UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________

FORM 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For quarterly period ended March 30, 2008

or

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________ to _________________________.

Commission file number: 1-8766

J. ALEXANDER’S CORPORATION

Tennessee		62-0854056
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)
3401 West End Avenue, Suite 260
P.O. Box 24300
Nashville, Tennessee		37202
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (615)269-1900

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.       Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer”, “non-accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one):

Large accelerated filer ¨		Accelerated filer ¨
Non-accelerated filer ¨		Smaller reporting company þ
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of May 12, 2008, 6,673,468 shares of the registrant’s Common Stock, $.05 par value, were outstanding.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

J. Alexander’s Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited in thousands, except share and per share amounts)

		March 30				December 30
		2008				2007
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	10,663			$	11,325
Accounts and notes receivable			3,323				3,365
Inventories			1,127				1,297
Deferred income taxes			1,047				1,047
Prepaid expenses and other current assets			1,487				1,596
TOTAL CURRENT ASSETS			17,647				18,630
OTHER ASSETS			1,420				1,341
PROPERTY AND EQUIPMENT, at cost, less allowances for depreciation and amortization of $47,031 and $45,698 at March 30, 2008 and December 30, 2007, respectively			78,994				78,551
DEFERRED INCOME TAXES			5,341				5,341
DEFERRED CHARGES, less amortization			711				716
		$	104,113			$	104,579

		March 30				December 30
		2008				2007
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable		$	4,343			$	5,885
Accrued expenses and other current liabilities			5,155				5,123
Unearned revenue			1,643				2,255
Current portion of long-term debt and obligations under capital leases			949				955
TOTAL CURRENT LIABILITIES			12,090				14,218
LONG-TERM DEBT AND OBLIGATIONS UNDER CAPITAL LEASES, net of portion classified as current			21,121				21,349
OTHER LONG-TERM LIABILITIES			6,602				6,431
STOCKHOLDERS’ EQUITY
Common Stock, par value $.05 per share: Authorized 10,000,000 shares; issued and outstanding 6,673,468 and 6,655,625 shares at March 30, 2008 and December 30, 2007, respectively			334				333
Preferred Stock, no par value: Authorized 1,000,000 shares; none issued			—				—
Additional paid-in capital			35,906				35,764
Retained earnings			28,060				26,484
TOTAL STOCKHOLDERS’ EQUITY			64,300				62,581
		$	104,113			$	104,579

See notes to condensed consolidated financial statements.

J. Alexander’s Corporation and Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited in thousands, except per share amounts)

		Quarter Ended
		March 30				April 1
		2008				2007
Net sales		$	37,486			$	36,525
Costs and expenses:
Cost of sales			12,048				11,714
Restaurant labor and related costs			11,699				11,224
Depreciation and amortization of restaurant property and equipment			1,445				1,279
Other operating expenses			7,412				6,924
Total restaurant operating expenses			32,604				31,141
General and administrative expenses			2,533				2,308
Pre-opening expense			44				—
Operating income			2,305				3,076
Other income (expense):
Interest expense			(452	)			(486	)
Interest income			62				175
Other, net			17				17
Total other expense			(373	)			(294	)
Income before income taxes			1,932				2,782
Income tax provision			(356	)			(757	)
Net income		$	1,576			$	2,025
Basic earnings per share		$	.24			$	.31
Diluted earnings per share		$	.23			$	.29

See notes to condensed consolidated financial statements.

J. Alexander’s Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited in thousands)

		Quarter Ended
		March 30				April 1
		2008				2007
Net cash provided by operating activities:
Net income		$	1,576			$	2,025
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property and equipment			1,461				1,300
Changes in working capital accounts			(520	)			(174	)
Other operating activities			280				197
			2,797				3,348
Net cash used in investing activities:
Purchase of property and equipment			(1,669	)			(881	)
Other investing activities			(71	)			(46	)
			(1,740	)			(927	)
Net cash used in financing activities:
Payments on debt and obligations under capital leases			(234	)			(222	)
Decrease in bank overdraft			(876	)			(1,171	)
Payment of cash dividend			(666	)			(657	)
Other			57				35
			(1,719	)			(2,015	)
(Decrease) increase in cash and cash equivalents			(662	)			406
Cash and cash equivalents at beginning of period			11,325				14,688
Cash and cash equivalents at end of period		$	10,663			$	15,094
Supplemental disclosures of non-cash items:
Property and equipment obligations accrued at beginning of period		$	610			$	123
Property and equipment obligations accrued at end of period		$	870			$	496

See notes to condensed consolidated financial statements.

J. Alexander’s Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE A — BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and rules of the United States Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the quarter ended March 30, 2008, are not necessarily indicative of the results that may be expected for the fiscal year ending December 28, 2008. For further information, refer to the consolidated financial statements and footnotes thereto included in the J. Alexander’s Corporation (the “Company’s”) Annual Report on Form 10-K for the fiscal year ended December 30, 2007.

     Net income and comprehensive income are the same for all periods presented.

