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UNITED STATES
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): February 21, 2002
-----------------
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 February 21, 2002, 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 quarter-end financial and other information. CBRL Group, Inc. also
disclosed information on current trends and reaffirmed earnings guidance for
the fiscal third quarter and full year.
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: February 25, 2002 CBRL GROUP, INC.
By: /s/ James F. Blackstock
-------------------------------------
Name: James F. Blackstock
Title: Senior Vice President, Secretary
and General Counsel
EXHIBIT INDEX
Exhibit No. Description Page No.
- ----------- ----------- --------
99 Press Release issued by CBRL Group, Inc. on 4
February 21, 2002.
Exhibit 99
[Letterhead of CBRL Group, Inc.]
Contact: Lawrence E. White
Senior Vice President/
Finance and Chief
Financial Officer
CBRL GROUP, INC. ANNOUNCES 42% SECOND QUARTER EPS IMPROVEMENT,
REPORTS CURRENT SALES TRENDS AND REAFFIRMS EARNINGS
GUIDANCE FOR REMAINDER OF FISCAL 2002
LEBANON, Tenn. (February 21, 2002) - CBRL Group, Inc. (the "Company")
(Nasdaq: CBRL) today announced results for its second quarter of fiscal 2002
ended February 1, 2002, reporting diluted earnings per share of $0.37, up 42%
from $0.26 in the year-earlier period. The Company also disclosed
information on current trends and reaffirmed earnings guidance for the fiscal
third quarter and full year.
Highlights of the quarter and update of trends and guidance included:
* Diluted earnings per share for the second fiscal quarter up
42% and net income up 40% from the second quarter of fiscal
2001, on a 7.9% increase in revenues.
* Store operating income margins for the quarter improved 1.1%
as a percent of revenues compared with a year earlier.
* Comparable store sales up 7.8% and 4.3% for the Company's
Cracker Barrel Old Country Store(R) ("Cracker Barrel")
restaurant and retail operations, respectively, marking the
eighth consecutive quarter of positive restaurant sales and
tenth consecutive quarter of positive restaurant guest
traffic.
* Comparable store sales increased 3.6% in the Company's
Logan's Roadhouse(R) ("Logan's") restaurants.
* Almost 1.7 million shares of the Company's outstanding
common stock have been repurchased at an average price of
$26.54 under the current three-million-share repurchase
authorization.
* Comparable store restaurant sales trends to date for the
third quarter are up 3.5-4% quarter-to-date in Cracker
Barrel and 2-2.5% in Logan's.
* Third quarter-to-date retail sales trends in Cracker Barrel
are up approximately 4%.
* Diluted earnings per share guidance in the low-to-mid
$0.30's for the third fiscal quarter, compared with $0.26 in
the prior fiscal year, and full fiscal year diluted earnings
per share guidance of in the mid $1.50's, both exceeding the
Company's objectives of 15% growth in earnings per share.
CBRL Announces Second Quarter Earnings and Sales Trends
Page 2
February 21, 2002
Revenue for the quarter ended February 1, 2002, of $522.5 million was up
7.9% compared with $484.3 million in the fiscal second quarter of 2001.
Comparable store sales for the Cracker Barrel concept increased 7.8% for
restaurants, including 5.1% higher guest traffic, and 4.3% in retail. The
Logan's concept achieved 3.6% higher comparable store sales, including a 3.5%
increase in guest traffic. During the quarter, the Company opened 5 new
Cracker Barrel units and 4 new company-operated and 1 franchised Logan's
restaurants.
The Company reported net income for the second quarter of fiscal 2002 of
$21.1 million, or $0.37 per diluted share, reflecting increases of 40.4% and
42.3%, respectively, from net income of $15.1 million and diluted earnings
per share of $0.26 for the second quarter of fiscal 2001.
Store operating income margins improved from 10.8% of revenue a year ago
to 11.9% in this year's second fiscal quarter, an improvement in margin of
1.1% as a percent of revenues, reflecting lower cost of goods sold and other
store operating expenses, partly offset by higher labor and related expenses.
The higher labor and related expenses reflected higher store bonuses and
workers' compensation expense.
The Company adopted Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangible Assets," during the first quarter, the
adoption of which caused the Company to cease amortization of goodwill.
During the second quarter, the Company completed its first annual evaluation
of the carrying value of goodwill as required under the new standard and
concluded that there was no current indication of impairment to goodwill.
