J. Alexanders (JAX) 8 Mar 182017 Q4 Earnings call transcript

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the J. Alexander's Holdings Incorporated Fourth Quarter 2017 Earnings Conference Call. Today's conference call is being recorded. Instructions]. [Operator pleasure conference my to turn to now over the Mr. It's speakers. for introduction Lawrence of Tom today's Please ahead, go Mr. Lawrence.

of Inc. We joining XXXX. copy conference results of us you. By on Alexander's Thank appreciate have this call your now everyone the to received quarter news the fourth for interest should in J. of Holdings, a discuss can at Alexander’s does it is copy, and that distributed website www.investor.jalexandersholdings.com, send copy release at a you was Berendt yesterday immediately. need afternoon. call or will she you on XXX-XXX-XXXX, If J. Katherine anyone a available

statements that conference call fact, to made other CEO statements pursuant reasonable are I Private the turn I Securities than President assumptions. Holdings, statements you second are remind Stout, made in safe provisions and XXXX. the These of Before J. its believes Act Inc., statements. forward-looking call, The Alexander's of over this are Lonnie news harbor historical all company expectations the Litigation release the that the of to on during of based Reform and

involve materially and expectations future However, or statements implied or actual statements. results, or or forward-looking performance other to cause the known that company's forward-looking unknown company's results, and risks, achievements results achievements expressed industry important from these the factors differ uncertainties could performance of by these

subsequent company's the SEC's Relations the SEC, X, filed the on risk you release year filings. section annual in other described company's website which can the Investor under and Statements and of January the find and is yesterday's ended uncertainties factors information concerning and those press XXXX, and Form risks, for of the Additional XX-K, headings Forward-looking other report, website in with the factors sections

X, in in financial March For this other press are GAAP statistical information the available and release and summary the dated the XXXX. call, non-GAAP related accompanying measures disclosed measures

results. operations the addition, future not its indicate company's In do necessarily past results of

contents information to Those statements by passage are of made the know understand the XXXX. the that should as itself, wanted replay of of the the done company, a of let to the of Lonnie with date diminish call listening transmission J. made call any statements. the to during of and time, will the X, may or the quality we replay the Finally, his people are call the call property of the that the March call, over of pleasure only It's my Inc. remarks. opening Alexander's Also, turn to the be Stout for consent now Holdings,

over today. all and you, questions my up of Thank remarks, After have we'll then call I'll summary. for do back just the you financial turn Parkey and glad to some Tom, on take to a it to review, Mark

press yesterday restaurant increases same-store As generally a in proposed Pub acquisition our was of proposed interest favorable the integration Mark the with And profit we have our stronger recent not detail impacting during performance discuss in pressure, details were impacted moments, a more provide nonrecurring primarily afternoon, I'll Services. both transaction to you costs sales were concept, would Advisory of on during Ninety we read believe could while fourth by release, his quarter in in Ninety Holdings J. considerable few that the quarter overall we sales turned solid results most another profit expenses in Nine our of been Nine cost with pleased our beef delivered most Also related Knight Restaurant and expenses while acquisition quarter. higher-than-anticipated our nonrecurring if our results, related Alexander's comments. along concepts. we operating Black of recent associated grant interest grant some to with and with valuation of

fourth the X% increased net quarter fourth $XX,XXX,XXX XXXX, quarter of sales to XXXX. of J. Holdings the Alexander's $XX,XXX,XXX For in of from

recent J. to Restaurants, to from of $XXX,XXX average average sales fourth the the sales the final advanced from quarter most in per $XXX,XXX restaurant Total in Alexander’s/Grill quarter in XXXX. X.X% of restaurant $XXX,XXX 'XX $XXX,XXX rose weekly For quarter. our same-store X.X% weekly per

average Steakhouse improved For $XX,XXX fourth X.X% final of same-store sales $XX,XXX to River of from and fourth $XX,XXX weekly restaurant Stoney Grill per rose from in sales weekly in Total quarter Restaurants, XXXX. quarter the per restaurant the of quarter the XXXX in restaurant in performance Stoney best, average and in was at two construction $XX,XXX new one continued previously to River of In 'XX. very recent The our fourth final development we're pleased announced. the quarter most 'XX same-store we those program, of on restaurants results. quarter our sales with X.X%,

