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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): September 13, 2001
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CBRL GROUP, INC.
Tennessee 0-25225 62-1749513
--------- ------- ----------
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
305 Hartmann Drive, Lebanon, Tennessee 37087
(615) 444-5533
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements. None.
(b) Pro Forma Financial Information. None.
(c) Exhibits. See Exhibit Index immediately following the signature
page hereto.
ITEM 9. REGULATION FD DISCLOSURE.
On September 13, 2001, CBRL Group, Inc. issued the press release that is
attached as Exhibit 99 to this Current Report on Form 8-K, which by this
reference is incorporated herein as if copied verbatim, with respect to
certain fiscal-year-end and quarter-end financial and other information.
SIGNATURE
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 hereunto duly authorized.
Dated: September 13, 2001 CBRL GROUP, INC.
By: /s/ James F. Blackstock
---------------------------------------
Name: James F. Blackstock
Title: Senior Vice President, Secretary and
General Counsel
2
EXHIBIT INDEX
Exhibit No. Description Page No.
- ----------- ----------- --------
99 Press Release issued by CBRL Group, Inc. on
September 13, 2001.
3
Exhibit 99
Contact: Lawrence E. White
Senior Vice President,
Finance and Chief
Financial Officer
615-444-5533
CBRL GROUP, INC. ANNOUNCES SUCCESSFUL, ON-TARGET FOURTH QUARTER AND
YEAR-END RESULTS, AND CONTINUING IMPROVEMENT IN CURRENT SALES TRENDS
AND EARNINGS GUIDANCE FOR FISCAL 2002
LEBANON, Tenn. (September 13, 2001) - CBRL Group, Inc. (Nasdaq: CBRL) today
announced that results for its fourth quarter and fiscal year ended August 3,
2001, were on-target with previously disclosed Company estimates. The
Company also disclosed information on current trends and earnings guidance
for its current fiscal first quarter and full year.
* Fourth quarter 2001 diluted earnings per share of $0.48 before
previously disclosed charges, up 14% from last year, and on-target with
the Company's guidance during the quarter; full-year fiscal 2001 diluted
earnings per share before charges of $1.30 compared with $1.11 before
charges in fiscal 2000
* Fourth quarter 2001 comparable store restaurant sales up 4.0% in its
Cracker Barrel Old Country Store(R) units from a year earlier; retail
comparable store sales down 1.3% for the quarter, an improvement from
earlier reported trends; Logan's Roadhouse(R) comparable store sales
down 1.9%, also an improvement from earlier disclosed trends
* Current sales trends positive in all key areas; current fiscal 2002
quarter-to-date Cracker Barrel Old Country Store comparable store
restaurant sales up approximately 5% from a year ago, comparable store
retail sales up approximately 1%, and Logan's Roadhouse comparable store
sales up approximately 1.5%
* Estimated current quarter diluted earnings per share of up to the mid-
$0.30's compared with $0.30 in the first quarter of the prior fiscal
year; full year fiscal 2002 diluted earnings per share growth targets of
15% or better compared with the $1.30 (before the effect of charges)
reported today for fiscal 2001
* Expected net free cash flow of $60 million after capital expenditures in
fiscal 2002
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CBRL Announces Fourth Quarter Results
Page 2
September 13, 2001
Details of the announcement follow.
For the fourth quarter ended August 3, 2001, the Company reported net
income before the effect of exiting its Carmine Giardini's business, closing
seven other units, and providing for the estimated settlement of certain
litigation ("before charge effect") of $27.1 million, or $0.48 per share
(diluted), compared with net income of $23.7 million, or $0.42 per share
(diluted), for the fourth fiscal quarter of 2000. The results were
consistent with the earlier guidance by the Company, that diluted earnings
per share before charge effect were expected to be in the high $0.40's range.
Actual net income and earnings per share (diluted) including the charges were
$2.6 million and $0.05 per share, respectively. The improvement in the
fourth quarter of fiscal 2001 over the fourth quarter of fiscal 2000 before
charge effect was approximately 14% in both net income and in diluted
earnings per share.
