Cracker Barrel Reports Results for Second Quarter Fiscal 2014 and Reaffirms Earnings Guidance for Fiscal 2014

  Cracker Barrel Reports Results for Second Quarter Fiscal 2014 and Reaffirms
  Earnings Guidance for Fiscal 2014

   Adjusted EPS increased 9% over prior year quarter despite the impact of
                            extreme winter weather

Business Wire

LEBANON, Tenn. -- February 25, 2014

Cracker Barrel Old Country Store, Inc. (“Cracker Barrel” or the “Company”)
(Nasdaq:CBRL) today reported financial results for the second quarter of
fiscal 2014 ended January 31, 2014.

Second-Quarter Fiscal 2014 Highlights

  *Compared to the prior-year second quarter, comparable store restaurant
    sales decreased 0.6% and comparable store retail sales decreased 3.0%. The
    Company estimates that the extreme winter weather during the quarter
    negatively impacted restaurant and retail sales by approximately 2.5%.
  *Ninth consecutive quarter of outperformance of the Knapp-Track^TM casual
    dining index
  *On a GAAP basis, operating income margin was 8.4% of total revenue,
    compared with 8.1% in the prior year quarter. Adjusted for proxy contest
    expenses, adjusted operating income margin was 8.5% of total revenue,
    compared with an adjusted operating income margin of 8.4% in the prior
    year quarter. (See non-GAAP reconciliation below.)
  *On a GAAP basis, earnings per diluted share were $1.55, or $1.56 when
    adjusted for proxy contest expenses, a 9% increase over adjusted earnings
    per diluted share of $1.43 in the prior year quarter.

Commenting on the second-quarter results, Cracker Barrel President and Chief
Executive Officer Sandra B. Cochran said, “The unusually severe winter weather
significantly impacted our store traffic and sales. Holiday travelers are an
important part of our customer base during the second quarter, and we believe
that the inclement weather reduced travel visits. I am pleased with the
performance of our field teams, who helped preserve our operating margins by
controlling costs during periods of unpredictable customer traffic. I am also
pleased that we outperformed the traffic and sales of our peers in the
Knapp-Track casual dining index during this time of continued economic
uncertainty and severe weather.”

Second-Quarter Fiscal 2014 Results

Revenue

The Company reported total revenue of $698.5 million for the second quarter of
fiscal 2014, representing a decrease of 0.6% over the second quarter of the
prior year. Comparable store restaurant sales decreased 0.6%, including a 2.3%
increase in average check. The average menu price increase for the quarter was
approximately 1.8%. Comparable store retail sales decreased 3.0% for the
quarter. The Company opened one store since the end of the second quarter, for
a total of two 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 and for the second quarter were as follows:

                                                               Second
                              November   December   January   Quarter
Comparable restaurant          -0.4%      -4.8%      -3.7%     -2.9%
traffic
Average check                  2.9%       2.1%       2.1%      2.3%
Comparable restaurant sales    2.5%       -2.7%      -1.6%     -0.6%
Comparable retail sales        -2.8%      -2.8%      -3.6%     -3.0%
                                                                       

The Company estimates that the extreme winter weather had a negative impact on
comparable store traffic and restaurant and retail sales of approximately 2.5%
for the quarter, with the greatest impact in December and January.

Operating Income

GAAP operating income in the second quarter was $58.7 million, or 8.4% of
total revenue. Adjusted for proxy contest expenses, adjusted operating income
was $59.1 million, or 8.5% of total revenue, compared with adjusted operating
income of $58.9 million, or 8.4% of total revenue, in the prior year quarter.
Reductions in labor and related expenses and general and administrative
expenses were partially offset by an increase in other store operating
expenses.

Diluted Earnings per Share

On a GAAP basis, earnings per diluted share in the second quarter of fiscal
2014 were $1.55, compared with $1.47 in the prior year quarter. Adjusted for
proxy contest expenses, adjusted earnings per diluted share were $1.56,
compared with adjusted earnings per diluted share of $1.43 in the prior year
quarter.

Fiscal 2014 Outlook

Based upon year-to-date financial performance, the Company re-affirmed its
previous earnings guidance and expects to report earnings per diluted share of
between $5.60 and $5.80. The Company noted that it expects its full year
earnings to be close to the midpoint of this range. For fiscal 2014, the
Company now expects total revenue of approximately $2.7 billion and an
operating income margin of approximately 8.0%. The revenue projection for
fiscal 2014 reflects the expected opening of seven new Cracker Barrel stores,
projected increases in comparable store restaurant sales of between 1.0% to
2.0%, and approximately flat comparable store retail sales. 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 third quarter
of 2014 of between $1.20 and $1.30. The Company notes that its guidance
assumes normal weather patterns for the balance of the third quarter and does
not include expenses related to the proxy contest at its annual shareholders
meeting held in November 2013 or expenses associated with the special
shareholders meeting scheduled for April 23, 2014. 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 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 25, 2014, 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 11, 2014.

