Market Overview

J. Alexander's Holdings, Inc. Reports Results For Second Quarter Ended July 1, 2018

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Same Store Sales Rise In Both Restaurant Concepts

J. Alexander's Holdings, Inc. (NYSE:JAX) (the Company), owner and
operator of a collection of restaurants which includes J. Alexander's,
Redlands Grill, Stoney River Steakhouse and Grill and selected other
restaurants, today reported financial results for the second quarter
ended July 1, 2018.

Second Quarter 2018 Highlights Compared to the Second Quarter of 2017

  • Net sales were $60,420,000, an increase of 3.8% from $58,216,000
    achieved in the second quarter of 2017.
  • For the J. Alexander's/Grill restaurants, average weekly same store
    sales per restaurant (1) were $116,200, an increase of 1.9%
    from $114,000 reported in the second quarter of 2017. For the Stoney
    River Steakhouse and Grill restaurants, average weekly same store
    sales were $78,900, up 6.2% from $74,300 recorded in the second
    quarter of 2017.
  • Pre-opening expense totaled $504,000 for the quarter ended July 1,
    2018 compared to $10,000 during the second quarter of 2017, with the
    increase attributable to the timing of new restaurant openings.
  • Income from continuing operations before income taxes was $2,203,000
    for the second quarter of 2018 compared to income from continuing
    operations before income taxes of $42,000 for the corresponding
    quarter of 2017. The sharp increase in results for the most recent
    quarter was primarily due to a favorable swing in the quarterly
    valuation of the Black Knight Advisory Services, LLC (Black Knight)
    profits interest grant. For the second quarter of 2018, the Company
    realized income of $53,000 compared to a profits interest expense of
    $1,714,000 in the same quarter a year ago. The Black Knight profits
    interest grant was issued in October 2015 and requires a quarterly
    valuation. The non-cash expense (income) associated with this grant is
    being recognized over a three‐year vesting period which runs through
    October 6, 2018. It is calculated each quarter based upon the most
    recent valuation performed using the Black‐Scholes valuation model,
    with any cumulative change associated with the most recent valuation
    impacting the most recent quarter. Primarily due to the $11.15 per
    share closing price of the Company's stock at the end of the most
    recent quarter, the grant's valuation decreased from $6,684,000 at
    April 1, 2018 to $6,018,000 at July 1, 2018. The Company also incurred
    consulting fees of $205,000 under its management agreement with Black
    Knight for the most recent quarter compared to $174,000 in the second
    quarter of 2017.
  • Net income for the second quarter of 2018 was $2,105,000, up from net
    income of $186,000 recorded for the comparable quarter of 2017.
  • Basic and diluted earnings per share were $0.14 for the second quarter
    of 2018 compared to $0.01 for the second quarter of 2017.
  • Adjusted EBITDA(2) rose 9.9% from $5,465,000 in the second
    quarter of 2017 to $6,007,000 in the second quarter of 2018.
  • Restaurant Operating Profit Margin (3) as a percent of net
    sales was 12.5% in the most recent quarter compared to
    12.1% for the second quarter of 2017.
  • Cost of sales as a percentage of net sales in the second quarter of
    2018 was 32.2% compared to 33.0% in the corresponding quarter of 2017.

(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 is 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 and a reconciliation of the non‐GAAP
financial measure Adjusted EBITDA to net income. 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 and a reconciliation of the non‐GAAP financial measure
Restaurant Operating Profit to Operating Income. Management uses
Restaurant Operating Profit to measure operating performance at the
restaurant level.

For the second quarter of 2018, the Company's restaurant labor and
related costs as a percentage of net sales were 31.1% compared to 30.8%
of net sales in the second quarter of 2017. Other restaurant operating
expenses were 19.8% of net sales in both the second quarter of 2018 and
second quarter of 2017.

The Company's operating income for the second quarter of 2018 was
$2,334,000 compared to operating income of $215,000 for the
second quarter of 2017.

The average weekly guest counts within the same store base of the
Company's J. Alexander's/Grills collection were down 0.6% in the second
quarter of 2018 compared to the second quarter of the prior year. Guest
counts within the same store base at the Company's Stoney River
Steakhouse and Grill restaurants were up 6.2% for the second quarter of
2018 over the second quarter of 2017. With respect to average guest
checks, which include alcoholic beverage sales, the average guest check
within the J. Alexander's/Grills same store base of restaurants during
the second quarter of 2018 was $31.60, up 2.6% from $30.80 during the
second quarter of 2017. The average guest check within the same store
base of Stoney River Steakhouse and Grill restaurants reached $42.27
during the second quarter of 2018, up 0.1% from $42.23 recorded in the
corresponding quarter of 2017.

