UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
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 23,
2010
CRACKER
BARREL OLD COUNTRY STORE, 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
Check the
appropriate box if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following
provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
2.02. Results of Operations and Financial Condition.
On February 23, 2010, Cracker Barrel
Old Country Store, Inc. issued the press release that is furnished as Exhibit
99.1 to this Current Report on Form 8-K, which by this reference is incorporated
herein as if copied verbatim, with respect to fiscal 2010 second quarter results
and the outlook for fiscal 2010.
Item
7.01. Regulation FD Disclosure.
The information set forth in Item
2.02 above is incorporated by reference as if fully set forth
herein.
Item
9.01. Financial Statements and Exhibits.
|
(d)
|
Exhibits.
|
|
|
See
Exhibit Index immediately following signature
page.
|
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
23, 2010
|
CRACKER
BARREL OLD COUNTRY
|
||
|
STORE,
INC.
|
|||
|
By:
|
/s/ N.B. Forrest Shoaf | ||
|
Name:
|
N.B.
Forrest Shoaf
|
||
|
Title:
|
Senior
Vice President, Secretary
|
||
|
and
Chief Legal Officer
|
|||
|
EXHIBIT INDEX
|
||
|
Exhibit
No.
|
Description
|
|
|
99.1
|
Press
Release issued by Cracker Barrel Old Country Store, Inc. dated February
23, 2010 (furnished only)
|
|
Exhibit 99.1
 |
POST OFFICE
BOX 787
LEBANON, TENNESSEE
37088-0787
|
| Investor Contact: | Barbara A. Gould |
| (615) 235-4124 | |
| Media Contact: | Julie K. Davis |
| (615) 443-9266 |
CRACKER
BARREL REPORTS 35% INCREASE IN SECOND-QUARTER EPS
UPDATES
FISCAL 2010 OUTLOOK
|
·
|
Fully
diluted income per share was $1.09 for the second quarter of fiscal 2010,
an increase of 35% compared
with the prior-year quarter
|
|
·
|
Operating
income margin in the second quarter was 7.8% of total revenue compared
with 6.2% in the prior-year quarter
|
|
·
|
Revenue
for the second quarter increased 0.4% to $632.6
million
|
|
·
|
Comparable
store restaurant traffic outpaced the Knapp-Track™ Traffic Index for the
fourteenth consecutive quarter
|
|
·
|
Comparable
store restaurant and retail sales decreased 0.2% and 3.0%,
respectively
|
|
·
|
Net
cash flow from operating activities for the first six months of fiscal
2010 increased $36.4 million to $86.3 million compared with the
prior-year comparable period
|
|
·
|
Reduced
long-term debt by $41.4 million in the second
quarter
|
|
·
|
Repurchased
205,000 shares in the second
quarter
|
LEBANON, Tenn. -- February 23, 2010 – Cracker
Barrel Old Country Store, Inc. (“Cracker Barrel,” or the “Company”)
(Nasdaq: CBRL) today reported net income per diluted share of $1.09 for the
second quarter of fiscal 2010, compared with $0.81 in the second quarter of
fiscal 2009, an increase of 34.6%. Net income was $25.4 million
compared with $18.4 million in the second quarter of fiscal 2009.
Second-Quarter
Fiscal 2010 Results
Revenue
from
continuing operations
In the
second quarter of fiscal 2010, total revenue of $632.6 million increased 0.4%
from the second quarter of fiscal 2009. Comparable store restaurant
sales for the period decreased 0.2%, including a 2.1% higher average
check. The average menu price increase for the quarter was
approximately 2.4%. Comparable store retail sales were down 3.0% for
the quarter. During the quarter, the Company opened two new Cracker
Barrel Old Country Store units, after having opened three in the first
quarter. Since the end of the second quarter, the Company has opened
one additional store.