NOTE B — EARNINGS PER SHARE

     The following table sets forth the computation of basic and diluted earnings per share:

(In thousands, except per share amounts)		Quarter Ended
		March 30				April 1
		2008				2007
Numerator:
Net income (numerator for basic and diluted earnings per share)		$	1,576			$	2,025
Denominator:
Weighted average shares (denominator for basic earnings per share)			6,663				6,571
Effect of dilutive securities			214				328
Adjusted weighted average shares (denominator for diluted earnings per share)			6,877				6,899
Basic earnings per share		$	.24			$	.31
Diluted earnings per share		$	.23			$	.29

NOTE C — INCOME TAXES

     Income tax expense for the first quarter of 2008 has been provided for based on an estimated effective tax rate of approximately 18.4% expected to be applicable for the 2008 fiscal year. For the quarter ended April 1, 2007, the effective tax rate was 27.2%. The effective income tax rates differ from the statutory federal income tax rate of 34% due to the effect of employee FICA tip tax credits (a reduction in income tax expense) partially offset by the effect of state income taxes.

NOTE D — COMMITMENTS AND CONTINGENCIES

     As a result of the disposition of its Wendy’s operations in 1996, the Company remains secondarily liable for certain real property leases with remaining terms of one to eight years. The total estimated amount of lease payments remaining on these 12 leases at March 30, 2008 was approximately $2.3 million. Also, in connection with the sale of its Mrs. Winner’s Chicken & Biscuit restaurant operations in 1989 and certain previous dispositions, the Company remains secondarily liable for certain real property leases with remaining terms of one to five years. The total estimated amount of lease payments remaining on these 20 leases at March 30, 2008, was approximately $1.0 million. Additionally, in connection with the previous disposition of certain other Wendy’s restaurant operations, primarily the southern California restaurants in 1982, the Company remains secondarily liable for real property leases with remaining terms of one to five years. The total estimated amount of lease payments remaining on these 9 leases as of March 30, 2008, was approximately $600,000.

     The Company is from time to time subject to routine litigation incidental to its business. The Company believes that the results of such legal proceedings will not have a materially adverse effect on the Company’s financial condition, operating results or liquidity.

NOTE E — RECENT ACCOUNTING PRONOUNCEMENTS

     In 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 provides guidance for using fair value to measure assets and liabilities. The standard expands required disclosures about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. SFAS 157 is effective for fiscal years beginning after November 15, 2007, except for nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis, which have been deferred for one year. Adoption of this Statement at the beginning of fiscal 2008 had no impact on the Company’s Condensed Consolidated Financial Statements.

     In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”), which gives entities the option to measure eligible financial assets and financial liabilities at fair value on an instrument by instrument basis which are otherwise not permitted to be accounted for at fair value under other accounting standards. The election to use the fair value option is available when an entity first recognizes a financial asset or financial liability. Subsequent changes in fair value must be recorded in earnings. This Statement is effective as of the beginning of a company’s first fiscal year after November 15, 2007. Adoption of this Statement at the beginning of fiscal 2008 had no impact on the Company’s Condensed Consolidated Financial Statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

RESULTS OF OPERATIONS

Overview

     J. Alexander’s Corporation (the “Company”) operates upscale casual dining restaurants. At March 30, 2008, the Company operated 30 J. Alexander’s restaurants in 12 states. The Company’s net sales are derived primarily from the sale of food and alcoholic beverages in its restaurants.

     The Company’s strategy is for J. Alexander’s restaurants to compete in the restaurant industry by providing guests with outstanding professional service, high-quality food, and an attractive environment with an upscale, high-energy ambiance. Quality is emphasized throughout J. Alexander’s operations and substantially all menu items are prepared on the restaurant premises using fresh, high-quality ingredients. The Company’s goal is for each J. Alexander’s restaurant to be perceived by guests in its market as a market leader in each of the categories above. J. Alexander’s restaurants offer a contemporary American menu designed to appeal to a wide range of consumer tastes. The Company believes, however, that its restaurants are most popular with more discriminating guests with higher discretionary incomes. J. Alexander’s typically does not advertise in the media and relies on each restaurant to increase sales by building its reputation as an outstanding dining establishment. The Company has generally been successful in achieving sales increases in its restaurants over time using this strategy. Currently, however, the Company is experiencing decreases in same store sales as is further discussed under Net Sales.

     The restaurant industry is highly competitive and is often affected by changes in consumer tastes and discretionary spending patterns; changes in general economic conditions; public safety conditions or concerns; demographic trends; weather conditions; the cost of food products, labor and energy; and governmental regulations. Because of these factors, the Company’s management believes it is of critical importance to the Company’s success to effectively execute the Company’s operating strategy and to constantly evolve and refine the critical conceptual elements of J. Alexander’s restaurants in order to distinguish them from other casual dining competitors and maintain the Company’s competitive position.

     The restaurant industry is also characterized by high capital investment for new restaurants and relatively high fixed or semi-variable restaurant operating expenses. Because a significant portion of restaurant operating expenses are fixed or semi-variable in nature, changes in sales in existing restaurants are generally expected to significantly affect restaurant profitability because many restaurant costs and expenses are not expected to change at the same rate as sales. Management believes that excellence in restaurant operations, and particularly providing exceptional guest service, will increase net sales in the Company’s restaurants over time and will support menu pricing levels which allow the Company to achieve reasonable operating margins while absorbing the higher costs of providing high-quality dining experiences and operating cost increases.

