| [CBRL GROUP, INC. LOGO] | Post Office Box 787 |
| Lebanon, Tennessee 37088 | |
| Phone 615.443.9869 | |
| Fax 615.443.9818 | |
| cbrlgroup.com |
December
11, 2006
Mr.
David
R. Humphrey, Branch Chief-Accountant
U.S.
Securities and Exchange Commission
450
Fifth
Street, N.W.
Washington,
D.C. 20549
|
Re:
|
CBRL
Group, Inc. Form 10-K for the year ended July 28, 2006,
|
File
No. 000-25225
Dear
Mr.
Humphrey:
We
have
received your letter dated November 13, 2006 (the “Letter”) with respect to the
CBRL Group, Inc. (the “Company”) Form 10-K for the fiscal year ended July 28,
2006. First let me thank you for the additional 10 business days to respond
that
we requested. We have reviewed the comments from the Securities and Exchange
Commission (the “Commission”) concerning questions and requests for supplemental
information contained in numbered paragraphs 1 through 3 of the Letter and
we
have the following responses.
| 1. |
Comment:
You indicate that you make estimates of the ultimate unredeemed
gift cards
and certificates in the period of the original sale and amortize
this
breakage through the redemption period. Please clarify this disclosure
by
further indicating, if true, that no revenue is recognized in connection
with the point of sale transaction. Supplementally tell us and
revise your
disclosure to explain how you account for the amounts remitted
to those
states that do not exempt gift cards and certificates from their
escheat
laws. Also, assuming such amounts are expensed when paid to the
applicable
state, tell us what consideration was given to recording such amounts
as a
reduction of the liability with no recognition of any revenue or
expense
for these transactions.
|
|
Response:
The Company updated this disclosure in its Quarterly Report on
Form 10-Q
for the quarter ended October 27, 2006 filed with the Commission
on
December 6, 2006 (the “2007 Q-1 10-Q”). First, a sentence was added to
clarify that “no revenue is recognized in connection with the
point-of-sale transaction when gift cards or gift certificates
are sold.”
Also, a second sentence was added to clarify that “any amounts remitted to
states under escheat laws reduce the Company’s deferred revenue and have
no effect on revenue or expense while any amounts permitted by
the state
escheat laws to be retained by the Company for administrative costs
are
recorded as revenue.” Other than as it relates to administrative fees, the
Company does not believe that amounts remitted to states under
escheat
laws meet the definition of revenue or
expense.
|
|
Mr. David R. Humphrey
December 11, 2006
Page 2
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| 2. |
Comment:
With respect to your 3% zero-coupon contingently convertible senior
notes,
we note that you have arranged a $200 million term loan facility
to
repurchase these senior notes. However, it is unclear whether you
would
account for the cumulative accretion of original issue discount at
the
date of repurchase in your statement of cash flows as an operating
activity pursuant to paragraph 23(d) of SFAS 95. Please advise us
supplementally.
|
|
Response:
At
the date of repurchase, the cumulative accretion of original issue
discount on our 3% zero-coupon contingently convertible senior notes
will
be classified in the Company’s statement of cash flows as an operating
activity pursuant to paragraph 23(d) of SFAS 95.
|
|
| 3. |
Comment:
We
note several references throughout your filing to possible divestitures
of
your Logan’s Roadhouse subsidiary. We also note your recent announcement
of an agreement to sell this subsidiary. In this regard, supplementally
tell us when you believe that the criteria set forth in paragraph
30 of
SFAS 144 were met.
|
|
Response:
The
Company updated this disclosure in the 2007 Q-1 10-Q as follows:
“On
October 12, 2006, the Company’s Board of Directors approved, within
specified parameters, the terms and provisions of a stock purchase
agreement (the “Stock Purchase Agreement”) with LRI Holdings, Inc. (“LRI”)
to divest Logan’s and authorized management to complete, and, subject to
the receipt of written confirmation that the consideration to be
received
in the divestiture was fair to the Company from a financial perspective,
thereafter, to execute and deliver the Stock Purchase Agreement.
Therefore, the Company believes that Logan’s met the criteria for
classification as discontinued operations on October 12,
2006.”
|
|
|
|
Supplementally,
we advise you as follows: On March 16, 2006 the Company’s Board of
Directors (the “Board”) approved the Company’s officers' preparation of a
confidential information memorandum and other offering memoranda
that
could be distributed to potential purchasers of Logan’s Roadhouse, Inc.
(“Logan’s”) and to solicit indications of interest from potential
purchasers of Logan’s as well as the pursuit of a potential initial public
offering (“IPO”) of Logan’s. Each of these courses of action, however,
remained at that time subject to the Board’s specific reservation of the
right to review and approve any proposed divestiture of Logan’s, including
the terms of any IPO. Accordingly, the Company deemed the criteria
in
paragraphs 30(b), (c) and (e) of SFAS 144 were met on March 16, 2006.
Additionally in connection with the potential IPO, on May 25, 2006,
the
Board formed a Pricing Committee made up of the Board’s Executive
Committee members together with certain executive officers. The Board
granted the Pricing Committee the authority to price and approve
an IPO
|
| Mr. David R. Humphrey
December 11, 2006
Page 3
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|
|
that
would divest 100% of the stock of Logan’s without further Board approval.
The Board did not provide the Pricing Committee, however, with
the
authority to sell Logan’s by any means other than an IPO. On July 13,
2006, pursuant to the Board’s grant of authority to pursue an IPO, a
registration statement under the Securities Act of 1933 was filed
by
Logan’s with the Commission. In view of the indications of interest that
the Company was receiving from potential private buyers of Logan’s and the
uncertainty of the IPO process, however, the Company deemed it
unlikely
that an IPO would occur. Because of these uncertainties, the Company
could
not conclude that “it was unlikely significant changes to the plan would
be made or the plan would be withdrawn” or that the disposition was
“probable.” Thus, with respect to the potential IPO, the Company believes
that paragraphs 30(d) and 30(f) of SFAS No. 144 were never met.
Finally,
paragraph 30(a) of SFAS 144 was not met with respect to any disposition
other than an IPO because management with appropriate authority
did not
approve a disposition by sale of Logan’s until October 12, 2006. The
Company believes that the criteria in paragraphs 30(a), (d) and
(f) were
met on October 12, 2006 when the Board took the action described
above.
Since all of the criteria listed in paragraph 30 of SFAS No. 144
were not
met until October 12, 2006, the Company believes that Logan’s did not meet
the criteria for classification as discontinued operations until
that
date.
|
|
In
connection
with responding to your comments, we acknowledge that: 1) we are responsible
for
the adequacy and accuracy of the disclosure in our Form 10-K for the fiscal
year
ended July 28, 2006 filed with the Commission on October 3, 2006; 2) staff
comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and 3)
we may
not assert staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United
States.
We
trust that
we have been responsive to your comments. Please contact us if the Commission
has further questions or would like additional information with respect
to the
matters discussed.
|
Very
truly yours,
|
|
| /s/ N. B. Forrest Shoaf | |
| N.B. Forrest Shoaf | |
|
Senior
Vice President and General Counsel
|
|
|
cc: Mike
Woodhouse
|
|
| Larry White | |
| Patrick Scruggs | |
|
Gary
Brown, Esq.
|