-MORE-
Cracker
Barrel Reports 35% Increase in Second-Quarter EPS
Page 2
February 23, 2010
Comparable
store restaurant and retail sales for the fiscal months of November, December
and January were as follows:
|
November
|
December
|
January
|
Second Quarter
|
|
|
Comparable
restaurant traffic
|
-2.9%
|
-2.6%
|
-1.5%
|
-2.3%
|
|
Average
check
|
2.1%
|
2.3%
|
1.9%
|
2.1%
|
|
Comparable
restaurant sales
|
-0.8%
|
-0.3%
|
0.4%
|
-0.2%
|
|
Comparable
retail sales
|
-9.9%
|
-3.6%
|
8.0%
|
-3.0%
|
Excluding
the impact of severe weather in the quarter, comparable store restaurant sales
would have been slightly positive.
Operating
Income
In the
second quarter of fiscal 2010, operating income of $49.4 million was 7.8% of
total revenue compared with $39.3 million, or 6.2% of total revenue, in the
second quarter of fiscal 2009. The increase in operating income was
the result of lower food costs, lower retail markdowns and lower labor and
related expenses partially offset by higher general and administrative expenses
and impairment charges.
Commenting
on the second-quarter results, Cracker Barrel Old Country Store, Inc. Chairman,
President and Chief Executive Officer Michael A. Woodhouse said, “Our results
reflect better execution in every part of the company. Our guest
satisfaction scores continue to improve as we roll-out the Seat to Eat
initiative, offer new menu choices and appealing products in our retail shops
and continue our focus on providing a high-quality guest experience each and
every time. Our guest traffic has now outperformed the Knapp-Track™
index for fourteen consecutive quarters.”
Year-to-date
Fiscal 2010 Results
Total
revenue from continuing operations of $1.2 billion year-to-date for fiscal 2010
represented an increase of 0.8% over fiscal 2009. Comparable store
restaurant sales increased 0.2%, including a 2.0% higher
check. Comparable store retail sales decreased 3.8%.
The
Company reported net income of $43.4 million, or $1.87 per diluted share,
compared with net income of $31.2 million, or $1.38 per diluted share, in fiscal
2009.
Year-to-date
net cash flow provided by operating activities was $86.3 million, compared with
$49.8 million in fiscal 2009, reflecting higher net income and continued
improvements in working capital. The Company used a portion of the
cash flow to reduce its long-term debt by $41.4 million. The Company
also repurchased 205,000 shares during the second quarter.
-MORE-
Cracker
Barrel Reports 35% Increase in Second-Quarter EPS
Page 3
February 23, 2010
Fiscal
2010 Outlook Update
The
Company commented that its updated outlook for fiscal 2010 continues to reflect
many assumptions, the accuracy of which is not yet known. Based on
current trends and estimates, the Company presently expects fiscal 2010 total
revenue to be in the range of flat to an increase of approximately 2.0% over
revenue in fiscal 2009. The revenue increase reflects the expected
opening of a total of six new Cracker Barrel units during the year, projected
comparable store restaurant sales between a decrease of 0.5% to an increase of
1.0%, and comparable store retail sales between a decrease of 2.0% to
flat. Depreciation for the year is expected to be $60 to $62
million. The Company expects fiscal 2010 operating income margin to
be approximately 6.7% to 6.9% compared with 6.0% in fiscal 2009. Net
interest expense is estimated to be $48 to $50 million, and diluted shares
outstanding are expected to be in the range of 23 to 23.5
million. The Company expects its full year 2010 effective tax rate to
be between 27.5% and 28.5%. Based on the assumptions outlined
above, full-year net income per diluted share for the 2010 fiscal year is
projected to be between $3.35 and $3.50. The Company expects capital
expenditures for fiscal 2010 to be between $70 and $75 million.
Commenting
on the outlook, Mr. Woodhouse said, “We’re very pleased with what we’ve done in
these difficult times, and we’re proud of the fact that our trusted brand
continues to offer great value in a family-friendly setting. Our execution is
continuing to improve and it’s helping us sustain our top line and better manage
the cost side of the business.”
Fiscal
2010 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 today
beginning at 11:00 a.m. (ET). The on-line replay will be available at
2:00 p.m. (ET) and continue through March 9, 2010.
The
Company plans to announce its fiscal 2010 third quarter earnings and comparable
restaurant and retail sales on Tuesday, May 25, 2010.