For the six months ended February 1, 2002, revenue was $1,017.7 million
compared with $951.5 million for the first six months of fiscal 2001, an
increase of 7.0%. Comparable store restaurant sales for Cracker Barrel were
up 6.3% from a year ago, including 3.2% higher guest traffic, and comparable
store retail sales grew 3.0%. For Logan's, comparable store sales during the
first six months of fiscal 2002 increased 2.6%, with a 2.4% increase in guest
traffic. The Company opened 8 new Cracker Barrel units and 8 new company-
operated and 2 franchised Logan's restaurants during the first six months of
the year.
Net income for the Company for the six-month period of $40.8 million, or
$0.72 per diluted share, rose from $32.0 million, or $0.56 per diluted share,
during the six months of last year, reflecting increases of 27.5% and 28.6%,
respectively.
Commenting on the results, CBRL Group, Inc. President and Chief
Executive Officer Michael A. Woodhouse said, "We are pleased to report that
our second quarter performance was at the high end of our expectations, for
which we thank our loyal customers and our dedicated employees. Our already
solid underlying sales performance was enhanced by the benefits from
favorable weather and apparently increased highway travel for Cracker Barrel.
Cracker Barrel also completed its holiday retail season with lower than
expected markdowns. While labor costs, especially store bonuses related to
the strong quarterly performance and unfavorable development of prior years'
workers' compensation claims from our independently determined actuarial
estimates, were a pressure point, we still recorded a significant improvement
in operating income margins, evidencing the improving performance of our
business."
THE COMPANY URGES CAUTION IN CONSIDERING ITS CURRENT TRENDS AND THE
EARNINGS TARGETS DISCLOSED IN THIS PRESS RELEASE. 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. 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.
-MORE-
CBRL Announces Second Quarter Earnings and Sales Trends
Page 3
February 21, 2002
The Company reported that quarter-to-date comparable store restaurant
sales in its Cracker Barrel units are up 3.5-4% compared with the same period
a year ago, including 1.5-2% higher guest traffic. Quarter-to-date retail
sales in the comparable units are up approximately 4%. Quarter-to-date
comparable store sales and guest traffic in the Company's Logan's restaurants
are up 2-2.5% from last year.
Present earnings guidance for the remainder of the fiscal year exceeds
the Company's objective of 15% growth in earnings per share. The Company's
present guidance for diluted earnings per share for the third quarter of
fiscal 2002, which ends on May 3, 2002, is in the low-to-mid $0.30's,
compared with $0.26 in the year-ago quarter. Second quarter results as
reported today were at the high end of the Company's previous guidance,
supporting strongly its guidance for the full fiscal year for diluted
earnings per share in the mid-$1.50's. This compares with fiscal 2001
earnings of $1.30 per share before the effect of charges taken in fiscal
2001. The Company pointed out that last year's fourth fiscal quarter
benefited from a fourteenth week compared with this year's thirteen weeks.
Earnings guidance reflects many assumptions, most of which cannot be known
with certainty, including very importantly, sales expectations. While the
Company's present earnings guidance reflects no additional menu pricing in
its Logan's concept over the remainder of the year, a modest price increase
of less than one percent is planned in its Cracker Barrel units at the end of
February. Guidance is based on Cracker Barrel restaurant and retail
comparable store sales generally in the 4-5% and 3-5% ranges, respectively,
and Logan's comparable store sales generally in the 2-3% range. The Company
expects to open six new Cracker Barrel units in each of the third and fourth
fiscal quarters, and one company-operated and one franchised Logan's
restaurant in the third fiscal quarter.
Thus far this fiscal year, the Company has repurchased almost 1.7
million shares of its common stock for total consideration of $44.1 million,
or approximately $26.54 per share. These purchases were made under the
Company's currently authorized three-million-share repurchase program.
