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Cracker Barrel Reports Results For First Quarter Fiscal 2013

Stocks in this article: CBRL

Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL) was established in 1969 in Lebanon, Tenn. and operates 621 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 Q1 FY13 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, and 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 successfully implement or sustain 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; our ability to successfully implement 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; 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; 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 STATEMENTS

(Unaudited)

(In thousands, except share and per share amounts, percentages and ratios)

       

First Quarter Ended

 

11/2/12

     

10/28/11

    Percentage

Change

Total revenue $ 627,451 $ 598,437 5%
Cost of goods sold   197,858   186,307 6
Gross profit 429,593 412,130 4
Labor and related expenses 232,739 220,968 5
Other store operating expenses   115,865   109,044 6
Store operating income 80,989 82,118 (1)
General and administrative expenses   35,681   37,494 (5)
Operating income 45,308 44,624 2
Interest expense   10,712   11,135 (4)
Pretax income 34,596 33,489 3
Provision for income taxes   11,404   9,687 18
Net income $ 23,192 $ 23,802 (3)
 
Earnings per share – Basic: $ 0.98 $ 1.04 (6)
Earnings per share – Diluted: $ 0.97 $ 1.03 (6)
 
Weighted average shares:
Basic 23,577,574 22,870,934 3
Diluted 23,787,625 23,145,783 3
 

Ratio Analysis

Total revenue:
Restaurant 80.4% 80.5%
Retail   19.6   19.5

Total revenue

100.0 100.0
Cost of goods sold   31.5   31.1
Gross profit 68.5 68.9
Labor and related expenses 37.1 37.0
Other store operating expenses   18.5   18.2
Store operating income 12.9 13.7
General and administrative expenses   5.7   6.2
Operating income 7.2 7.5
Interest expense   1.7   1.9
Pretax income 5.5 5.6
Provision for income taxes   1.8   1.6
Net income   3.7%   4.0%
 

 

         CRACKER BARREL OLD COUNTRY STORE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited and in thousands, except share amounts)

 
        11/2/12       8/3/12
Assets
Cash and cash equivalents $ 118,865 $ 151,962
Property held for sale 883 884
Accounts receivable 14,893 14,609
Inventory 177,475 143,267
Prepaid expenses 16,907 11,405
Deferred income taxes 11,939 15,181
Property and equipment, net 1,019,253 1,022,370
Other long-term assets 60,288 59,314
Total assets $1,420,503 $1,418,992
 
Liabilities and Shareholders’ Equity
Accounts payable $ 98,847 $ 101,271
Other current liabilities 207,037 217,788
Long-term debt 518,759 525,036
Interest rate swap liability 15,081 14,166
Other long-term obligations 115,705 114,897
Deferred income taxes 62,173 63,159
Shareholders’ equity, net 402,901 382,675
Total liabilities and shareholders’ equity $1,420,503 $1,418,992
 
Common shares issued and outstanding 23,676,980 23,473,024
 
 

 

CRACKER BARREL OLD COUNTRY STORE, INC.

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS

(Unaudited and in thousands)

 
        Three Months Ended
11/2/12       10/28/11
Cash flows from operating activities:
Net income $ 23,192 $ 23,802
Depreciation and amortization 15,959 15,453
Loss on disposition of property and equipment 655 502
Share-based compensation, net of excess tax benefit 595 2,464
(Increase) in inventories (34,208) (19,121)
Increase (decrease) in accounts payable (2,424) 1,788
Net changes in other assets and liabilities (17,397) (4,644)
Net cash provided by (used in) operating activities (13,628) 20,244
Cash flows from investing activities:
Purchase of property and equipment, net of insurance recoveries (13,310) (18,712)
Proceeds from sale of property and equipment 6 107
Net cash used in investing activities (13,304) (18,605)
Cash flows from financing activities:
Net payments for credit facilities and other long-term obligations (29) (30)
Proceeds from exercise of share-based compensation awards 2,322 823
Excess tax benefit from share-based compensation 1,274 83
Dividends on common stock (9,732) (5,018)
Net cash (used in) provided by financing activities (6,165) (4,142)
 
Net change in cash and cash equivalents (33,097) (2,503)
Cash and cash equivalents, beginning of period 151,962 52,274
Cash and cash equivalents, end of period $ 118,865 $ 49,771
 
       

CRACKER BARREL OLD COUNTRY STORE, INC.

Supplemental Information

(Unaudited)

 

First Quarter Ended

11/2/12

     

10/28/11

 
Units in operation:
Open at beginning of period 616 603
Opened during period 4 3
Open at end of period 620 606
 
Total revenue: (In thousands)
Restaurant $504,314 $481,509
Retail 123,137 116,928
Total revenue $627,451 $598,437
 
Cost of goods sold: (In thousands)
Restaurant

 

$135,183

$127,696
Retail

 

62,675

58,611
Total cost of goods sold

 

$197,858

$186,307

Average unit volume: (In thousands)

Restaurant

 

$ 815.1

$ 797.1
Retail

 

199.1

193.6
Total

 

$ 1,014.2

$ 990.7
 
Operating weeks:

 

8,043

7,853
 
     

Q1 2013 vs. Q1 2012

 
Comparable store sales period-to-period increase:
Restaurant 3.3%
Retail 1.6%
 

Number of locations incomparable store base

596

 

CRACKER BARREL OLD COUNTRY STORE, INC. Reconciliation of GAAP basis operating results to adjusted non-GAAP operating results (Unaudited and in thousands)

The Company makes reference in this release to “adjusted operating income,” “adjusted net income,” “adjusted earnings per diluted share,” and “adjusted general and administrative expenses,” excluding the impact of severance and 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, net income, or earnings per share or expense information prepared in accordance with GAAP.

      First Quarter ended November 2, 2012
  As Reported             Adjust      

As Adjusted

(1),(2)

 

Store operating income

$ 80, 989

-

 

$ 80, 989

General and administrative expenses

 

35, 681

             

(3, 908

)

         

31, 773

 

Operating income

 

45, 308

 

3, 908

49, 216

Interest Expense

 

10, 712

           

-

       

10, 712

 

Pretax income

34, 596

3, 908

38, 504

Provision for income taxes

 

11, 404

             

1, 288

         

12, 692

 

Net income

$ 23, 192

           

$ 2, 620

       

$ 25, 812

 
 

Earning per share - Basic

$ 0.98

$ 0.11

$ 1.09

Earning per share - Diluted

$ 0.97

$ 0.11

$ 1.08

 
 

First Quarter ended October 28, 2011

As Reported

Adjust

As Adjusted

(1)

 

Store operating income

$ 82,118

-

$ 82,118

General and administrative expenses

37,494

           

(1,966)

     

35,528

 

Operating income

44,624

1,966

46,590

Interest Expense

11,135

           

-

     

11,135

 

Pretax income

33,489

1,966

35,455

Provision for income taxes

9,687

           

569

       

10,256

 

Net income

$ 23,802

           

$ 1,397

       

$ 25,199

 
 

Earning per share - Basic

$ 1.04

$ 0.06

$ 1.10

Earning per share - Diluted

$ 1.03

$ 0.06

$ 1.09

 
 

(1) Proxy contest costs and related tax effects.

(2) Severance and related costs and tax effects.

 




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