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 626 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 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 STATEMENT

(Unaudited)

(In thousands, except share and per share amounts, percentages and ratios)
                                                                        
                   Second Quarter Ended                                 Six Months Ended
                                                         Percentage                                           Percentage
                    1/31/14         2/1/13                         1/31/14         2/1/13        
                                                         Change                                               Change
Total revenue      $ 698,491          $ 702,671          (1)%           $ 1,347,632        $ 1,330,122        1%
Cost of goods       243,015           244,187          (1)             448,944           442,045          2
sold
Gross profit         455,476            458,484          (1)              898,688            888,077          1
Labor and
other related        238,742            244,871          (3)              475,489            477,610          0
expenses
Other store
operating           128,100           122,586          5               253,441           238,451          6
expenses
Store
operating            88,634             91,027           (3)              169,758            172,016          (1)
income
General and
administrative      29,928            33,830           (12)            66,815            69,511           (4)
expenses
Operating            58,706             57,197           3                102,943            102,505          0
income
Interest            4,471             10,293           (57)            8,878             21,005           (58)
expense
Pretax income        54,235             46,904           16               94,065             81,500           15
Provision for       17,180            11,736           46              29,850            23,140           29
income taxes
Net income         $ 37,055           $ 35,168           5              $ 64,215           $ 58,360           10
                                                                                                              
Earnings per       $ 1.56             $ 1.48             5              $ 2.70             $ 2.47             9
share – Basic:
Earnings per
share –            $ 1.55             $ 1.47             5              $ 2.68             $ 2.45             9
Diluted:
                                                                                                              
Weighted
average
shares:
Basic                23,812,777         23,711,235       0                23,815,107         23,644,405       1
Diluted              23,907,611         23,945,236       0                23,947,850         23,866,431       0
                                                                                                              
Ratio Analysis
Total revenue:
Restaurant           75.6       %       75.2       %                      77.9       %       77.6       %
Retail              24.4              24.8                             22.1              22.4
Total revenue        100.0              100.0                             100.0              100.0
Cost of goods       34.8              34.8                             33.3              33.2
sold
Gross profit         65.2               65.2                              66.7               66.8
Labor and
other related        34.2               34.8                              35.3               35.9
expenses
Other store
operating           18.3              17.4                             18.8              18.0
expenses
Store
operating            12.7               13.0                              12.6               12.9
income
General and
administrative      4.3               4.9                              5.0               5.2
expenses
Operating            8.4                8.1                               7.6                7.7
income
Interest            0.6               1.4                              0.6               1.6
expense
Pretax income        7.8                6.7                               7.0                6.1
Provision for       2.5               1.7                              2.2               1.7
income taxes
Net income          5.3        %      5.0        %                     4.8        %      4.4        %
                                                                                                              

                                                           
CRACKER BARREL OLD COUNTRY STORE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited and in thousands, except share amounts)
                                                                
                                                1/31/14         2/1/13
Assets
Cash and cash equivalents                      $ 91,353         $ 186,148
Property held for sale                           0                882
Accounts receivable                              18,206           13,338
Income tax receivable                            4,100            0
Inventory                                        148,073          139,567
Prepaid expenses                                 13,881           19,229
Deferred income taxes                            4,316            9,206
Property and equipment, net                      1,029,447        1,017,930
Other long-term assets                          60,764          59,301
Total assets                                   $ 1,370,140      $ 1,445,601
                                                                
Liabilities and Shareholders’ Equity
Accounts payable                               $ 82,202         $ 85,109
Other current liabilities                        215,170          220,585
Long-term debt                                   387,500          512,500
Interest rate swap liability                     9,761            14,911
Other long-term obligations                      121,228          116,660
Deferred income taxes                            57,098           61,543
Shareholders’ equity, net                       497,181         434,293
Total liabilities and shareholders’ equity     $ 1,370,140      $ 1,445,601
                                                                
Common shares issued and outstanding             23,820,077       23,728,808
                                                                  

                                                
CRACKER BARREL OLD COUNTRY STORE, INC.

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

(Unaudited and in thousands)
                                                   
                                                   Six Months Ended
                                                    1/31/14     2/1/13  
Cash flows from operating activities:
Net income                                         $ 64,215        $ 58,360
Depreciation and amortization                        33,301          32,357
Loss on disposition of property and equipment        2,089           1,465
Share-based compensation, net of excess tax          3,642           4,120
benefit
(Decrease) increase in inventories                   (1,386  )       3,700
(Decrease) in accounts payable                       (28,435 )       (16,162 )
Net changes in other assets and liabilities         (10,521 )      (2,860  )
Net cash provided by operating activities           62,905        80,980  
Cash flows from investing activities:
Purchase of property and equipment, net of           (38,468 )       (29,329 )
insurance recoveries
Proceeds from sale of property and equipment        1,268         333     
Net cash used in investing activities               (37,200 )      (28,996 )
Cash flows from financing activities:
Net payments for credit facilities and other         (1      )       (58     )
long-term obligations
(Taxes withheld) and proceeds from exercise of       (8,446  )       2,622
share-based compensation awards, net
Excess tax benefit from share-based                  604             1,289
compensation
Purchases and retirement of common stock             (12,473 )       0
Dividends on common stock                           (35,754 )      (21,651 )
Net cash used in financing activities               (56,070 )      (17,798 )
                                                                   
Net (decrease) increase in cash and cash             (30,365 )       34,186
equivalents
Cash and cash equivalents, beginning of period      121,718       151,962 
Cash and cash equivalents, end of period           $ 91,353       $ 186,148 
                                                                             

                                              
CRACKER BARREL OLD COUNTRY STORE, INC.

