Tennessee | 62-1749513 |
(State or Other Jurisdiction | (IRS Employer |
of Incorporation or Organization) | Identification No.) |
Large accelerated filer | x | Accelerated filer | o |
Non-accelerated filer | o | Smaller reporting company | o |
PART
I. FINANCIAL INFORMATION
|
Page
|
|||
Item
1
|
||||
● |
Condensed
Consolidated Financial Statements (Unaudited)
|
|||
a) | Condensed Consolidated Balance Sheet as of January 30, 2009 and August 1, 2008 | 3 | ||
b) | Condensed Consolidated Statement of Income for the Quarters and Six | |||
Months
Ended January 30, 2009 and February 1, 2008
|
4 | |||
c) | Condensed Consolidated Statement of Cash Flows for the Six Months | |||
Ended
January 30, 2009 and February 1, 2008
|
5 | |||
d) | Notes to Condensed Consolidated Financial Statements | 6 | ||
Item 2 | ||||
● | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 15 | ||
Item 3 | ||||
● | Quantitative and Qualitative Disclosures About Market Risk | 29 | ||
Item 4 | ||||
● | Controls and Procedures | 29 | ||
PART II. OTHER INFORMATION | ||||
Item 1A | ||||
● | Risk Factors | 29 | ||
Item 4 | ||||
● | Submission of Matters to a Vote of Security Holders | 29 | ||
Item 6 | ||||
● | Exhibits | 29 | ||
SIGNATURES
|
30 |
January 30, | August 1, | |||||||
2009 | 2008* | |||||||
ASSETS
|
||||||||
Current
assets:
|
||||||||
Cash
and cash equivalents
|
$ | 11,135 | $ | 11,978 | ||||
Property
held for sale
|
5,543 | 3,248 | ||||||
Accounts
receivable
|
12,687 | 13,484 | ||||||
Income
taxes receivable
|
5,034 | 6,919 | ||||||
Inventories
|
137,758 | 155,954 | ||||||
Prepaid
expenses and other current assets
|
12,070 | 10,981 | ||||||
Deferred
income taxes
|
24,814 | 18,075 | ||||||
Total
current assets
|
209,041 | 220,639 | ||||||
Property
and equipment
|
1,599,536 | 1,571,816 | ||||||
Less:
Accumulated depreciation and amortization of capital
leases
|
550,675 | 526,576 | ||||||
Property
and equipment – net
|
1,048,861 | 1,045,240 | ||||||
Other
assets
|
41,855 | 47,824 | ||||||
Total
assets
|
$ | 1,299,757 | $ | 1,313,703 | ||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
Current
liabilities:
|
||||||||
Accounts
payable
|
$ | 56,143 | $ | 93,112 | ||||
Current
maturities of long-term debt and other long-term
obligations
|
8,811 | 8,714 | ||||||
Deferred
revenues
|
36,233 | 22,618 | ||||||
Accrued
interest expense
|
10,999 | 12,485 | ||||||
Other
accrued expenses
|
114,693 | 127,790 | ||||||
Total
current liabilities
|
226,879 | 264,719 | ||||||
Long-term
debt
|
771,907 | 779,061 | ||||||
Capital
lease obligations
|
69 | 77 | ||||||
Interest
rate swap liability
|
63,326 | 39,618 | ||||||
Other
long-term obligations
|
82,054 | 83,147 | ||||||
Deferred
income taxes
|
52,933 | 54,330 | ||||||
Commitments
and contingencies (Note 17)
|
||||||||
Shareholders’
equity:
|
||||||||
Preferred
stock – 100,000,000 shares of $.01 par
|
||||||||
value
authorized; no shares issued
|
-- | -- | ||||||
Common
stock – 400,000,000 shares of $.01 par value authorized;
|
||||||||
22,394,103
shares issued and outstanding at January 30, 2009,
|
||||||||
and
22,325,341 shares issued and outstanding at August 1, 2008
|
224 | 223 | ||||||
Additional
paid-in capital
|
5,300 | 731 | ||||||
Accumulated
other comprehensive loss
|
(44,518 | ) | (27,653 | ) | ||||
Retained
earnings
|
141,583 | 119,450 | ||||||
Total
shareholders’ equity
|
102,589 | 92,751 | ||||||
Total
liabilities and shareholders’ equity
|
$ | 1,299,757 | $ | 1,313,703 |
CRACKER
BARREL OLD COUNTRY STORE, INC.
