The leaders of J. Alexander’s Holdings have joined a handful of other local public companies in maxing out their available credit as they seek to buffer the blows from the spread of COVID-19.
The Nashville-based restaurant chain’s executives on Tuesday said they have drawn down the $17 million that was available to them under their lines of credit with Pinnacle Financial Partners. J. Alexander’s, which runs 47 restaurant under various flags in 16 states, now has about $26 million in cash on hand. Nearly all of the company’s locations have converted their operations to a carry-out model being staffed by managers and a few hourly staffers. About 3,400 hourly employees have been furloughed until dining in is an option again.
President and CEO Mark Parkey and his team estimate their cash on hand will be enough to fund the company through at least late summer. That doesn’t account for any possible government relief programs, and the team pointed out that J. Alexander’s team could potentially borrow against the six unencumbered restaurant sites it owns.
“While we have historically focused our guest experience on in-restaurant dining, we recognize that there is a need for us to expand our to-go and carry-out dining in each of the communities we serve,” Parkey said. “I could not be prouder of the teams at each of our restaurants, along with our veteran operations leadership group, for the way they have responded and adapted in these unprecedented times. Based on that response, I am confident that we will survive the current storm.”
Shares of J. Alexander’s (Ticker: JAX) were up more than 16 percent in late-Tuesday trading, double the overall market’s gains on a day investors grew more optimistic about the passage of a federal aid package. Over the past month, however, they have still lost half their value.
This post originally appeared in our sister publication, the Nashville Post.