About
Cracker Barrel
Cracker
Barrel Old Country Storeâ
restaurants provide 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 594 company-owned locations in 41
states. Every Cracker Barrel unit 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.
-MORE-
Cracker
Barrel Reports 35% Increase in Second-Quarter EPS
Page 4
February 23, 2010
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 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 our fiscal 2010 outlook
and expected number of new units. Factors which could materially
affect actual results include, but are not limited to: the effects of
uncertain consumer confidence, higher costs for energy, or general or regional
economic weakness, or 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 its
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”);
-MORE-
Cracker
Barrel Reports 35% Increase in Second-Quarter EPS
Page 5
February 23, 2010
and
other factors described from time to time in our filings with the Securities and
Exchange Commission, press releases, and other communications.
-MORE-
Cracker
Barrel Reports 35% Increase in Second-Quarter EPS
Page 6
February 23, 2010
CRACKER BARREL OLD COUNTRY STORE,
INC.
CONDENSED
CONSOLIDATED INCOME STATEMENT
(Unaudited)
(In
thousands, except share amounts)
|
Second
Quarter Ended
|
Six
Months Ended
|
|||||||||||||||||||||||
|
1/29/10
|
1/30/09
|
Percentage
Change
|
1/29/10
|
1/30/09
|
Percentage
Change
|
|||||||||||||||||||
|
Total
revenue
|
$ | 632,616 | $ | 630,182 | 0 | % | $ | 1,213,799 | $ | 1,204,114 | 1 | % | ||||||||||||
|
Cost
of goods sold
|
211,898 | 222,493 | (5 | ) | 389,369 | 403,850 | (4 | ) | ||||||||||||||||
|
Gross
profit
|
420,718 | 407,689 | 3 | 824,430 | 800,264 | 3 | ||||||||||||||||||
|
Labor
and other related expenses
|
228,594 | 234,118 | (2 | ) | 453,354 | 456,551 | (1 | ) | ||||||||||||||||
|
Other
store operating expenses
|
105,501 | 105,740 | -- | 210,967 | 211,706 | -- | ||||||||||||||||||
|
Impairment
charges
|
2,263 | -- | -- | 2,263 | -- | -- | ||||||||||||||||||
|
Store
operating income
|
84,360 | 67,831 | 24 | 157,846 | 132,007 | 20 | ||||||||||||||||||
|
General
and administrative expenses
|
34,975 | 28,558 | 22 | 70,476 | 60,176 | 17 | ||||||||||||||||||
|
Operating
income
|
49,385 | 39,273 | 26 | 87,370 | 71,831 | 22 | ||||||||||||||||||
|
Interest
expense
|
13,293 | 13,281 | -- | 25,063 | 27,314 | (8 | ) | |||||||||||||||||
|
Pretax
income
|
36,092 | 25,992 | 39 | 62,307 | 44,517 | 40 | ||||||||||||||||||
|
Provision
for income taxes
|
10,699 | 7,630 | 40 | 18,890 | 13,323 | 42 | ||||||||||||||||||
|
Net
income
|
$ | 25,393 | $ | 18,362 | 38 | $ | 43,417 | $ | 31,194 | 39 | ||||||||||||||
|
Earnings
per share – Basic:
|
||||||||||||||||||||||||
|
Net
income per share
|