     Changes in sales for existing restaurants are generally measured in the restaurant industry by computing the change in same store sales, which represents the change in sales for the same group of restaurants from the same period in the prior year. Same store sales changes can be the result of changes in guest counts, which the Company estimates based on a count of entrée items sold, and changes in the average check per guest. The average check per guest can be affected by menu price changes and the mix of menu items sold. Management regularly analyzes guest count, average check and product mix trends for each restaurant in order to improve menu pricing and product offering strategies. Management believes it is important to maintain or increase guest counts and average guest checks over time in order to improve the Company’s profitability.

     Other key indicators which can be used to evaluate and understand the Company’s restaurant operations include cost of sales, restaurant labor and related costs and other operating expenses, with a focus on these expenses as a percentage of net sales. Since the Company uses primarily fresh ingredients for food preparation, the cost of food commodities can vary significantly from time to time due to a number of factors. The Company generally expects to increase menu prices in order to offset the increase in the cost of food products as well as increases which the Company experiences in labor and related costs and other operating expenses, but attempts to balance these increases with the goals of providing reasonable value to the Company’s guests and maintaining same store sales growth. Management believes that restaurant operating margin, which is net sales less total restaurant operating expenses expressed as a percentage of net sales, is an important indicator of the Company’s success in managing its restaurant operations because it is affected by the level of sales achieved, menu pricing strategy, and the management and control of restaurant operating expenses in relation to net sales.

     The number of restaurants opened or under development in a particular year can have a significant impact on the Company’s operating results because pre-opening expense for new restaurants is significant and most new restaurants incur operating losses during their early months of operation.

     Because large capital investments are required for J. Alexander’s restaurants and because a significant portion of labor costs and other operating expenses are fixed or semi-variable in nature, management believes the sales required for a J. Alexander’s restaurant to break even are relatively high compared to many other casual dining concepts and that it is necessary for the Company to achieve relatively high sales volumes in its restaurants in order to achieve desired financial returns. The Company’s criteria for new restaurant development target locations with high population densities and high household incomes which management believes provide the best prospects for achieving attractive financial returns on the Company’s investments in new restaurants. The Company expects to open three new restaurants in 2008.

     The following table sets forth, for the fiscal years indicated, (i) the items in the Company’s Condensed Consolidated Statements of Income expressed as a percentage of net sales, and (ii) other selected operating data:

		Quarter Ended
		March 30				April 1
		2008				2007
Net sales			100.0	%			100.0	%
Costs and expenses:
Cost of sales			32.1				32.1
Restaurant labor and related costs			31.2				30.7
Depreciation and amortization of restaurant property and equipment			3.9				3.5
Other operating expenses			19.8				19.0
Total restaurant operating expenses			87.0				85.3
General and administrative expenses			6.8				6.3
Pre-opening expense			.1				—
Operating income			6.1				8.4
Other income (expense):
Interest expense			(1.2	)			(1.3	)
Interest income			.2				.5
Other, net			—				—
Total other expense			(1.0	)			(.8	)
Income before income taxes			5.2				7.6
Income tax provision			(.9	)			(2.1	)
Net income			4.2	%			5.5	%
Note: Certain percentage totals do not sum due to rounding.
Restaurants open at end of period			30				28
Average weekly sales per restaurant (1):
All restaurants		$	96,600			$	100,300
Percent (decrease)			(3.7	)%
Same store restaurants (2)		$	97,800			$	100,300
Percent (decrease)			(2.5	)%

(1)		The Company computes average weekly sales per restaurant by dividing total restaurant sales for the period by the total number of days all restaurants were open for the period to obtain a daily sales average, with the daily sales average then multiplied by seven to arrive at weekly average sales per restaurant. Days on which restaurants are closed for business for any reason other than the scheduled closure of all J. Alexander’s restaurants on Thanksgiving day and Christmas day are excluded from this calculation. Average weekly same store sales per restaurant are computed in the same manner as described above except that sales and sales days used in the calculation include only those for restaurants open for more than 18 months. Revenue associated with reductions in liabilities for gift cards which are considered to be only remotely likely to be redeemed is not included in the calculation of average weekly sales per restaurant or average weekly same store sales per restaurant.
(2)		Includes the twenty-eight restaurants open for more than eighteen months.

Net Sales

     Net sales increased by $961,000, or 2.6%, in the first quarter of 2008 compared to the first quarter of 2007. This increase was due to net sales generated by two new restaurants opened in the fourth quarter of 2007 which more than offset a decrease in net sales in the same store restaurant base.

