☒ |
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
☐ |
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Tennessee
|
62‑0812904
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification Number)
|
305 Hartmann Drive
|
37087-4779
|
|
Lebanon, Tennessee
|
(Zip code)
|
|
(Address of principal executive offices)
|
Title of each class
|
Name of each exchange on which registered
|
|
Common Stock (Par Value $.01)
|
The NASDAQ Stock Market LLC
|
|
Rights to Purchase Series A Junior Participating
|
(NASDAQ Global Select Market)
|
|
Preferred Stock (Par Value $0.01)
|
Large accelerated filer ☑
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company ☐
|
Emerging growth company ☐
|
Document from which Portions
are Incorporated by Reference
|
Part of Form 10‑K
into which incorporated
|
|||
1.
|
Proxy Statement for Annual Meeting of
|
Part III
|
||
Shareholders to be held November 16, 2017
|
||||
(the “2017 Proxy Statement”)
|
Price Range
|
||||
Breakfast
|
$
|
3.39 to $11.99
|
||
Lunch and Dinner
|
$
|
4.49 to $16.69
|
Percentage of
Restaurant
Sales in 2017
|
||||
Breakfast Day-Part (until 11:00 a.m.)
|
24
|
%
|
||
Lunch Day-Part (11:00 a.m. to 4:00 p.m.)
|
39
|
%
|
||
Dinner Day-Part (4:00 p.m. to close)
|
37
|
%
|
Percentage of
Retail Sales in
2017
|
||||
Apparel and Accessories
|
30
|
%
|
||
Food
|
18
|
%
|
||
Décor
|
13
|
%
|
||
Toys
|
11
|
%
|
||
Bed and Bath
|
8
|
%
|
Percentage of
Food Purchases
in 2017
|
||||
Beef
|
14
|
%
|
||
Dairy (including eggs)
|
12
|
%
|
||
Fruits and vegetables
|
12
|
%
|
||
Poultry
|
11
|
%
|
||
Pork
|
10
|
%
|
· |
fluctuating currency exchange rates or control regulations;
|
· |
foreign government regulations;
|
· |
import/export restrictions and product testing regulations;
|
· |
foreign political and economic instability;
|
· |
disruptions due to labor stoppages, strikes or slowdowns, or other disruptions, involving our vendors or the transportation and handling industries; and
|
· |
tariffs, trade barriers and other trade restrictions by the U.S. government on products or components shipped from foreign sources.
|
· |
increases and decreases in guest traffic, average weekly sales, restaurant and retail sales and restaurant profitability;
|
· |
the rate at which we open new stores, the timing of new store openings and the related high initial operating costs;
|
· |
changes in advertising and promotional activities and expansion into new markets; and
|
· |
impairment of long-lived assets and any loss on store closures.
|
· |
responding to public proposals, special meeting requests and other actions by activist shareholders can disrupt our operations, be costly and time-consuming, and divert the attention of our management and employees;
|
· |
perceived uncertainties as to our future direction may result in the loss of potential business opportunities, and may make it more difficult to attract and retain qualified personnel and business partners; and
|
· |
pursuit of an activist shareholder’s agenda may adversely affect our ability to effectively implement our business strategy and create additional value for our shareholders.
