EX-99.1
2
g94293exv99w1.txt
EX-99.1  PRESS RELEASE


                                                       CONTACT: R. Gregory Lewis
                                                                (615)269-1900


                       J. ALEXANDER'S CORPORATION REPORTS
                  YEAR END AND FOURTH QUARTER RESULTS FOR 2004


     NASHVILLE, Tenn., Apr. 15, 2005 --- J. Alexander's Corporation (AMEX: JAX)
today announced operating results for the year and fourth quarter ended January
2, 2005. The fiscal year just ended included 53 weeks, compared to 52 weeks in
the prior annual reporting period, while the fourth quarter of 2004 included 14
weeks as compared to 13 weeks in the final period a year earlier.

     "We are pleased with our performance for the year and for the quarter,"
said Lonnie J. Stout II, chairman, president and chief executive. "We achieved
excellent same store sales performance for the year by maintaining our guest
counts while increasing menu prices approximately 5% in response to extremely
high levels of input costs in virtually every major food cost category. Our beef
input prices alone increased by an estimated 13% to 14% in March of 2004, and
beef accounts for 28% of our cost of sales. We also experienced significant
increases in poultry, dairy and produce costs for much of the year."

     For the year ended January 2, 2005, J. Alexander's Corporation reported net
sales of $122,918,000, up from net sales of $107,059,000 recorded in the
previous year.

     Income before income taxes for the most recent year reached $4,378,000, up
from income before income taxes of $2,158,000 recorded in the prior year.
Results for 2003 included pre-opening expenses of $897,000 while no pre-opening
expenses were



J. Alexander's Corporation Reports - Page 2


included in 2004. Results for 2003 also included $552,000 of non-cash
compensation expense recognized in connection with the variable plan stock
option awarded in 1999, compared to $18,000 in 2004.

     Both the full year and fourth quarter of 2004 included a $1,531,000
favorable adjustment to the Company's deferred income tax provisions resulting
from a reduction in the beginning of the year valuation allowance on the
Company's deferred tax assets based on the expectation of using these assets in
the future. The effect of this item was to increase earnings per diluted share
by $.23 for both the year and fourth quarter.

     In the previous year, the Company's full year and fourth quarter included a
$1,475,000 favorable adjustment to its deferred income tax provisions. The
effect of this item was to increase earnings per diluted share by $ .22 for both
the fourth quarter and full year.

     Net income for the year just ended was $4,822,000, or $.71 per diluted
share, as compared to net income of $3,280,000, or $ .49 per diluted share,
achieved in 2003.

     "It is important to note," Stout continued, "that while we consider our
overall performance in 2004 to have been very good in light of the cost
pressures we experienced, we do not consider our operating performance to have
improved as much as is indicated by the improvement of over 100% in reported
pre-tax income or even the 55% improvement in reported operating income for 2004
over 2003." Improvement in both of these key measures was affected by the
inclusion of pre-opening expenses and



J. Alexander's Corporation Reports - Page 3

non-cash compensation expense associated with a variable stock option in the
2003 results, with virtually no corresponding expenses incurred in 2004. Also
reflected in the Company's 2004 operating results is the benefit of an extra
week in the fiscal year as compared to the previous year as well as a
non-recurring property gain of $117,000.

     For the 53 weeks ended January 2, 2005, J. Alexander's Corporation reported
average weekly same store sales of $88,500, up 7.9% from $82,000 recorded in the
52 weeks of 2003. Excluding the last week of the most recent year, the Company's
average weekly same store sales per restaurant were $88,100, up 7.4% from
$82,000 recorded in 2003. These same store sales results are based on 25
restaurants open for more than 18 months.

     J. Alexander's Corporation had average weekly sales per restaurant of
$85,800 for the 53 weeks ended January 2, 2005, up 5.1% from $81,600 posted in
the 52 weeks of 2003. Excluding the last week of the most recent year, J.
Alexander's Corporation's average weekly sales per restaurant rose to $85,400,
up 4.7% from $81,600 achieved in 2003.

     For the fourth quarter of 2004, the Company's net sales climbed 18.1% to
$33,488,000 from net sales of $28,362,000 recorded in the fourth period of 2003.
Included in the increase for 2004 were sales of approximately $2,850,000
recorded for the extra week included in the quarter.

     Income before income taxes for the fourth quarter of 2004 reached
$1,747,000, up from income before income taxes of $446,000 achieved in the
fourth quarter of 2003. Net



J. Alexander's Corporation Reports - Page 4

income for the fourth quarter of 2004 was $3,033,000, or $.45 per diluted share,
as compared to net income of $2,078,000, or $ .31 per diluted share, achieved in
the last period of 2003.