On a consolidated basis, average weekly guest counts within the
Company's J. Alexander's/Grills locations in the second quarter of 2018
were down 2.0% from the second quarter of 2017, while average weekly
guest counts within the Company's Stoney River Steakhouse and Grill
locations increased 7.8% for the second quarter of 2018 compared to the
second quarter of 2017. Average guest checks for the combined J.
Alexander's/Grills concepts rose 2.7% from $30.85 in the second quarter
of 2017 to $31.69 for the second quarter of 2018. Average guest checks
for the Stoney River Steakhouse and Grill restaurants decreased 0.6%
from $42.17 in the second quarter of 2017 to $41.90 in the second
quarter of 2018.

The effect of menu pricing for the second quarter of 2018 was estimated
to be a 1.8% increase for the J. Alexander's/Grills restaurants and a
1.9% increase for the Stoney River Steakhouse and Grill restaurants
compared to the corresponding quarter of 2017. Deflation in food costs
for the second quarter of 2018 was estimated to total 0.9% for the J.
Alexander's/Grills restaurants, with beef costs decreasing by an
estimated 4.6% compared to the second quarter of 2017. For the Stoney
River Steakhouse and Grill restaurants, deflation for the second quarter
of 2018 was estimated to total 3.0%, with beef costs down by
approximately 7.2% from the comparable quarter of 2017.

Chief Executive Officer's Comments

"The second quarter of 2018 again reflected increases in average weekly
same store sales for both of our restaurant groups," Lonnie J. Stout II,
President and Chief Executive Officer, said. "It was a solid quarter
that included improvement not only at the top line, but also in several
key operating areas. We were pleased with our overall performance."

During the second quarter, Stout said the Company continued to execute
strategies allowing it to build guest loyalty in both of its restaurant
collections.

"We were encouraged that guest counts at our J. Alexander's/Grill
restaurants showed improvement over the first quarter's performance. We
realize, however, that further improvement is needed in the final half
of 2018 and we remain tightly focused on making certain each guest visit
is an outstanding experience." Stout noted that the modest decrease in
guest counts within the Company's J. Alexander's/Grills group during the
second quarter of 2018 was significantly influenced by three specific
locations. "From time to time, we will encounter situations that impact
our traditional guest traffic patterns and require us to work that much
harder to recapture or replace the business. Examples include the
relocation of a major corporate presence within a specific market or,
for limited periods of time, competitive intrusion of a new restaurant
opened within a specific market. As we analyze our same store guest
traffic, excluding three specific restaurants that have been subject to
events similar to these examples, our performance for the second quarter
of 2018 would have reflected a slight increase instead of the 0.6%
decrease previously noted."

Stout said the recent addition of lunch and brunch at several Stoney
River locations in the last quarter has positively impacted guest
traffic and sales of the restaurant group, but that the primary factor
influencing the increase in average weekly same store sales per
restaurant was organic growth in guest counts. "This collection has
continued to show stronger than anticipated momentum, including our
newer restaurants."

The Company's cost of sales decreased in the most recent quarter due
principally to falling beef prices. Restaurant operating margins also
showed improvement, rising 0.4% for the quarter ended July 1, 2018 over
the same quarter a year earlier.

"We remain cautiously optimistic that the beef market will continue to
perform within acceptable parameters," Stout continued. "On balance, we
continue to be encouraged by the performance of our newer restaurants in
both operating groups, and look forward to announcing plans for
additional locations as soon as leases are executed," he added.

Highlights for the First Six Months of 2018

For the six months ended July 1, 2018, the Company posted net sales of
$122,329,000, up 3.6% from $118,038,000 recorded in the first half of
2017. Within the J. Alexander's/Grill restaurants, average weekly same
store sales per restaurant were $118,100 for the six months ended July
1, 2018, an increase of 1.0% from $116,900 achieved in the same two
quarters of 2017. For the Stoney River Steakhouse and Grill restaurants,
average weekly same store sales per restaurant advanced 6.1% from
$76,600 in the first six months of 2017 to $81,300 in the first half of
2018.

Income from continuing operations before income taxes for the six months
ended July 1, 2018 was $4,045,000, up 9.8% from $3,683,000 reported for
the same two quarters a year ago.

During the first half of 2018, the Black Knight profits interest grant
resulted in non-cash profits interest expense of $1,854,000, an increase
of 10.6% from profits interest expense of $1,676,000 reported in the
same six months of 2017. For the first six months of 2018, the Company
had consulting fees of $449,000 from its management agreement with Black
Knight compared to $439,000 of expense in the first half of 2017.

