J. Alexander's — Merger or Acquisition (January 2018)
23 slides from J. Alexander's's merger presentation, Jan 8, 2018
Slide 1: Acquisition of 99 Restaurants
Acquisition of 99 Restaurants January 8, 2018
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
Cautionary Statement Regarding Forward-Looking Statements In connection with the safe harbor established under the Private Securities Litigation Reform Act of 1995, J. Alexander’s Holdings, Inc. (the “Company,” “J. Alexander’s” or “JAX”) cautions that certain information contained or incorporated by
Slide 3: Additional Information
Additional Information Additional Information and Where to Find It In connection with the proposed merger, the Company has filed with the SEC a definitive proxy statement on Schedule 14A on December 21, 2017, which has been mailed to the Company’s shareholders on or about December 22, 2017. SHAREHOL
Slide 4: Transaction
Transaction JAX to acquire 99 Restaurants 100% all-stock transaction valued at $199 million (including assumption of $20 million in net debt) based on the agreed-upon $11.00 per share value of the equity component of the merger consideration Combined company will remain public as JAX Merger Consider
Slide 5: Combination Provides Significant Value to JAX Shareholders
Combination Provides Significant Value to JAX Shareholders Compelling Financial Dynamics Expected to be accretive to earnings per share of JAX in future years (and would have represented an estimated additional $0.17 to 2016 basic EPS and $0.31 to 2016 fully diluted EPS, pro forma), excluding the as
Slide 6: 99 Restaurants Key Concept Statistics
2016 Average Check Size $15.85 # of Locations 106 2016 Average Unit Volume $2,881,000 Geographic Presence Northeast 2016 Alcohol Mix 18.5% Key Concept Statistics 99 Restaurants
Slide 7: J. Alexander's / Grills Key Concept Statistics
Key Concept Statistics 2016 Average Check Size $30.41 # of Locations 32 2016 Average Unit Volume $5,710,000 Primary Geographic Presence South & Midwest 2016 Alcohol Mix 17% J. Alexander’s / Grills
Slide 8: Stoney River Steakhouse and Grill Key Concept Statistics
Key Concept Statistics 2016 Average Check Size $44.13 # of Locations 12 2016 Average Unit Volume $3,858,000 Primary Geographic Presence South & Midwest 2016 Alcohol Mix 21% Stoney River Steakhouse and Grill
Slide 9: Historical financials by concept
FYE 2015A 2016A Net Units 41 43 Growth - 4.9% Revenue $217.9 $219.6 Growth 7.8% 0.8% Net Income $7.0 Adjusted EBITDA $24.3 EBITDA $18.9 Capital Expenditures $11.4 $ 20.8 Free Cash Flow(a) $(1.9) Net Units 105 106 Growth 1.0% 1.0% Revenue $293.3 $304.0 Growth 4.6% 3.6% Average Weekly Same Store Sales
Slide 10: Anticipated to Be Accretive to EPS in Future Years
Anticipated to Be Accretive to EPS in Future Years FYE 12/31 2018E* 2019E* JAX Rev enue(a) $255.9 $279.5 99 Restaurants Rev enue(a) 317.1 330.4 Total Revenue $573.0 $609.9 JAX EBI TDA $25.4 $31.4 99 Restaurants EBI TDA 31.0 33.6 (+) 99 Restaurants Cost Synergies 1.2 1.2 (+) Black Knight Management F
Slide 11: Increased Scale and New Opportunities for Growth
Increased Scale and New Opportunities for Growth J. Alexander’s (includes 2018 announced openings) 99 Restaurants 4 13 4 1 6 2 3 1 1 1 3 3 8 1 5 2 6 1 1 8 12 63 3
Slide 12: 99 Restaurants: Valuable Asset, Strong Regional Competitor
99 Restaurants: Valuable Asset, Strong Regional Competitor Unique Culture Tenured management team and staff Culture has retained leadership over time Low turnover rates Community-focused restaurants Employee-first culture Strong Regional Footprint in a Difficult Market Regional competitor with 106 c
Slide 13: 99 Restaurants: Financial and Operational Expectations
Adjustments include pre-opening expenses and impairment charges. JAX standard financial presentation does not adjust for non-cash rent expense. 99 Restaurants financials have been conformed to this presentation. Note: EBITDA defined as net income plus taxes, interest, depreciation, non-cash items (p
Slide 14: 99 Restaurants' projections are achievable
99 Restaurants’ projections are achievable Assume same store sales growth of 2% annually Assume payroll and benefits increase modestly (10-20 basis points) Assume cost of sales consistent at 28.5% of sales 99 Restaurants is positioned to continue generating positive results 99 Restaurants has driven
Slide 15: Don't Be Misled by Inaccurate Critiques (cont.)
Under the terms of a Transaction Services Agreement (“TSA”), JAX has agreed to reimburse FNH at a rate which approximates the current back office overhead costs allocated to 99 Restaurants, or approximately $517,000 per month, for up to 12 months after the transaction closes, which fees will be redu
Slide 16: Appendix
J.ALEXANDER'S Appendix
Slide 17: JAX Recapitalization and FNH Reorganization
JAX Recapitalization JAX creates Merger Sub and amends and restates its charter to increase the authorized shares of capital stock of the Company and authorize a new class of Class B Common Stock– existing Company common stock is renamed Class A Common Stock and will continue to be traded on the NYS
Slide 18: Additional Transaction Terms (cont.)
Additional Transaction Terms (cont.) Required Disinterested Shareholder Vote The approval of the holders of a majority of shares of Company common stock held as of December 19, 2017, excluding shares owned by a director or officer with a conflicting interest in the transaction or a related person of
Slide 19: Non-GAAP Financial Measures
Non-GAAP Financial Measures Fiscal Year 2016A JAX 99 Combined Net Income $ 7.0 $ 17.2 $ 24.2 Tax Expense 2.1 - 2.1 Interest Expense 0.6 - 0.6 Depreciation and Amortization 9.2 10.8 20.0 Non-cash Corporate Allocation Expense - 1.3 1.3 Tax Expense EBITDA 18.9 29.3 48.2 Loss Disposals of Fixed Assets 0
Slide 20: Reconciliation of Projected 2018 and 2019 EBITDA
2018E 2019E Net Income $ 19.0 $ 22.4 Tax Expense - - Interest Expense - - Depreciation and Amortization 10.8 9.9 Non-cash Corporate Allocation Expense 1.2 1.3 EBITDA 31.0 33.6 Loss Disposals of Fixed Assets - - Transaction and Integration Costs - - Non-cash Compensation - - Loss from Discontinued Op
Slide 21: Letter to shareholders mailed January 8, 2018
On January 8, 2018, the Company mailed the following letter to shareholders and posted the letter to www.jalexandersand99.com:
Slide 22: Your Vote Is Important!
YOUR VOTE IS IMPORTANT! Ninety on the enclosed WHITE proxy card TODAY. Dear Shareholder, WHITE orony card TODAY, seroxat SL. lon oS illon anual pect on pe The Transaction Creates Significant Value For Shareholders cash sup Nipety Ne has developed a succesful competitive poson ian area of the county
Slide 23: Cautionary Statement Regarding Forward-Looking Statements
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS In connection with the safe harbor established under the Private Securities Litigation Reform Act of 1995, J. Alexander’s Holdings, Inc. (the “Company,” “J. Alexander’s” or “JAX”) cautions that certain information contained or incorporated by
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