$ | 1.11 | $ | 0.82 | 35 | $ | 1.90 | $ | 1.39 | 37 | ||||||||||||||
|
Earnings
per share – Diluted:
|
||||||||||||||||||||||||
|
Net
income per share
|
$ | 1.09 | $ | 0.81 | 35 | $ | 1.87 | $ | 1.38 | 36 | ||||||||||||||
|
Weighted
average shares:
|
||||||||||||||||||||||||
|
Basic
|
22,831,645 | 22,389,598 | 2 | 22,796,846 | 22,369,783 | 2 | ||||||||||||||||||
|
Diluted
|
23,397,279 | 22,597,183 | 4 | 23,266,832 | 22,631,754 | 3 | ||||||||||||||||||
|
Ratio Analysis
|
||||||||||||||||||||||||
|
Total
revenue:
|
||||||||||||||||||||||||
|
Restaurant
|
74.9 | % | 74.4 | % | 77.5 | % | 76.8 | % | ||||||||||||||||
|
Retail
|
25.1 | 25.6 | 22.5 | 23.2 | ||||||||||||||||||||
|
Total
revenue
|
100.0 | 100.0 | 100.0 | 100.0 | ||||||||||||||||||||
|
Cost
of goods sold
|
33.5 | 35.3 | 32.1 | 33.5 | ||||||||||||||||||||
|
Gross
profit
|
66.5 | 64.7 | 67.9 | 66.5 | ||||||||||||||||||||
|
Labor
and other related expenses
|
36.1 | 37.1 | 37.3 | 37.9 | ||||||||||||||||||||
|
Other
store operating expenses
|
16.7 | 16.8 | 17.4 | 17.6 | ||||||||||||||||||||
|
Impairment
charges
|
0.4 | -- | 0.2 | -- | ||||||||||||||||||||
|
Store
operating income
|
13.3 | 10.8 | 13.0 | 11.0 | ||||||||||||||||||||
|
General
and administrative expenses
|
5.5 | 4.6 | 5.8 | 5.0 | ||||||||||||||||||||
|
Operating
income
|
7.8 | 6.2 | 7.2 | 6.0 | ||||||||||||||||||||
|
Interest
expense
|
2.1 | 2.1 | 2.1 | 2.3 | ||||||||||||||||||||
|
Pretax
income
|
5.7 | 4.1 | 5.1 | 3.7 | ||||||||||||||||||||
|
Provision
for income taxes
|
1.7 | 1.2 | 1.5 | 1.1 | ||||||||||||||||||||
|
Net
income
|
4.0 | % | 2.9 | % | 3.6 | % | 2.6 | % | ||||||||||||||||
-MORE-
Cracker
Barrel Reports 35% Increase in Second-Quarter EPS
Page 7
February 23, 2010
CRACKER
BARREL OLD COUNTRY STORE, INC.
CONDENSED
CONSOLIDATED BALANCE SHEET
(Unaudited
and in thousands, except share amounts)
|
1/29/10
|
7/31/09
|
|||||||
|
Assets
|
||||||||
|
Cash
and cash equivalents
|
$ | 13,151 | $ | 11,609 | ||||
|
Inventory
|
120,859 | 137,424 | ||||||
|
Other
current assets
|
58,030 | 49,292 | ||||||
|
Property
and equipment, net
|
994,814 | 1,001,776 | ||||||
|
Long-lived
assets
|
50,010 | 45,080 | ||||||
|
Total
assets
|
$ | 1,236,864 | $ | 1,245,181 | ||||
|
Liabilities
and Shareholders’ Equity
|
||||||||
|
Accounts
payable
|
$ | 71,606 | $ | 92,168 | ||||
|
Other
current liabilities
|
181,870 | 172,794 | ||||||
|
Long-term
debt
|
595,236 | 638,040 | ||||||
|
Other
long-term obligations
|
215,065 | 206,557 | ||||||
|
Shareholders’
equity
|
173,087 | 135,622 | ||||||
|
Total
liabilities and shareholders’ equity
|
$ | 1,236,864 | $ | 1,245,181 | ||||
|
Common
shares outstanding
|
22,802,610 | 22,722,685 | ||||||
-MORE-
Cracker
Barrel Reports 35% Increase in Second-Quarter EPS
Page 8
February 23,
2010
CRACKER
BARREL OLD COUNTRY STORE, INC.
