Cracker Barrel Urges Shareholders to Reject Nominations of Biglari and Cooley to Board of Directors
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Begins Mailing Proxy Statement for
November 15 th Annual Meeting -
Letter to
Shareholders Cites Company's Strong Business Performance and Share Price, New Management and Board Members - Continues to Question Motives and Business Conflicts of Biglari and Cooley
"Despite being rejected by a significant margin last year,
"We believe
The stock market, she noted, has recognized Cracker Barrel's progress
since the announcement of the Company's six strategic priorities on
- Has increased its quarterly dividend 100% over the last year and continued its share buyback program.
- Had an excellent fourth quarter and full-year fiscal 2012 as a result of successfully implementing key strategic initiatives.
-
Has a talented new management team, with five senior executives either
new to the Company or serving in new positions since
January 2011 . - Has benefitted from the effective leadership of its renewed Board of Directors, with six new independent directors joining the Board within the last 18 months.
Ms. Cochran noted that Cracker Barrel has successfully delivered on the strategy it set out last year, stating, "We believe the facts today provide even stronger support for Cracker Barrel and its management and Board."
"In these challenging economic times, we strongly believe it is in the best interest of all of our shareholders to allow our cohesive and revitalized Board to continue our recent and ongoing success, and stay focused on the execution of our strategic initiatives," Ms. Cochran wrote. "Our strong results, our commitment to the highest standards of corporate governance and our determination to serve the best interests of our shareholders speak for themselves."
Ms. Cochran urged shareholders to vote the WHITE proxy card to vote "FOR ALL" ten of the Company's nominees to the Board.
Text of Letter from Ms. Cochran to Cracker Barrel Shareholders:
Dear Cracker Barrel Shareholders,
Cracker Barrel will hold its annual meeting on
Unfortunately,
In an effort to avoid this fight, and in recognition of Biglari
Holdings' position as our largest shareholder, we offered
We believe
PROVEN DELIVERY OF SIGNIFICANT SHAREHOLDER VALUE IN 2012
THAT
OUTPACED OUR COMPETITORS
Delivering value that benefits all our shareholders is our overriding
focus. I am proud to have served as CEO during the past year, a time of
significant achievements. To that end, we are pleased that the stock
market has recognized our progress since the announcement of our six
strategic priorities on
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Total Percentage Share Price |
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Cracker Barrel | 68.4% | ||||
S&P 500 Restaurant Index | 15.4 | ||||
S&P 600 Restaurant Index | 35.1 | ||||
S&P 1500 Restaurant Index | 17.8 | ||||
S&P 500 Index | 24.0 | ||||
We have also increased our quarterly dividend 100% over the last year and continued our share buyback program as we strive to find additional ways to deliver value on your investment.
At the heart of these positive shareholder returns were strong operating results built on the successful execution of the sound business strategy we announced last year. We had an excellent fourth quarter and full-year fiscal 2012. This is particularly impressive as many of our competitors have continued to struggle in this challenging economic environment.
Highlights from our most recent quarter and fiscal year include:
-
During the fourth quarter of fiscal 2012, comparable store traffic and
restaurant sales increased 1.4% and 3.8%, respectively, marking the
third consecutive quarter of positive year-over-year sales and traffic
and the third consecutive quarter of beating the Knapp-TrackTM casual
dining index. Our new
$5.99 lunch specials, which offer consumers a different price point, generate attractive profitability for us, and we believe have contributed to our traffic gains. - We increased our focus on retail sales, resulting in three consecutive quarters of growth. Most recently, comparable store retail sales increased 3.1% in the fourth quarter.
- We also improved our operating profit and margins, despite continued pressure from commodity prices. These improvements resulted in a significant increase in earnings per share (both GAAP and as adjusted)1 for the fourth quarter and for fiscal 2012 over the previous year.
- We improved our reach and impact with the new marketing campaign, "Hand Crafted by Cracker Barrel." This message resonated with consumers looking for both value and good food that is made from scratch in real kitchens by real cooks.
-
Finally, for the second year in a row, we were voted No. 1 in the
Family Dining segment in the 2012 Consumer Picks survey conducted by
Nation's
Restaurant News . Cracker Barrel had the highest ranking in several categories, including service, menu variety, and likely to return.
EFFECTIVE LEADERSHIP BY A NEW MANAGEMENT TEAM AND NEW DIRECTORS
Our performance is driven by a talented new management team at Cracker
Barrel, with five senior executives either new to the Company or serving
in new positions since
We have also benefitted from the effective leadership of our renewed Board of Directors, with six new independent directors joining the Board along with me within the last 18 months. At the same time, six long-standing directors have retired from the Board. Our new Board members bring valuable experience and new energy to Cracker Barrel, including a diverse and complementary mix of senior management, marketing, operational and finance expertise both in the restaurant industry and beyond. We believe these new directors are contributing substantial leadership and insight to lead Cracker Barrel into the future.
Among the Board changes,
WHY WE BELIEVE SARDAR BIGLARI AND PHIL COOLEY
ARE WRONG
FOR OUR BOARD
We do not think it is in our shareholders' best interests to risk
jeopardizing our strong operational momentum by electing
Given that they are directors or officers of Biglari Holdings, whose principal operating subsidiary is Steak ‘n Shake - a company we view as a competitor operating squarely in our space - we also have significant concerns about potential conflicts of interest, as well as possible legal issues that could arise from Mr. Biglari's and/or Mr. Cooley's presence in our boardroom. At a minimum, we believe the presence of current key officers or directors of a company that we see as a competitor could limit the free exchange of ideas by our recently renewed Board that has been vital to our success.
Moreover,
THE WRONG TIME FOR CHANGE
Last year, proxy advisory services ISS and Egan-Jones both recommended that shareholders vote for the Company's entire slate of nominees for the Board. ISS wrote: "In aggregate, the company's key performance trends, careful executive succession process, and current board renewal efforts strongly suggest that the dissident's arguments are poorly-founded, and that there is not a compelling need for shareholders to effect board change at this time." It is important to note that ISS reached this conclusion BEFORE we so successfully delivered on the strategy we had set out, and we believe the facts today provide even stronger support for Cracker Barrel and its management and Board.
In these challenging economic times, we strongly believe it is in the best interest of all of our shareholders to allow our cohesive and revitalized Board to continue our recent and ongoing success, and stay focused on the execution of our strategic initiatives. Our strong results, our commitment to the highest standards of corporate governance and our determination to serve the best interests of our shareholders speak for themselves.
I urge you to vote the enclosed WHITE card to vote "FOR ALL" ten of the
Company's nominees to the Board. To ensure that your vote is received in
time, I urge you to vote by telephone or Internet by following the
instructions on the Company's WHITE card. I urge you NOT to sign any
gold proxy card sent to you by
If you have any questions or require assistance with voting your WHITE
proxy card, please call
Sincerely,
President and Chief Executive Officer
About Cracker Barrel
Headquartered in
Important Additional Information
Cracker Barrel, its directors and certain of its executive officers may
be deemed to be participants in the solicitation of proxies from Cracker
Barrel shareholders in connection with the matters to be considered at
Cracker Barrel's 2012 Annual Meeting. On
CBRL-F
1 As set forth in our
Investor Contact:
Senior Vice President and Chief Financial
Officer
or
or
Media Contact:
Senior Director, Corporate Communications
or
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