Cracker Barrel Reports Results for First Quarter Fiscal 2014

  Cracker Barrel Reports Results for First Quarter Fiscal 2014

        Positive Comparable Restaurant and Retail Sales in the Quarter

Business Wire

LEBANON, Tenn. -- November 26, 2013

Cracker Barrel Old Country Store, Inc. (“Cracker Barrel” or the “Company”)
(Nasdaq: CBRL) today reported financial results for the first quarter of
fiscal 2014 ended November 1, 2013.

First-Quarter Fiscal 2014 Highlights

  *Compared to the prior year first quarter, comparable store restaurant
    sales increased 2.8% and comparable store retail sales increased 2.5%.
  *Eighth consecutive quarter of positive comparable restaurant sales and
    retail sales, and outperformance of the Knapp-Track^TM casual dining
    index.
  *On a GAAP basis, operating income margin was 6.8% of total revenue,
    compared with 7.2% in the prior year quarter. Adjusted for proxy contest
    expenses, adjusted operating income margin was 7.2% of total revenue,
    compared with 7.8% in the prior year quarter. (See non-GAAP reconciliation
    below.)
  *On a GAAP basis, earnings per diluted share were $1.14, or $1.22 when
    adjusted for proxy contest expenses, compared with adjusted EPS of $1.08
    in the prior year quarter.

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 eighth consecutive quarter of increased
year-over-year comparable store sales. Although the government shutdown
challenged our consumer and added to an already difficult environment, this
quarter’s financial results exceeded our expectations and reflect our initial
success in executing our business priorities for fiscal 2014.”

First-Quarter Fiscal 2014 Results

Revenue

The Company reported total revenue of $649.1 million for the first quarter of
fiscal 2014, representing an increase of 3.5% over the first quarter of the
prior year. Comparable store restaurant sales increased 2.8%, including a 2.9%
increase in average check. The average menu price increase for the quarter was
approximately 2.5%. Comparable store retail sales increased 2.5% for the
quarter. The Company opened one new Cracker Barrel store during the quarter.

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 traffic  1.2%    -0.1%      -1.1%    -0.1%
Average check                  2.0%    3.3%       3.2%     2.9%
Comparable restaurant sales    3.2%    3.2%       2.1%     2.8%
Comparable retail sales        2.9%    3.3%       1.7%     2.5%

The Company believes that the 16-day partial shutdown of the federal
government in October had a negative impact on comparable store traffic and
sales of between 20 and 30 basis points for the quarter.

Operating Income

GAAP operating income in the first quarter was $44.2 million, or 6.8% of total
revenue. Adjusted for proxy contest expenses, adjusted operating income was
$47.1 million, or 7.2% of total revenue, compared with adjusted operating
income of $49.2 million, or 7.8% of total revenue, in the prior year quarter.
A 60 basis point reduction in store labor and related expenses was offset by
the cost of a company-wide managers’ conference and the timing of advertising
expenses related to the Wholesome Fixin’s® rollout.

Diluted Earnings per Share

On a GAAP basis, earnings per diluted share in the first quarter of fiscal
2014 were $1.14, compared with $0.97 in the prior year quarter. Adjusted for
proxy contest expenses, adjusted earnings per diluted share were $1.22,
compared with adjusted earnings per diluted share of $1.08 in the prior year
quarter.

Fiscal 2014 Outlook

Based upon year-to-date financial performance and continuing uncertainty about
economic trends, the Company re-affirmed its previous full year earnings
guidance. For fiscal 2014, the Company expects total revenue of between $2.7
billion and $2.75 billion, an operating income margin of between 7.8% and
8.0%, and earnings per diluted share of between $5.60 and $5.80. The revenue
projection for fiscal 2014 reflects the expected opening of seven or eight new
Cracker Barrel stores, and projected increases in comparable store restaurant
sales and retail sales in a range of 2.0% to 3.0%. The Company’s projections
are based upon expected food commodity inflation of approximately 2% for the
year; depreciation expense between $68 million and $70 million; net interest
expense between $16 million and $18 million; and an effective tax rate of
between 31% and 32%. The Company expects capital expenditures during fiscal
2014 to be between $90 million and $100 million.

