Cracker Barrel Reports Results for Third Quarter Fiscal 2014

  Cracker Barrel Reports Results for Third Quarter Fiscal 2014

         Adjusted EPS increased 20.6% over EPS in prior year quarter

Business Wire

LEBANON, Tenn. -- May 28, 2014

Cracker Barrel Old Country Store, Inc. (“Cracker Barrel” or the “Company”)
(Nasdaq:CBRL) today reported financial results for the third quarter of fiscal
2014 ended May 2, 2014.

Third-Quarter Fiscal 2014 Highlights

  *Tenth consecutive quarter of outperformance of the Knapp-Track^TM casual
    dining index
  *Compared to the prior-year third quarter, total sales increased 0.5%,
    comparable store restaurant sales decreased 0.6% and comparable store
    retail sales increased 0.9%.
  *On a GAAP basis, operating income margin was 7.0% of total revenue, or
    7.2% when adjusted for expenses associated with the Special Meeting of
    Cracker Barrel Shareholders, compared with 6.9% in the prior year quarter.
    (See non-GAAP reconciliation below.)
  *On a GAAP basis, earnings per diluted share were $1.20, or $1.23 when
    adjusted for special meeting expenses, a 20.6% increase over earnings per
    diluted share of $1.02 in the prior year quarter.
  *As previously disclosed, the Board approved a quarterly dividend increase
    of 33% to $1.00 per share.

Commenting on the third-quarter results, Cracker Barrel President and Chief
Executive Officer Sandra B. Cochran said, “Like many in our industry, Cracker
Barrel continued to face headwinds during the quarter from severe winter
weather, a challenging consumer environment and an increasingly promotional
competitive landscape. Nevertheless, we continued to outperform our peers in
the Knapp-Track casual dining index for the tenth consecutive quarter, while
our field teams focused on controlling costs and preserving our operating
margins.”

Third-Quarter Fiscal 2014 Results

Revenue

The Company reported total revenue of $643.3 million for the third quarter of
fiscal 2014, representing an increase of 0.5% over the third quarter of the
prior year. Comparable store restaurant sales decreased 0.6%, as a 2.9%
decline in customer traffic was partially offset by a 2.3% increase in average
check. The average menu price increase for the quarter was approximately 1.8%.
Comparable store retail sales increased 0.9% for the quarter. The Company
opened two stores during the third quarter, for a total of three new store
openings year-to-date.

Comparable store restaurant traffic, average check, and comparable store
restaurant and retail sales for the fiscal months of February, March and April
and for the third quarter were as follows:


                               February   March   April   Third
                                                                   Quarter
Comparable restaurant traffic   -4.9%      -4.0%   -0.4%   -2.9%
Average check                     2.2%         2.0%      2.6%      2.3%
Comparable restaurant sales       -2.7%        -2.0%     2.2%      -0.6%
Comparable retail sales           -5.8%        -5.0%     11.0%     0.9%
                                                                   

Operating Income

GAAP operating income in the third quarter was $45.2 million, or 7.0% of total
revenue. Adjusted for special meeting expenses, adjusted operating income was
$46.3 million, or 7.2% of total revenue, compared with operating income of
$44.2 million, or 6.9% of total revenue, in the prior year quarter. Reductions
in cost of goods sold and general and administrative expenses as a percent of
total revenue 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 $1.20. Adjusted for special meeting expenses, adjusted earnings per
diluted share were $1.23, representing a 20.6% increase compared with earnings
per diluted share of $1.02 in the prior year quarter.

Fiscal 2014 Outlook

Based upon year-to-date financial performance, the Company expects to report
earnings per diluted share for the 2014 fiscal year of between $5.50 and
$5.60, which implies adjusted EPS for the fourth quarter of between $1.50 and
$1.60. The Company now expects total revenue for the year of approximately
$2.7 billion and an operating income margin between 7.7% and 7.9% of total
revenue. The revenue projection for fiscal 2014 reflects the expected opening
of seven new Cracker Barrel stores, projected increases in comparable store
restaurant sales of approximately 0.5%, and approximately flat comparable
store retail sales. The Company’s projections are based upon expected food
commodity inflation of approximately 2% for the year, and 2.5% for the fourth
quarter. The Company expects annual depreciation expense between $68 million
and $70 million; net interest expense between $17 million and $18 million; and
an effective tax rate of between 31% and 32%. The Company expects capital
expenditures for fiscal 2014 to be between $90 million and $100 million.