these quarter. We're of sometime second in of potential of Pennsylvania the Prussia, first will Philadelphia excited King in open restaurant. then The the this about and

also Stoney are in opening looking XXXX, our We other restaurants forward River in to Michigan. Troy, a

quarter net the of final restaurant. in We that earlier of I mentioned the of this was of of largest opening in cost of both concepts, of sales Probably issue have in for sales the running on targeted 'XX. compared with to quarter last XX.X% sales of confronted us fourth quarter XXXX food XXXX operational XX.X% our the pressure the the cost net

of operations for the income before fourth taxes compared locations quarter income In from for of $X,XXX,XXX While that income comparable These XXXX. costs, Alexander's/Grill an final said at XX% prices X.X% were we example, our to to continuing up the continuing planned Stoney for to for of results beef control. River increase disappointed the of final a of increase the of which Income estimated before over taxes quarter cost I sales basis, We with were decreasing approximately from quarter XXXX of we certainly was quarter we the aspects costs, operations not during we 'XX. same in operation abnormally quarter for the with the at last period of referenced level we experienced overall 'XX, for $X,XXX,XXX estimated did beef pleased restaurants. increase from the I and J. our had X% anticipate 'XX, when market our 'XX. fourth an X.X% of on an favorable incurred. were Thus, generally quarter we

several were factors $X,XXX,XXX. there expenses acquisition of the proposed transaction company's for and XXXX, of fourth quarter of the Restaurant including nonrecurring Ninety the related Pub noted, results concept to integration As Nine impacting

of a of provision final income quarter of quarter income achieved an tax earlier. in Results from Excluding compared in before these quarter in the XXXX expenses, $X,XXX,XXX $X,XXX,XXX, comparable XX.X% net would $X,XXX,XXX quarter tax Net the $X,XXX,XXX continuing income to the income $XXX,XXX fourth of of the the from taxes quarter included year income XXXX. an income operations fourth benefit up of of have the XXXX. XXXX reached totaled for for fourth

XXXX. quarter last the to year. to we $X,XXX,XXX impact top of in sales acceptable. EBITDA Our XX in line earnings of the fourth quarter quarter basic of the the Adjusted per last quarter compared to $X.XX of XXXX for three the the compared quarter totaled XXXX summary, posted at in In another line for our the weeks totaled $X.XX be share final was the cost the previous positive adjusted earnings share in fourth XXXX, the per Considering XXXX. performance in final of considered quarter also $X.XX to of EBITDA XXXX. most quarter of reported the months for level fourth of recent compared the Diluted on $X.XX $X,XXX,XXX we

good share as of and emerged head third the I comments to Chief to have We the momentum from President, Parkey, Financial on quarter Officer, XXXX call operational more in our guidance back on Executive last execution our we focus discuss Mark? will of into the a Vice and the with XXXX. over XXXX. few the first to moments. Mark I continue details come for quarter closing with about now quarter quarter turn to fourth

good Thanks, morning, Lonnie, and everyone.

as were beef for quarter the generally being despite with related results with our pleased to we primarily jumbo costs crab with as final of associated of cost cost a spike higher indicated, input Lonnie lump XXXX in meat. sales pressure, confronted well As

sales increase by bolstered all same-store concepts, continued holiday Our to in season. strong restaurant

which cost the proposed expenses the impact quarter impacting impact of the Pub. the and XXXX, associated there of timing XXXX which were in related quarter expenses, results to nonrecurring XXXX, Other represented sales transaction integration the factors In valuation other Restaurant fourth pressure, acquisition of new and of Nine were noncash addition quarter of the favorable including with aforementioned a the factors several for Knight fourth Ninety of fourth $XXX,XXX of of openings. profit $XXX,XXX the preopening restaurant Black interest for the and to $XXX,XXX compared of our totaled impact to

