Adjusted EPS increased to $1.93 compared to $1.56 in the prior year quarter

Comparable store restaurant sales increased 7.9% on 4.7% traffic growth

LEBANON, Tenn.--(BUSINESS WIRE)-- Cracker Barrel Old Country Store, Inc. ("Cracker Barrel" or the "Company") (Nasdaq:CBRL) today reported financial results for the second quarter of fiscal 2015 ended January 30, 2015.

Second-Quarter Fiscal 2015 Highlights

• Compared to the prior-year second quarter, comparable store traffic increased 4.7%, comparable store restaurant sales increased 7.9% and comparable store retail sales increased 3.2%.
• Thirteenth consecutive quarter of outperformance of the Knapp-Track^TM casual dining index.
• On a GAAP basis, operating income margin was 9.4% of total revenue, compared with 8.4% in the prior year quarter. Adjusted to exclude the impact of an accrual related to the previously disclosed Fair Labor Standards Act (" FLSA") litigation, adjusted operating income margin was 9.7% of total revenue, compared to prior year adjusted operating income margin of 8.5%. (See non-GAAP reconciliation below.)
• On a GAAP basis, earnings per diluted share were $1.96, or $1.93 when adjusted to exclude the impact of the FLSA litigation accrual and the retroactive reinstatement of the Work Opportunity Tax Credit ("WOTC"), a 24% increase over adjusted earnings per diluted share of $1.56 in the prior year quarter.

Commenting on the second-quarter results, Cracker Barrel President and Chief Executive Officer Sandra B. Cochran said, "We believe that our strong performance in the quarter results from several key factors, including mild winter weather compared to the prior year quarter, the positive impact of lower gasoline prices on consumer spending and travel, the success of our national advertising, and consistent execution of the Cracker Barrel experience by our operations teams. We are pleased with the strength of these results and our ability to once again outperform the industry as measured by the Knapp-Track Casual Dining Index."

Second-Quarter Fiscal 2015 Results

Revenue

The Company reported total revenue of $756.0 million for the second quarter of fiscal 2015, representing an increase of 8.2% over the second quarter of the prior year. Comparable store restaurant sales increased 7.9%, including a 3.2% increase in average check. The average menu price increase for the quarter was approximately 2.5%. Comparable store retail sales increased 3.2% for the quarter. The Company opened one store during the second quarter, for a total of three new store openings year-to-date.

Comparable store restaurant traffic, average check, and comparable store restaurant and retail sales for the fiscal months of November, December and January and for the second quarter were as follows:

				November			December			January			Second Quarter
Comparable restaurant traffic				2.5%			3.1%			8.3%			4.7%
Average check				3.1%			3.2%			3.1%			3.2%
Comparable restaurant sales				5.6%			6.3%			11.4%			7.9%
Comparable retail sales				-0.6%			0.5%			15.0%			3.2%

Operating Income

GAAP operating income in the second quarter was $71.2 million, or 9.4% of total revenue. Adjusted to exclude the impact of the FLSA litigation accrual, adjusted operating income was $73.4 million, or 9.7% of total revenue, compared with adjusted operating income of $59.1 million, or 8.5% of total revenue, in the prior year quarter. Reductions in labor and related expenses and other store operating expenses were partially offset by an increase in general and administrative expenses.

Diluted Earnings per Share

On a GAAP basis, earnings per diluted share in the second quarter of fiscal 2015 were $1.96, compared with $1.55 in the prior year quarter. Adjusted to exclude the impact of the FLSA litigation accrual and the retroactive reinstatement of the Work Opportunity Tax Credit, adjusted earnings per diluted share were $1.93, compared with adjusted earnings per diluted share of $1.56 in the prior year quarter.

Fiscal 2015 Outlook

Based upon year-to-date financial performance, the Company adjusted its previous full year earnings guidance, and now expects to report adjusted earnings per diluted share of between $6.40 and $6.50. For fiscal 2015, the Company expects total revenue of between $2.80 billion and $2.85 billion and an adjusted operating income margin of approximately 8.5%. The revenue projection for fiscal 2015 reflects the expected opening of six new Cracker Barrel stores for the year, projected increases in comparable store restaurant sales of between 3.5% to 4.5%, and comparable store retail sales of between 2.5% to 3.5%. The Company's projections are based upon expected food commodity inflation of between 3.5% to 4.0% for the year; depreciation expense of between $71 million and $73 million; net interest expense of approximately $17 million; and an effective tax rate with the WOTC reinstatement of between 31% to 32%. The Company expects capital expenditures during fiscal 2015 to be approximately $100 million.