|
CONDENSED
CONSOLIDATED STATEMENT OF INCOME
|
(In
thousands, except share and per share
data)
|
(Unaudited)
|
Quarter
Ended
|
Six Months Ended | |||||||||||||||
January
30,
|
February
1,
|
January
30,
|
February
1,
|
|||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Total
revenue
|
$ | 630,182 | $ | 634,453 | $ | 1,204,114 | $ | 1,215,618 | ||||||||
Cost
of goods sold
|
222,493 | 223,735 | 403,850 | 403,963 | ||||||||||||
Gross
profit
|
407,689 | 410,718 | 800,264 | 811,655 | ||||||||||||
Labor
and other related expenses
|
234,118 | 229,133 | 456,551 | 454,801 | ||||||||||||
Impairment
and store closing charges
|
-- | 68 | -- | 877 | ||||||||||||
Other
store operating expenses
|
105,740 | 106,473 | 211,706 | 211,693 | ||||||||||||
Store
operating income
|
67,831 | 75,044 | 132,007 | 144,284 | ||||||||||||
General
and administrative expenses
|
28,558 | 29,623 | 60,176 | 62,841 | ||||||||||||
Operating
income
|
39,273 | 45,421 | 71,831 | 81,443 | ||||||||||||
Interest
expense
|
13,281 | 14,454 | 27,314 | 29,363 | ||||||||||||
Interest
income
|
-- | 128 | -- | 185 | ||||||||||||
Income
before income taxes
|
25,992 | 31,095 | 44,517 | 52,265 | ||||||||||||
Provision
for income taxes
|
7,630 | 10,861 | 13,323 | 18,048 | ||||||||||||
Income
from continuing operations
|
18,362 | 20,234 | 31,194 | 34,217 | ||||||||||||
Loss
from discontinued operations, net of tax
|
-- | (17 | ) | -- | (111 | ) | ||||||||||
Net
income
|
$ | 18,362 | $ | 20,217 | $ | 31,194 | $ | 34,106 | ||||||||
Basic
net income per share:
|
||||||||||||||||
Income
from continuing operations
|
$ | 0.82 | $ | 0.87 | $ | 1.39 | $ | 1.46 | ||||||||
Loss
from discontinued operations, net of tax
|
$ | -- | $ | -- | $ | -- | $ | -- | ||||||||
Net
income per share
|
$ | 0.82 | $ | 0.87 | $ | 1.39 | $ | 1.46 | ||||||||
Diluted
net income per share:
|
||||||||||||||||
Income
from continuing operations
|
$ | 0.81 | $ | 0.85 | $ | 1.38 | $ | 1.42 | ||||||||
Loss
from discontinued operations, net of tax
|
$ | -- | $ | -- | $ | -- | $ | -- | ||||||||
Net
income per share
|
$ | 0.81 | $ | 0.85 | $ | 1.38 | $ | 1.42 | ||||||||
Weighted average shares: | ||||||||||||||||
Basic
|
22,389,598 | 23,133,206 | 22,369,783 | 23,419,403 | ||||||||||||
Diluted
|
22,597,183 | 23,758,343 | 22,631,754 | 24,101,665 | ||||||||||||
Dividends
declared per share
|
$ | 0.20 | $ | 0.18 | $ | 0.40 | $ | 0.36 | ||||||||
Six
Months Ended
|
||||||||
January 30, | February 1, | |||||||
2009 | 2008 | |||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$ | 31,194 | $ | 34,106 | ||||
Loss
from discontinued operations, net of tax
|
-- | 111 | ||||||
Adjustments
to reconcile net income to net cash provided
|
||||||||
by
operating activities of continuing operations:
|
||||||||
Depreciation
and amortization
|
28,938 | 27,983 | ||||||
Loss
(gain) on disposition of property and equipment
|
1,790 | (446 | ) | |||||
Impairment
|
-- | 532 | ||||||
Share-based
compensation
|
3,744 | 4,980 | ||||||
Excess
tax benefit from share-based compensation
|
-- | (49 | ) | |||||
Changes
in assets and liabilities:
|
||||||||
Accounts
receivable
|
797 | 731 | ||||||
Income
taxes receivable
|
1,834 | (11,967 | ) | |||||
Inventories
|
18,196 | 17,222 | ||||||
Prepaid
expenses and other current assets
|
(1,089 | ) | 117 | |||||
Accounts
payable
|
(36,969 | ) | (27,101 | ) | ||||
Deferred
revenues
|
13,615 | 14,323 | ||||||
Accrued
interest expense
|
(1,486 | ) | 13,824 | |||||