     The reported average weekly consolidated and same store sales per restaurant have been adjusted for the effect of 15 sales days and estimated net sales of $215,000 lost in the first quarter of 2008 due to a fire at the Company’s Denver restaurant and severe winter weather conditions in the Ohio market. Also, the Company’s fiscal calendar resulted in New Year’s Eve, when the Company typically experiences much higher than normal net sales, being included as the first day of the first fiscal quarter of 2008, but not being included in the first quarter of 2007. Management estimates that average weekly same store sales excluding the first day of the first fiscal quarter of both 2008 and 2007 decreased by 3.3% rather than the 2.5% decrease reported for the full quarter.

     Management estimates the average check per guest, including alcoholic beverage sales, increased by 1.9% to $24.82 in the first quarter of 2008 from $24.35 in the first quarter of 2007. Management believes this increase was due primarily to the effect of higher menu prices which it estimates averaged approximately 1.3% more in the first quarter of 2008 than in the same quarter of 2007. This price increase estimate reflects menu price changes, without regard to any change in product mix because of price increases, and may not reflect amounts effectively paid by the customer. Management estimates that weekly average guest counts decreased on a same store basis, as adjusted for sales days lost for the first quarter of 2008, by approximately 4.2% in the first quarter of 2008 compared to the first quarter of 2007.

     The Company’s same store sales have decreased in most weeks since mid-September of 2007. Management believes these decreases, as well as recent guest count losses, are due to a significant slowdown in discretionary consumer spending due to the effects of rising inflation, especially for food and fuel, the tightening of consumer credit and general concerns about the U.S economy. The J. Alexander’s restaurants most impacted by prevailing economic conditions in the first quarter of 2008 were primarily in the Company’s Ohio and Chicago markets.

     Further, management believes that increasing same store sales will be very difficult until consumers regain their confidence and consumer spending improves. Because, as previously discussed, a significant portion of the Company’s labor costs and other restaurant operating expenses are fixed or semi-variable in nature, management expects that continued decreases in same store sales will continue to place pressure on restaurant operating margins in 2008, especially given management’s expectation that input costs and other restaurant operating expenses will also continue to increase, mitigated to some extent by management’s change in beef purchasing described below.

Restaurant Costs and Expenses

     Total restaurant operating expenses increased to 87.0% of net sales in the first quarter of 2008 from 85.3% in the first period of the previous year due primarily to the effect of lower same store sales and the two new restaurants opened in the fourth quarter of 2007. Restaurant

operating margins decreased to 13.0% in the first quarter of 2008 from 14.7% in the first quarter of 2007.

     Cost of sales, which includes the cost of food and beverages, was 32.1% of net sales in the first quarters of both 2008 and 2007 as the effect of menu price increases and lower prices paid for poultry products in the 2008 quarter offset higher input costs for a number of other food products.

     Beef purchases represent the largest component of the Company’s cost of sales and comprise approximately 28% to 30% of this expense category. In recent years the Company has entered into fixed price beef purchase agreements in an effort to minimize the impact of significant increases in the market price of beef. However, because of uncertainty in the beef market and the high prices at which beef has been quoted to the Company on a forward fixed price basis relative to current market prices, the Company has not entered into a fixed price beef purchase agreement to replace the agreement which expired in March of 2008, and has purchased beef based on weekly market prices since that time. Although market prices are currently substantially lower than contract prices paid by the Company for beef for most of 2007, this strategy exposes the Company to variable market conditions and there can be no assurance that the price of beef will not increase significantly. Management will continue to monitor the beef market in 2008 and if there are significant changes in market conditions or attractive opportunities to contract later in the year, will consider entering into a fixed price purchasing agreement.

     Management expects the Company to experience increases in many of the food commodities it purchases in 2008, and believes a significant factor which will contribute to such increases is the increased price of petroleum which has increased fuel costs as well as the price of corn and other commodities as the result of increased demand for corn for use in producing corn ethanol as an alternative fuel source. Management is uncertain at this time whether it will raise menu prices in response to such increases because the Company is experiencing decreases in same store guest counts and continues to have concerns about spending pressures already being faced by consumers.

     Restaurant labor and related costs increased to 31.2% of net sales in the first quarter of 2008 from 30.7% in the first quarter of 2007. The increase was due primarily to the effects of higher labor costs incurred in the two new restaurants opened in the fourth quarter of 2007 and to lower same store sales, which effects were partially offset by lower incentive compensation and other benefits expense.

     The Company estimates that the impact of increases in minimum wage rates will be approximately $150,000 in 2008. Most of these increases relate to increases in minimum cash rates required by certain states to be paid to tipped employees. The increase in the federal minimum wage rate in 2007 has not had a significant impact on the Company because most of the Company’s non-tipped employees are already paid more than the federal minimum wage. The required federal minimum cash wage paid to tipped employees was not increased in 2007.

     Depreciation and amortization of restaurant property and equipment increased by $166,000 in the first quarter of 2008 compared to the first quarter of 2007 because of the effect of the new restaurants opened during the fourth quarter of 2007. The effect of the new

restaurants as well as the effect of lower same store sales resulted in an increase in 2008 in this expense category as a percentage of net sales.

