J. Alexander’s Holdings could be on the move. Lonnie J. Stout II, executive chairman of the multi-concept company, referenced the red-hot M&A climate for restaurants ahead of Friday’s second-quarter report. “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,” he said in a statement.

The “potential path,” concerns what J. Alexander’s called an expansion of its “review of strategic alternatives.” One option, the company said, is a possible merger or sale. Also, a strategic, large investment in the company (similar perhaps to the $200 million deal Papa John’s struck earlier with Starboard), accompanied by a “significant” share repurchase; or the acquisition of complementary concepts to increase J. Alexander’s revenue base and operating leverage.

So, J. Alexander’s could be sold, buy someone else, or take on a strategic partner. None of those alternatives are assured, however, J. Alexander’s said in a release. Piper Jaffray & Co. is serving as a financial adviser during the process.

“Our board is fully committed to maximizing shareholder value and believes that expanding our ongoing strategic review process is in the best interests of our shareholders,” Stout said. “…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.”

J. Alexander’s has no timetable for completion of the review process. It hasn’t made a decision to pursue any of those strategic alternatives, either, the company said.

But, in the meantime, it won’t provide any updates “unless or until it determines that further disclosure is appropriate or necessary.” The company also suspended its quarterly conference calls until completion.

Nashville, Tennessee-based J. Alexander’s, which operates 46 restaurants in 16 states, said the review would not have an impact on customers, suppliers or employees. It won’t influence operations, which are “continuing as usual.”

The news came as J. Alexander’s posted net sales of $62.229 million in Q2—an increase of 3 percent from $60.42M in the prior-year period.

For J. Alexander’s/Grill restaurants, average weekly same-store sales were $114,800, an increase of 0.3 percent from $114,400 last year. Stoney River Steakhouse and Grill saw its average weekly same-store sales come in at $78,600, also up 0.3 percent from $78,400 in Q2 2018.

Average weekly guest counts within the company’s J. Alexander’s/Grill locations in Q2 declined 1.3 percent, year-over-year, while average weekly guest counts at Stoney River rose 2.4 percent. Average guest checks for the combined J. Alexander’s/Grill concepts increased 1.5 percent, from $31.69 to $32.17. Average guest checks at Stoney River dropped 0.9 percent from $41.90 to $41.51.

Menu pricing was up roughly 0.9 percent at J. Alexander’s and 0.5 percent at Stoney River.

Income from continuing operations (before income taxes) was $2.244 million compared to $2.203 million. J. Alexander’s recorded net income of $2.168 million in the quarter. It was $2.105 million in the year-ago period.

There were a few reasons for the dip, including a $205,000 consulting fee under a management agreement with Black Knight Advisory Services and transaction (now terminated), contested proxy, and other related expenses of $651,000 related to J. Alexander’s solicitation of proxies from shareholders at its 2019 annual meeting. Last year, the figure was just $7,000.

“We were particularly encouraged with increasing guest counts and improving sales in selected new restaurants within our J. Alexander’s/Grill collection,” said Mark A. Parkey, president and CEO, in a statement. “As noted in prior earnings releases, several of these restaurants have taken longer than expected to generate significant guest trial. During the second quarter, we saw consistent and significant improvement in guest counts at these locations, with our three newest J. Alexander’s restaurants all posting positive results with respect to the traffic trend on a comparative basis. Indications are that this trend will continue through the last half of 2019.”

Stony River’s results lapped a 6.2 percent same-store sales result from last year. “We are confident that the success of our efforts will lead to continued gains in same store sales from this restaurant group in the third and fourth quarters of the year,” he said.

“While we are pleased that both restaurant concepts generated positive same store sales in the second quarter, we will not be fully satisfied with our overall performance in the J. Alexander’s/Grill restaurant group until our guest traffic and sales ramp up to higher targeted levels,” Parkey added. “As noted in our first quarter release, we have continued to see competitive intrusion into certain of our long-established markets, which coupled with other market-specific external factors, may continue to temporarily impact guest traffic in those particular markets for the balance of 2019.”

J. Alexander’s also operates Redlands Grill, which is scheduled to open a San Antonio location in fiscal 2020.

What other activity is J. Alexander’s referencing?

In June, Del Frisco’s, which bears some similarities to J. Alexander’s in size and offering, entered into a definitive agreement to be purchased by private-equity firm L Catterton. L Catterton, which is no stranger to the restaurant space with investments in Noodles & Company, Uncle Julio’s, Hopdoddy, Chopt, Anthony’s Coal Fired Pizza, and others, said it was buying the restaurant group in an all-cash transaction valued at about $650 million. The agreed price was $267.3 million but included debt. As of March 26, Del Frisco’s had $336.1 million in debt.

Del Frisco’s stockholders were set to receive $8 per share, representing a 22 percent premium to the closing price on December 19, 2019—the last day trading prior to the company’s announcement it was exploring strategic alternatives. It was also a premium of about 21 percent to Del Frisco’s 30-day volume weight average price ended on June 21. Del Frisco’s runs 16 Double Eagle Steakhouses, 24 Del Frisco’s Grilles, 17 Barcelona Wine Bars, and 21 Bartacos across 17 states and Washington, D.C.

Just a few weeks ago, Ares Management Corp.’s private-equity division agreed to invest in 35-unit Cooper’s Hawk Winery & Restaurants. In the deal, Ares bought a stake from Connecticut-based KarpReilly, who has held a minority position since 2009. While financial terms of the deal were not disclosed, it valued the growing chain at about $800 million.

J. Alexander’s itself has been mired in combative transaction talks in recent months, which were part of the brand’s added costs it noted earlier.

Activist investor Ancora Advisors offered to buy the company in June for $11.75 per share, or $172 million in total for the parts of the company it does not currently hold.

J. Alexander’s responded by saying the deal was “nowhere near a full and fair value for the sale of our company.”

While Ancora, which owns 9 percent of J. Alexander’s stock, said the price represented a 24 percent premium to the unaffected share price prior to its schedule 13D filing on March 12, J. Alexander’s said it failed to disclosed that the figure is more than 12 percent lower than the 52-week trading higher and nearly 22 percent lower than the prevailing equity analyst price target for J. Alexander’s.

“Further, our board strongly doubts whether Ancora’s proposal is a bona fide offer,” the company said.

“We view Ancora’s spurious proposal and open attack as a publicity attempt intended to bolster Ancora’s future fundraising and line their pockets with fees,” J. Alexander’s added.

Later in the month, shareholders handed a victory to the activist investor, with more than 60 percent submitting “withhold” votes on two directors, Timothy Janszen and Ronald Maggard. These were preliminary results. Ancora claimed the pair had conflicts of interest after J. Alexander’s failed merger last year with Ninety Nine Restaurants. Janszen is CEO of Newport Global Advisors, which holds a 30 percent stake in Ninety Nine. Maggard was on the board of a Fidelity subsidiary (Fidelity National Financial would have taken control in the proposed merger). He resigned before the deal was announced.

The vote was nonbinding. Ancora CEO Fred DiSanto said in a statement that “shareholders made their voices heard loud and clear, and now it is time for the board to immediately conduct a strategic review process, in which Ancora fully intends to participate, and sell the company to the highest bidder.”