The Company expects to report earnings per diluted share for the third quarter of 2015 of between $1.30 and $1.40. The Company notes that this guidance assumes normal weather patterns for the balance of the third quarter. Additionally, the Company reminds investors that its outlook for both the third quarter and for fiscal 2015 reflects a number of assumptions, many of which are outside the Company's control.

Fiscal 2015 Second-Quarter Conference Call

As previously announced, the live broadcast of Cracker Barrel's quarterly conference call will be available to the public on-line at investor.crackerbarrel.com on February 24, 2015, beginning at 11:00 a.m. (Eastern Time). An on-line replay will be available at 2:00 p.m. (Eastern Time) and continue through March 10, 2015.

About Cracker Barrel

Cracker Barrel Old Country Store provides a friendly home-away-from-home in its old country stores and restaurants. Guests are cared for like family while relaxing and enjoying real home-style food and shopping that's surprisingly unique, genuinely fun and reminiscent of America's country heritage…all at a fair price. The restaurants serve up delicious, home-style country food such as meatloaf and homemade chicken n' dumplins as well as our signature biscuits using an old family recipe. The authentic old country retail store is fun to shop and offers unique gifts and self-indulgences.

Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL) was established in 1969 in Lebanon, Tenn. and operates 634 company-owned locations in 42 states. Every Cracker Barrel store is open seven days a week with hours Sunday through Thursday, 6 a.m. - 10 p.m., and Friday and Saturday, 6 a.m. - 11 p.m. For more information, visit: crackerbarrel.com.

CBRL-F

Except for specific historical information, certain of the matters discussed in this press release may express or imply projections of revenues or expenditures, statements of plans and objectives or future operations or statements of future economic performance. These, and similar statements are forward-looking statements concerning matters that involve risks, uncertainties and other factors which may cause the actual performance of Cracker Barrel Old Country Store, Inc. and its subsidiaries to differ materially from those expressed or implied by this discussion. All forward-looking information is subject to completion of our financial procedures for Q2 FY 2015 and is provided pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of these factors. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "trends," "assumptions," "target," "guidance," "outlook," "opportunity," "future," "plans," "goals," "objectives," "expectations," "near-term," "long-term," "projection," "may," "will," "would," "could," "expect," "intend," "estimate," "anticipate," "believe," "potential," "regular," "should," "projects," "forecasts," or "continue" (or the negative or other derivatives of each of these terms) or similar terminology and include the expected effects of operational improvement initiatives, such as new menu items and retail offerings. Factors which could materially affect actual results include, but are not limited to: the effects of uncertain consumer confidence, higher costs for energy, general or regional economic weakness, weather on sales and customer travel, discretionary income or personal expenditure activity of our customers; our ability to identify, acquire and sell successful new lines of retail merchandise and new menu items at our restaurants; our ability to sustain or the effects of plans intended to improve operational or marketing execution and performance; changes in or implementation of additional governmental or regulatory rules, regulations and interpretations affecting tax, wage and hour matters, health and safety, pensions, insurance or other undeterminable areas; the effects of plans intended to promote or protect our brands and products; commodity price increases; the ability of and cost to us to recruit, train, and retain qualified hourly and management employees in an escalating wage environment; the effects of increased competition at our locations on sales and on labor recruiting, cost, and retention; workers' compensation, group health and utility price changes; consumer behavior based on negative publicity or concerns over nutritional or safety aspects of our food or products or those of the restaurant industry in general, including concerns about pandemics, as well as the possible effects of such events on the price or availability of ingredients used in our restaurants; the effects of our substantial indebtedness and associated restrictions on our financial and operating flexibility and ability to execute or pursue our operating plans and objectives; changes in interest rates or capital market conditions affecting our financing costs and ability to refinance all or portions of our indebtedness; the effects of business trends on the outlook for individual restaurant locations and the effect on the carrying value of those locations; our ability to retain key personnel; the availability and cost of suitable sites for restaurant development and our ability to identify those sites; changes in land, building materials and construction costs; the actual results of pending, future or threatened litigation or governmental investigations and the costs and effects of negative publicity associated with these activities; practical or psychological effects of natural disasters or terrorist acts or war and military or government responses; disruptions to our restaurant or retail supply chain; changes in foreign exchange rates affecting our future retail inventory purchases; implementation of new or changes in interpretation of existing accounting principles generally accepted in the United States of America ("GAAP"); and other factors described from time to time in our filings with the Securities and Exchange Commission, press releases, and other communications. Any forward-looking statement made by us herein, or elsewhere, speaks only as of the date on which made. We expressly disclaim any intent, obligation or undertaking to update or revise any forward-looking statements made herein to reflect any change in our expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based.