The Company posted net income of $3,698,000 in the first six months of
2018, up 28.9% from $2,870,000 for the same two quarters of 2017.
Adjusted EBITDA for the first two quarters of 2018 totaled $14,158,000,
up 8.4% from $13,066,000 recorded in the first six months of 2017. Basic
earnings per share and diluted earnings per share totaled $0.25 in the
first half of 2018. In the comparable two quarters of 2017, basic
earnings per share totaled $0.20 while diluted earnings per share
totaled $0.19. See attached "Adjusted EBITDA Reconciliation" for our
definition of Adjusted EBITDA and a reconciliation to net income.

Guest counts within the same store base of restaurants decreased by 1.4%
within the J. Alexander's/Grill restaurants for the first half of 2018,
and increased 7.2% within the Stoney River Steakhouse and Grill
restaurants during the same two quarters. The average guest check within
the same store base at the combined J. Alexander's/Grill restaurants
increased 2.5% from $30.95 for the first six months of 2017 to $31.73
for the first half of 2018, while the Stoney River average guest check
decreased by 0.8% from $42.94 in the first two quarters of 2017 to
$42.58 for the first half of 2018. The effect of menu price changes for
the first half of 2018 was estimated to be a 1.8% increase at the J.
Alexander's/Grill locations and a 1.7% increase at the Stoney River
Steakhouse and Grill restaurants compared to the first six months of
2017.

Cost of sales as a percentage of net sales for the first two quarters of
2018 was 31.6% compared to 31.9% for the first six months of 2017. The
estimated effect of inflation in food costs for the first half of 2018
was 1.0% for the J. Alexander's/Grill restaurants, with beef costs
declining by approximately 1.1% compared to the same six months a year
earlier. For the Stoney River Steakhouse and Grill restaurants,
deflation was an estimated 0.3%, including an estimated decrease of 2.7%
in beef costs compared to the first half of 2017.

Restaurant Development

During the second quarter of 2018, the Company opened a new J.
Alexander's restaurant in King of Prussia, PA, marking the Company's
entry into Pennsylvania. The Company continued construction on a new
Stoney River Steakhouse and Grill in Troy, MI. This new restaurant is
expected to open in the fourth quarter of 2018. The Company anticipates
opening three to four new restaurants in 2019, and will announce details
once leases related to such sites have been executed.

Guidance For 2018 Unchanged

Our performance outlook is based on current information as of August 8,
2018. The Company does not expect to update its 2018 guidance before
next quarter's earnings release. However, the information on which the
outlook is based is subject to change, and the Company may update its
full business outlook or any portion thereof at any time for any reason.
Based upon current information, the guidance for the 2018 fiscal year is
the same as reported on May 3, 2018.

Conference Call

The Company will hold a conference call on Thursday, August 9, 2018, at
10 a.m., Central time to discuss its financial results for the second
quarter ended July 1, 2018. The conference call can be accessed live
over the phone by dialing 1‐877‐407‐0789 (Toll‐Free) or 1‐201‐689‐8562
(Toll/International). To access the call via the internet, go to J.
Alexander's website at http://investor.jalexandersholdings.com
or http://public.viavid.com/index.php?id=130771.
A replay of the conference call will be available shortly following the
conclusion of the call at http://investor.jalexandersholdings.com
and http://public.viavid.com/index.php?id=130771,
as well as by dialing 1‐844‐512‐2921 or 1‐412‐317‐6671 and providing the
access code 13682084. The replay will be accessible through August 16,
2018 via telephone and for 30 days on the internet.

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 45 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. 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 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 Company's ability to maintain satisfactory
guest count levels and maintain or increase sales and operating margins
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 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; 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 Securities and
Exchange Commission on March 15, 2018 and subsequent filings. 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 Income
(Unaudited in thousands, except per share amounts)
Quarter Ended Six Months Ended
July 1 July 2 July 1 July 2
  2018     2017     2018     2017  
 
Net sales $ 60,420 $ 58,216 $ 122,329 $ 118,038
Costs and expenses:
Cost of sales 19,433 19,197 38,694 37,628
Restaurant labor and related costs 18,781 17,959 37,007 35,904

Depreciation and amortization of restaurant property and equipment

2,696 2,500 5,265 4,878
Other operating expenses   11,943     11,539     23,961     23,109  
Total restaurant operating expenses 52,853 51,195 104,927 101,519
Transaction and integration expenses 7 460 933 460
General and administrative expenses 4,722 6,336 11,247 11,164
Pre-opening expense   504     10     830     886  
Total operating expenses   58,086     58,001     117,937     114,029  
Operating income 2,334 215 4,392 4,009
Other income (expense):
Interest expense (186 ) (224 ) (360 ) (398 )
Other, net   55     51     13     72  
Total other expense   (131 )   (173 )   (347 )   (326 )