Headquartered in Lebanon, Tennessee, CBRL Group, Inc. presently operates
447 Cracker Barrel Old Country Store restaurants and gift shops located in 41
states and 83 company operated and 11 franchised Logan's Roadhouse
restaurants in 16 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", "GUIDANCE",
"PLANS", "MAY", "WILL", "WOULD", "EXPECT", "PROJECT", "PROJECTION", "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: ADVERSE GENERAL
ECONOMIC CONDITIONS INCLUDING UNCERTAIN CONSUMER CONFIDENCE EFFECTS ON SALES;
THE ACTUAL RESULTS OF PENDING OR THREATENED LITIGATION; THE EFFECTS OF
NEGATIVE PUBLICITY; WEATHER CONDITIONS; COMMODITY, WORKERS' COMPENSATION,
GROUP HEALTH AND UTILITY PRICE INCREASES; THE EFFECTS 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
AVAILABILITY AND COST OF ACCEPTABLE SITES FOR DEVELOPMENT; THE ACCEPTANCE OF
THE COMPANY'S CONCEPTS AS THE COMPANY CONTINUES TO EXPAND INTO NEW MARKETS
AND GEOGRAPHIC REGIONS; 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,
TAX, PENSIONS AND INSURANCE; PRACTICAL OR PSYCHOLOGICAL EFFECTS OF TERRORIST
ACTS OR MILITARY RESPONSES; 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, PRESS RELEASES
AND OTHER COMMUNICATIONS.
-MORE-
CBRL Announces Second Quarter Earnings and Sales Trends
Page 4
February 21, 2002
CBRL GROUP, INC.
CONSOLIDATED INCOME STATEMENT (Unaudited)
(In thousands, except per share amounts)
SECOND QUARTER ENDED SIX MONTHS ENDED
--------------------------- ----------------------------
2/1/02 1/26/01 CHANGE 2/1/02 1/26/01 CHANGE
------ ------- ------ ------ ------- ------
Net Sales:
Restaurant $ 391,176 $ 354,403 10% $ 786,913 $ 724,445 9%
Retail 131,064 129,690 1 230,320 226,712 2
--------- --------- ---------- ---------
Net sales 522,240 484,093 8 1,017,233 951,157 7
Franchise fees and royalties 262 174 51 482 365 32
--------- --------- ---------- ---------
Total revenue 522,502 484,267 8 1,017,715 951,522 7
Cost of goods sold 181,732 174,539 4 344,932 330,611 4
--------- --------- ---------- ---------
Gross profit 340,770 309,728 10 672,783 620,911 8
Labor & other related expenses 191,308 173,728 10 378,203 347,018 9
Other store operating expenses 87,204 83,756 4 169,232 163,554 3
--------- --------- ---------- ---------
Store operating income 62,258 52,244 19 125,348 110,339 14
General and administrative 28,014 23,969 17 58,748 50,599 16
Amortization of goodwill - 999 (100) - 1,997 (100)
--------- --------- ---------- ---------
Operating income 34,244 27,276 26 66,600 57,743 15
Interest expense 1,328 3,298 (60) 3,081 6,776 (55)
Interest income - 35 (100) - 54 (100)
--------- --------- ---------- ---------
Pretax income 32,916 24,013 37 63,519 51,021 24
Provision for income taxes 11,784 8,957 32 22,740 19,031 19
--------- --------- ---------- ---------
Net income $ 21,132 $ 15,056 40 $ 40,779 $ 31,990 27
========= ========= ========== =========
Earnings per share:
Basic $ 0.38 $ 0.27 41 $ 0.74 $ 0.56 32
Diluted $ 0.37 $ 0.26 42 $ 0.72 $ 0.56 29
Weighted average shares:
Basic 55,498 56,633 (2) 55,217 56,666 (3)
Diluted 57,595 57,600 - 56,888 57,215 (1)
Ratio Analysis
- --------------
Net sales:
Restaurant 74.9% 73.2% 77.3% 76.1%
Retail 25.1 26.8 22.7 23.9
--------- --------- ---------- ---------
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 34.8 36.0 33.9 34.7
--------- --------- ---------- ---------
Gross profit 65.2 64.0 66.1 65.3
Labor & other related expenses 36.6 35.9 37.2 36.5
Other store operating expenses 16.7 17.3 16.6 17.2
--------- --------- ---------- ---------
Store operating income 11.9 10.8 12.3 11.6
General and administrative 5.4 5.0 5.8 5.3
Amortization of goodwill - 0.2 - 0.2
--------- --------- ---------- ---------
Operating income 6.5 5.6 6.5 6.1
Interest expense 0.2 0.7 0.3 0.7
Interest income - - - -
--------- --------- ---------- ---------
Pretax income 6.3 4.9 6.2 5.4
Provision for income taxes 2.3 1.8 2.2 2.0
--------- --------- ---------- ---------
Net income 4.0% 3.1% 4.0% 3.4%
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-MORE-
CBRL Announces Second Quarter Earnings and Sales Trends
Page 5
February 21, 2002
CONSOLIDATED CONDENSED BALANCE SHEET
(Unaudited)
(In thousands)
2/1/2002 8/3/2001
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Assets