CRACKER BARREL OLD COUNTRY STORE, INC.
CONDENSED CONSOLIDATED INCOME STATEMENT
(Unaudited)
(In thousands, except share and per share amounts, percentages and ratios)
		Second Quarter Ended										Six Months Ended
								Percentage										Percentage
		1/30/15			1/31/14			Change				1/30/15			1/31/14			Change
Total revenue		$755,966			$698,491			8%				$1,439,394			$1,347,632			7%
Cost of goods sold		262,155			243,015			8				484,450			448,944			8
Gross profit		493,811			455,476			8				954,944			898,688			6
Labor and other related expenses		251,674			238,742			5				494,001			475,489			4
Other store operating expenses		133,726			128,100			4				263,898			253,441			4
Store operating income		108,411			88,634			22				197,045			169,758			16
General and administrative expenses		37,190			29,928			24				70,382			66,815			5
Operating income		71,221			58,706			21				126,663			102,943			23
Interest expense		4,684			4,471			5				9,108			8,878			3
Pretax income		66,537			54,235			23				117,555			94,065			25
Provision for income taxes		19,374			17,180			13				36,368			29,850			22
Net income		$47,163			$37,055			27				$81,187			$64,215			26
Earnings per share - Basic:		$1.97			$1.56			26				$3.40			$2.70			26
Earnings per share - Diluted:		$1.96			$1.55			26				$3.38			$2.68			26
Weighted average shares:
Basic		23,914,797			23,812,777			0				23,888,496			23,815,107			0
Diluted		24,032,389			23,970,611			0				24,016,913			23,947,850			0
Ratio Analysis
Total revenue:
Restaurant		76.4%			75.6%							78.1%			77.9%
Retail		23.6			24.4							21.9			22.1
Total revenue		100.0			100.0							100.0			100.0
Cost of goods sold		34.7			34.8							33.7			33.3
Gross profit		65.3			65.2							66.3			66.7
Labor and other related expenses		33.3			34.2							34.3			35.3
Other store operating expenses		17.7			18.3							18.3			18.8
Store operating income		14.3			12.7							13.7			12.6
General and administrative expenses		4.9			4.3							4.9			5.0
Operating income		9.4			8.4							8.8			7.6
Interest expense		0.6			0.6							0.6			0.6
Pretax income		8.8			7.8							8.2			7.0
Provision for income taxes		2.6			2.5							2.6			2.2
Net income		6.2%			5.3%							5.6%			4.8%

CRACKER BARREL OLD COUNTRY STORE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share amounts)
			1/30/15				1/31/14
Assets
Cash and cash equivalents			$182,609				$91,353
Accounts receivable			20,046				18,206
Income tax receivable			0				4,100
Inventory			140,820				148,073
Prepaid expenses			16,676				13,881
Deferred income taxes			6,004				4,316
Property and equipment, net			1,040,475				1,029,447
Other long-term assets			63,848				60,764
Total assets			$1,470,478				$1,370,140
Liabilities and Shareholders' Equity
Accounts payable			$82,902				$82,202
Other current liabilities			231,818				215,170
Long-term debt			400,000				387,500
Interest rate swap liability			12,957				9,761
Other long-term obligations			127,678				121,228
Deferred income taxes			53,493				57,098
Shareholders' equity, net			561,630				497,181
Total liabilities and shareholders' equity			$1,470,478				$1,370,140
Common shares issued and outstanding			23,923,881				23,820,077

CRACKER BARREL OLD COUNTRY STORE, INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
(Unaudited and in thousands)
			Six Months Ended
			1/30/15				1/31/14
Cash flows from operating activities:
Net income			$81,187				$64,215
Depreciation and amortization			35,506				33,301
Loss on disposition of property and equipment			3,995				2,089
Share-based compensation, net of excess tax benefit			4,031				3,642
Decrease (Increase) in inventories			24,606				(1,386)
(Decrease) in accounts payable			(15,575)				(28,435)
Net changes in other assets and liabilities			19,316				(10,521)
Net cash provided by operating activities			153,066				62,905
Cash flows from investing activities:
Purchase of property and equipment, net of insurance recoveries			(37,647)				(38,468)
Proceeds from sale of property and equipment			1,317				1,268
Net cash used in investing activities			(36,330)				(37,200)
Cash flows from financing activities:
Net payments for credit facilities and other long-term obligations			0				(1)
(Taxes withheld) from exercise of share-based compensation awards, net			(4,420)				(8,446)
Excess tax benefit from share-based compensation			2,299				604
Purchases and retirement of common stock			0				(12,473)
Deferred financing costs			(3,537)				0
Dividends on common stock			(47,830)				(35,754)
Net cash used in financing activities			(53,488)				(56,070)
Net increase (decrease) in cash and cash equivalents			63,248				(30,365)
Cash and cash equivalents, beginning of period			119,361				121,718
Cash and cash equivalents, end of period			$182,609				$91,353