Other
accrued expenses
|
(13,543 | ) | (15,636 | ) | ||||
Other
long-term assets and liabilities
|
2,813 | 4,860 | ||||||
Net
cash provided by operating activities of continuing
operations
|
49,834 | 63,590 | ||||||
Cash
flows from investing activities:
|
||||||||
Purchase
of property and equipment
|
(37,444 | ) | (45,123 | ) | ||||
Proceeds
from sale of property and equipment
|
1,496 | 4,786 | ||||||
Proceeds
from insurance recoveries of property and equipment
|
74 | 114 | ||||||
Net
cash used in investing activities of continuing operations
|
(35,874 | ) | (40,223 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Proceeds
from issuance of long-term debt
|
518,200 | 415,300 | ||||||
Principal
payments under long-term debt and other long-term
obligations
|
(525,265 | ) | (383,286 | ) | ||||
Proceeds
from exercise of share-based compensation awards
|
877 | 1,965 | ||||||
Excess
tax benefit from share-based compensation
|
-- | 49 | ||||||
Purchases
and retirement of common stock
|
-- | (52,380 | ) | |||||
Dividends
on common stock
|
(8,615 | ) | (7,660 | ) | ||||
Net
cash used in financing activities of continuing operations
|
(14,803 | ) | (26,012 | ) | ||||
Cash
flows from discontinued operations:
|
||||||||
Net
cash used in operating activities of discontinued
operations
|
-- | (170 | ) | |||||
Net
cash used in discontinued operations
|
-- | (170 | ) | |||||
Net
decrease in cash and cash equivalents
|
(843 | ) | (2,815 | ) | ||||
Cash
and cash equivalents, beginning of period
|
11,978 | 14,248 | ||||||
Cash
and cash equivalents, end of period
|
$ | 11,135 | $ | 11,433 | ||||
Supplemental
disclosures of cash flow information:
|
||||||||
Cash
paid during the six months for:
|
||||||||
Interest,
excluding interest rate swap payments, net of amounts
capitalized
|
$ | 18,832 | $ | 14,111 | ||||
Interest
rate swap
|
$ | 8,743 | $ | 357 | ||||
Income
taxes
|
$ | 10,856 | $ | 25,812 |
Supplemental
schedule of non-cash financing activity:
|
||||||||
Change
in fair value of interest rate swap
|
$ | (23,708 | ) | $ | (46,901 | ) | ||
Change
in deferred tax asset for interest rate swap
|
$ | 6,843 | $ | 15,724 |
1. | Condensed Consolidated Financial Statements |
2. | Summary of Significant Accounting Policies |
3.
|
Recent Accounting
Pronouncements
|
4.
|
Fair Value
Measurements
|
·
|
Level 1 – quoted prices (unadjusted) for an identical asset or liability in an active market. |
·
|
Level
2 – quoted prices for a similar asset or liability in an active market or
model-derived valuations in which all significant inputs are observable
for substantially the full term of the asset or
liability.
|
·
|
Level 3 – unobservable and significant to the fair value measurement of the asset or liability. |
Quoted
Prices
|
Significant
|
|||||||||||||||
in
Active
|
Other | Significant | ||||||||||||||
Markets
for
|
Observable | Unobservable |
Fair
Value as
|
|||||||||||||
Identical Assets | Inputs | Inputs | of January 30, | |||||||||||||
(Level
1)
|
|
(Level 2) | (Level 3) | 2009 | ||||||||||||
Cash
equivalents*
|
$ | 98 | $ | -- | $ | -- | $ | 98 | ||||||||
Deferred
compensation plan assets**
|
21,607 | -- | -- | 21,607 | ||||||||||||
Total
assets at fair value
|
$ | 21,705 | $ | -- | $ | -- | $ | 21,705 | ||||||||
Interest
rate swap liability
|
$ | -- | $ | 63,326 | $ | -- | $ | 63,326 | ||||||||
Total
liabilities at fair value
|
$ | -- | $ | 63,326 | $ | -- | $ | 63,326 |
5.
|
Property Held for
Sale
|
6.
