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Ancora Advisors Presentation May 2019 Ancora Disclaimer This - PowerPoint PPT Presentation

Ancora Advisors Presentation May 2019 Ancora Disclaimer This presentation is for discussion and general informational purposes only. It does not have regard to the specific investment objective, financial situation, suitability, or the

  1. Ancora Advisors Presentation May 2019

  2. Ancora Disclaimer This presentation is for discussion and general informational purposes only. It does not have regard to the specific investment objective, financial situation, suitability, or the particular need of any specific person who may receive this presentation, and should not be taken as advice on the merits of any investment decision. This presentation is not an offer to sell or the solicitation of an offer to buy interests in a fund or investment vehicle managed by Ancora Advisors, LLC (“Ancora”) and is being provided to you for informational purposes only. The views ex pressed herein represent the opinions of Ancora, and are based on publicly available information with respect to J. Alexander’s Holdings, In c. (the “Issuer”). Certain financial information and data used herein have been derived or obtained from public filings, including filings made by the Issuer with the Securities and Exchange Commission (“SEC”), and other sources. Ancora has not sought or obtained consent from any third party to use any statements or information indicated herein as having been obtained or derived from statements made or published by third parties. Any such statements or information should not be viewed as indicating the support of such third party for the views expressed herein. No warranty is made that data or information, whether derived or obtained from filings made with the SEC or from any third party, are accurate. No agreement, arrangement, commitment or understanding exists or shall be deemed to exist between or among Ancora and any third party or parties by virtue of furnishing this presentation. Except for the historical information contained herein, the matters addressed in this presentation are forward-looking statements that involve certain risks and uncertainties. You should be aware that actual results may differ materially from those contained in the forward-looking statements. Ancora shall not be responsible or have any liability for any misinformation contained in any third party SEC filing or third party report relied upon in good faith by Ancora that is incorporated into this presentation. There is no assurance or guarantee with respect to the prices at which any securities of the Issuer will trade, and such securities may not trade at prices that may be implied herein. The estimates, projections and pro forma information set forth herein are based on assumptions which Ancora believes to be reasonable, but there can be no assurance or guarantee that actual results or performance of the Issuer will not differ, and such differences may be material. This presentation does not recommend the purchase or sale of any security. Ancora reserves the right to change any of its opinions expressed herein at any time as it deems appropriate. Ancora disclaims any obligation to update the information contained herein. Under no circumstances is this presentation to be used or considered as an offer to sell or a solicitation of an offer to buy any security. Ancora Advisors LLC 2

  3. Table of Contents Introduction 4 5 Executive Summary 6 Company Overview 7 Ancora’s J. Alexander’s Ownership 8 J. Alexander’s Shareholder Returns 9 Strategic Issues 14 Governance Issues 16 Operational Issues 18 Equity Incentive Plan 19 Summary 20 Ancora Overview Ancora Advisors LLC 3

  4. Introduction Ancora Advisors, LLC urges shareholders of J. Alexander’s Holdings, Inc. to withhold their votes from the re -election of Timothy T. Janszen and Ronald B. Maggard, Sr. to the Board of Directors of JAX By withholding their votes for these directors, shareholders will send a clear message to JAX that: › The status quo is unacceptable – immediate change is required to address the Company’s continued underperformance › The Board must hold management accountable for its continuing execution failures › Shareholders will no longer tolerate a Board engaging in conflicted transactions that favor its own interests over that of shareholders › The Board should engage with Ancora on its proposal to acquire the Company and/or otherwise explore strategic alternatives Given the timing of the expiration of the Black Knight Advisory Services Agreement, Ancora believes it was more prudent to run a withhold campaign rather than nominating directors and potentially impacting the stock price, which could have caused further dilution for shareholders Ancora Advisors LLC 4