Cash and cash equivalents $ 18,173 $ 11,807
Other current assets 135,156 143,383
Property and equipment, net 969,711 955,028
Goodwill, net 92,882 92,882
Other assets 10,712 9,772
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Total assets $1,226,634 $1,212,872
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Liabilities and Stockholders' Equity
Current liabilities $ 167,860 $ 197,249
Long-term debt 135,000 125,000
Other long-term obligations 46,239 44,515
Stockholders' equity 877,535 846,108
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Total liabilities and stockholders' equity $1,226,634 $1,212,872
========== ==========
CONSOLIDATED CONDENSED CASH FLOW STATEMENT
(Unaudited)
(In thousands)
SIX MONTHS ENDED
------------------------
2/1/02 1/26/01
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Cash flow from operating activities:
Net income $ 40,779 $ 31,990
Depreciation and amortization 30,019 31,638
Gain on disposition of property and equipment (84) (8)
Net changes in other assets and liabilities (20,501) (9,658)
---------- ----------
Net cash provided by operating activities 50,213 53,962
---------- ----------
Cash flows from investing activities:
Purchase of property and equipment (45,781) (55,009)
Net proceeds from sale of property and equipment 1,336 141,366
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Net cash (used in) provided by investing activities (44,445) 86,357
---------- ----------
Cash flows from financing activities:
Proceeds from issuance of long-term debt 273,600 171,500
Principal payments under long-term debt and
other long-term obligations (263,650) (307,618)
Proceeds from exercise of stock options 35,950 3,436
Purchases and retirement of common stock (44,139) (10,852)
Dividends on common stock (1,163) (1,185)
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Net cash provided by (used in) financing activities 598 (144,719)
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Net increase (decrease) in cash and cash equivalents 6,366 (4,400)
Cash and cash equivalents, beginning of period 11,807 13,865
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Cash and cash equivalents, end of period $ 18,173 $ 9,465
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CBRL Announces Second Quarter Earnings and Sales Trends
Page 6
February 21, 2002
CBRL GROUP, INC.
SUPPLEMENTAL INFORMATION
AS OF AS OF AS OF
2/1/2002 8/3/2001 1/26/2001
-------- -------- ---------
Common shares outstanding 55,431,802 55,026,846 55,251,347
========== ========== ==========
Units in operation:
Cracker Barrel 445 437 434
Carmine Giardini's Gourmet Market* - - 3
Logan's Roadhouse - company-owned 83 75 74
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Total company-owned units 528 512 511
Logan's Roadhouse - franchised 10 8 8
---------- ---------- ----------
System-wide units 538 520 519
========== ========== ==========
SECOND QUARTER ENDED SIX MONTHS ENDED
2/1/02 1/26/01 2/1/02 1/26/01
------ ------- ------ -------
Net sales in company-owned stores:
(In thousands)
Cracker Barrel - restaurant $ 330,754 $ 301,890 $ 670,758 $ 622,823
Cracker Barrel - retail 131,064 126,095 230,320 220,904
--------- --------- ---------- ---------
Cracker Barrel - total 461,818 427,985 901,078 843,727
Carmine Giardini's Gourmet Market* - 4,899 - 7,984
Logan's Roadhouse 60,422 51,209 116,155 99,446
--------- --------- ---------- ---------
Total net sales $ 522,240 $ 484,093 $1,017,233 $ 951,157
========= ========= ========== =========
Operating weeks - company-owned stores:
Cracker Barrel 5,747 5,630 11,448 11,214
Logan's Roadhouse 1,060 944 2,058 1,821
Average comparable store sales -
company-owned stores: (In thousands)
Cracker Barrel - restaurant $ 747.6 $ 693.2 $ 1,523.8 $ 1,433.8
Cracker Barrel - retail 295.6 283.4 521.6 506.6
--------- --------- ---------- ---------
Cracker Barrel - total $ 1,043.2 $ 976.6 $ 2,045.4 $ 1,940.4
========= ========= ========== =========
Logan's Roadhouse $ 732.4 $ 707.1 $ 1,467.9 $ 1,430.7
========= ========= ========== =========
Capitalized interest $ 87 $ 261 $ 197 $ 583
========= ========= ========== =========
*The Company exited the Carmine Giardini's Gourmet Market business at the end of fiscal 2001.
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