|
State
|
Owned
|
Leased
|
State
|
Owned
|
Leased
|
|
Tennessee
|
37
|
15
|
Oklahoma
|
6
|
2
|
|
Florida
|
40
|
19
|
New Jersey
|
2
|
4
|
|
Texas
|
33
|
18
|
Wisconsin
|
5
|
0
|
|
Georgia
|
31
|
17
|
Colorado
|
3
|
1
|
|
North Carolina
|
24
|
16
|
Kansas
|
3
|
1
|
|
Kentucky
|
22
|
14
|
Massachusetts
|
0
|
4
|
|
Alabama
|
21
|
11
|
New Mexico
|
3
|
1
|
|
Virginia
|
19
|
13
|
Utah
|
4
|
0
|
|
Ohio
|
22
|
9
|
Idaho
|
2
|
1
|
|
Indiana
|
22
|
7
|
Iowa
|
3
|
0
|
|
South Carolina
|
14
|
12
|
Connecticut
|
1
|
1
|
|
Pennsylvania
|
9
|
14
|
Montana
|
2
|
0
|
|
Illinois
|
19
|
2
|
Nebraska
|
1
|
1
|
|
Missouri
|
14
|
3
|
Nevada
|
0
|
2
|
|
Michigan
|
13
|
3
|
Delaware
|
0
|
1
|
|
Mississippi
|
10
|
4
|
Maine
|
0
|
1
|
|
Arizona
|
2
|
11
|
Minnesota
|
1
|
0
|
|
Arkansas
|
5
|
7
|
New Hampshire
|
1
|
0
|
|
Louisiana
|
8
|
2
|
North Dakota
|
1
|
0
|
|
Maryland
|
3
|
6
|
Oregon
|
0
|
1
|
|
New York
|
8
|
1
|
Rhode Island
|
0
|
1
|
|
West Virginia
|
3
|
6
|
South Dakota
|
1
|
0
|
|
Total
|
418
|
232
|
Name
|
Age
|
Position with the Company
|
|
Sandra B. Cochran
|
59
|
President and Chief Executive Officer
|
|
Jill M. Golder
|
55
|
Senior Vice President and Chief Financial Officer
|
|
Beverly K. Carmichael
|
58
|
Senior Vice President and Chief People Officer
|
|
Laura A. Daily
|
53
|
Senior Vice President, Retail
|
|
Nicholas V. Flanagan
|
51
|
Senior Vice President, Operations
|
|
Donald H. Hoffman
|
60
|
Senior Vice President, Marketing
|
|
Richard M. Wolfson
|
51
|
Senior Vice President, General Counsel and Secretary
|
|
Doug Couvillion
|
53
|
Senior Vice President, Sourcing and Supply Chain
|
|
Jeffrey M. Wilson
|
42
|
Vice President, Corporate Controller and Principal Accounting Officer
|
ITEM 5. |
Fiscal Year 2017
|
Fiscal Year 2016
|
|||||||||||||||||||||||||||||||
Prices
|
Dividends
Declared
|
Dividends
Paid
|
Prices
|
Dividends
Declared
|
Dividends
Paid
|
|||||||||||||||||||||||||||
High
|
Low
|
High
|
Low
|
|||||||||||||||||||||||||||||
First
|
$
|
162.33
|
$
|
130.15
|
$
|
1.15
|
$
|
1.15
|
$
|
155.97
|
$
|
117.95
|
$
|
1.10
|
$
|
4.10
|
||||||||||||||||
Second
|
175.04
|
131.74
|
1.15
|
1.15
|
141.94
|
118.01
|
1.10
|
1.10
|
||||||||||||||||||||||||
Third
|
169.07
|
154.79
|
1.15
|
1.15
|
156.65
|
124.80
|
1.10
|
1.10
|
||||||||||||||||||||||||
Fourth
|
170.50
|
154.46
|
4.70
|
4.65
|
172.89
|
144.00
|
4.40
|
4.35
|
(Dollars in thousands except percentages and share data)
For each of the fiscal years ended
|
||||||||||||||||||||
July 28,
2017
|
July 29,
2016
|
July 31,
2015
(a)
|
August 1,
2014
(b)
|
August 2,
2013
|
||||||||||||||||
Selected Income Statement Data:
|
||||||||||||||||||||
Total revenue
|
$
|
2,926,289
|
$
|
2,912,351
|
$
|
2,842,284
|
$
|
2,683,677
|
$
|
2,644,630
|
||||||||||
Net income
|
201,899
|
189,299
|
163,903
|
132,128
|
117,265
|
|||||||||||||||
Net income per share:
|
||||||||||||||||||||