The charges taken in the fourth fiscal quarter reflected the costs of
exiting the Company's Carmine Giardini's restaurant and gourmet market
business and closing seven other units in the Company's Cracker Barrel Old
Country Store and Logan's Roadhouse concepts, as well as an accrual for a
settlement proposal for a certain collective action lawsuit under the Fair
Labor Standards Act not considered routine litigation incidental to the
Company's business. The pre-tax cost of exiting the Carmine Giardini's
business and closing seven other units included the following: $10.4 million
for write-off of goodwill related to the original acquisition of the Carmine
Giardini's business; $14.8 million for loss on disposition of inventories and
property and equipment net of projected sales proceeds; and $4.4 million for
estimated lease termination expenses, severance costs, and other incidental
costs of exiting and closing. The accrual for estimated settlement of
litigation was $3.5 million. These charges are reflected in the Company's
consolidated statements of income for the fourth quarter and full fiscal year
ended August 3, 2001, as follows: cost of goods sold, $0.7 million; labor
and other related expenses, $0.9 million; other store operating expenses,
$20.6 million; general and administrative expenses, $0.5 million; and
amortization of goodwill, $10.4 million.
For the full fiscal year, net income before charge effect was $73.7
million, or $1.30 per share (diluted), increases of approximately 14% and
17%, respectively. Full year net income in the prior year was $64.4 million,
or $1.11 per share (diluted) before the effect of previously reported charges
of $5.4 million, or $0.09 per share, recorded in the prior year fiscal second
quarter as a result of management changes and resulting refocused priorities.
The following table summarizes the results before the effect of charges
and actual results:
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CBRL Announces Fourth Quarter Results
Page 3
September 13, 2001
Fourth Quarter Full Year
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FY2001 FY2000 FY2001 FY2000
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Net Income (in millions)
Before effect of charges $27.1 (a) $23.7 $73.7 (a) $64.4 (b)
Actual $ 2.6 $23.7 $49.2 $59.0
Earnings per Share (diluted)
Before effect of charges $0.48 (a) $0.42 $1.30 (a) $1.11 (b)
Actual $0.05 $0.42 $0.87 $1.02
(a) Results before effect of charges reflect earnings before charges taken in
the fourth quarter of fiscal 2001 for exiting the Carmine Giardini's
restaurant and gourmet market business, closing of seven other units, and
providing for estimated settlement value of certain litigation
(b) Results before effect of charges reflect earnings before charges taken in
the second quarter of fiscal 2000 principally as a result of management
changes and resulting refocused priorities
Revenue for the fourth quarter in fiscal 2001 was $544.1 million
compared with $470.9 million in fiscal 2000, an increase of 15.5%, of which
$40.5 million, or 8.6%, was the effect of one additional week in the 14-week
fourth quarter of fiscal 2001. Comparable store sales (based on comparable
calendar weeks) for the Cracker Barrel Old Country Stores concept increased
4.0% for restaurants, including increases of 3.2% in average check and 0.8%
in guest traffic, and decreased 1.3% in retail. The Logan's Roadhouse
concept recorded a comparable store sales decrease of 1.9%, reflecting 0.6%
increase in average check and a 2.5% traffic decline. During the quarter,
the Company opened two new Cracker Barrel Old Country Store units and no new
Logan's Roadhouse units.
Revenue for the fiscal year was approximately $2.0 billion compared with
approximately $1.8 billion in fiscal 2000, an increase of 10.8%, of which
2.3% was the effect of one additional week in the 53-week fiscal 2001.
Comparable store sales for the Cracker Barrel Old Country Store concept
increased 4.6% for restaurants, including 3.1% higher average check and 1.5%
guest traffic improvement, and increased 1.1% in retail. The Logan's
Roadhouse concept recorded a comparable store sales decrease of 1.1%,
reflecting 1.3% higher average check and a 2.4% traffic decline. During the
fiscal year, the Company opened 15 new Cracker Barrel Old Country Store
units, and 13 new company-operated and one franchised Logan's Roadhouse
units.
Commenting on the results, CBRL Group, Inc. President and Chief
Executive Officer Michael A. Woodhouse said, "We are very pleased with the
results reported today. We achieved the fourth quarter earnings improvements
before the effect of charges as targeted in press releases throughout the
quarter. Our Cracker Barrel Old Country Store concept was within one-half of
one percent of our plan for the year; its best relative performance in years.
We've now had eight consecutive quarters of comparable store guest traffic
improvements at the Cracker Barrel Old Country Store concept, an
accomplishment last achieved in fiscal 1994. We recently have begun to see
a restoration of positive comparable store
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CBRL Announces Fourth Quarter Results
Page 4
September 13, 2001
sales and guest traffic in our Logan's Roadhouse concept. And, we
successfully exited our Carmine Giardini's business."