Income from continuing operations before income taxes

2,203 42 4,045 3,683
Income tax benefit (expense) 12 254 (126 ) (590 )
Loss from discontinued operations, net   (110 )   (110 )   (221 )   (223 )
Net income $ 2,105   $ 186   $ 3,698   $ 2,870  
 
Basic Earnings per share:
Income from continuing operations, net of tax $ 0.15 $ 0.02 $ 0.27 $ 0.21
Loss from discontinued operations, net   (0.01 )   (0.01 )   (0.02 )   (0.02 )
Basic earnings per share $ 0.14   $ 0.01   $ 0.25   $ 0.20  
 
Diluted Earnings per share:
Income from continuing operations, net of tax $ 0.15 $ 0.02 $ 0.26 $ 0.21
Loss from discontinued operations, net   (0.01 )   (0.01 )   (0.01 )   (0.02 )
Diluted earnings per share $ 0.14   $ 0.01   $ 0.25   $ 0.19  
 
Weighted average common shares outstanding:
Basic 14,695 14,695 14,695 14,695
Diluted 14,901 14,905 14,869 14,800
     
J. Alexander's Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Income Data as a Percentage
of Net Sales and
Other Financial and Performance Data (Unaudited)
  Quarter Ended Six Months Ended
July 1 July 2 July 1 July 2
  2018     2017     2018     2017  
Net sales 100.0 % 100.0 % 100.0 % 100.0 %
Costs and expenses:
Cost of sales 32.2 33.0 31.6 31.9
Restaurant labor and related costs 31.1 30.8 30.3 30.4

Depreciation and amortization of restaurant property and equipment

4.5 4.3 4.3 4.1
Other operating expenses   19.8     19.8     19.6     19.6  
Total restaurant operating expenses 87.5 87.9 85.8 86.0
Transaction and integration expenses 0.0 0.8 0.8 0.4
General and administrative expenses 7.8 10.9 9.2 9.5
Pre-opening expense   0.8     0.0     0.7     0.8  
Total operating expenses   96.1     99.6     96.4     96.6  
Operating income 3.9 0.4 3.6 3.4
Other income (expense):
Interest expense (0.3 ) (0.4 ) (0.3 ) (0.3 )
Other, net   0.1     0.1     0.0     0.1  
Total other expense   (0.2 )   (0.3 )   (0.3 )   (0.3 )

Income from continuing operations before income taxes

3.6 0.1 3.3 3.1
Income tax benefit (expense) 0.0 0.4 (0.1 ) (0.5 )
Loss from discontinued operations, net   (0.2 )   (0.2 )   (0.2 )   (0.2 )
Net income   3.5   %   0.3   %   3.0   %   2.4   %
 
Note: Certain percentage totals do not sum due to rounding.
 
Other Financial and Performance Data:
 
Adjusted EBITDA(1) $ 6,007 $ 5,465 $ 14,158 $ 13,066
As a % of net sales 9.9 % 9.4 % 11.6 % 11.1 %
 
Average weekly sales per restaurant:
 
J. Alexander's Restaurant/ Grills $ 113,200 $ 112,600 $ 115,700 $ 115,400
Percent change 0.5 % 0.3 %
 
Stoney River Steakhouse and Grill $ 78,400 $ 73,100 $ 80,500 $ 75,400
Percent change 7.3 % 6.8 %
 
Average weekly same store sales per restaurant:
 
J. Alexander's Restaurant/ Grills $ 116,200 $ 114,000 $ 118,100 $ 116,900
Percent change 1.9 % 1.0 %
 
Stoney River Steakhouse and Grill $ 78,900 $ 74,300 $ 81,300 $ 76,600
Percent change 6.2 % 6.1 %

(1) See definitions and reconciliation attached.