Basic
|
8.40
|
7.91
|
6.85
|
5.55
|
4.95
|
|||||||||||||||
Diluted
|
8.37
|
7.86
|
6.82
|
5.51
|
4.90
|
|||||||||||||||
Dividends declared per share
|
8.15
|
7.70
|
7.10
|
3.25
|
2.25
|
|||||||||||||||
Dividends paid per share
|
8.10
|
10.65
|
4.00
|
3.00
|
1.90
|
|||||||||||||||
As Percent of Total Revenue:
|
||||||||||||||||||||
Cost of goods sold (exclusive of depreciation and rent)
|
30.5
|
%
|
31.9
|
%
|
32.5
|
%
|
32.5
|
%
|
32.3
|
%
|
||||||||||
Labor and related expenses
|
34.8
|
34.6
|
34.9
|
36.0
|
36.5
|
|||||||||||||||
Other store operating expenses
|
19.2
|
19.0
|
18.4
|
18.9
|
18.2
|
|||||||||||||||
Store operating income
|
15.5
|
14.5
|
14.2
|
12.6
|
13.0
|
|||||||||||||||
General and administrative expenses
|
4.8
|
4.9
|
5.2
|
4.8
|
5.4
|
|||||||||||||||
Operating income
|
10.7
|
9.6
|
9.0
|
7.8
|
7.6
|
|||||||||||||||
Income before income taxes
|
10.2
|
9.1
|
8.4
|
7.1
|
6.3
|
|||||||||||||||
Selected Balance Sheet Data:
|
||||||||||||||||||||
Working capital (deficit)
|
$
|
(16,971
|
)
|
$
|
(13,077
|
)
|
$
|
11,213
|
$
|
(14,789
|
)
|
$
|
(13,873
|
)
|
||||||
Total assets
|
1,521,942
|
1,497,664
|
1,576,208
|
1,432,248
|
1,388,306
|
|||||||||||||||
Long-term debt
|
400,000
|
400,000
|
400,000
|
375,000
|
400,000
|
|||||||||||||||
Long-term interest rate swap liability
|
6,833
|
22,070
|
8,704
|
3,239
|
11,644
|
|||||||||||||||
Other long-term obligations
|
129,353
|
126,608
|
133,594
|
123,221
|
120,073
|
|||||||||||||||
Shareholders’ equity
|
544,507
|
526,443
|
538,268
|
528,641
|
484,026
|
|||||||||||||||
Selected Cash Flow Data:
|
||||||||||||||||||||
Purchase of property and equipment, net
|
$
|
110,108
|
$
|
113,360
|
$
|
90,490
|
$
|
90,564
|
$
|
73,961
|
||||||||||
Share repurchases
|
--
|
14,653
|
--
|
12,473
|
3,570
|
|||||||||||||||
Selected Other Data:
|
||||||||||||||||||||
Common shares outstanding at end of year
|
24,055,682
|
23,956,134
|
23,975,755
|
23,821,227
|
23,795,327
|
|||||||||||||||
Stores open at end of year
|
649
|
641
|
637
|
631
|
624
|
|||||||||||||||
Average Unit Volumes
(c)
:
|
||||||||||||||||||||
Restaurant
|
$
|
3,646
|
$
|
3,651
|
$
|
3,581
|
$
|
3,415
|
$
|
3,390
|
||||||||||
Retail
|
892
|
926
|
904
|
873
|
869
|
|||||||||||||||
Comparable Store Sales
(d)
:
|
||||||||||||||||||||
Period to period increase (decrease) in comparable store sales:
|
||||||||||||||||||||
Restaurant
|
0.2
|
%
|
2.2
|
% |
5.1
|
%
|
0.7
|
%
|
3.1
|
%
|
||||||||||
Retail
|
(3.7
|
)
|
2.7
|
3.6
|
0.4
|
2.9
|
||||||||||||||
Number of stores in comparable base
|
632
|
623
|
621
|
609
|
596
|
(a) |
We incurred approximately $3,500 in costs related to a litigation matter, which are included in general and administrative expenses. Our debt refinancing in the second quarter of fiscal 2015 resulted in additional interest expense of $412 related to the write-off of deferred financing costs.