The Company expects to report earnings per diluted share for the second
quarter of 2014 of between $1.50 and $1.60. The Company notes that its
guidance does not include expenses related to the proxy contest at its recent
annual shareholders’ meeting. The Company reminds investors that its outlook
for fiscal 2014 reflects a number of assumptions, many of which are outside
the Company’s control.

Fiscal 2014 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 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 December 10, 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 625 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 FY14 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
                                   11/1/13       11/2/12      Percentage
                                                                    Change
Total revenue                     $ 649,141        $ 627,451        4      %
Cost of goods sold                 205,929        197,858       4
Gross profit                        443,212          429,593        3
Labor and related expenses          236,747          232,739        2
Other store operating expenses     125,341        115,865       8
Store operating income              81,124           80,989         0
General and administrative         36,887         35,681        3
expenses
Operating income                    44,237           45,308         (2     )
Interest expense                   4,407          10,712        (59    )
Pretax income                       39,830           34,596         15
Provision for income taxes         12,670         11,404        11
Net income                        $ 27,160        $ 23,192        18
                                                                    
Earnings per share – Basic:       $ 1.14          $ 0.98          16
Earnings per share – Diluted:     $ 1.14          $ 0.97          17
                                                                    
Weighted average shares:
Basic                               23,817,436       23,577,574     1
Diluted                             23,925,088       23,787,625     1
                                                                    
Ratio Analysis
Total revenue:
Restaurant                          80.4       %     80.4       %
Retail                             19.6           19.6       
Total revenue                       100.0            100.0
Cost of goods sold                 31.7           31.5       
Gross profit                        68.3             68.5
Labor and related expenses          36.5             37.1
Other store operating expenses     19.3           18.5       
Store operating income              12.5             12.9
General and administrative         5.7            5.7        
expenses
Operating income                    6.8              7.2
Interest expense                   0.7            1.7        
Pretax income                       6.1              5.5
Provision for income taxes         1.9            1.8        
Net income                         4.2        %    3.7        %


CRACKER BARREL OLD COUNTRY STORE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share amounts)
                                                         
                                               11/1/13        8/2/13
Assets
Cash and cash equivalents                    $ 57,542       $ 121,718
Property held for sale                         883            883
Accounts receivable                            16,730         15,942
Inventory                                      173,296        146,687
Prepaid expenses                               15,913         12,648
Deferred income taxes                          4,315          4,316
Property and equipment, net                    1,026,185      1,026,369
Other long-term assets                         59,719         59,743
Total assets                                 $ 1,354,583    $ 1,388,306
                                                            
Liabilities and Shareholders’ Equity
Accounts payable                             $ 93,694       $ 110,637
Other current liabilities                      205,487        205,430
Long-term debt                                 393,750        400,000
Interest rate swap liability                   11,298         11,644
Other long-term obligations                    117,392        120,073
Deferred income taxes                          57,111         56,496
Shareholders’ equity, net                      475,851        484,026
Total liabilities and shareholders’ equity   $ 1,354,583    $ 1,388,306
                                                            
Common shares issued and outstanding           23,795,590     23,795,327


CRACKER BARREL OLD COUNTRY STORE, INC.