The Company urges caution in considering its current trends and earnings
targets as disclosed below. The restaurant industry is highly competitive;
and trends and targets are subject to numerous factors and influences, some
of which are discussed in the cautionary language at the end of this press
release. Such trends and targets should not be assumed to be current after
the date of this press release unless specifically updated by the Company.
The Company assumes no obligation to update disclosed information on trends
or targets other than in its periodic filings under Forms 10-K, 10-Q, and 8-K
with the Securities and Exchange Commission.
Quarter-to-date comparable store sales in the Cracker Barrel Old Country
Store concept increased approximately 5%, a rate that includes a higher
average check of approximately 3-3.5% and guest traffic improvement of
approximately 1.5-2%, reflecting particularly strong trends before Labor Day.
During the fourth quarter of fiscal 2001 the Company took estimated menu
price increases of approximately 1.3%. Quarter-to-date Cracker Barrel Old
Country Store concept comparable store retail sales have been higher than
prior year by approximately 1%, more than accounted for by a recent highly
successful clearance sale. Quarter-to-date comparable store sales trends for
the Logan's Roadhouse concept have been higher than prior year by
approximately 1.5%. This trend includes a higher average check of
approximately 0.5% compared with the same period last year, and increased
guest traffic of approximately 1%.
The Company has opened one new Cracker Barrel Old Country Store unit
thus far this quarter. It presently expects to open two more new units
before quarter-end, with a total of 20 new units to be opened during the
fiscal year. One new Logan's Roadhouse unit has been opened during the
quarter, with three more expected before quarter-end and a total of nine
during the fiscal year.
After projected capital expenditures of approximately $100-105 million,
the Company expects to generate net positive free cash flow of $60 million or
more during fiscal 2002 but has not yet determined how such cash flow will be
used. At the present time, consideration is being given to reducing debt and
to repurchasing shares of its common stock. Any decision to repurchase
shares will be announced prior to the commencement of any repurchase
activities.
The Company's present estimate for diluted earnings per share in the
first quarter of fiscal 2002 is up to the mid-$0.30's per share, compared
with $0.30 in the first quarter of fiscal 2001, reflecting continuation of
current sales trends among other things. For the full fiscal year, the
Company presently expects to achieve diluted earnings per share growth of
15%, or better, from the fiscal 2001 earnings before the effect of charges of
$1.30 reported today. Key assumptions in achieving these targets include:
elimination of amortization of goodwill as the Company adopts FAS 142; a
related lower effective income tax rate of not more than 36%; improvements in
comparable store restaurant and retail sales generally at or above current
trends; modest improvements in store operating income margins, primarily in
cost of sales, as a result of exiting the gourmet market business, closing
seven low performing stores in
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CBRL Announces Fourth Quarter Results
Page 5
September 13, 2001
fiscal 2001, and other operational improvements; and flat to modestly
increasing general and administrative expenses as a percent of revenues as
the Company invests in various new initiatives to improve future operations.
Partly offsetting the targeted improvements will be the loss of the benefit
of the additional week in the fourth quarter and full year of fiscal 2001.
Commenting on the present trends and earnings guidance, Mr. Woodhouse
said, "We have made clear progress in turning around our operating and
financial results. The present trends and our earnings estimates, while not
without challenges and risks, reflect our expectation that this progress will
continue."
Headquartered in Lebanon, Tennessee, CBRL Group, Inc. presently operates
438 Cracker Barrel Old Country Store restaurants and gift shops located in 40
states, and 76 Logan's Roadhouse company-operated and eight franchised
restaurants in 15 states.