|
Inventories |
January 30, | August 1, | |||||||
2009 | 2008 | |||||||
Retail
|
$ | 103,669 | $ | 124,572 | ||||
Restaurant
|
18,849 | 17,439 | ||||||
Supplies
|
15,240 | 13,943 | ||||||
Total
|
$ | 137,758 | $ | 155,954 |
January
30,
2009
|
August
1,
2008
|
|||||||
Term
Loan B
|
||||||||
payable
$1,792 per quarter with the remainder due
on
April 27, 2013
|
$ | 629,872 | $ | 633,456 | ||||
Delayed-Draw
Term Loan Facility
payable
$383 per quarter with the remainder due
on
April 27, 2013
|
150,338 | 151,103 | ||||||
Revolving
Credit Facility
payable
on or before April 27, 2011
|
-- | 3,200 | ||||||
Note
payable
|
491 | -- | ||||||
780,701 | 787,759 | |||||||
Current
maturities
|
(8,794 | ) | (8,698 | ) | ||||
Long-term
debt
|
$ | 771,907 | $ | 779,061 |
8. | Derivative Instruments and Hedging Activities |
9. | Shareh olders’ Equity |
During
the six-month period ended January 30, 2009, total share-based
compensation was $3,744 and the tax deficiency from share-based
compensation was $51. During the six-month period ended
February 1, 2008, total share-based compensation was $4,980 and the excess
tax benefit from share-based compensation was
$49.
|
Quarter Ended | Six Months Ended | |||||||||||||||
January 30, | February 1, | January 30, | February 1, | |||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Net
income
|
$ | 18,362 | $ | 20,217 | $ | 31,194 | $ | 34,106 | ||||||||
Other
comprehensive income (loss):
|
||||||||||||||||
Change
in fair value of interest rate
Swap,
net of tax
|
(15,304 | ) | (20,685 | ) | (16,865 | ) | (31,177 | ) | ||||||||
Total
comprehensive income (loss)
|
$ | 3,058 | $ | (468 | ) | $ | 14,329 | $ | 2,929 |
Quarter Ended | Six Months Ended | |||||||||||||||
January 30, | February 1, | January 30, | February 1, | |||||||||||||
2009 | 2008 | 2009 | 200 8 | |||||||||||||
Revenue:
|
||||||||||||||||
Restaurant
|
$ | 468,919 | $ | 465,105 | $ | 924,886 | $ | 927,858 | ||||||||
Retail
|
161,263 | 169,348 | 279,228 | 287,760 | ||||||||||||
Total
revenue
|
$ | 630,182 | $ | 634,453 | $ | 1,204,114 | $ | 1,215,618 |
Quarter Ended | Six Months Ended | |||||||
February 1, | February 1, | |||||||
2008 | 2008 | |||||||
Loss
before tax benefit from discontinued operations
|
$ | (25 | ) | $ | (170 | ) | ||
Tax
benefit
|
8 | 59 | ||||||
Loss
from discontinued operations, net of tax
|
$ | (17 | ) | $ | (111 | ) |
Quarter Ended | Six Months Ended | |||||||||||||||
January 30, | February 1, | January 30, | February 1, | |||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Income
from continuing operations per share
numerator
|
$ | 18,362 | $ | 20,234 | $ | 31,194 | $ | 34,217 | ||||||||
Loss
from discontinued operations, net of
tax,
per share numerator
|
$ | -- | $ | (17 | ) | $ | -- | $ | (111 | ) |
Income
from continuing operations, loss from
discontinued
operations, net of tax, and net
income
per share denominator:
|
||||||||||||||||
Weighted
average shares
|
22,389,598 | 23,133,206 | 22,369,783 | 23,419,403 | ||||||||||||
Add
potential dilution:
|
||||||||||||||||
Stock
options and nonvested stock and
stock
awards
|
207,585 | 625,137 | 261,971 | 682,262 | ||||||||||||
Diluted
weighted average shares
|
22,597,183 | 23,758,343 | 22,631,754 | 24,101,665 |
Financial
Statements included in the 2008 Form 10-K), the Company entered into
various agreements to indemnify third parties against certain tax
obligations, for any breaches of representations and warranties in the
applicable transaction documents and for certain costs and expenses that
may arise out of specified real estate matters, including potential
relocation and legal costs. With the exception of certain tax
indemnifications, the Company believes that the probability of being
required to make any indemnification payments to Logan’s is
remote. Therefore, at January 30, 2009, the Company has
recorded a liability of $387 in the condensed consolidated balance sheet
for these potential tax indemnifications, but no provision has been
recorded for potential non-tax
indemnifications.