     Other operating expenses, which include restaurant level expenses such as china and supplies, laundry and linen costs, repairs and maintenance, utilities, credit card fees, rent, property taxes and insurance, were 19.8% of net sales in the first quarter of 2008, compared to 19.0% of net sales in the first quarter of 2007. This increase was also due to the effects of the two new restaurants opened in the fourth quarter of 2007 and lower sales in the same store restaurant base.

General and Administrative Expenses

     General and administrative expenses, which include all supervisory costs and expenses, management training and relocation costs, and other costs incurred above the restaurant level, increased by $225,000 in the first quarter of 2008 versus the first quarter of 2007 due primarily to increases in training and relocation expense, accounting and auditing fees, and share-based compensation expense. These increases were partially offset by the absence in the 2008 quarter of bonus accruals for the corporate management staff, whereas such accruals were included in the first quarter of 2007.

Pre-Opening Expense

     Pre-opening expense consists of expenses incurred prior to opening a new restaurant and include principally manager salaries and relocation costs, payroll and related costs for training new employees, travel and lodging expenses for employees who assist with training new employees, and the cost of food and other expenses associated with practice of food preparation and service activities. Pre-opening expense also includes rent expense for leased properties for the period of time between the Company taking control of the property and the opening of the restaurant.

     Pre-opening expense of $44,000 was incurred in the first quarter of 2008 in connection with restaurants currently under development. The Company expects to incur substantial pre-opening expenses during the remainder of 2008 in connection with three new J.Alexander’s restaurants which are expected to open during the year.

Other Income (Expense)

     Interest expense decreased in the first quarter of 2008 compared to the first quarter of 2007 due to the effect of reductions in outstanding debt and capitalization of interest costs in connection with new restaurant development. Interest income decreased in the first quarter of 2008 compared to the first quarter of 2007 due to lower average balances of surplus funds invested in money market funds and lower interest rates earned on those funds.

     Interest income is expected to continue to decrease in 2008 due to the expected use of a significant portion of the Company’s surplus funds for restaurant development and lower expected yields on invested funds.

Income Taxes

     The Company’s estimated effective income tax rates were 18.4% and 27.2% for the first quarters of 2008 and 2007, respectively. These rates are lower than the statutory federal rate of 34% due primarily to the effect of FICA tip tax credits, with the effect of those credits being partially offset by the effect of state income taxes.

LIQUIDITY AND CAPITAL RESOURCES

     The Company’s capital needs are primarily for the development and construction of new J. Alexander’s restaurants, for maintenance of and improvements to its existing restaurants, and for meeting debt service requirements and operating lease obligations. Additionally, the Company paid cash dividends to all shareholders aggregating $666,000, $657,000 and $653,000 in January of 2008, 2007 and 2006, respectively, which dividends met the requirements to extend certain contractual standstill restrictions under an agreement with the Company’s largest shareholder. The Company may consider paying additional dividends in the future. The Company has met its needs and maintained liquidity in recent years primarily by use of cash flow from operations and the availability of a bank line of credit.

     The Company’s net cash provided by operating activities totaled $2,797,000 and $3,348,000 for the first quarters of 2008 and 2007, respectively. Management expects that future cash flows from operating activities will vary primarily as a result of future operating results. Cash and cash equivalents on hand at March 30, 2008 were approximately $10.7 million. In addition, at December 30, 2007, the Company had an account receivable for federal income taxes of approximately $1,100,000, a portion of which was used to satisfy estimated tax payments for the first quarter of 2008 and the remainder of which is expected to be received in 2008.

     The Company plans to open three new restaurants in 2008. Estimated cash expenditures for capital assets for 2008 are approximately $16.5 million, a significant portion of which represents the costs to develop the new restaurants planned for the year.

     Management believes cash and cash equivalents on hand at March 30, 2008 combined with cash flow from operations will be adequate to meet the Company’s capital needs for 2008. Management tentatively plans to open one restaurant in 2009 and two or three restaurants in 2010. It is possible, however, that no new restaurants will be opened in 2009 if the Company is unable to secure on terms acceptable to it one of a limited number of locations currently under consideration for opening next year. While management does not believe its longer-term growth plans will be constrained due to lack of capital resources, capital requirements for future growth could exceed funds currently on hand and which are expected to be generated by the Company’s operations. Management believes that, if needed, additional financing would be available for future growth through bank borrowing, additional mortgage or equipment financing, or the sale and leaseback of some or all of the Company’s unencumbered restaurant properties. There can be no assurance, however, that such financing, if needed, could be obtained or that it would be on terms satisfactory to the Company.

