EXHIBIT 99.1
(J. ALEXANDER'S CORPORATION(R) LOGO)
NEWS RELEASE
AMEX:JAX
FOR IMMEDIATE RELEASE CONTACT: R. Gregory Lewis
- --------------------- (615) 269-1900
J. ALEXANDER'S CORPORATION ANNOUNCES RESULTS
FOR SECOND QUARTER AND FIRST HALF OF 2005
SECOND QUARTER NET INCOME RISES 71%
ON NET SALES INCREASE OF 3.7%
NASHVILLE, TN., July 27, 2005 - J. Alexander's Corporation (AMEX: JAX)
today announced operating results for the second quarter and first half of 2005.
Lonnie J. Stout II, chairman, president and chief executive officer,
said income before income taxes for the second period ended July 3, 2005 reached
$1,296,000, up 55% from income before income taxes of $837,000 in the same
period a year earlier. Net income for the second quarter of 2005 rose 71% to
$984,000, or $ .14 per diluted share, on net sales of $30,953,000. In the year
earlier reporting period, the Company's net income was $576,000, or $ .09 per
diluted share, and net sales were $29,847,000.
"We recorded solid gains in net income during the quarter and were able
to maintain same store sales growth, although at a slightly lower pace than
during the first period of 2005," Stout said. "By raising our menu prices and
changing to a modified a la carte pricing format in early April, we were able to
significantly lower our cost of sales percentage," he explained.
Stout noted that while the Company's guest check average rose by over
7% and same store sales increased by 3.6%, guest count losses of approximately
4% were somewhat greater than expected and were of some concern, particularly in
restaurants located in smaller markets.
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3401 West End Avenue, Suite 260 - P.O. Box 24300
Nashville, Tennessee 37202 - Phone (615) 269-1900 - Fax (615) 269-1999
J. Alexander's Corporation - Second Quarter 2005 - Page 2
"We believe that our price increase and modified a la carte pricing
have resulted in positive benefits to the Company," Stout observed. "During the
recent quarter, these changes not only reduced our cost of sales to an
acceptable level of 32.6% of net sales, but also helped offset increases in
state minimum wages as well as increases in other operating expenses. Our
restaurant margins climbed to 12.9% of net sales in the second quarter of 2005
from 11.8% of net sales in the reporting period a year ago."
J. Alexander's Corporation had average weekly same store sales per
restaurant of $89,000 in the quarter just ended, up 3.6% from $85,900 posted in
the corresponding quarter of 2004. These same store sales results are based on
27 restaurants open for more than 18 months. The Company's average weekly sales
per restaurant were $88,000 for the second quarter of 2005, up 3.8% from $84,800
recorded in the comparable quarter of the previous year.
For the first six months of 2005, J. Alexander's Corporation recorded
income before income taxes of $2,546,000, up from income before income taxes of
$2,244,000 achieved in the first two periods of 2004. The Company's net income
for the first half of 2005 reached $1,933,000, or $.28 per diluted share, an
increase of 27% from net income of $1,524,000, or $.22 per diluted share,
achieved in the same two quarters of 2004.
J. Alexander's Corporation had average weekly same store sales per
restaurant of $91,200 for the first six months of 2005. This represents a gain
of 3.8% over average weekly same store sales per restaurant of $87,900 in the
corresponding six months of 2004. These same store sales results are based on 27
restaurants open for more than 18 months. The Company's average weekly sales per
restaurant for the first half of 2005 rose 4.2% to $89,700 from average weekly
sales per restaurant of $86,100 recorded in the same two quarters of the
previous year.
J. Alexander's Corporation - Second Quarter 2005 - Page 3
"We do not expect our same store sales growth rate to increase
appreciably for the next several months, and we could see further slowing,"
Stout said. "We expect that guest count decreases will remain in the 2% to 4%
range.
"Some of the restaurants in our smaller markets have experienced
greater resistance to our pricing changes," he explained. "We are continuing to
seek to increase the value perception of J. Alexander's products and service in
these markets and will make additional menu modifications if we believe they
would be helpful in improving our performance.
"While we expect further pressure on operating costs, we believe that
the steps we have taken will continue to have a positive impact on our sales and
operating margins for the third and fourth quarters of 2005," he said. Stout
added that the Company expects to open its 28th restaurant, now under
construction, in the fourth quarter of the current year.