|
·
|
Results
of Operations – an analysis of our condensed consolidated statements of
income for the periods presented.
|
·
|
Liquidity
and Capital Resources – an analysis of our primary sources of liquidity
and capital expenditures.
|
·
|
Critical
Accounting Estimates – a discussion of accounting policies that require
critical judgments and estimates.
|
·
|
lower
restaurant traffic and lower retail
sales,
|
·
|
higher
retail cost of goods sold,
|
·
|
higher
group health costs,
|
·
|
higher
utilities expense,
|
·
|
higher
store management wages,
|
·
|
non-recurrence
of the prior-year gain on the sale of the remaining Logan’s property we
had retained,
|
·
|
higher
workers’ compensation expense and
|
·
|
higher
property taxes.
|
·
|
lower
income taxes,
|
·
|
lower
general insurance expense,
|
·
|
lower
interest expense,
|
·
|
lower
store miscellaneous expense,
|
·
|
lower
food costs,
|
·
|
lower
store bonus accruals,
|
·
|
lower
professional fees and
|
·
|
higher
menu pricing.
|
continuing
operations for the six-month period ended January 30, 2009 decreased 8.8%
as compared to the six-month period ended February 1, 2008. The
decrease in income from continuing operations reflected the
following:
|
·
|
lower
restaurant traffic and lower retail
sales,
|
·
|
higher
utilities expense,
|
·
|
higher
store management wages,
|
·
|
non-recurrence
of the prior-year gain on the sale of the remaining Logan’s property we
had retained,
|
·
|
higher
retail costs of goods sold,
|
·
|
higher
food costs and
|
·
|
higher
property taxes.
|
·
|
lower
income taxes,
|
·
|
lower
general insurance expense,
|
·
|
non-recurrence
of manager meeting expense,
|
·
|
lower
interest expense,
|
·
|
lower
professional fees and
|
·
|
higher
menu pricing.
|
The following table
highlights operating results by percentage relationships to total revenue
for the quarter and six-month period ended January 30, 2009 as compared to
the same periods in the prior
year:
|
Quarter Ended | Six Months Ended | |||||||||||||||
January 30, | February 1, | January 30, | February 1, | |||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Total
revenue
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Cost
of goods sold
|
35.3 | 35.3 | 33.5 | 33.2 | ||||||||||||
Gross
profit
|
64.7 | 64.7 | 66.5 | 66.8 | ||||||||||||
Labor
and other related expenses
|
37.1 | 36.1 | 37.9 | 37.4 | ||||||||||||
Impairment
and store closing charges
|
-- | -- | -- | 0.1 | ||||||||||||
Other
store operating expenses
|
16.8 | 16.8 | 17.6 | 17.4 | ||||||||||||
Store
operating income
|
10.8 | 11.8 | 11.0 | 11.9 | ||||||||||||
General
and administrative expenses
|
4.6 | 4.6 | 5.0 | 5.2 | ||||||||||||
Operating
income
|
6.2 | 7.2 | 6.0 | 6.7 | ||||||||||||
Interest
expense
|
2.1 | 2.3 | 2.3 | 2.4 | ||||||||||||
Interest
income
|
-- | -- | -- | -- | ||||||||||||
Income
before income taxes
|
4.1 | 4.9 | 3.7 | 4.3 | ||||||||||||
Provision
for income taxes
|
1.2 | 1.7 | 1.1 | 1.5 | ||||||||||||
Income
from continuing operations
|
2.9 | 3.2 | 2.6 | 2.8 | ||||||||||||
Loss
from discontinued operations, net of tax
|
-- | -- | -- | -- | ||||||||||||
Net
income
|
2.9 | % | 3.2 | % | 2.6 | % | 2.8 | % |
Quarter Ended | Six Months Ended | |||||||||||||||
January 30, | February 1, | January 30, | February 1, | |||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Revenue:
|
||||||||||||||||
Restaurant
|
74.4 | % | 73.3 | % | 76.8 | % | 76.3 | % | ||||||||
Retail
|
25.6 | 26.7 | 23.2 | 23.7 | ||||||||||||
Total
revenue
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
Quarter Ended | Six Months Ended | |||||||||||||||
January 30, | February 1, | January 30, | February 1, | |||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Open
at beginning of period
|
581 | 566 | 577 | 562 | ||||||||||||
Opened
during period
|
4 | 4 | 8 | 10 | ||||||||||||
Closed
during period
|
-- | -- | -- | (2 | ) | |||||||||||
Open
at end of period
|
585 | 570 | 585 | 570 |
Quarter Ended | Six Months Ended | |||||||||||||||
January 30, | February 1, | January 30, | February 1, | |||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Revenue:
|
||||||||||||||||
Restaurant
|
$ | 802.7 | $ | 817.2 | $ | 1,591.6 | $ | 1,638.8 | ||||||||
Retail
|
276.1 | 297.5 | 480.5 | 508.2 | ||||||||||||
Total
revenue
|
$ | 1,078.8 | $ | 1,114.7 | $ | 2,072.1 | $ | 2,147.0 |
decreased
2.3% and comparable store retail sales decreased 5.0% resulting in a
combined comparable store sales (total revenue) decrease of
3.0%. The comparable store restaurant sales decrease consisted
of a 3.2% average check increase for the six months (including a 3.4%
average menu price increase) and a 5.5% guest traffic
decrease. We continue to experience the effects of pressures on
consumer discretionary income in our guest traffic and
sales. Sales from newly opened stores partially offset the
decrease in comparable store restaurant and retail
sales.
|
fees
and non-labor-related pre-opening expenses. Other store
operating expenses as a percentage of total revenue remained flat compared
to the second quarter of the prior year at 16.8%. Higher
utilities expense, higher property taxes and the effect of lower guest
traffic were partially offset by lower general insurance expense as a
result of revised actuarial estimates, lower store miscellaneous expense
and higher menu pricing. Lower store miscellaneous expense
resulted from lower hourly employee turnover and cost control
initiatives.
|
We
believe that cash at January 30, 2009, along with cash generated from our
operating activities, the borrowing capacity under our Revolving Credit
Facility and the expected proceeds from the planned sale-leaseback
transactions described below will be sufficient to finance our continued
operations, our continued expansion plans, our principal payments on our
debt and our dividend payments for at least the next twelve months and
thereafter for the foreseeable
future.
|
From
May 3, 2008 through May 1, 2009
|
4.00
|
From
May 2, 2009 thereafter
|
3.75
|
From
May 3, 2008 through May 1, 2009
|
3.50
|
From
May 2, 2009 through April 30, 2010
|
3.75
|
From
April 31, 2010 thereafter
|
4.00
|
acquisition
and construction costs for 7 new stores to be opened in 2010 and capital
expenditures for maintenance programs. We intend to fund our
capital expenditures with cash flows from operations and borrowings under
our Revolving Credit Facility, as necessary. Capitalized
interest was $94 and $294, respectively, for the quarter and six-month
period ended January 30, 2009, as compared to $184 and $412, respectively,
for the quarter and six-month period ended February 1,
2008.
|
Other
than various operating leases, we have no material off-balance sheet
arrangements. Refer to our 2008 Form 10-K for additional
information regarding our operating
leases.
|
·
|
management
believes are both most important to the portrayal of our financial
condition and operating results and
|
·
|
require
management's most difficult, subjective or complex judgments, often as a
result of the need to make estimates about the effect of matters that are
inherently uncertain.
|
·
|
Impairment
of Long-Lived Assets and Provision for Asset
Dispositions
|
·
|
Insurance
Reserves
|
·
|
Inventory
Shrinkage
|
·
|
Tax
Provision
|
·
|
Share-Based
Compensation
|
·
|
Unredeemed
Gift Cards and Certificates
|
·
|
Legal
Proceedings
|
·
|
The
expected volatility is a blend of implied volatility based on
market-traded options on our stock and historical volatility of our stock
over the contractual life of the
options.
|
·
|
We
use historical data to estimate option exercise and employee termination
behavior within the valuation model; separate groups of employees that
have similar historical exercise behavior are considered separately for
valuation purposes. The expected life of options granted is
derived from the output of the option valuation model and represents the
period of time the options are expected to be
outstanding.
|
·
|
The
risk-free interest rate is based on the U.S. Treasury yield curve in
effect at the time of grant for periods within the contractual life of the
option.