     A mortgage loan obtained in 2002 represents the most significant portion of the Company’s outstanding long-term debt. The loan, which was originally for $25 million, had an

outstanding balance of $21.7 million at March 30, 2008. It has an effective annual interest rate, including the effect of the amortization of deferred issue costs, of 8.6% and is payable in equal monthly installments of principal and interest of approximately $212,000 through November 2022. Provisions of the mortgage loan and related agreements require that a minimum fixed charge coverage ratio of 1.25 to 1 be maintained for the businesses operated at the properties included under the mortgage and that a funded debt to EBITDA (as defined in the loan agreement) ratio of 6 to 1 be maintained for the Company and its subsidiaries. The loan is secured by the real estate, equipment and other personal property of nine of the Company’s restaurant locations with an aggregate book value of $23.3 million at March 30, 2008. The real property at these locations is owned by JAX Real Estate, LLC, the borrower under the loan agreement, which leases them to a wholly-owned subsidiary of the Company as lessee. The Company has guaranteed the obligations of the lessee subsidiary to pay rents under the lease. JAX Real Estate, LLC, is an indirect wholly-owned subsidiary of the Company which is included in the Company’s Consolidated Financial Statements. However, JAX Real Estate, LLC was established as a special purpose, bankruptcy remote entity and maintains its own legal existence, ownership of its assets and responsibility for its liabilities separate from the Company and its other affiliates.

     The Company maintains a secured bank line of credit agreement which provides up to $10 million of credit availability for financing capital expenditures related to the development of new restaurants and for general operating purposes. The line of credit is secured by mortgages on the real estate of two of the Company’s restaurant locations with an aggregate book value of $7.3 million at March 30, 2008, and the Company has also agreed not to encumber, sell or transfer four other fee-owned properties. Provisions of the loan agreement require that the Company maintain a fixed charge coverage ratio of at least 1.5 to 1 and a maximum adjusted debt to EBITDAR (as defined in the loan agreement) ratio of 3.5 to 1. The loan agreement also provides that defaults which permit acceleration of debt under other loan agreements constitute a default under the bank agreement and restricts the Company’s ability to incur additional debt outside of the agreement. Any amounts outstanding under the line of credit bear interest at the LIBOR rate as defined in the loan agreement plus a spread of 1.75% to 2.25%, depending on the Company’s leverage ratio within a permitted range. The Company also pays a commitment fee of .125% to .3% per annum on the unused portion of the credit line, also depending on the Company’s leverage ratio. The maturity date of this credit facility is July 1, 2009 unless it is converted to a term loan under the provisions of the agreement prior to May 1, 2009. There were no borrowings outstanding under the line as of March 30, 2008.

     The Company was in compliance with the financial covenants of its debt agreements as of March 30, 2008. Should the Company fail to comply with these covenants, management would likely request waivers of the covenants, attempt to renegotiate them or seek other sources of financing. However, if these efforts were not successful, the unused portion of the Company’s bank line of credit would not be available for borrowing and amounts outstanding under the Company’s debt agreements could become immediately due and payable, and there could be a material adverse effect on the Company’s financial condition and operations.

OFF-BALANCE SHEET ARRANGEMENTS

     As of May 13, 2008, the Company had no financing transactions, arrangements or other relationships with any unconsolidated affiliated entities. Additionally, the Company is not a party to any financing arrangements involving synthetic leases or trading activities involving

commodity contracts. Operating lease commitments for leased restaurants and office space are disclosed in Note D, “Commitments and Contingencies”, to the Condensed Consolidated Financial Statements.

CONTRACTUAL OBLIGATIONS

     From 1975 through 1996, the Company operated restaurants in the quick-service restaurant industry. The discontinuation of these quick-service restaurant operations included disposals of restaurants that were subject to lease agreements which typically contained initial lease terms of 20 years plus two additional option periods of five years each. In connection with certain of these dispositions, the Company remains secondarily liable for ensuring financial performance as set forth in the original lease agreements. The Company can only estimate its contingent liability relative to these leases, as any changes to the contractual arrangements between the current tenant and the landlord subsequent to the assignment are not required to be disclosed to the Company. A summary of the Company’s estimated contingent liability as of March 30, 2008, is as follows:

Wendy’s restaurants (21 leases)		$	2,900,000
Mrs. Winner’s Chicken & Biscuits restaurants (20 leases)			1,000,000
Total contingent liability related to assigned leases		$	3,900,000

     There have been no payments by the Company of such contingent liabilities in the history of the Company.

RECENT ACCOUNTING PRONOUNCEMENTS

     In 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 provides guidance for using fair value to measure assets and liabilities. The standard expands required disclosures about the extent to which companies measure assets and liabilities at fair value, the information used to measure fair value, and the effect of fair value measurements on earnings. SFAS 157 is effective for fiscal years beginning after November 15, 2007, except for nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis, which have been deferred for one year. Adoption of this Statement at the beginning of fiscal 2008 had no impact on the Company’s Condensed Consolidated Financial Statements.

     In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”), which gives entities the option to measure eligible financial assets and financial liabilities at fair value on an instrument by instrument basis which are otherwise not permitted to be accounted for at fair value under other accounting standards. The election to use the fair value option is available when an entity first recognizes a financial asset or financial liability. Subsequent changes in fair value must be recorded in earnings. This Statement is effective as of the beginning of a company’s first fiscal year after November 15, 2007. Adoption of this Statement at the beginning of fiscal 2008 had no impact on the Company’s Condensed Consolidated Financial Statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

     The preparation of the Company’s Condensed Consolidated Financial Statements, which have been prepared in accordance with U.S. generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. On an ongoing basis, management evaluates its estimates and judgments, including those related to its accounting for gift card breakage, property and equipment, leases, impairment of long-lived assets, income taxes, contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

     Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties, and potentially result in materially different results under different assumptions and conditions. Management believes the following critical accounting policies are those which involve the more significant judgments and estimates used in the preparation of the Company’s Condensed Consolidated Financial Statements.

