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J Alexander’s chopping up strategic ideas
Posted on Monday, 12 August 2019 12:45
Shares in J Alexander’s Holdings rose 9.2 per cent in after-hours trading on 9th August 2019, after the restaurant group announced its second quarter financial results and plans to review strategic alternatives.
The latter is part of the company’s efforts to maximise stockholder value, agreeing to work with financial and legal advisors to explore a sale, merger, a large investment, share repurchase or the acquisitions of complementary dining concepts to increase revenue base and operating leverage.
J Alexander has hired Piper Jaffray & Co to assist in this process and while it has not set a timetable for when the review will be finished, it will make a further announcement as and when it deems it necessary.
The Tennessee-headquartered group, which manages about 46 restaurants across the US, also cautioned there can be no guarantee that exploring alternatives will lead to a deal being reached.
Chairman Lonnie Stout said: “Recent transactions for companies in the upscale casual dining segment make this potential path more attractive now as we contemplate how to best position the company for the future.
“In addition to our board’s strategic review process, we will continue to execute our strategic and operational plan to deliver significant value to our shareholders as well as to deliver exceptional food and professional service in a sophisticated and relaxed atmosphere to each of our guests.”
At the same time, J Alexander also released the financial results for the six months ended 30th June 2019, with net sales rising 3.8 per cent to USD 126.96 million, compared to USD 122.33 million in the corresponding period of 2018.
The business posted adjusted earnings before interest, taxes, depreciation and amortisation of USD 14.28 million in H1 2019, representing a slight increase on USD 14.16 million in H1 2018.
J Alexander owns and operates three complementary dining concepts, including one under its own moniker, Redlands Grill and Stoney River Steakhouse and Grill.
The company’s stock reached USD 11.74 at 18:55 after the bell rang on 9th August 2019, following the release of its financials and the announcement of the strategic review, which gives the group a market capitalisation of USD 172.52 million.
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