CRACKER BARREL OLD COUNTRY STORE, INC.
Supplemental Information
(Unaudited)
		Second Quarter Ended							Six Months Ended
		1/30/15			1/31/14				1/30/15			1/31/14
Units in operation:
Open at beginning of period		633			625				631			624
Opened during period		1			0				3			1
Open at end of period		634			625				634			625
Total revenue: (In thousands)
Restaurant		$577,558			$528,391				$1,124,265			$1,050,338
Retail		178,408			170,100				315,129			297,294
Total revenue		$755,966			$698,491				$1,439,394			$1,347,632
Cost of goods sold: (In thousands)
Restaurant		$163,742			$148,382				$317,160			$290,978
Retail		98,413			94,633				167,290			157,966
Total cost of goods sold		$262,155			$243,015				$484,450			$448,944
Average unit volume: (In thousands)
Restaurant		$911.1			$845.4				$1,775.4			$1,681.5
Retail		281.4			272.2				497.7			475.9
Total		$1,192.5			$1,117.6				$2,273.1			$2,157.4
Operating weeks:		8,241			8,125				16,464			16,241
		Q2 2015 vs. Q2 2014							6 mo. 2015 vs. 6 mo. 2014
Comparable store sales period to period increase:
Restaurant		7.9%							5.6%
Retail		3.2%							4.4%
Number of locations in comparable store base		622							621

CRACKER BARREL OLD COUNTRY STORE, INC.

Reconciliation of GAAP basis operating

results to adjusted non-GAAP operating results

(Unaudited and in thousands)

In the accompanying press release the Company makes reference to As Adjusted store operating income, general and administrative expenses, operating income, provision for taxes and net income per share before the impact of a contingent accrual for the Fair Labor Standards Act litigation, the retroactive reinstatement of the Work Opportunity Tax Credit and prior year proxy contest expenses. The Company believes that excluding these items and their related tax effects from its financial results reflects operating results that are more indicative of the Company's ongoing operating performance while improving comparability to prior periods, and, as such may provide investors with an enhanced understanding of the Company's past financial performance and prospects for the future. This information is not intended to be considered in isolation or as a substitute for operating income or earnings per share information prepared in accordance with GAAP.

	Second Quarter ended January 30, 2015											Second Quarter ended January 31, 2014
	As Reported			Adjust				As Adjusted				As Reported			Adjust				As Adjusted
				(1), (2)											(3)
Store operating income		108,411			-				108,411				88,634			-				88,634
General and administrative expenses		37,190			(2,150	)			35,040				29,928			(376	)			29,552
Operating income		71,221			2,150				73,371				58,706			376				59,082
Interest Expense		4,684			-				4,684				4,471			-				4,471
Pretax income		66,537			2,150				68,687				54,235			376				54,611
Provision for income taxes		19,374			2,984				22,358				17,180			119				17,299
Net income	$	47,163		$	(834	)		$	46,329			$	37,055		$	256			$	37,311
Earning per share - Basic	$	1.97		$	(0.03	)		$	1.94			$	1.56		$	0.01			$	1.57
Earning per share - Diluted	$	1.96		$	(0.03	)		$	1.93			$	1.55		$	0.01			$	1.56
	Six months ended January 31, 2015											Six months ended January 31, 2014
	As Reported			Adjust				As Adjusted				As Reported			Adjust				As Adjusted
				(1), (2)											(3)
Store operating income		197,045			-				197,045				169,758			-				169,758
General and administrative expenses		70,382			(2,150	)			68,232				66,815			(3,200	)			63,615
Operating income		126,663			2,150				128,813				102,943			3,200				106,143
Interest Expense		9,108			-				9,108				8,878			-				8,878
Pretax income		117,555			2,150				119,705				94,065			3,200				97,265
Provision for income taxes		36,368			2,984				39,352				29,850			1,015				30,865
Net income	$	81,187		$	(834	)		$	80,353			$	64,215		$	2,185			$	66,400
Earning per share - Basic	$	3.40		$	(0.04	)		$	3.36			$	2.70		$	0.09			$	2.79
Earning per share - Diluted	$	3.38		$	(0.03	)		$	3.35			$	2.68		$	0.09			$	2.77
(1) Charges and tax effects of contingent liability accrual related to previously disclosed Fair Labor Standards Act litigation.
(2) Provision for taxes adjusted to exclude the $2.3 million prior year favorable effect of the retroactive reinstatement of the work opportunity tax credit.
(3) Charges and tax effects of the proxy contest concluded at the Company's annual shareholder meeting

Cracker Barrel Old Country Store, Inc.
Investor:
Lawrence E. Hyatt, 615-235-4432
or
Media:
Janella Escobar, 615-235-4618

Source: Cracker Barrel Old Country Store, Inc.

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