Revenue Recognition for Gift Cards: The Company records a liability for gift cards at the time they are sold by the Company’s gift card subsidiary. Upon redemption of gift cards, net sales are recorded and the liability is reduced by the amount of card values redeemed. Reductions in liabilities for gift cards which, although they do not expire, are considered to be only remotely likely to be redeemed and for which there is no legal obligation to remit balances under unclaimed property laws of the relevant jurisdictions, have been recorded as revenue by the Company and are included in net sales in the Company’s Condensed Consolidated Statements of Income. Based on the Company’s historical experience, management considers the probability of redemption of a gift card to be remote when it has been outstanding for 24 months.

Property and Equipment: Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the lesser of the asset’s estimated useful life or the expected lease term which generally includes renewal options. Improvements are capitalized while repairs and maintenance costs are expensed as incurred. Because significant judgments are required in estimating useful lives, which are not ultimately known until the passage of time and may be dependent on proper asset maintenance, and in the determination of what constitutes a capitalized cost versus a repair or maintenance expense, changes in circumstances or use of different assumptions could result in materially different results from those determined based on the Company’s estimates.

Lease Accounting: The Company is obligated under various lease agreements for certain restaurant facilities. At inception each lease is evaluated to determine whether it is an operating or capital lease. For operating leases, the Company recognizes rent expense on a straight-line basis over the expected lease term. Capital leases are recorded as an asset and an obligation at an amount equal to the lesser of the present value of the minimum lease payments during the lease term or the fair market value of the leased asset.

Certain of the Company’s leases include rent holidays and/or escalations in payments over the base lease term, as well as the renewal periods. The effects of the rent holidays and escalations have been reflected in rent expense on a straight-line basis over the expected lease term, which begins when the Company takes possession of or is given control of the leased property and includes cancelable option periods when it is deemed to be reasonably assured that the Company will exercise its options for such periods because it would incur an economic penalty for not doing so. Prior to 2006, rent expense incurred during the construction period for a restaurant was capitalized as a component of property and equipment. Beginning in 2006, any rent expense incurred during the construction period for a leased restaurant has been included in pre-opening expense.

Leasehold improvements and, when applicable, property held under capital lease for each leased restaurant facility are amortized on the straight-line method over the shorter of the estimated life of the asset or the expected lease term used for lease accounting purposes. Percentage rent expense is generally based upon sales levels and is typically accrued when it is deemed probable that it will be payable. Allowances for tenant improvements received from lessors are recorded as deferred rent obligations and credited to rent expense over the term of the lease.

Judgments made by the Company about the probable term for each restaurant facility lease affect the payments that are taken into consideration when calculating straight-line rent expense and the term over which leasehold improvements for each restaurant facility are amortized. These judgments may produce materially different amounts of depreciation, amortization and rent expense than would be reported if different assumed lease terms were used.

Impairment of Long-Lived Assets: When events and circumstances indicate that long-lived assets — most typically assets associated with a specific restaurant — might be impaired, management compares the carrying value of such assets to the undiscounted cash flows it expects that restaurant to generate over its remaining useful life. In calculating its estimate of such undiscounted cash flows, management is required to make assumptions, which are subject to a high degree of judgment, relative to the restaurant’s future period of operation, sales performance, cost of sales, labor and operating expenses. The resulting forecast of undiscounted cash flows represents management’s estimate based on both historical results and management’s expectation of future operations for that particular restaurant. To date, all of the Company’s long-lived assets have been determined to be recoverable based on management’s estimates of future cash flows.

Income Taxes: The Company accounts for income taxes in accordance with SFAS No. 109, “Accounting for Income Taxes”. This statement establishes financial accounting and reporting standards for the effects of income taxes that result from an enterprise’s activities during the current and preceding years. It requires an asset and liability approach for financial accounting and reporting of income taxes. The Company recognizes deferred tax liabilities and assets for the future consequences of events that have been recognized in its Consolidated Financial Statements or tax returns. In the event the future consequences of differences between financial reporting bases and tax bases of the Company’s assets and liabilities result in a net deferred tax asset, an evaluation is made of the probability of the Company’s ability to realize the future benefits of such asset. A valuation allowance related to a deferred tax asset is recorded

when it is more likely than not that all or some portion of the deferred tax asset will not be realized. The realization of such net deferred tax will generally depend on whether the Company will have sufficient taxable income of an appropriate character within the carry-forward period permitted by the tax law.