   
J. Alexander's Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited in thousands)
July 1 December 31
  2018   2017
Assets
Current assets:
Cash and cash equivalents $ 7,259 $ 10,711
Other current assets   7,563   8,019
Total current assets 14,822 18,730
 
Other assets 5,776 6,183
Property and equipment, net 107,033 103,615
Goodwill 15,737 15,737
Tradename and other indefinite-lived intangibles 25,631 25,202
Deferred Charges, net   167   184
$ 169,166 $ 169,651
 
Liabilities and Stockholders' Equity
 
Current liabilities $ 26,304 $ 30,027

Long term debt, net of portion classified as current and
unamortized deferred loan costs

8,322 10,781
Deferred compensation obligations 6,592 6,451
Deferred income taxes 1,193 2,075
Other long-term liabilities 6,779 6,456
Stockholders' equity   119,976   113,861
$ 169,166 $ 169,651
     
J. Alexander's Holdings, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited in thousands) Six Months Ended
  July 1 July 2
  2018     2017  
 
Cash flows from operating activities:
Net income $ 3,698 $ 2,870
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization of property and equipment 5,411 5,021
Equity-based compensation expense 2,383 2,308
Other, net (282 ) 52
Changes in assets and liabilities, net   (2,631 )   (2,147 )
Net cash provided by operating activities 8,579 8,104
 
Cash flows from investing activities:
Purchase of property and equipment (9,019 ) (6,597 )
Other investing activities   (512 )   (273 )
Net cash used in investing activities (9,531 ) (6,870 )
 
Cash flows from financing activities:
Payments on long-term debt and obligations under capital leases (2,500 ) (1,111 )
Other financing activities   -     (2 )
Net cash used in financing activities   (2,500 )   (1,113 )
Increase (decrease) in cash and cash equivalents (3,452 ) 121
Cash and cash equivalents at beginning of period   10,711     6,632  
Cash and cash equivalents at end of period $ 7,259   $ 6,753  
 
Supplemental disclosures:
Property and equipment obligations accrued at beginning of period $ 1,854 $ 2,587
Property and equipment obligations accrued at end of period 1,760 969
Cash paid for interest 402 395
Cash paid for income taxes 234 1,838
       
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 expense (benefit),
depreciation and amortization, and adding asset impairment charges
and restaurant closing costs, loss on disposals of fixed assets,
transaction and integration costs, non-cash compensation, loss
from discontinued operations, gain on debt extinguishment 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 cost of sales, 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 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 Six Months Ended
July 1 July 2 July 1 July 2
2018   2017   2018 2017
 
Net income $ 2,105 $ 186 $ 3,698 $ 2,870
 
Income tax (benefit) expense (12 ) (254 ) 126 590
Interest expense 186 224 360 398
Depreciation and amortization   2,780     2,586     5,433   5,048
 
EBITDA 5,059 2,742 9,617 8,906
 
Transaction and integration expenses 7 460 933 460
Loss on disposal of fixed assets 38 54 96 88

Asset impairment charges and restaurant closing costs

12 27 10 133
Non-cash compensation 277 2,062 2,451 2,370
Loss from discontinued operations, net 110 110 221 223
Pre-opening expense   504     10     830   886
 
Adjusted EBITDA $ 6,007   $ 5,465   $ 14,158 $ 13,066
 
 
Note: For purposes of computing Adjusted EBITDA, the $(53) and
$1,714 for the quarters ended July 1, 2018 and July 2, 2017,
respectively, and $1,854 and $1,676 for the six months ended July 1,
2018 and July 2, 2017, respectively, in non-cash compensation
associated with a profits interest grant issued to Black Knight
Advisory Services, LLC ("BKAS") on October 6, 2015 has been included
in "Non-cash compensation" above. Additional expenses associated
with the Company's management agreement with BKAS totaling $205 and
$174 for the quarters ended July 1, 2018 and July 2, 2017,
respectively, and totaling $449 and $439 for the six months ended
July 1, 2018 and July 2, 2017, respectively, are included in general
and administrative expenses and have not been included in the
reconciliation set forth above.
                       
J. Alexander's Holdings, Inc. and Subsidiaries
Non-GAAP Financial Measures and Reconciliations
(Unaudited in thousands)
        Quarter Ended Six Months Ended
July 1 July 2 July 1 July 2
  2018   2017 2018   2017
Amount    

Percent of Net

Sales

Amount    

Percent of Net

Sales

Amount    

Percent of Net

Sales

Amount    

Percent of Net

Sales

   
Operating income $ 2,334 3.9 % $ 215 0.4 % $ 4,392 3.6 % $ 4,009 3.4 %
 
General and administrative expenses 4,722 7.8 % 6,336 10.9 % 11,247 9.2 % 11,164 9.5 %
Transaction and integration expenses 7 0.0 % 460 0.8 % 933 0.8 % 460 0.4 %
Pre-opening expense   504     0.8 %   10     0.0 %   830     0.7 %   886     0.8 %
 
Restaurant Operating Profit $ 7,567     12.5 % $ 7,021     12.1 % $ 17,402     14.2 % $ 16,519     14.0 %

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