Cracker Barrel Reports Results for Second Quarter Fiscal 2013

  Cracker Barrel Reports Results for Second Quarter Fiscal 2013

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

Business Wire

LEBANON, Tenn. -- February 26, 2013

Cracker Barrel Old Country Store, Inc. (“Cracker Barrel” or the “Company”)
(Nasdaq: CBRL) today reported financial results for the second quarter of
fiscal 2013 ended February 1, 2013.

Second-Quarter Fiscal 2013 Highlights

  *Compared to the prior year second quarter, comparable store traffic
    increased 0.2%, comparable store restaurant sales increased 3.3% and
    comparable store retail sales increased 3.1%.
  *Fifth 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 8.1% of total revenue,
    compared with 7.0% in the prior year quarter. Adjusted for proxy contest
    and severance expenses, adjusted operating income margin was 8.4% of total
    revenue, compared with 7.5% in the prior year quarter. (See non-GAAP
    reconciliation below.)
  *On a GAAP basis, earnings per diluted share were $1.47, compared to $1.10
    in the prior year quarter. Adjusted for proxy contest and severance
    expenses, and the prior year benefit from the Work Opportunities Tax
    Credit (“WOTC”), adjusted earnings per diluted share were $1.43 compared
    to adjusted earnings per diluted share of $1.20 in the prior year quarter.
    Second quarter GAAP EPS includes $0.19 per diluted share due to the
    retroactive reinstatement (effective January 1, 2012) of the WOTC, of
    which $0.09 per share relates to the prior fiscal year. (See non-GAAP
    reconciliation below.)

Second-Quarter Fiscal 2013 Results

Revenue

The Company reported total revenue of $702.7 million for the second quarter of
fiscal 2013, representing an increase of 4.4% over the second quarter of the
prior year. Comparable store restaurant sales increased 3.3%, including a 3.1%
increase in average check. The average menu price increase for the quarter was
approximately 2.6%. Comparable store retail sales were up 3.1% for the
quarter. The Company estimates that inclement weather in the second quarter
reduced comparable store traffic, restaurant and retail sales by approximately
0.3%. During the quarter, the Company opened one new Cracker Barrel store, 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 November, December and
January were as follows:

                       November    December    January    Second
                                                                       Quarter
Comparable              0.6   %     -1.9  %     1.6  %     0.2  %
restaurant traffic
Average check           3.3   %     3.4   %     2.7  %     3.1  %
Comparable              3.9   %     1.5   %     4.3  %     3.3  %
restaurant sales
Comparable retail       -8.4  %     11.0  %     5.3  %     3.1  %
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

On a GAAP basis, operating income was $57.2 million, or 8.1% of total revenue,
in the second quarter of fiscal 2013 compared with $47.3 million, or 7.0% of
total revenue, in the second quarter of the prior year. Adjusted for proxy
contest and severance expenses, adjusted operating income was $58.9 million,
or 8.4% of total revenue, in the second quarter of fiscal 2013, compared with
adjusted operating income of $50.6 million, or 7.5% of total revenue, in the
prior year quarter. Lower retail cost of goods, restaurant hourly labor
expense, and general and administrative expense as a percent of total revenue
contributed to most of this operating income margin improvement.

Diluted Earnings Per Share

On a GAAP basis, earnings per diluted share in the second quarter of fiscal
2013 were $1.47, compared with $1.10 in the prior year quarter. During the
quarter, Congress retroactively reinstated the WOTC effective to January 1,
2012, which reduced the effective income tax rate in the quarter to 25.0%
compared with 29.5% in the prior year quarter, and contributed $0.19 per
diluted share to second quarter earnings. Adjusted for proxy contest and
severance expenses and the prior-year WOTC benefit of $0.09 per diluted share,
adjusted earnings per diluted share were $1.43, an increase of 19.2% over
adjusted earnings per diluted share in the prior year quarter.

“This is the first quarter in more than ten years with positive comparable
store traffic against a prior-year quarter with positive comparable store
traffic,” said Sandra B. Cochran, Cracker Barrel’s President and Chief
Executive Officer. “This was also the fifth consecutive quarter of comparable
store traffic and sales growth, and of outperforming the Knapp-Track casual
dining index. This quarter’s financial results exceeded our expectations and
reflect the continued success of our marketing, menu, and operational
initiatives. While we remain confident of our ability to execute our strategic
plan, we also remain cautious about general economic conditions and consumer
spending.”

Fiscal 2013 Outlook

Based upon year-to-date financial performance, continued food commodity
pressures, inclement weather in February, the reinstatement of WOTC, and
remaining uncertainty in the economic environment, the Company adjusted 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 $4.60 and $4.80. The revenue projection for
fiscal 2013 reflects the expected opening of eight 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 total revenue for fiscal 2013.

The Company expects to report earnings per diluted share for the third quarter
of fiscal 2013 of between $0.90 and $0.95. 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 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 on February 26, 2013, 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 March 12, 2013.