The Company had a net deferred tax asset at December 30, 2007 of $8,100,000, which amount included $3,898,000 of tax credit carryforwards. Management has evaluated both positive and negative evidence, including its forecasts of the Company’s future taxable income adjusted by varying probability factors, in making a determination as to whether it is more likely than not that all or some portion of the deferred tax asset will be realized. Based on its analysis, management concluded that for 2007 a valuation allowance was needed for federal alternative minimum tax (AMT) credit carryforwards of $1,657,000 and for tax assets related to certain state net operating loss carryforwards, the use of which involves considerable uncertainty. The valuation allowance provided for these items at December 30, 2007 was $1,712,000. Even though the AMT credit carryforwards do not expire, their use is not presently considered more likely than not because significant increases in earnings levels are expected to be necessary to utilize them since they must be used only after certain other carryforwards currently available, as well as additional tax credits which are expected to be generated in future years, are realized.

Failure to achieve projected taxable income could affect the ultimate realization of the Company’s net deferred tax asset. Because of the uncertainties associated with projecting future operating results, there can be no assurance that management’s estimates of future taxable income will be achieved and that there could not be an increase in the valuation allowance in the future. It is also possible that the Company could generate taxable income levels in the future which would cause management to conclude that it is more likely than not that the Company will realize all, or an additional portion of, its deferred tax asset. Any such revisions to the estimated realizable value of the deferred tax asset could cause the Company’s provision for income taxes to vary significantly from period to period, although its cash tax payments would remain unaffected until the benefits of the various carryforwards were fully utilized.

In addition, certain other components of the Company’s provision for income taxes must be estimated. These include, but are not limited to, effective state tax rates, allowable tax credits for FICA taxes paid on reported tip income, and estimates related to depreciation expense allowable for tax purposes. These estimates are made based on the best available information at the time the tax provision is prepared. Income tax returns are generally not filed, however, until several months after year-end. All tax returns are subject to audit by federal and state governments, usually years after the returns are filed, and could be subject to differing interpretations of the tax laws.

     The above listing is not intended to be a comprehensive listing of all of the Company’s accounting policies and estimates. In many cases, the accounting treatment of a particular transaction is specifically dictated by U.S. generally accepted accounting principles, with no need for management’s judgment in their application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result. For further information, refer to the Condensed Consolidated Financial

Statements and notes thereto included elsewhere in this filing which contain accounting policies and other disclosures required by U.S. generally accepted accounting principles.

FORWARD-LOOKING STATEMENTS

     In connection with the safe harbor established under the Private Securities Litigation Reform Act of 1995, the Company cautions investors that certain information contained in this Form 10-Q, particularly information regarding future economic performance and finances, development plans, and objectives of management is forward-looking information that involves risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by forward-looking statements. The Company disclaims any intent or obligation to update these forward-looking statements. The Company’s ability to pay a dividend will depend on its financial condition and results of operations at any time a dividend is considered or paid. Other risks, uncertainties and factors which could affect actual results include the Company’s ability to maintain satisfactory guest counts and increase sales and operating margins in its restaurants; changes in business or economic conditions, including rising food costs and product shortages; the effect of higher minimum hourly wage requirements; the effect of higher gasoline prices and other economic factors on consumer demand; availability of qualified employees; increased cost of utilities, insurance and other restaurant operating expenses; potential fluctuations in quarterly operating results due to seasonality and other factors; the effect of hurricanes and other weather disturbances which are beyond the control of the Company; the number and timing of new restaurant openings and its ability to operate them profitably; competition within the casual dining industry, which is very intense; competition by the Company’s new restaurants with its existing restaurants in the same vicinity; changes in consumer spending, consumer tastes, and consumer attitudes toward nutrition and health; expenses incurred if the Company is the subject of claims or litigation or increased governmental regulation; changes in accounting standards, which may affect the Company’s reported results of operations; and expenses the Company may incur in order to comply with changing corporate governance and public disclosure requirements of the Securities and Exchange Commission and the principal exchange or market on which the Company’s common stock is listed. See “Risk Factors” included in the Company’s Annual Report on Form 10-K for the year ended December 30, 2007 for a description of a number of risks and uncertainties which could affect actual results.

Item 4T. Controls and Procedures

	(a)		Evaluation of disclosure controls and procedures. The Company’s principal executive officer and principal financial officer have conducted an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) as of the end of the period covered by this quarterly report. Based on that evaluation, the Company’s principal executive officer and principal financial officer concluded that, as of the end of the period covered by this quarterly report, the Company’s disclosure controls and procedures were effective.
	(b)		Changes in internal controls. There were no changes in the Company’s internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On February 19, 2008, the Company sold 5,643 shares of its common stock to the Trustee of the J. Alexander’s Corporation Employee Stock Ownership Plan (the “ESOP”) for $8.86 per share, which was the market price of the stock on that date, for an aggregate purchase price of $49,997. In making the sale, the Company relied on the exemption from registration under Section 4(2) of the Securities Act of 1933, as amended. After giving effect to the transaction the ESOP owns 217,168 shares of common stock of the Company.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 6. Exhibits

(a) Exhibits:

Exhibit 10.1		J. Alexander’s Corporation Deferred Compensation Plan
Exhibit 31.1		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

J. ALEXANDER’S CORPORATION AND SUBSIDIARIES
INDEX TO EXHIBITS

Exhibit No.

Exhibit 10.1		J. Alexander’s Corporation Deferred Compensation Plan
Exhibit 31.1		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 31.2		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.