CONDENSED
CONSOLIDATED CASH FLOW STATEMENT
(Unaudited
and in thousands)
|
Six
Months Ended
|
||||||||
|
1/29/10
|
1/30/09
|
|||||||
|
Cash
flows from operating activities:
|
||||||||
|
Net
income
|
$ | 43,417 | $ | 31,194 | ||||
|
Depreciation
and amortization
|
30,499 | 28,938 | ||||||
|
Loss
on disposition of property and equipment
|
2,033 | 1,790 | ||||||
|
Impairment
|
2,263 | -- | ||||||
|
Share-based
compensation, net of excess tax benefit
|
4,597 | 3,744 | ||||||
|
Decrease
in inventories
|
16,565 | 18,196 | ||||||
|
Decrease
in accounts payable
|
(20,562 | ) | (36,969 | ) | ||||
|
Net
changes in other assets and liabilities
|
7,452 | 2,941 | ||||||
|
Net
cash provided by operating activities
|
86,264 | 49,834 | ||||||
|
Cash
flows from investing activities:
|
||||||||
|
Purchase
of property and equipment, net of insurance
recoveries
|
(27,374 | ) | (37,370 | ) | ||||
|
Proceeds
from sale of property and equipment
|
100 | 1,496 | ||||||
|
Net
cash used in investing activities
|
(27,274 | ) | (35,874 | ) | ||||
|
Cash
flows from financing activities:
|
||||||||
|
Net
payments for credit facilities and other long-term
obligations
|
(43,260 | ) | (7,065 | ) | ||||
|
Proceeds
from exercise of share-based
compensation awards
|
4,564 | 877 | ||||||
|
Excess
tax benefit from share-based compensation
|
1,228 | -- | ||||||
|
Purchase
and retirement of common stock
|
(7,799 | ) | -- | |||||
|
Deferred
financing costs
|
(2,908 | ) | -- | |||||
|
Dividends
on common stock
|
(9,273 | ) | (8,615 | ) | ||||
|
Net
cash used in financing activities
|
(57,448 | ) | (14,803 | ) | ||||
|
Net
increase (decrease) in cash and cash equivalents
|
1,542 | (843 | ) | |||||
|
Cash
and cash equivalents, beginning of period
|
11,609 | 11,978 | ||||||
|
Cash
and cash equivalents, end of period
|
$ | 13,151 | $ | 11,135 | ||||
-MORE-
Cracker
Barrel Reports 35% Increase in Second-Quarter EPS
Page 9
February 23, 2010
CRACKER
BARREL OLD COUNTRY STORE, INC.
Supplemental
Information
(Unaudited)
|
Second Quarter Ended
|
Six Months Ended
|
|||||||||||||||
|
1/29/10
|
1/30/09
|
1/29/10
|
1/30/09
|
|||||||||||||
|
Units
in operation:
|
||||||||||||||||
|
Open
at beginning of period
|
591 | 581 | 588 | 577 | ||||||||||||
|
Opened
during period
|
2 | 4 | 5 | 8 | ||||||||||||
|
Open
at end of period
|
593 | 585 | 593 | 585 | ||||||||||||
|
Total
revenue: (In thousands)
|
||||||||||||||||
|
Restaurant
|
$ | 473,953 | $ | 468,919 | $ | 940,785 | $ | 924,886 | ||||||||
|
Retail
|
158,663 | 161,263 | 273,014 | 279,228 | ||||||||||||
|
Total
|
$ | 632,616 | $ | 630,182 | $ | 1,213,799 | $ | 1,204,114 | ||||||||
|
Operating
weeks:
|
7,708 | 7,594 | 15,373 | 15,109 | ||||||||||||
|
Average
unit volume: (In thousands)
|
||||||||||||||||
|
Restaurant
|
$ | 799.3 | $ | 802.7 | $ | 1,591.1 | $ | 1,591.6 | ||||||||
|
Retail
|
267.6 | 276.1 | 461.8 | 480.5 | ||||||||||||
|
Total
|
$ | 1,066.9 | $ | 1,078.8 | $ | 2,052.9 | $ | 2,072.1 | ||||||||
|
Q2 2010 vs. Q2 2009
|
6 mo. 2010 vs. 6 mo. 2009 | |||||||
|
Comparable
store sales increase (decrease):
|
||||||||
| Restaurant | (0.2)% | 0.2% | ||||||
| Retail | (3.0)% | (3.8)% | ||||||
| Number of locations in comparable store base | 576 | 570 | ||||||
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