company's noncash Services valuation the recorded of $XXX,XXX. of profits fourth Knight in Advisory in profits resulted XXXX, Black income of During profits interest quarter $XXX,XXX X The calculated quarter interest expense grant interest to This grant to closing the which the cumulative of valuation upon compares at of most fourth the model. the grant, over recent at Black-Scholes the of recent vesting of Black with quarterly XXXX. the quarter, October the stock was expense associated valuation. a recent to XX, primarily is using at $X.XX change of valuation the $X,XXX,XXX decreased December per grant Any associated impacts $X,XXX,XXX to quarter share the the XXXX price common most due the of most quarter, with October valuation recent and recognized issued The interest is XXXX, in of or the of valuation requires period this each based grant's most end from Knight be required the three-year the XXXX. income profits performed

which beverage to corresponding last restaurants X.X% within of to our the final the net and XXXX company's quarter check sales increased the X% sales of operating by the Stoney income net the The sales guest base River costs, quarter XXXX. were same-store for guest compared compared recorded last XX.X% to restaurants' estimated X.X% counts XXXX, quarter food restaurants last restaurants for Same-store the operating expenses of $XX.XX of average XX.X% of to XXXX. J. quarter to estimated and alcoholic quarter XXXX. quarter of $X,XXX,XXX a net X.X% of same-store River Alexander's/Grill the fourth quarter XXXX. restaurants quarter relative fourth to was same in be Alexander's/Grill percentage average the restaurant income corresponding of was the quarter of were total collection of Alexander's/Grill sales, average Alexander’s/Grill by J. to total quarter for declined to guest the With guest fourth XX.X% within of of the operating XXXX the of and for fourth The of XXXX. to fourth to as during estimated the the For XXXX. menu at XXXX quarter net fourth XXXX increased the the of of the Stoney in basis and in X.X% compared comparable Inflation consolidated compared was pricing the costs the restaurants an XXXX of restaurants from include of $XX.XX J. XX.X% related the during of increase fourth quarter quarter X.X% and same from $X,XXX,XXX quarter of for the check the of checks, consolidated the quarter of respect compared River to labor XXXX fourth restaurant increase Stoney XXXX. the quarter of XXXX our the Other of to in X.X%. in $XX.XX X.X% at XXXX in XXXX $XX.XX J. The quarter was decreased effective of for during sales, River inflation Stoney

River and our both of to concepts of net administrative final for X.X% the in pointed a the fourth final Lonnie XXXX sales the of of the quarter compared Consolidated company's of As XXXX margin, in in expenses prices XX.X% XX.X% fourth J. general were fourth restaurant quarter as to Stoney XXXX. of operating X.X% sharply The the of of Alexander's/Grills quarter sales, quarter higher-than-expected net quarter of were percentage compared beef was XXXX. and sales in net XXXX. out,

Knight expenses the As fourth impact the impact and interest had general quarter profits administrative previously favorable was a XXXX. item this disclosed, significantly in the line grant of and noncash Black during on included of is

XXXX. directors XXXX, shares the million were of to repurchase No authorized a up by of shares quarter board during fourth the ending years X.X program for three period company's repurchased the common stock During a XX, of share the XXXX. October over company's company of

XXXX. an company quarter fourth to the of $XXX,XXX benefit referenced XXXX, the of $X,XXX,XXX relative that of tax during provision to compared the recorded Lonnie totaling fourth income tax the quarter Finally,

quarter Act, of an the into The tax of For which recorded tax benefit of to $X,XXX,XXX following Jobs company and in during year, the March reduction XX, a as XX% of tax a signed law a after was annual the with in of on does Tax deferred follows December of rate fiscal performance years recorded income XXXX. tax to provision XXXX compared reflects of to next company a XXXX. of resulted U.S. net from and and liabilities rate the the the tax XX% that The XXXX. connection XXXX, be to $X,XXX,XXX current anticipate of benefit before impact the we and XX% Cuts range related XXXX. In the revaluation $X,XXX,XXX beginning rate to corporate release. XX, will XX% December this on legislation, beginning benefit fiscal is information income tax company's for to The the of XX%, in provided not tax update the fourth to guidance effective as based X, quarterly earnings XX% from reduced XXXX our expect outlook a assets