|
·
|
The
expected dividend yield is based on our current dividend yield as the best
estimate of projected dividend yield for periods within the contractual
life of the option.
|
Unredeemed
Gift Cards and Certificates
|
Item 1A. | Risk Fact ors |
Item 4. | Submission of Matters to a Vote of Security Holders |
Item 6. | Exh ibits |
|
See
Exhibit Index immediately following the signature page
hereto.
|
CRACKER BARREL OLD COUNTRY STORE, INC. | |||
Date:
3/10/09
|
By:
|
/s/ N.B. Forrest Shoaf | |
N.B. Forrest Shoaf, Senior Vice President, Secretary, | |||
Chief Legal Officer and Interim Chief Financial Officer |
Date:
3/10/09
|
By:
|
/s/ Patrick A. Scruggs | |
Patrick A. Scruggs, Vice President, Accounting and Tax | |||
and Chief Accounting Officer |
3(I),
4
|
Articles
of Incorporation (as amended to date) (incorporated by reference to
Exhibit 3(I), 4 to the Company’s Quarterly Report on Form 10-Q for the
quarter ended October 31, 2008 and filed with the SEC on December 9,
2008)
|
10.1
|
The
Company's Amended and Restated Stock Option Plan (as amended to
date)
|
10.2
|
The
Company’s 2002 Omnibus Incentive Compensation Plan (as amended to
date)
|
31
|
Rule
13a-14(a)/15d-14(a) Certifications
|
32
|
Section
1350 Certifications
|
(i) Intoxication while on duty. | |
(ii) Theft or dishonesty in the conduct of the Company's business. | |
|
(iii) Willful
neglect or negligence in the management of the Company's
business.
|
(iv) Conviction of a crime involving moral turpitude. |
(i)
|
Exercise in the Event
of Death or Disability
. If an Optionee shall die (i)
while an employee of the Company or of a Subsidiary or (ii) within 90 days
after termination of his employment with the Company or a Subsidiary,
other than for termination for Just Cause, his Option may be exercised, to
the extent that the Optionee shall have been entitled to do so at the date
of his termination of employment, by the person or persons to whom the
Optionee's rights under the Option pass by will or applicable law, or if
no such person has such right, by his executors or administrators, at any
time, or from time to time, for a period of one year after the date of the
Optionee's death, but in no event later than the expiration
date. In the event an Optionee's employment with the Company is
terminated as a result of Disability, the Optionee may exercise options,
to the extent the Optionee was entitled to do so at the date of his
termination of employment for a period of one year, but in no event later
than the expiration date of the
Option.
|
(ii)
|
|
Exercise in the Event
of Termination of Employment
. If an Optionee's
employment by the Company or a Subsidiary shall terminate for any reason
other than Disability, Retirement, death or Just Cause, he may exercise
his Option, to the extent that he may be entitled to do so at the date of
the termination of his employment, at any time, or from time to time, for
a period of 90 days after the date of termination, but in no event
|
later than the expiration date of the Option. Whether authorized leave of absence for military or governmental service shall constitute termination of employment for purposes of this Plan shall be determined by the Committee. In the event an Optionee's employment with the Company or any Subsidiary is terminated for Just Cause, the Option shall terminate as of the date of the employee's termination and will no longer be exercisable. | ||
(iii)
|
|
Exercise in the Event
of Retirement
. If an Optionee ceases to be an employee
by reason of Retirement, the former employee may exercise Options, to the
extent the Optionee was entitled to do so at the date of termination at
any time during the remaining life of the Option, but in no event later
than the expiration date of the
Option.
|
(i)
|
A
“change of control” shall be deemed to have occurred
if:
|
|
(1)
|
without
prior approval of the Board, any "person" becomes a beneficial owner,
directly or indirectly, of securities of the Company representing 20% or
more of the combined voting power of the Company's then outstanding
securities; or
|
|
(2)
|
without
prior approval of the Board, as a result of, or in connection with, or
within two years following, a tender or exchange offer for the voting
stock of the Company, a merger or other business combination to which the
Company is a party, the sale or other disposition of all or substantially
all of the assets of the
|
Company, a reorganization of the Company, or a proxy contest in connection with the election of members of the Board, the persons who were directors of the Company immediately prior to any of such transactions cease to constitute a majority of the Board or of the board of directors of any successor to the Company (except for resignations due to death, Disability or normal Retirement). | ||
|
(ii)
|
A
person shall be deemed the “beneficial owner” of any
securities:
|
|
(1)
|
which
such person or any of its Affiliates or Associates beneficially owns,
directly or indirectly; or
|
|
(2)
|
which
such person or any of its Affiliates or Associates has, directly or
indirectly, (1) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise, or (2) the right to
vote pursuant to any agreement, arrangement or understanding;
or
|
|
(3)
|
which
are beneficially owned, directly or indirectly, by any other person with
which such person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any
securities.