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(Unaudited and in thousands)
                                                   
                                                     Three Months Ended
                                                       11/1/13      11/2/12
Cash flows from operating activities:
Net income                                           $ 27,160      $ 23,192
Depreciation and amortization                          16,477        15,959
Loss on disposition of property and equipment          877           655
Share-based compensation, net of excess tax            2,252         595
benefit
(Increase) in inventories                              (26,609 )     (34,208 )
(Decrease) in accounts payable                         (16,943 )     (2,424  )
Net changes in other assets and liabilities            (12,445 )     (17,397 )
Net cash used in operating activities                  (9,231  )     (13,628 )
Cash flows from investing activities:
Purchase of property and equipment, net of             (17,122 )     (13,310 )
insurance recoveries
Proceeds from sale of property and equipment           144          6       
Net cash used in investing activities                  (16,978 )     (13,304 )
Cash flows from financing activities:
Net payments for credit facilities and other           (1      )     (29     )
long-term obligations
(Taxes withheld) and proceeds from issuance of
share-based                                            (8,214  )     2,322
compensation awards, net
Excess tax benefit from share-based compensation       568           1,274
Purchases and retirement of common stock               (12,473 )     0
Dividends on common stock                              (17,847 )     (9,732  )
Net cash used in financing activities                  (37,967 )     (6,165  )
                                                                   
Net change in cash and cash equivalents                (64,176 )     (33,097 )
Cash and cash equivalents, beginning of period         121,718      151,962 
Cash and cash equivalents, end of period             $ 57,542     $ 118,865 


CRACKER BARREL OLD COUNTRY STORE, INC.
Supplemental Information
(Unaudited)

                                     First Quarter Ended
                                        11/1/13    11/2/12
                                                  
Units in operation:
Open at beginning of period             624         616
Opened during period                    1           4
Open at end of period                   625         620
                                                  
Total revenue: (In thousands)
Restaurant                            $ 521,947   $ 504,314
Retail                                  127,194     123,137
Total revenue                         $ 649,141   $ 627,451
                                                  
Cost of goods sold: (In thousands)
Restaurant                            $ 142,596   $ 135,183
Retail                                  63,333      62,675
Total cost of goods sold              $ 205,929   $ 197,858
                                                    
Average unit volume: (In thousands)
Restaurant                            $ 836.1     $ 815.1
Retail                                  203.7       199.1
Total                                 $ 1,039.8   $ 1,014.2
                                                  
Operating weeks:                        8,116       8,043

                          Q1 2014 vs. Q1 2013
                          
Comparable store sales period-to-period increase:
Restaurant                2.8          %
Retail                    2.5          %
                          
Number of locations in    609
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 1, 2013
                                      As           Adjust       As
                                      Reported                      Adjusted
                                                     (1)
                                                                    
Store operating                       $  81,124      $ -            $  81,124
income
General and
administrative                          36,887       (2,824 )       34,063
expenses
Operating income                         44,237        2,824           47,061
Interest Expense                        4,407                       4,407
Pretax income                            39,830        2,824           42,654
Provision for                           12,670       898           13,568
income taxes
Net income                            $  27,160      $ 1,926       $  29,086
                                                                    
Earning per share                     $  1.14        $ 0.08         $  1.22
- Basic
Earning per share                     $  1.14        $ 0.08         $  1.22
- Diluted
                                                                    
                                      First Quarter ended November 2, 2012
                                      As             Adjust         As
                                      Reported                      Adjusted
                                                     (1), (2)
                                                                    
Store operating                          80,989                        80,989
income
General and
administrative                          35,681       (3,908 )       31,773
expenses
Operating income                         45,308        3,908           49,216
Interest Expense                        10,712       -             10,712
Pretax income                            34,596        3,908           38,504
Provision for                           11,404       1,288         12,692
income taxes
Net income                            $  23,192      $ 2,620       $  25,812
                                                                    
Earning per share                     $  0.98        $ 0.11         $  1.09
- Basic
Earning per share                     $  0.97        $ 0.11         $  1.08
- Diluted
                                                                    
                                                                    
(1) Proxy contest costs and related tax effects.
(2) Severance and related costs and tax effects.
                                                                    

Contact:

Cracker Barrel Old Country Store, Inc.
Investor Contact:
Lawrence E. Hyatt, (615) 235-4432
or
Media Contact:
Andy Merrill, (212) 886-9304
 
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