  5. Executive Summary › The Board unanimously supported the 99 Restaurants deal, which valued JAX at $11.00 per share, but unanimously rejected a preliminary proposal to acquire the Company at $11.75 by Ancora Advisors (“Ancora Proposal”) › Strategic The Board has shown a willingness to pursue strategic transactions using JAX equity currency, despite the meaningful Issues valuation discount to restaurant peers › We believe the Board should immediately run a strategic review focused on a sale or take private transaction to maximize value for shareholders › J. Alexander’s Board members all have ties back to Fidelity National Financial (“FNF”), despite FNF and affiliates now only owning approximately 14% of shares outstanding › Inherent conflicts of interest manifested themselves clearly in the 99 Restaurants deal and the Black Knight Advisory Governance Services Agreement Issues › In these cases, the Board appears to have elevated their own personal interests at the expense of JAX shareholders › Board composition and corporate governance practices are also highly problematic › Continued failure by the Board and management to meet stated unit growth targets of 10%. 2015-2018 CAGR of ~4% unit growth was less than half of stated development target of 10% annually Operational › Operating results have led to consistently declining returns on invested capital. Returns on incremental invested Issues capital have been NEGATIVE the last three years › Execution failures have resulted in dismal share price performance Source: Ancora, Company Filings Ancora Advisors LLC 5

  6. J. Alexander’s Company Overview Company Description Key Financials ($ in millions, except per share) • J. Alexander’s is an owner and operator of 46 $300.0 Total enterprise value $242.3 $233.3 restaurants across 16 states, with headquarters in $217.9 $219.6 $250.0 Share price $10.50 Nashville, TN and first location opened in 1991 $200.0 Shares out 14.7 Market cap $154.3 $150.0 • The Company operates 5 casual dining concepts: J. $100.0 $26.5 $24.6 $25.3 $26.0 Cash $6.7 Alexander’s (19), Redlands Grill (12), Lyndhurst Grill $50.0 Total debt 13.6 $0.0 (1), Overland Park Grill (1) and Stoney River Net debt $6.9 2015 2016 2017 2018 Steakhouse and Grill (13) Revenue Adj. EBITDA Adjustments (1) $6.3 • Average weekly sales per unit in 2018 of $112,900 EBITDA Adj TEV $167.5 12.1% 11.2% 10.8% 10.7% margin (1) Defered compensation obligations Share Price Performance (since spin) Management Overview In addition to restaurant • Lonnie Stout (Executive Chairman) – Former JAX CEO, $14.00 transitioned to Exec. Chairman role in May 2019 operations, JAX owns the $13.00 real estate (site and $12.00 • Mark Parkey (President & CEO) – Former CFO of JAX, promoted to CEO May 2019 $11.00 building) under 18 of the $10.00 • Jessica Hagler (Vice President, Chief Financial Officer, 46 locations $9.00 Treasurer, and Secretary) – Former Senior Manager – Audit at KPMG $8.00 $7.00 • Mike Moore (EVP & COO) $6.00 9/23/2015 9/23/2016 9/23/2017 9/23/2018 Note: market values priced as of 5/29/19 Source: Ancora, Factset, company filings Ancora Advisors LLC 6

  7. Ancora’s J. Alexander’s Ownership Ancora’s JAX Share Ownership, as Percentage of Total Outstanding (Year End) 12.0% 10.0% 9.2% 8.8% 8.7% 8.0% 6.0% 4.0% 3.2% 3.0% 2.0% 0.0% 0.0% Spin-Off 2015 2016 2017 2018 Today › Ancora is a long-term shareholder of J. Alexander’s, acquiring shares shortly after the spin-off in 2015 › Ancora currently beneficially owns approximately 8.8% of the total shares outstanding of J. Alexander’s › Parties associated with Fidelity National Financial currently own approximately 14% of JAX based on our estimates, but effectively control the entire Board of Directors Note: Spin- off date was 9/25/2015, today’s share count as of 1Q’19 Source: Ancora, company filings Ancora Advisors LLC 7

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