|
|
(iii)
|
A
“person” shall mean any individual, firm, company, partnership, other
entity or group.
|
|
(iv)
|
The
terms “Affiliate” or “Associate” shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
promulgated by the Securities and Exchange Commission under the Securities
Exchange Action of 1934, as in effect on the date the Plan is approved by
the shareholders of the Company and becomes
effective.
|
3.
|
ADMINISTRATION
.
|
4.
|
ELIGIBILITY
.
|
5.
|
NUMBER OF SHARES
AVAILABLE
.
|
6.
|
EFFECTIVE DATE;
TERM
.
|
7.
|
PARTICIPATION
.
|
12. | PLAN CASH BONUSES . |
13. | PERFORMANCE GOALS FOR CERTAIN SECTION 162(m) AWARDS . |
|
(1)
|
return
on capital, equity, or assets (including economic value
created),
|
|
(2)
|
productivity,
|
|
(3)
|
cost
improvements,
|
|
(4)
|
cash
flow,
|
|
(5)
|
sales
revenue growth,
|
|
(6)
|
net
income, earnings per share, or earnings from
operations,
|
|
(7)
|
quality,
|
|
(8)
|
customer
satisfaction,
|
|
(9)
|
comparable
store sales,
|
|
(10)
|
stock
price or total shareholder return;
|
|
(11)
|
satisfaction
of specified business expansion
goals;
|
|
(12)
|
diversity
goals;
|
|
(13)
|
turnover;
|
|
(14)
|
specified
objective social goals;
|
|
(15)
|
hiring
or retention of high-potential employees or
executives;
|
|
(16)
|
growth
in locations; or
|
|
(17)
|
brand
positioning goals.
|
15. | DIVIDEND AND DIVIDEND EQUIVALENTS . |
16. | DEFERRAL OF AWARDS . |
17. | TERMINATION OF EMPLOYMENT . |
18. | NO ASSIGNMENT . |
19. | CAPITAL ADJUSTMENTS . |
20. | WITHHOLDING TAXES . |
21. | NONCOMPETITION; CONFIDENTIALITY . |
22. | REGULATORY APPROVALS AND LISTINGS . |
23. | PLAN AMENDMENT . |
24. | AWARD AMENDMENTS . |
29. | NO RIGHT, TITLE OR INTEREST IN COMPANY ASSETS . |
30. | SECURITIES LAWS . |
31. | REQUIRED WRITTEN REPRESENTATIONS . |
32. | NON-EXCLUSIVE ARRANGEMENT . |
33. | LIMITS ON LIABILITY AND INDEMNIFICATION . |
1. |
|
I
have reviewed this Quarterly Report on Form 10-Q of Cracker Barrel Old
Country Store, Inc.;
|
2. |
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3. |
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4. |
|
The
registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
(a) |
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
(b)
|
|
Designed
such internal controls over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
(c)
|
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
(d)
|
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
|
The
registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
(a)
|
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
(b)
|
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
1. |
|
I
have reviewed this Quarterly Report on Form 10-Q of Cracker Barrel Old
Country Store, Inc.;
|
2. |
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3. |
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4. |
|
The
registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
(a) |
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
(b)
|
|
Designed
such internal controls over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
(c)
|
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
(d)
|
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
|
The
registrant's other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
(a)
|
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
(b)
|
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
1.
|
The
Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934;
and
|
2.
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Issuer.
|
Date: March 9, 2009 | By: | /s/Michael A. Woodhouse | |
Michael A. Woodhouse, | |||
Chairman, President and Chief Executive Officer |
1.
|
The
Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934;
and
|
2.
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Issuer.
|
Date: March 9, 2009 | By: | /s/N.B. Forrest Shoaf | |
N.B. Forrest Shoaf, | |||
Senior Vice President, Secretary, Chief |
Legal Officer and Interim Chief Financial Officer | |||