The Company notes that its annual earnings guidance does not include expenses
related to the proxy contest at its annual shareholders meeting held on
November 13, 2013 or expenses associated with the special shareholders meeting
held on 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 Third-Quarter Conference Call

As previously announced, the live broadcast of Cracker Barrel’s quarterly
conference call will be available to the public online at
investor.crackerbarrel.com on May 28, 2014 beginning at 11:00 a.m. (Eastern
Time). An online replay will be available at 2:00 p.m. (Eastern Time) and
continue through June 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 627 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 Q3 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)

                  Third Quarter Ended                                Nine Months Ended
                     5/2/14           5/3/13           Percentage     5/2/14           5/3/13           Percentage
                                                           Change                                               Change
Total revenue        $ 643,298          $ 640,407          1%             $ 1,990,930        $ 1,970,529        1%
Cost of goods         201,507          201,982         0               650,451          644,027         1
sold
Gross profit           441,791            438,425          1                1,340,479          1,326,502        1
Labor and
other related          242,977            241,864          1                718,466            719,474          0
expenses
Other store
operating             121,060          116,408         4               374,501          354,859         6
expenses
Store
operating              77,754             80,153           (3)              247,512            252,169          (2)
income
General and
administrative        32,541           35,981          (10)            99,356           105,492         (6)
expenses
Operating              45,213             44,172           2                148,156            146,677          1
income
Interest              4,327            10,194          (58)            13,205           31,199          (58)
expense
Pretax income          40,886             33,978           20               134,951            115,478          17
Provision for         12,158           9,376           30              42,008           32,516          29
income taxes
Net income           $ 28,728          $ 24,602          17             $ 92,943          $ 82,962          12
                                                                                                                
Earnings per         $ 1.21            $ 1.04            16             $ 3.90            $ 3.50            11
share – Basic:
Earnings per
share –              $ 1.20            $ 1.02            18             $ 3.88            $ 3.47            12
Diluted:
                                                                                                                
Weighted
average
shares:
Basic                  23,820,309         23,760,589       0                23,816,841         23,683,133       1
Diluted                23,978,474         24,006,821       0                23,958,058         23,913,226       0
                                                                                                                
Ratio Analysis
Total revenue:
Restaurant             81.4       %       81.6       %                      79.1       %       78.9       %
Retail                18.6             18.4                            20.9             21.1       
Total revenue          100.0              100.0                             100.0              100.0
Cost of goods         31.3             31.5                            32.7             32.7       
sold
Gross profit           68.7               68.5                              67.3               67.3
Labor and
other related          37.8               37.8                              36.1               36.5
expenses
Other store
operating             18.8             18.2                            18.8             18.0       
expenses
Store
operating              12.1               12.5                              12.4               12.8
income
General and
administrative        5.1              5.6                             5.0              5.4        
expenses
Operating              7.0                6.9                               7.4                7.4
income
Interest              0.6              1.6                             0.6              1.5        
expense
Pretax income          6.4                5.3                               6.8                5.9
Provision for         1.9              1.5                             2.1              1.7        
income taxes
Net income            4.5        %      3.8        %                     4.7        %      4.2        %
                                                                                                                


CRACKER BARREL OLD COUNTRY STORE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share amounts)

                                              5/2/14       5/3/13
Assets
Cash and cash equivalents                        $ 88,239       $ 58,457
Property held for sale                           0              884
Accounts receivable                              16,402         14,406
Income tax receivable                            3,570          1,435
Inventory                                        147,378        134,131
Prepaid expenses                                 13,148         16,016
Deferred income taxes                            4,339          7,407
Property and equipment, net                      1,034,834      1,016,811
Other long-term assets                           60,625         60,126
Total assets                                     $1,368,535     $1,309,673
                                                                
Liabilities and Shareholders’ Equity
Accounts payable                                 $ 71,971       $ 72,732
Other current liabilities                        240,024        183,127
Long-term debt                                   381,250        400,000
Interest rate swap liability                     7,908          16,888
Other long-term obligations                      122,223        119,855
Deferred income taxes                            57,956         61,739
Shareholders’ equity, net                        487,203        455,332
Total liabilities and shareholders’ equity       $1,368,535     $1,309,673
                                                                
Common shares issued and outstanding             23,820,500     23,757,956
                                                                


CRACKER BARREL OLD COUNTRY STORE, INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
(Unaudited and in thousands)

                                               Nine Months Ended
                                                  5/2/14        5/3/13
Cash flows from operating activities:
Net income                                        $ 92,943        $ 82,962
Depreciation and amortization                       50,601         49,000
Loss on disposition of property and                 3,159           2,324
equipment
Share-based compensation, net of excess tax         5,520           9,035
benefit
(Decrease) increase in inventories                  (691    )       9,136
(Decrease) in accounts payable                      (38,666 )       (28,539  )
Net changes in other assets and liabilities        (11,669 )      (17,219  )
Net cash provided by operating activities          101,197       106,699  
Cash flows from investing activities:
Purchase of property and equipment, net of          (62,337 )       (45,738  )
insurance recoveries
Proceeds from sale of property and                 1,572         550      
equipment
Net cash used in investing activities              (60,765 )      (45,188  )
Cash flows from financing activities:
Net payments for credit facilities and              (1      )       (125,087 )
other long-term obligations
(Taxes withheld) and proceeds from exercise         (8,430  )       5,195
of share-based compensation awards, net
Excess tax benefit from share-based                 612             1,961
compensation
Purchases and retirement of common stock            (12,473 )       (3,570   )
Dividends on common stock                          (53,619 )      (33,515  )
Net cash used in financing activities              (73,911 )      (155,016 )
                                                                  