end ranging to same-store which total from is at subject Based expenditures ranging million; EBITDA in for full per I XX%; basic on any guidance Grill million to the $X.X $X.XX $XXX,XXX and to to based the is million X% information, incurred River Ninety upon sales ranging outlook X%; the company per mentioned adjusted fiscal as from information also ranging million; the tax this outlook will expenses share an XXXX. follows, finally, that Nine from the $XXX from change, participant year at in subsequent current in of previously, will may note an reason. million; Steakhouse million; operator $X.XX However, were to open estimated time X.X% Restaurants to back transaction for XXXX to for the its million related million is $XX.X $XX.X $XX the same-store increase to J. for portion now turn segment to calling rate $X.X thereof as increase acquisition from and to fiscal capital XX% $XXX $XX ranging and to from the restaurants, is the share. the outlook an Stoney anticipates Alexander's/Grill per that X.X%; update range the from additional Pub net call the I income business the proposed ranging revenue Restaurants, sales effective share XXXX call. on any to to and earnings any for morning's the

Instructions]. [Operator

of comes first Our today Slabaugh Will question from line the with Stephens.

ask the primary big have to that that maybe you Or the to saw there's you with contributed first there. posted were geographical may that you I if River, the want the big at quarter anything uptick numbers out? seen versus What in past? about benefits Stoney call to And the what in else have number? you anything saw

they once River the factors. reached Germantown state, many we restaurant that mature designed finally generate as seem to And maturity. has Well, sales One, we Stoney our acquired with of restaurants, there's gain. after same-store get several significant in they

River those three a mall lunch and XXXX, with we performing added in program is exceptionally they together locations performing is well. we performance restaurant really acquired on are worked lunch really locations, hard well we another We've their Stoney to putting lunch. also restaurant strong. for After that and So and exceptionally had

we quality Our is on work menu, X done Stoney at regular years or the the last with River. is. business the pleased growing where of are a We've really lot over X

the market observe was Except year only a issues. to last program, Stoneys at but we the that's slower the in little have any strong enough, geographic disappointing for Stoney Cumberland big we original River us we oddly a where drive, geographic didn't Atlanta. were two located of terms In anticipated, sort Mall, restaurant of than lunch was

so a market year Nashville tremendous or under pressure. I ago, the mentioned I on was call think the

in read starting number a to back but had lot here, in about our had can up. off so our openings build You the But build of restaurant trial. publication, it we've thing, it's of any two-year same Springs starting restaurant to it's up. a of And Nashville, dip, Coral

at So good have very had Strong accepted. been lunch performance programs the Stoney we've overall, business. River,

restaurant and year The doing a future. we is last we going It's But cost differential bit harder was We think because do well. difference the capital little lunch maximize parking. Stoney only totally a makes door's We doing very this we're definitely dinner at value cannibalize one can't dinner. is site think off move and it next that a better the is find that, that we to so are did the in to how dinner bank River. But to lunch small, model only.

were Got it. wanted didn't a of little mentioned talk it of concepts. lot ask on the on of did And bit at look also couple in maybe we the have a about And But how months, heavily release. that I the press sounds about basis? It to the weighed a more? focus about momentum quarter-to-date you underlying past markets you for and feel in weather concepts can you that forward that go pretty weather, momentum like if the both as to trends

overall, We But We take some to got weather Nashville a Atlanta the weather. up good real which always is sales same-store markets, mid-South, all hit on feel Memphis, in We went is bounced back. Yes, one destroys back bad away, to bad we got markets. us. the these which when Michigan, snow some But in the weather, had about which markets hit very right rare. did have good momentum. trends. popped our sales of big strongest

continuing. of the one don't any geographic point down a in Atlanta restaurant sort restaurants Those except our issues, stronger, for points in sales Our softness same-store week We see of, is is two the and West and some the market sales one sales week. J. here End really performers next up in Nashville Alexander's Stoney are, quarter.