Except for specific historical information, the matters discussed in
this press release are forward-looking statements that involve risks,
uncertainties and other factors that may cause actual results and performance
of CBRL Group, Inc. to differ materially from those expressed or implied by
this discussion. All forward-looking information is provided by the Company
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 "assumptions," "target," "plans,"
"may," "will," "would," "expect," "intend," "estimate," "anticipate,"
"believe," "potential," or "continue" (or the negative of each of these
terms) or similar terminology. Factors which will affect actual results
include, but are not limited to: commodity, group health and utility price
increases; the effect of plans intended to improve operational execution and
performance; the effects of increased competition at Company locations on
sales and on labor recruiting, cost, and retention; the ability of and cost
to the Company to recruit, train, and retain qualified restaurant hourly and
management employees; the ability of the Company to identify successful new
lines of retail merchandise; the actual results of pending or threatened
litigation; the effects of negative publicity; the availability and costs of
acceptable sites for development; adverse weather conditions; the acceptance
of the Company's concepts as the Company expands into new markets and
geographic regions; adverse general economic conditions including high or
escalating gasoline prices and declining consumer confidence; changes in
interest rates affecting the Company's financing costs; changes in or
implementation of additional governmental rules and regulations affecting
wage and hour matters, health and safety, pensions and insurance; other
undeterminable areas of government actions or regulations; and other factors
described from time to time in the Company's filings with the Securities and
Exchange Commission and press releases.
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CBRL Announces Fourth Quarter Results
Page 6
September 13, 2001
CBRL GROUP, INC.
CONSOLIDATED INCOME STATEMENT (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
FOURTH QUARTER ENDED YEAR ENDED
--------------------------------- -----------------------------------
Net sales: 8/03/01 7/28/00 CHANGE 8/03/01 7/28/00 CHANGE
-------- --------- ------ --------- --------- ------
Restaurant $ 440,005 $ 375,171 17% $ 1,543,815 $ 1,378,753 12%
Retail 103,846 95,575 9 419,104 393,293 7
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Net sales 543,851 470,746 16 1,962,919 1,772,046 11
Franchise fees and royalties 218 203 7 773 666 16
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Total revenue 544,069 470,949 16 1,963,692 1,772,712 11
Cost of goods sold 178,053 157,694 13 664,332 614,472 8
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Gross profit 366,016 313,255 17 1,299,360 1,158,240 12
Labor & other related expenses 206,859 172,362 20 732,419 645,976 13
Other store operating expenses 107,810 72,357 49 353,334 294,012 20
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Store operating income 51,347 68,536 (25) 213,607 218,252 (2)
General and administrative 27,285 22,718 20 102,541 95,289 8
Amortization of goodwill 11,374 998 1,040 14,370 3,994 260
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Operating income 12,688 44,820 (72) 96,696 118,969 (19)
Interest expense 2,526 6,870 (63) 12,316 24,616 (50)
Interest income - 85 (100) 84 352 (76)
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Pretax income 10,162 38,035 (73) 84,464 94,705 (11)
Provision for income taxes 7,568 14,342 (47) 35,283 35,707 (1)
---------- ---------- ---------- ----------
Net income $ 2,594 $ 23,693 (89) $ 49,181 $ 58,998 (17)
========== ========== ============ ===========
Earnings per share:
Basic $ 0.05 $ 0.42 (88) $ 0.88 $ 1.02 (14)
Diluted $ 0.05 $ 0.42 (88) $ 0.87 $ 1.02 (15)
Weighted average shares:
Basic 55,236 56,872 (3) 56,129 57,960 (3)
Diluted 55,923 56,986 (2) 56,799 58,041 (2)
Ratio Analysis
- --------------
Net sales:
Restaurant 80.9% 79.7% 78.6% 77.8%
Retail 19.1 20.3 21.4 22.2
---------- ---------- ---------- ----------
Net sales 100.0 100.0 100.0 100.0
Franchise fees and royalties - - - -
---------- ---------- ---------- ----------
Total revenue 100.0 100.0 100.0 100.0
Cost of goods sold 32.7 33.5 33.8 34.7
---------- ---------- ---------- ----------
Gross profit 67.3 66.5 66.2 65.3
Labor & other related expenses 38.0 36.6 37.3 36.4
Other store operating expenses 19.8 15.4 18.0 16.6
---------- ---------- ----------- ----------
Store operating income 9.5 14.5 10.9 12.3
General and administrative 5.0 4.8 5.2 5.4
Amortization of goodwill 2.1 0.2 0.8 0.2
---------- ---------- ----------- ----------
Operating income 2.4 9.5 4.9 6.7
Interest expense 0.5 1.5 0.6 1.4
Interest income - - - -
---------- ---------- ----------- ----------
