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Cracker Barrel Reports Results for First Quarter Fiscal 2013

  Cracker Barrel Reports Results for First Quarter Fiscal 2013

Positive Comparable Store Traffic, Restaurant and Retail Sales in the Quarter

Business Wire

LEBANON, Tenn. -- November 29, 2012

Cracker Barrel Old Country Store, Inc. (“Cracker Barrel” or the “Company”)
(Nasdaq: CBRL) today reported financial results for the first quarter of
fiscal 2013 ended November 2, 2012.

First-Quarter Fiscal 2013 Highlights

  *Compared to the prior year first quarter, comparable store traffic
    increased 0.8%, comparable store restaurant sales increased 3.3% and
    comparable store retail sales increased 1.6%
  *Fourth consecutive quarter of positive comparable traffic, restaurant
    sales and retail sales, and outperformance of the Knapp-Track^TM casual
    dining index.
  *On a GAAP basis, operating income margin was 7.2% of total revenue,
    compared with 7.5% in the prior year quarter. Adjusted for proxy contest
    and severance expenses, adjusted operating income margin was 7.8% of total
    revenue, compared with 7.8% in the prior year quarter. (See non-GAAP
    reconciliation below.)

First-Quarter Fiscal 2013 Results

Revenue

The Company reported total revenue of $627.5 million for the first quarter of
fiscal 2013, representing an increase of 4.8% over the first quarter of the
prior year. Comparable store restaurant sales increased 3.3%, including a 2.5%
increase in average check. The average menu price increase for the quarter was
approximately 2.0%. Comparable store retail sales were up 1.6% for the
quarter. During the quarter, the Company opened four new Cracker Barrel
stores, and has opened an additional store since the end of the quarter for a
total of five new store openings year-to-date.

Comparable store restaurant traffic, average check and comparable store
restaurant and retail sales for the fiscal months of August, September and
October and for the first quarter were as follows:

                                                                           

                   August    September    October    First
                                                                  Quarter
Comparable
restaurant          2.6%      -0.5%        0.2%       0.8%
traffic
Average check       2.8%      2.5%         2.3%       2.5%
Comparable          5.4%      2.0%         2.5%       3.3%
restaurant sales
Comparable          8.1%      -0.8%        -0.9%      1.6%
retail sales

Fiscal 2012 was a 53-week year. For Fiscal 2013, the Company calculates
comparable store traffic, check and sales using the corresponding prior year
weeks.

Operating Income

Operating income was $45.3 million, or 7.2% of total revenue, in the first
quarter of fiscal 2013 compared with $44.6 million, or 7.5% of total revenue,
in the first quarter of the prior year. Adjusted for proxy contest and
severance expenses, adjusted operating income was $49.2 million, or 7.8% of
total revenue, in the first quarter of fiscal 2013, compared with adjusted
operating income of $46.6 million, or 7.8% of total revenue, in the prior year
quarter. Operating income in the first quarter of the prior year included a
net benefit of $5.5 million, or 0.9% of total revenue, resulting collectively
from a favorable premium adjustment related to health insurance, a reduction
in worker’s compensation expense and a favorable litigation settlement,
partially offset by expenses related to a non-annual companywide managers’
conference.

Diluted Earnings Per Share

On a GAAP basis, earnings per diluted share in the first quarter of fiscal
2013 were $0.97, compared with $1.03 in the prior year quarter. Adjusted for
severance and proxy contest expenses, adjusted earnings per diluted share were
$1.08, compared with adjusted earnings per diluted share of $1.09 in the prior
year quarter. The effective income tax rate in the quarter increased to 33.0%,
compared with 28.9% in the prior year quarter, due primarily to the expiration
of the Work Opportunities Tax Credit. The higher tax rate in the quarter
reduced earnings per diluted share by $0.06.

Commenting on the first-quarter results, Cracker Barrel President and Chief
Executive Officer Sandra B. Cochran said, “We are pleased with our first
quarter results, which represent our fourth consecutive quarter of increased
year-over-year traffic and sales. This quarter’s results exceeded our
expectations and reflect the operational improvements and general and
administrative savings implemented in fiscal 2012 and the early execution by
our management team and employees of our business priorities for fiscal 2013."