not is that Fortunately, our great. exposure

the in we restaurant of sales Michigan, except continues a get competition grow stable. all in markets, good X quarter, of one. to program exception our up top when Cumber the time. in on we pretty normal where That's Florida, for lunch from or Ohio's and Mall Most have restaurants the in restaurant the see the is different to usually of first Stoneys. been other grow, things national basis, time pretty that X grow But and the With

operating I So our strong. weather, outlook minus for the very groups, would is say, both

dislocation little what talk the bit and just made. lot kind USDA to a you the Great. of, the And lot made. seen seeing XXXX? heard you've since commentary fourth Can and lastly, in we curious, on in beef ended quarter about other, you into the rising then We've about the you led year what to that? that movement we're a more about think some saw follow-up you also, revised But that and as what XQ and I'm what work makes that

think year. way back the I Will, to Well to to explain last the beginning Sure. best beef, the of go is

beef part tenderloins we under ribeyes significant issues them. Our tenderloin a at significant pressure. really There some It nine sort to did to and J. River we was, pretty our data Stoney like going fourth small was XX% were quarter, market. Alexander's. going be really, beef to a were spike and really compare say, of we to more suppliers for big, issues. than saw fourth the buy to hard quarter we expected forecast forecast for in again, some I'm anticipated. our it it we a said The in of months accounts even that be of expect is a was going knew quality And were the costs the the Ribeye but But to rig cattle to not find spike. we had or favorable get and of and higher year. spike substitution lay They moderate from numbers. they a first

China on that's know could millions the people just on impact Our not that, impact how back impact, Chinese theory the prices holidays or still one have market of did talk right happy hungry on now, you producers, say was I drop the beef of accurate. dropped this. if say producers after level We're margins. but don't that. The very coming beef by of many buying All beef had prices. now the that. But beef to no immediately an and exception. some pricing they'll They not I U.S. in China deny with had but Cargill significant any suspect the have

within we to quarter having though very year still was first and even high range much the quality we're pay to favorable quarter, more last our premiums fourth Abundance guidelines. the out get very, beef so market, running we're compared well in normal there year, our last so favorable, of to to The not spec. pretty are but

the we the a with So was they one of is country but And too. no it explanation. did not fourth outlook work that said agrees our beef I shaker in the any because coming the around that we didn't and well, quarter good mine, heard know were confidence suppliers so. we shock, good. gave same thing in But you with was all me, that

for closing [Operator this turn Lonnie back I'll Instructions]. floor time, Stout At remarks. to the

Thank being proposed all And The the of you indeed eventful Alexander's was Restaurant you acquisition was Nine thank announcement so year and the an for of for of Included call. our one much. Holdings. Ninety Pub. XXXX on you

of appreciative We support that representing out of of was the from we the disappointed level were XX% the very XX not many shareholders, disinterested merger approved by shareholders. largest were stock. contacted got we participation shareholder, and we and reached While our proposed of the

season at of to buoyed discussing received. a of to with considerable year XXXX. strong end shareholder investors. We feedback We about and lot corporate to the We that of many new them. we've we've very some the concerns also out has the momentum, reached receptive been hearing among obtained with board board the governance a by items, our holiday started And retail shared that

it the noted, of the representing in about Midwestern the and for of necessary was of were close in accounted we bodes two Valentine's Through card we the issue harsh about for we quarter first markets have of $XX,XXX. our were our we weather Southern usually year of early as sales days, especially found we in future. restaurant the Our markets. to One accounted of closed winter encouraging the weeks revenue concepts. revenue parts some had total well a our restaurants and gift we which That encountered, as ago, very for of a same in six days, A XX lost first Day loss total quarter. for $XXX,XXX period, during --

be to positive of to relatively cost to relative yesterday's sharply leadership the we're newer building profitability. of during position I Our focused restaurant our the XXXX. over set back expected postopening tracking periods. are to We business levels for that progress line the quarter a food And Every success ahead In on as operating operator. we compared first our summary, restaurants. pleased our will should turn our Today, hold that Thank confident optimistic remains in and Holdings. to we locations, to of will anticipate XXXX, continued noted press I'd of historical you. to remain like earlier. that delivery release, and competitive making on sure focused planned. forward. they in up call in newer made are mentioned restaurants professional the location that ramp service. anticipate to move trends towards strengthening new able we of our as we've to one outstanding separate from as In organically we of will be Beef well, prices We're construction the due of challenges as continue launch all overcome, year And sales has we we're a that Alexander's that stable, J.

may And call. you time, this does this At conference conclude today's disconnect.