|
(b) |
We incurred $4,313 in costs related to the November 2013 proxy contest and April 2014 special shareholders’ meeting, which are included in general and administrative expenses.
|
(c) |
Average unit volumes include sales of all stores.
|
(d) |
Comparable store sales consist of sales of stores open at least six full quarters at the beginning of the year and are measured on comparable calendar weeks.
|
· |
Executive Overview – a general description of our business, the restaurant and retail industries, our key performance indicators and the Company’s performance in 2017.
|
· |
Results of Operations – an analysis of our consolidated statements of income for the three years presented in our Consolidated Financial Statements.
|
· |
Liquidity and Capital Resources – an analysis of our primary sources of liquidity, capital expenditures and material commitments.
|
· |
Critical Accounting Estimates – a discussion of accounting policies that require critical judgments and estimates.
|
· |
Enhancing the Core business by increasing our brand’s relevance to customers in order to drive guest traffic and sales in both restaurant and retail across demographic groups and generations and improving our business model to reduce operating costs and further drive margins;
|
· |
Expanding the Footprint in new and developing markets while expanding our store opening pipeline to accelerate future growth; and
|
· |
Extending the Brand by optimizing on long-term drivers, such as Holler & Dash Biscuit House
TM
, to further drive shareholder value.
|
Relationship to Total Revenue
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Total revenue
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||||
Cost of goods sold (exclusive of depreciation and rent)
|
30.5
|
31.9
|
32.5
|
|||||||||
Labor and other related expenses
|
34.8
|
34.6
|
34.9
|
|||||||||
Other store operating expenses
|
19.2
|
19.0
|
18.4
|
|||||||||
Store operating income
|
15.5
|
14.5
|
14.2
|
|||||||||
General and administrative
|
4.8
|
4.9
|
5.2
|
|||||||||
Operating income
|
10.7
|
9.6
|
9.0
|
|||||||||
Interest expense
|
0.5
|
0.5
|
0.6
|
|||||||||
Income before income taxes
|
10.2
|
9.1
|
8.4
|
|||||||||
Provision for income taxes
|
3.3
|
2.6
|
2.6
|
|||||||||
Net income
|
6.9
|
6.5
|
5.8
|
2017
|
2016
|
2015
|
||||||||||
Revenue in dollars:
|
||||||||||||
Restaurant
|
$
|
2,351,212
|
$
|
2,323,199
|
$
|
2,269,610
|
||||||
Retail
|
575,077
|
589,152
|
572,674
|
|||||||||
Total revenue
|
$
|
2,926,289
|
$
|
2,912,351
|
$
|
2,842,284
|
||||||
Total revenue percentage increase
|
0.5
|
%
|
2.5
|
%
|
5.9
|
%
|
||||||
Total revenue by percentage relationships:
|
||||||||||||
Restaurant
|
80.3
|
%
|
79.8
|
%
|
79.9
|
%
|
||||||
Retail
|
19.7
|
%
|
20.2
|
%
|
20.1
|
%
|
||||||
Comparable number of stores
|
632
|