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 Q2 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," "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 STATEMENT
(Unaudited)
(In thousands, except share and per share amounts, percentages and ratios)
                                                                                
                     Second Quarter Ended                                       Six Months Ended
                                                         Percentage                                           Percentage
                      2/1/13             1/27/12           Change            2/1/13             1/27/12           Change
Total revenue        $ 702,671            $ 673,234            4     %          $ 1,330,122          $ 1,271,671          5     %
Cost of goods         244,187            235,391           4                 442,045            421,698           5
sold
Gross profit           458,484              437,843            4                  888,077              849,973            5
Labor and
other related          244,871              234,933            4                  477,610              455,901            5
expenses
Other store
operating             122,586            119,136           3                 238,451            228,180           5
expenses
Store
operating              91,027               83,774             9                  172,016              165,892            4
income
General and
administrative        33,830             36,437            (7    )           69,511             73,931            (6    )
expenses
Operating              57,197               47,337             21                 102,505              91,961             12
income
Interest              10,293             11,025            (7    )           21,005             22,160            (5    )
expense
Pretax income          46,904               36,312             29                 81,500               69,801             17
Provision for         11,736             10,703            10                23,140             20,390            14
income taxes
Net income           $ 35,168            $ 25,609            37               $ 58,360            $ 49,411            18
                                                                                                                          
Earnings per         $ 1.48              $ 1.11              33               $ 2.47              $ 2.16              14
share – Basic:
Earnings per
share –              $ 1.47              $ 1.10              34               $ 2.45              $ 2.13              15
Diluted:
                                                                                                                          
Weighted
average
shares:
Basic                  23,711,235           22,968,002         3                  23,644,405           22,919,451         3
Diluted                23,945,236           23,306,177         3                  23,866,431           23,225,963         3
                                                                                                                          
Ratio Analysis
Total revenue:
Restaurant             75.2       %         74.8       %                          77.6       %         77.5       %
Retail                24.8               25.2                                22.4               22.5       
Total revenue          100.0                100.0                                 100.0                100.0
Cost of goods         34.8               35.0                                33.2               33.2       
sold
Gross profit           65.2                 65.0                                  66.8                 66.8
Labor and
other related          34.8                 34.9                                  35.9                 35.9
expenses
Other store
operating             17.4               17.7                                18.0               17.9       
expenses
Store
operating              13.0                 12.4                                  12.9                 13.0
income
General and
administrative        4.9                5.4                                 5.2                5.8        
expenses
Operating              8.1                  7.0                                   7.7                  7.2
income
Interest              1.4                1.6                                 1.6                1.7        
expense
Pretax income          6.7                  5.4                                   6.1                  5.5
Provision for         1.7                1.6                                 1.7                1.6        
income taxes
Net income            5.0        %        3.8        %                         4.4        %        3.9        %
                                                                                                                          

                                                           
CRACKER BARREL OLD COUNTRY STORE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share amounts)
                                                                    
                                               2/1/13               8/3/12
Assets
Cash and cash equivalents                      $ 186,148          $ 151,962
Property held for sale                           882                884
Accounts receivable                              13,338             14,609
Inventory                                        139,567            143,267
Prepaid expenses                                 19,229             11,405
Deferred income taxes                            9,206              15,181
Property and equipment, net                      1,017,930          1,022,370
Other long-term assets                           59,301             59,314
Total assets                                   $ 1,445,601        $ 1,418,992
                                                                  
Liabilities and Shareholders’ Equity
Accounts payable                               $ 85,109           $ 101,271
Other current liabilities                        220,585            217,788
Long-term debt                                   512,500            525,036
Interest rate swap liability                     14,911             14,166
Other long-term obligations                      116,660            114,897
Deferred income taxes                            61,543             63,159
Shareholders’ equity, net                        434,293            382,675
Total liabilities and shareholders’            $ 1,445,601        $ 1,418,992
equity
                                                                    
Common shares issued and outstanding             23,728,808         23,473,024
                                                                    

                                             
CRACKER BARREL OLD COUNTRY STORE, INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
(Unaudited and in thousands)
                                                 
                                                 Six Months Ended
                                                   2/1/13         1/27/12
Cash flows from operating activities:
Net income                                       $ 58,360          $ 49,411
Depreciation and amortization                      32,357            31,339
Loss on disposition of property and                1,465             1,258
equipment
Share-based compensation, net of excess            4,120             5,791
tax benefit
Increase in inventories                            3,700             14,371
(Decrease) in accounts payable                     (16,162 )         (6,087  )
Net changes in other assets and                    (2,860  )         17,876
liabilities
Net cash provided by operating activities          80,980            113,959
Cash flows from investing activities:
Purchase of property and equipment, net of         (29,329 )         (38,719 )
insurance recoveries
Proceeds from sale of property and                 333               477
equipment
Net cash used in investing activities              (28,996 )         (38,242 )
Cash flows from financing activities:
Net payments for credit facilities and             (58     )         (76     )
other long-term obligations
Proceeds from exercise of share-based              2,622             2,137
compensation awards
Excess tax benefit from share-based                1,289             155
compensation
Dividends on common stock                          (21,651 )         (10,822 )
Net cash used in financing activities              (17,798 )         (8,606  )
                                                                   