Supplemental Information

(Unaudited)
                                                   
                       Second Quarter Ended        Six Months Ended
                       1/31/14     2/1/13        1/31/14       2/1/13
                                                                   
Units in
operation:
Open at beginning        625           620           624             616
of period
Opened during           0            1            1              5
period
Open at end of           625           621           625             621
period
                                                                   
Total revenue: (In
thousands)
Restaurant             $ 528,391     $ 528,155     $ 1,050,338     $ 1,032,469
Retail                  170,100      174,516      297,294        297,653
Total revenue          $ 698,491     $ 702,671     $ 1,347,632     $ 1,330,122
                                                                   
Cost of goods
sold: (In
thousands)
Restaurant             $ 148,382     $ 146,338     $ 290,978       $ 281,521
Retail                  94,633       97,849       157,966        160,524
Total cost of          $ 243,015     $ 244,187     $ 448,944       $ 442,045
goods sold
                                                                   
Average unit
volume: (In
thousands)
Restaurant             $ 845.4       $ 850.5       $ 1,681.5       $ 1,665.7
Retail                  272.2        281.0        475.9          480.2
Total                  $ 1,117.6     $ 1,131.5     $ 2,157.4       $ 2,145.9
                                                                     

Operating weeks:         8,125         8,073         16,241          16,116
                                                                     

                                                       
                                  Q2 2014 vs. Q2 2013     6 mo. 2014 vs. 6 mo.
                                                          2013
                                  
Comparable store sales period to
period (decrease) increase:
Restaurant                        -0.6          %         1.0         %
Retail                            -3.0          %         -0.7        %
                                                        
                                 
Number of locations in comparable 613                     609
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 January 31, 2014          Second Quarter ended February 1, 2013
                   As Reported   Adjust       As Adjusted     As Reported   Adjust       As Adjusted
                                   (1)                                            (1) (2)
                                                                                  (3)
                                                                                                 
Store
operating            88,634          -              88,634          91,027          -              91,027
income
General and
administrative       29,928          (376   )       29,552          33,830          (1,726 )       32,104
expenses
Impairment and
store               -           -          -             -           -          -       
dispositions,
net
Operating            58,706          376            59,082          57,197          1,726          58,923
income
Interest            4,471       -          4,471         10,293      -          10,293  
Expense
Pretax income        54,235          376            54,611          46,904          1,726          48,630
Provision for       17,180      119        17,299        11,736      2,637      14,373  
income taxes
Net income         $ 37,055     $ 257         $ 37,312       $ 35,168     $ (911   )   $ 34,257  
                                                                                                 
Earning per        $ 1.56          $ 0.01         $ 1.57          $ 1.48          $ (0.04  )     $ 1.44
share - Basic
Earning per
share -            $ 1.55          $ 0.01         $ 1.56          $ 1.47          $ (0.04  )     $ 1.43
Diluted
Tax rate             31.7    %                      31.7    %       25.0    %                      29.6    %
                                                                                                 
                                                                                                 
                   Six months ended January 31, 2014              Six months ended February 1, 2013
                   As Reported     Adjust         As Adjusted     As Reported     Adjust         As Adjusted
                                   (1)                                            (1) (2)
                                                                                  (3)
                                                                                                 
Store
operating            169,758         -              169,758         172,016         -              172,016
income
General and
administrative      66,815      (3,200 )    63,615        69,511      (5,634 )    63,877  
expenses
Operating            102,943         3,200          106,143         102,505         5,634          108,139
income
Interest            8,878       -          8,878         21,005      -          21,005  
Expense
Pretax income        94,065          3,200          97,265          81,500          5,634          87,134
Provision for       29,850      1,015      30,865        23,140      3,847      26,987  
income taxes
Net income         $ 64,215     $ 2,185     $ 66,400       $ 58,360     $ 1,787     $ 60,147  
                                                                                                 
Earning per        $ 2.70          $ 0.09         $ 2.79          $ 2.47          $ 0.07         $ 2.54
share - Basic
Earning per
share -            $ 2.68          $ 0.09         $ 2.77          $ 2.45          $ 0.07         $ 2.52
Diluted
Tax rate             31.7    %                      31.7    %       28.4    %                      31.0    %
                                                                                                 

(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.
      Provision for taxes adjusted to exclude the $2.1 million prior year
(3)   favorable effect of the retroactive reinstatement of the work
      opportunity tax credit.

Contact:

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