     For the 14-week quarter just ended, J. Alexander's Corporation reported
average weekly same store sales per restaurant of $90,300, up 7.9% from $83,700
recorded in the 13 weeks of the final period in 2003. Excluding the last week of
the quarter in 2004, the Company's average weekly same store sales per
restaurant were $88,900, up 6.2% from the comparable period of 2003. These same
store sales results are based on 25 restaurants open for more than 18 months.

     For the 14-week quarter of 2004, J. Alexander's Corporation had average
weekly sales per restaurant of $87,900, up 6.9% from $82,200 posted in the 13
weeks of the fourth quarter of 2003. Excluding the last week of the quarter of
2004, the Company's average weekly sales per restaurant reached $86,600, up 5.4%
from $82,200 achieved in the corresponding quarter a year earlier.

     "We continued to post solid sales gains throughout the fourth quarter of
2004," Stout said. "While our overall performance was very positive, our results
during the final period of 2004 continued to be adversely impacted by the
persistence of high food costs and continued operating losses in our two newest
restaurants opened in the fourth quarter of 2003."

     According to Stout, the Company's cost of sales increased to 33.4% for the
fourth quarter of 2004 from 33.1% in the final period of 2003. "Although the
cost of sales



J. Alexander's Corporation Reports - Page 5

moderated slightly in the final months of 2004, it remained at a high level as
the year closed," Stout said.

     During the fourth quarter of 2004, J. Alexander's Corporation did not
record any pre-opening expenses, while for the fourth period of 2003, the
Company incurred pre-opening expenses of $458,000. Also, the Company recorded
$223,000 of non-cash compensation expense in the fourth quarter of 2003 in
connection with a variable plan stock option award granted to the Company's CEO
in 1999.

     "We are pleased with the steady growth in sales, which is continuing into
2005," Stout said. "The pressure on operating margins from high input costs
remains a challenge. In an effort to offset at least a portion of the cost
pressures we are experiencing, we recently increased our prices for selected
menu items and changed our menu pricing format to modified a la carte pricing
for beef and seafood entrees. Under the modified a la carte format, menu prices
of beef and seafood entrees which previously included a dinner salad decreased
by $1.00 to $2.00 in many locations (although increasing in certain major market
locations), but no longer include a salad. If desired, a salad can be added for
an additional charge of $4.00. We believe these changes should reduce our cost
of sales as a percentage of sales, but we will carefully monitor their effect on
guest counts in our restaurants." During the last half of 2004 and first quarter
of 2005, average guest counts per restaurant declined by approximately 2% on a
same store basis compared to the corresponding periods of the previous years.



J. Alexander's Corporation Reports - Page 6

     Stout said that the Company upgraded its beef program to serve only 100%
Certified Angus Beef(R) in all J. Alexander's restaurants beginning in April of
2005. "We believe this change will significantly enhance the quality of our beef
offerings and is consistent with our philosophy of providing the highest quality
products possible to our guests," he said.

     The J. Alexander's Corporation chief executive officer pointed out that the
beef market remains high and said the Company had recently signed a new annual
beef pricing agreement which will increase the Company's beef input costs on an
annual basis by an estimated 7% to 8%. He said that a portion of this increase
was due to the change to Certified Angus Beef(R).

     "We remain sharply focused on taking measures to reduce input costs
wherever possible without sacrificing our food quality," Stout said. "We are
also firmly committed to ensuring that exceptional service and food quality
continue as a hallmark of J. Alexander's restaurants."

     Stout noted that a portion of the increase in the Company's general and
administrative expenses for 2004 was the result of the cost of compliance with
various requirements of the Sarbanes-Oxley Act, the American Stock Exchange, and
the Securities and Exchange Commission.

     Lastly, Stout reported that the Internal Revenue Service has completed its
examination of the Company's federal income tax returns for tax years



J. Alexander's Corporation Reports - Page 7

2001 through 2003. In connection with this examination, the Company expects to
pay additional income taxes and related interest expense of approximately
$89,000. This includes an adjustment for additional income taxes of $127,000
related to the timing of the recognition by the Company of gift certificate
revenues for tax purposes, which was partially offset by the effect of other
deductions allowed by the IRS. The adjustments related to the additional amounts
to be paid did not have a material effect on the Company's consolidated
financial statements for the full year or fourth quarter of 2004.