Net increase in cash and cash equivalents          34,186            67,111
Cash and cash equivalents, beginning of            151,962           52,274
period
Cash and cash equivalents, end of period         $ 186,148         $ 119,385
                                                                             

                                          
CRACKER BARREL OLD COUNTRY STORE, INC.
Supplemental Information
(Unaudited)
                                                 
                 Second Quarter Ended            Six Months Ended
                   2/1/13       1/27/12         2/1/13         1/27/12
                                                                   
Units in
operation:
Open at
beginning          620             606             616               603
of period
Opened
during             1               2               5                 5
period
Open at
end of             621             608             621               608
period
                                                                   
Total
revenue:
(In
thousands)
Restaurant       $ 528,155       $ 503,531       $ 1,032,469       $ 985,040
Retail             174,516         169,703         297,653           286,631
Total            $ 702,671       $ 673,234       $ 1,330,122       $ 1,271,671
revenue
                                                                   
Cost of
goods
sold: (In
thousands)
Restaurant       $ 146,338       $ 138,456       $ 281,521         $ 266,152
Retail             97,849          96,935          160,524           155,546
Total cost
of goods         $ 244,187       $ 235,391       $ 442,045         $ 421,698
sold
Average
unit
volume:
(In
thousands)
Restaurant       $ 850.5         $ 828.3         $ 1,665.7         $ 1,625.5
Retail             281.0           279.1           480.2             473.0
Total            $ 1,131.5       $ 1,107.4       $ 2,145.9         $ 2,098.5
                                                                   
Operating        8,073           7,903           16,116            15,756
weeks:


                                Q2 2013 vs. Q2 2012    6 mo. 2013 vs. 6
                                                              mo. 2012
                                                              
Comparable store sales period
to period increase:
Restaurant                          3.3        %              3.3       %
Retail                              3.1        %              2.5       %
                                                              
Number of locations in              600                       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 store operating
income,” “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 and
the retroactive restatement of the work opportunities tax credit. 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.

                                                          
                   Second Quarter ended February 1, 2013        Second Quarter ended January 27, 2012
                   As          Adjust       As              As          Adjust       As
                   Reported                     Adjusted        Reported                     Adjusted
                                   (1) (2)                                    (1)
                                   (3)
                                                                                             
Store
operating          $ 91,027      $ -            $ 91,027        $ 83,774      $ -            $ 83,774
income
General and
administrative      33,830       (1,726 )      32,104         36,437       (3,249 )      33,188
expenses
Operating            57,197        1,726          58,923          47,337        3,249          50,586
income
Interest            10,293       -            10,293         11,025       -            11,025
Expense
Pretax income        46,904        1,726          48,630          36,312        3,249          39,561
Provision for       11,736       2,637        14,373         10,703       958          11,661
income taxes
Net income         $ 35,168      $ (911   )     $ 34,257        $ 25,609      $ 2,291       $ 27,900
                                                                                             
Earning per        $ 1.48          (0.04  )     $ 1.44          $ 1.11        $ 0.10         $ 1.21
share - Basic
Earning per
share -            $ 1.47          (0.04  )     $ 1.43          $ 1.10        $ 0.10         $ 1.20
Diluted
                                                                                             
                   Six months ended February 1, 2013            Six months ended January 27, 2012
                   As            Adjust         As              As            Adjust         As
                   Reported                     Adjusted        Reported                     Adjusted
                                   (1) (2)                                    (1)
                                   (3)
                                                                                             
Store
operating          $ 172,016     $ -            $ 172,016       $ 165,892     $ -            $ 165,892
income
General and
administrative      69,511       (5,634 )      63,877         73,931       (5,203 )      68,728
expenses
Operating            102,505       5,634          108,139         91,961        5,203          97,164
income
Interest            21,005       -            21,005         22,160       -            22,160
Expense
Pretax income        81,500        5,634          87,134          69,801        5,203          75,004
Provision for       23,140       3,847        26,987         20,390       1,520        21,910
income taxes
Net income         $ 58,360      $ 1,787       $ 60,147        $ 49,411      $ 3,683       $ 53,094
                                                                                             
Earning per        $ 2.47        $ 0.07         $ 2.54          $ 2.16        $ 0.16         $ 2.32
share - Basic
Earning per
share -            $ 2.45        $ 0.07         $ 2.52          $ 2.13        $ 0.16         $ 2.29
Diluted
(1) Charges and tax effects of the proxy contest concluded at the Company's annual meeting of
shareholders.
(2) Severance, other charges and tax effects related to organizational changes.
(3) Provision for taxes adjusted to exclude the $2.1 million prior year favorable effect of the
retroactive reinstatement of the work opportunity tax credit.


Contact:

Cracker Barrel
Investors:
Lawrence E. Hyatt, 615-235-4432
or
Media:
Jeanne Ludington, 615-443-9115