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 - Second Quarter 2005 - Page 4
J. ALEXANDER'S CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Quarters Ended Six Months Ended
---------------------- ----------------------
JULY 3 June 27 JULY 3 June 27
2005 2004 2005 2004
-------- -------- -------- --------
Net sales .................................... $ 30,953 $ 29,847 $ 63,107 $ 60,636
Costs and expenses:
Cost of sales ............................. 10,104 10,194 20,868 20,395
Restaurant labor and related costs ........ 9,791 9,318 19,781 18,986
Depreciation and amortization of restaurant
property and equipment .................. 1,198 1,161 2,386 2,314
Other operating expenses .................. 5,866 5,647 12,087 11,307
-------- -------- -------- --------
Total restaurant operating expenses ..... 26,959 26,320 55,122 53,002
General and administrative expenses .......... 2,326 2,177 4,616 4,366
-------- -------- -------- --------
Operating income ............................. 1,668 1,350 3,369 3,268
Other income (expense):
Interest expense, net ..................... (447) (527) (909) (1,056)
Other, net ................................ 75 14 86 32
-------- -------- -------- --------
Total other expense ..................... (372) (513) (823) (1,024)
-------- -------- -------- --------
Income before income taxes ................... 1,296 837 2,546 2,244
Income tax provision ......................... (312) (261) (613) (720)
-------- -------- -------- --------
Net income ................................... $ 984 $ 576 $ 1,933 $ 1,524
-------- ======== -------- ========
Earnings per share:
Basic earnings per share .................. $ .15 $ .09 $ .30 $ .24
======== ======== ======== ========
Diluted earnings per share ................ $ .14 $ .09 $ .28 $ .22
======== ======== ======== ========
Weighted average number of shares:
Basic earnings per share .................. 6,469 6,443 6,465 6,440
Diluted earnings per share ................ 6,792 6,776 6,788 6,789
J. Alexander's Corporation - Second Quarter 2005 - Page 5
J. ALEXANDER'S CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
PERCENTAGES OF SALES
Quarters Ended Six Months Ended
-------------- ----------------
JULY 3 June 27 JULY 3 June 27
2005 2004 2005 2004
---- ---- ---- ----
Net sales.............................................. 100.0% 100.0% 100.0% 100.0%
Costs and expenses:
Cost of sales..................................... 32.6 34.2 33.1 33.6
Restaurant labor and related costs................ 31.6 31.2 31.3 31.3
Depreciation and amortization of restaurant
property and equipment.......................... 3.9 3.9 3.8 3.8
Other operating expenses.......................... 19.0 18.9 19.2 18.6
---- ---- ---- ----
Total restaurant operating expenses............. 87.1 88.2 87.3 87.4
General and administrative expenses.................. 7.5 7.3 7.3 7.2
--- --- --- ---
Operating income..................................... 5.4 4.5 5.4 5.4
Other income (expense):
Interest expense, net............................ (1.4) (1.8) (1.4) (1.7)
Other, net........................................ 0.2 -- 0.1 0.1
---- ---- ---- ----
Total other expense............................. (1.2) (1.7) (1.3) (1.7)
---- ---- ---- ----
Income before income taxes........................... 4.2 2.8 4.0 3.7
Income tax provision................................. (1.0) (0.9) (1.0) (1.2)
---- ---- ---- ----
Net income........................................... 3.2% 1.9% 3.1% 2.5%
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Note: Certain percentage totals do not sum due to rounding.
AVERAGE WEEKLY SALES INFORMATION:
Average weekly sales per restaurant.................. $88,000 $84,800 $89,700 $86,100
Percent increase..................................... +3.8% +4.2%
Same store weekly sales per restaurant (1)........... $89,000 $85,900 $91,200 $87,900
Percent increase..................................... +3.6% +3.8
(1) Includes the twenty-seven restaurants open for more than eighteen months.
J. Alexander's Corporation - Second Quarter 2005 - Page 6
J. ALEXANDER'S CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
JULY 3 January 2
2005 2005
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ASSETS
Current Assets
Cash and cash equivalents ...................... $ 4,795 $ 5,494
Deferred income taxes .......................... 1,327 1,327
Other current assets ........................... 4,271 4,501
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Total current assets ........................ 10,393 11,322
Other assets ......................................... 1,192 1,122
Property and equipment, net .......................... 72,679 72,425
Deferred income taxes ................................ 3,236 3,236
Deferred charges, net ................................ 775 814
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$88,275 $88,919
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities .................................. $ 8,121 $10,757
Long-term debt and capital lease obligations ......... 23,610 24,017
Other long-term liabilities .......................... 4,914 4,543
Stockholders' equity ................................. 51,630 49,602
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$88,275 $88,919
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