Pretax income 1.9 8.0 4.3 5.3
Provision for income taxes 1.4 3.0 1.8 2.0
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Net income 0.5% 5.0% 2.5% 3.3%
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CBRL Announces Fourth Quarter Results
Page 7
September 13, 2001
CONSOLIDATED CONDENSED BALANCE SHEET
(UNAUDITED)
(IN THOUSANDS)
8/03/01 7/28/00
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Assets
Cash and cash equivalents $ 11,807 $ 13,865
Other current assets 143,383 130,170
Property and equipment, net 955,028 1,075,134
Goodwill, net 92,882 107,253
Other assets 9,772 8,601
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Total assets $ 1,212,872 $ 1,335,023
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Liabilities and Stockholders' Equity
Current liabilities $ 197,249 $ 173,578
Long-term debt 125,000 292,000
Other long-term obligations 44,515 40,475
Stockholders' equity 846,108 828,970
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Total liabilities and stockholders' equity $ 1,212,872 $ 1,335,023
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CONSOLIDATED CONDENSED CASH FLOW STATEMENT
(UNAUDITED)
(IN THOUSANDS)
FISCAL YEAR ENDED
-------------------------
8/03/01 7/28/00
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Cash flow from operating activities:
Net income $ 49,181 $ 58,998
Depreciation and amortization 64,902 65,218
Loss on disposition of property and equipment 671 664
Impairment loss 24,431 3,887
Net changes in other assets and liabilities 8,577 31,480
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Net cash provided by operating activities 147,762 160,247
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Cash flows from investing activities:
Purchase of property and equipment (91,439) (138,032)
Net proceeds from sale of property and equipment 141,283 17,333
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Net cash provided by (used in) investing activities 49,844 (120,699)
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Cash flows from financing activities:
Proceeds from issuance of long-term debt 355,600 444,500
Principal payments under long-term debt and capital lease obligations (522,790) (467,234)
Proceeds from exercise of stock options 5,155 530
Purchase and retirement of common stock (36,444) (21,104)
Dividends on common stock (1,185) (637)
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Net cash used in financing activities (199,664) (43,945)
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Net decrease in cash and cash equivalents (2,058) (4,397)
Cash and cash equivalents, beginning of year 13,865 18,262
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Cash and cash equivalents, end of year $ 11,807 $ 13,865
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CBRL Announces Fourth Quarter Results
Page 8
September 13, 2001
CBRL GROUP, INC.
SUPPLEMENTAL INFORMATION
(UNAUDITED)
AS OF AS OF
8/03/01 7/28/00
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Common shares outstanding 55,026,846 56,668,349
Units in operation:
Cracker Barrel 437 426
Carmine Giardini's Gourmet Market * 3
Logan's Roadhouse - company-owned 75 65
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Total company-owned units 512 494
Logan's Roadhouse - franchised 8 7
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System-wide units 520 501
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FOURTH QUARTER ENDED FISCAL YEAR ENDED
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Net sales in company-owned stores: 8/03/01 7/28/00 8/03/01 7/28/00
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(In thousands)
Cracker Barrel - restaurant $ 380,767 $ 328,074 $ 1,324,903 $ 1,196,680
Cracker Barrel - retail 101,595 93,211 407,887 382,932
------------ ------------ ----------- -----------
Cracker Barrel - total 482,362 421,285 1,732,790 1,579,612
Carmine Giardini's Gourmet Market 2,997 3,439 15,587 14,137
Logan's Roadhouse 58,492 46,022 214,542 178,297
------------ ------------ ----------- -----------
Total net sales $ 543,851 $ 470,746 $ 1,962,919 $ 1,772,046
============ ============ =========== ===========
Operating weeks - company-owned stores:
Cracker Barrel 6,161 5,538 23,049 21,676
Logan's Roadhouse 1,086 840 3,906 3,165
Average comparable store sales -
Company-owned stores: (In thousands)
Cracker Barrel - restaurant $ 871.2 $ 837.5 $ 3,081.6 $ 2,945.7
Cracker Barrel - retail 232.5 235.6 946.4 936.3
------------ ------------ ----------- -----------
Cracker Barrel - total $ 1,103.7 $ 1,073.1 $ 4,028.0 $ 3,882.0
============ ============ =========== ===========
Logan's Roadhouse $ 774.3 $ 789.5 $ 3,040.7 $ 3,073.7
============ ============ =========== ===========
Capitalized interest $ 120 $ 333 $ 851 $ 1,511
============ ============ =========== ===========
* The Company has exited the Carmine Giardini's Gourmet Market business.
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