Net (decrease) in cash and cash equivalents         (33,479 )       (93,505  )
Cash and cash equivalents, beginning of            121,718       151,962  
period
Cash and cash equivalents, end of period          $ 88,239       $ 58,457   


                                                                             
CRACKER BARREL OLD COUNTRY STORE, INC.
Supplemental Information
(Unaudited)
                                                                             
               Third Quarter Ended         Nine Months Ended
                  5/2/14      5/3/13             5/2/14       5/3/13
                                                                             
Units in
operation:
Open at
beginning         625           621                624            616
of period
Opened
during            2             1                  3              6
period
Open at end       627           622                627            622
of period
                                                                             
Total
revenue:
(In
thousands)
Restaurant        $523,557      $522,642           $1,573,895     $1,555,111
Retail            119,741       117,765            417,035        415,418
Total             $643,298      $640,407           $1,990,930     $1,970,529
revenue
                                                                             
Cost of
goods sold:
(In
thousands)
Restaurant        $141,757      $141,617           $432,735       $423,138
Retail            59,750        60,365             217,716        220,889
Total cost
of goods          $201,507      $201,982           $650,451       $644,027
sold
Average
unit
volume: (In
thousands)
Restaurant        $836.5        $840.8             $2,517.9       $2,506.5
Retail            191.3         189.4              667.2          669.6
Total             $ 1,027.8     $                  $3,185.1       $3,176.1
                                1,030.2
                                                                             
Operating         8,137         8,081              24,378         24,197
weeks:
                                                                             


                                      Q3 2014 vs. Q3      9 mo. 2014 vs. 9
                                        2013                  mo. 2013
                                                              
Comparable store sales period to period (decrease)
increase:
Restaurant                              -0.6%                 0.5%

Retail                                  0.9%                  -0.2%
                                                              
Number of locations in comparable       616                   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, special meeting 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.

                  Third Quarter ended May 2, 2014     Third Quarter ended May 3, 2013
                     As         Adjust    As           As         Adjust    As
                     Reported                 Adjusted     Reported                 Adjusted
                                  (1)
                                                                                    
Store
operating            $ 77,754     -           $ 77,754     $ 80,153     -           $ 80,153
income
General and
administrative       32,541     (1,113)   31,428       35,981              35,981
expenses
Operating            45,213       1,113       46,326       44,172       -           44,172
income
Interest             4,327      -         4,327        10,194     -         10,194
Expense
Pretax income        40,886       1,113       41,999       33,978       -           33,978
Provision for        12,158     346       12,504       9,376               9,376
income taxes
Net income           $ 28,728   $ 767     $ 29,495     $ 24,602   $ -       $ 24,602
                                                                                    
Earning per          $ 1.21       $ 0.03      $ 1.24       $ 1.04       $ -         $ 1.04
share - Basic
Earning per
share -              $ 1.20       $ 0.03      $ 1.23       $ 1.02       $ -         $ 1.02
Diluted
                                                                                    
                                                                                    
                     Nine months ended May 2, 2014         Nine months ended May 3, 2013
                     As           Adjust      As           As           Adjust      As
                     Reported                 Adjusted     Reported                 Adjusted
                                  (1)                                   (1) (2)
                                                                        (3)
                                                                                    
Store                $                        $            $                        $
operating            247,512      -           247,512      252,169      -           252,169
income
General and
administrative       99,356     (4,313)   95,043       105,492    (5,634)   99,858
expenses
Operating            148,156      4,313       152,469      146,677      5,634       152,311
income
Interest             13,205     -         13,205       31,199     -         31,199
Expense
Pretax income        134,951      4,313       139,264      115,478      5,634       121,112
Provision for        42,008     1,343     43,351       32,516     3,847     36,363
income taxes
Net income           $ 92,943   $ 2,970   $ 95,913     $ 82,962   $ 1,787   $ 84,749
                                                                                    
Earning per          $ 3.90       $ 0.12      $ 4.02       $ 3.50       $ 0.08      $ 3.58
share - Basic
Earning per
share -              $ 3.88       $ 0.12      $ 4.00       $ 3.47       $ 0.07      $ 3.54
Diluted
                                                                                    


(1) Charges and tax effects of the special meeting of shareholders or proxy
contest at the annual shareholders meeting.
(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 Old Country Store
Investors:
Lawrence E. Hyatt, 615-235-4432
or
Media:
Andy Merrill, 212-886-9304
 
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