462) (529)
Other, net ............................................. 11 18
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Total other expense .................................. (451) (511)
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Income before income taxes ................................ 1,250 1,407
Income tax provision ...................................... (301) (459)
-------- --------
Net income ................................................ $ 949 $ 948
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Earnings per share:
Basic earnings per share ............................... $ .15 $ .15
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Diluted earnings per share ............................. $ .14 $ .14
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Weighted average number of shares:
Basic earnings per share ............................... 6,461 6,438
Diluted earnings per share ............................. 6,783 6,803
J. Alexander's Corporation - First Quarter 2005 - Page 5
J. ALEXANDER'S CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
PERCENTAGES OF NET SALES
Quarter Ended
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APRIL 3 March 28
2005 2004
---- ----
Net sales ................................................... 100.0% 100.0%
Costs and expenses:
Cost of sales .......................................... 33.5 33.1
Restaurant labor and related costs ..................... 31.1 31.4
Depreciation and amortization of restaurant property and
equipment .......................................... 3.7 3.7
Other operating expenses ............................... 19.3 18.4
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Total restaurant operating expenses ................ 87.6 86.7
General and administrative expenses ......................... 7.1 7.1
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Operating income ............................................ 5.3 6.2
Other income (expense):
Interest expense, net .................................. (1.4) (1.7)
Other, net ............................................. -- .1
--------- ---------
Total other expense ................................ (1.4) (1.7)
Income before income taxes .................................. 3.9 4.6
Income tax provision ........................................ (.9) (1.5)
--------- ---------
Net income .................................................. 3.0% 3.1%
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Note: Certain percentage totals do not sum due to rounding.
AVERAGE WEEKLY SALES INFORMATION:
Average weekly sales per restaurant ......................... $ 91,400 $ 87,400
Percent increase ............................................ +4.6%
Same store weekly sales per restaurant(1) ................... $ 93,600 $ 89,900
Percent increase ............................................ +4.1%
(1) Includes the twenty-five restaurants open for more than eighteen months.
J. Alexander's Corporation - First Quarter 2005 - Page 6
J. ALEXANDER'S CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
APRIL 3 January 2
2005 2005
---- ----
ASSETS
Current Assets
Cash and cash equivalents ...................... $ 7,089 $ 7,495
Deferred income taxes .......................... 1,327 1,327
Other current assets ........................... 2,259 2,500
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Total current assets ........................ 10,675 11,322
Other assets ......................................... 1,180 1,122
Property and equipment, net .......................... 72,109 72,425
Deferred income taxes ................................ 3,236 3,236
Deferred charges, net ................................ 789 814
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$87,989 $88,919
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities .................................. $ 8,827 $10,757
Long-term debt and capital lease obligations ......... 23,810 24,017
Other long-term liabilities .......................... 4,794 4,543
Stockholders' equity ................................. 50,558 49,602
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$87,989 $88,919
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