     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 AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


Quarter Ended Year Ended ------------- ---------- JAN. 2 Dec. 28 JAN. 2 Dec. 28 2005 2003 2005 2003 ---- ---- ---- ---- (14 WEEKS) (13 Weeks) (53 WEEKS) (52 Weeks) Net sales............................................ $33,488 $28,362 $122,918 $107,059 Costs and expenses: Cost of sales..................................... 11,187 9,387 41,324 34,732 Restaurant labor and related costs................ 10,237 9,280 38,597 35,031 Depreciation and amortization of restaurant property and equipment.......................... 1,210 1,136 4,670 4,337 Other operating expenses.......................... 6,370 5,238 23,394 19,651 ----- ------- ------ -------- Total restaurant operating expenses............. 29,004 25,041 107,985 93,751 General and administrative expenses.................. 2,280 1,916 8,568 8,220 Pre-opening expense.................................. - 458 - 897 Gain on involuntary property conversion ............. 117 - 117 - --- ----------- --- ----------- Operating income..................................... 2,321 947 6,482 4,191 Other income (expense): Interest expense, net............................ (556) (514) (2,130) (2,108) Other, net........................................ (18) 13 26 75 ------- ------ ------ --------- Total other expense............................. (574) (501) (2,104) (2,033) ------ ------ ------ --------- Income before income taxes........................... 1,747 446 4,378 2,158 Income tax provision (benefit): Current........................................... 602 (157) 1,444 353 Deferred.......................................... (1,888) (1,475) (1,888) (1,475) ------ ------ ------ ------- Total........................................... (1,286) (1,632) (444) (1,122) ----- ------ ---- ------ Net income........................................... $ 3,033 $ 2,078 $ 4,822 $ 3,280 ====== ====== ====== ====== Earnings per share: Basic earnings per share.......................... $ .47 $ .32 $ .75 $ .50 ======== ======== ======== ======= Diluted earnings per share........................ $ .45 $ .31 $ .71 $ .49 ======= ======= ======== ====== Weighted average number of shares: Basic earnings per share......................... 6,455 6,433 6,446 6,519 Diluted earnings per share........................ 6,769 6,762 6,781 6,693
J. ALEXANDER'S CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME PERCENTAGES OF SALES
Quarter Ended Year Ended ------------- ---------- JAN. 2 Dec. 28 JAN. 2 Dec. 28 2005 2003 2005 2003 ---- ---- ---- ---- (14 WEEKS) (13 Weeks) (53 WEEKS) (52 Weeks) Net sales.............................................. 100.0% 100.0% 100.0% 100.0% Costs and expenses: Cost of sales..................................... 33.4 33.1 33.6 32.4 Restaurant labor and related costs................ 30.6 32.7 31.4 32.7 Depreciation and amortization of restaurant property and equipment.......................... 3.6 4.0 3.8 4.1 Other operating expenses.......................... 19.0 18.5 19.0 18.4 ---- ---- ---- ---- Total restaurant operating expenses............. 86.6 88.3 87.9 87.6 General and administrative expenses.................. 6.8 6.8 7.0 7.7 Pre-opening expense.................................. - 1.6 - 0.8 Gain on involuntary property conversion.............. 0.3 - 0.1 - -------- ------ --- ------- Operating income..................................... 6.9 3.3 5.3 3.9 Other income (expense): Interest expense, net............................ (1.7) (1.8) (1.7) (2.0) Other, net........................................ (0.1) - - 0.1 ----- ------ ----- ------ Total other expense............................. (1.7) (1.8) (1.7) (1.9) ---- ---- ---- ---- Income before income taxes........................... 5.2 1.6 3.6 2.0 Income tax provision (benefit): Current........................................... 1.8 (0.6) 1.2 0.3 Deferred.......................................... (5.6) (5.2) (1.5) (1.4) ---- ---- ---- ---- Total........................................... (3.8) (5.8) (0.4) (1.0) --- ----- --- ---- Net income........................................... 9.1% 7.3% 3.9% 3.1% ==== ==== ===== ===== Note: Certain percentage totals do not sum due to rounding. AVERAGE WEEKLY SALES INFORMATION: Average weekly sales per restaurant.................. $87,900 $82,200 $85,800 $81,600 Percent increase..................................... +6.9% +5.1% Same store weekly sales per restaurant (1)........... $90,300 $83,700 $88,500 $82,000 Percent increase..................................... +7.9% +7.9
(1) Includes the twenty-five restaurants open for more than eighteen months. J. ALEXANDER'S CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS)
JANUARY 2 December 28 2005 2003 ---- ---- ASSETS Current Assets Cash and cash equivalents............................................ $7,495 $1,635 Deferred income taxes................................................ 1,327 791 Other current assets................................................. 2,500 2,707 ----- ----- Total current assets.............................................. 11,322 5,133 Other assets............................................................... 1,122 1,009 Property and equipment, net................................................ 72,425 73,613 Deferred income taxes...................................................... 3,236 1,884 Deferred charges, net...................................................... 814 898 -------- -------- $88,919 $82,537 ====== ====== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities........................................................ $10,757 $10,891 Long-term debt and capital lease obligations............................... 24,017 24,642 Other long-term liabilities................................................ 4,543 2,572 Stockholders' equity....................................................... 49,602 44,432 ------ ------ $88,919 $82,537 ====== ======

The following information was filed by Alexanders J Corp on Friday, April 15, 2005 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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