Fiscal 2013 Outlook

Based upon year-to-date financial performance, continued food commodity
pressures and the remaining uncertainty in the economic environment, the
Company re-affirmed its previous full year earnings guidance. For fiscal 2013,
the Company expects total revenue of between $2.6 billion and $2.65 billion
and adjusted earnings per diluted share of between $4.50 and $4.70. The
revenue projection for fiscal 2013 reflects the expected opening of 9 to 11
new Cracker Barrel stores and projected increases in comparable store
restaurant and retail sales in a range of 2.0% to 3.0%. The Company projects
an adjusted operating income margin of between 7.3% and 7.5% of revenues.

The Company expects to report adjusted earnings per diluted share for the
second quarter of 2013 of between $1.22 and $1.27. The Company reminds
investors that its outlook for fiscal 2013 reflects a number of assumptions,
many of which are outside the Company’s control.

Fiscal 2013 First-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 on November 29, 2012, beginning at 11:00 a.m.
(Eastern Time). An on-line replay will be available at 2:00 p.m. (Eastern
Time) and continue through December 13, 2012.

About Cracker Barrel

Cracker Barrel Old Country Store provides 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 621 company-owned locations in42 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
                                                                    Percentage
                                   11/2/12       10/28/11    
                                                                    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                   232,739          220,968        5
expenses
Other store operating              115,865         109,044        6
expenses
Store operating income              80,989           82,118         (1)
General and                        35,681          37,494         (5)
administrative expenses
Operating income                    45,308           44,624         2
Interest expense                   10,712          11,135         (4)
Pretax income                       34,596           33,489         3
Provision for income               11,404          9,687          18
taxes
Net income                        $ 23,192         $ 23,802         (3)
                                                                    
Earnings per share –              $ 0.98           $ 1.04           (6)
Basic:
Earnings per share –              $ 0.97           $ 1.03           (6)
Diluted:
                                                                    
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                   37.1             37.0
expenses
Other store operating              18.5            18.2
expenses
Store operating income              12.9             13.7
General and                        5.7             6.2
administrative expenses
Operating income                    7.2              7.5
Interest expense                   1.7             1.9
Pretax income                       5.5              5.6
Provision for income               1.8             1.6
taxes
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           595             2,464
benefit
(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              (13,628)        20,244
activities
Cash flows from investing activities:
Purchase of property and equipment, net of            (13,310)        (18,712)
insurance recoveries
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          (29)            (30)
long-term obligations
Proceeds from exercise of share-based                 2,322           823
compensation awards
Excess tax benefit from share-based                   1,274           83
compensation
Dividends on common stock                             (9,732)         (5,018)
Net cash (used in) provided by financing              (6,165)         (4,142)
activities
                                                                      
Net change in cash and cash equivalents               (33,097)        (2,503)
Cash and cash equivalents, beginning of               151,962         52,274
period
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 in            596
comparable store base
                                                        

                    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               Adjust        As
                           Reported                                Adjusted
                                                  (1),(2)
                                                                             
Store operating            $ 80, 989              -                   $ 80,
income                                                                 989
General and                                          (3,               31,
administrative               35, 681         908 )        773   
expenses
Operating income             45, 308               3,                49,
                                                     908               216
Interest Expense             10, 712       -                10,   
                                                                       712
Pretax income                 34, 596                3,                38,
                                                     908               504
Provision for income         11, 404         1,           12,   
taxes                                                288               692
Net income                 $ 23, 192        $ 2,         $ 25, 812 
                                                  620
                                                                             
Earning per share -        $ 0.98                 $ 0.11           $ 1.09
Basic
Earning per share -        $ 0.97                 $ 0.11           $ 1.08
Diluted
                                                                             
                          First Quarter ended October 28, 2011
                           As                     Adjust           As
                           Reported                                Adjusted
                                                  (1)
                                                                             
Store operating            $ 82,118               -                $ 82,118
income
General and
administrative             37,494           (1,966)       35,528    
expenses
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       9,687            569          10,256    
taxes
Net income                 $ 23,802         $ 1,397      $ 25,199  
                                                                             
Earning per share -        $ 1.04                 $ 0.06           $ 1.10
Basic
Earning per share -        $ 1.03                 $ 0.06           $ 1.09
Diluted
                                                                             
                                                                             
(1) Proxy contest
costs and related
tax effects.
(2) Severance and
related costs and
tax effects.
                                                                             

Contact:

Cracker Barrel Old Country Store, Inc.
Investors:
Lawrence E. Hyatt, 615-235-4432
or
Media:
Julie K. Davis, 615-443-9266