623
|
621
|
|||||||||
Comparable store averages per store:
|
||||||||||||
Restaurant
|
$
|
3,669
|
$
|
3,670
|
$
|
3,569
|
||||||
Retail
|
890
|
925
|
894
|
|||||||||
Total
|
$
|
4,559
|
$
|
4,595
|
$
|
4,463
|
||||||
Restaurant average weekly sales
(1)
|
$
|
70.1
|
$
|
70.2
|
$
|
68.9
|
||||||
Retail average weekly sales
(1)
|
17.1
|
17.8
|
17.4
|
Period to Period
Increase (Decrease)
|
||||||||
2017 vs 2016
(632 Stores)
|
2016 vs 2015
(623 Stores)
|
|||||||
Restaurant
|
0.2
|
%
|
2.2
|
%
|
||||
Retail
|
(3.7
|
)
|
2.7
|
|||||
Restaurant & Retail
|
(0.6
|
)
|
2.3
|
2017
|
2016
|
2015
|
||||||||||
Cost of Goods Sold:
|
||||||||||||
Restaurant
|
$
|
595,186
|
$
|
627,713
|
$
|
630,417
|
||||||
Retail
|
296,107
|
300,463
|
293,754
|
|||||||||
Total Cost of Goods Sold
|
$
|
891,293
|
$
|
928,176
|
$
|
924,171
|
2017
|
2016
|
2015
|
||||||||||
Restaurant Cost of Goods Sold
|
25.3
|
%
|
27.0
|
%
|
27.8
|
%
|
2017
|
2016
|
2015
|
||||||||||
Retail Cost of Goods Sold
|
51.5
|
%
|
51.0
|
%
|
51.3
|
%
|
2016 to 2017
Increase (Decrease) as a
Percentage of Total Revenue
|
||||
Markdowns
|
0.4
|
%
|
||
Lower initial margin
|
0.2
|
%
|
||
Provision for obsolete inventory
|
0.1
|
%
|
||
Retail credits
|
(0.3
|
%)
|
2015 to 2016
(Decrease) Increase as a
Percentage of Total Revenue
|
||||
Higher initial margin
|
(0.8
|
%)
|
||
Freight
|
(0.1
|
%)
|
||
Markdowns
|
0.5
|
%
|
||
Provision for obsolete inventory
|
0.1
|
%
|
2017
|
2016
|
2015
|
||||||||||
Labor and other related expenses
|
34.8
|
%
|
34.6
|
%
|
34.9
|
%
|
2016 to 2017
Increase (Decrease) as a
Percentage of Total Revenue
|
||||
Store hourly labor
|
0.1
|
%
|
||
Store management compensation
|
0.1
|
%
|
||
Employee health care expenses
|
(0.1
|
%)
|
2015 to 2016
(Decrease) as a Percentage
of Total Revenue
|
||||
Store bonus expense
|
(0.2
|
%)
|
||
Payroll taxes
|
(0.1
|
%)
|
2017
|
2016
|
2015
|
||||||||||
Other store operating expenses
|
19.2
|
%
|
19.0
|
%
|
18.4
|
%
|
2016 to 2017
Increase (Decrease) as a
Percentage of Total Revenue
|
||||
Depreciation
|
0.3
|
%
|
||
Advertising
|
0.1
|
%
|
||
Maintenance
|
(0.2
|
%)
|
2015 to 2016
Increase (Decrease) as a
Percentage of Total Revenue
|
||||
Advertising
|
0.3
|
%
|
||
Maintenance
|
0.2
|
%
|
||
Supplies
|
0.1
|
%
|
||
Depreciation
|
0.1
|
%
|
||
Store manager conference expense
|
0.1
|
%
|
||
Utilities
|
(0.2
|
%)
|
2017
|
2016
|
2015
|
||||||||||
General and administrative expenses
|
4.8
|
%
|
4.9
|
%
|
5.2
|
%
|
2017
|
2016
|
2015
|
||||||||||
Interest expense
|
$
|
14,271
|
$
|
14,052
|
$
|
16,679
|
2017
|
2016
|
2015
|
||||||||||
Effective tax rate
|
32.4
|
%
|
28.9
|
%
|
31.2
|
%
|
2017
|
2016
|
2015
|
||||||||||
Net cash provided by operating activities
|
$
|
320,767
|
$
|
271,378
|
$
|
334,055
|
||||||
Net cash used in investing activities
|
(109,605
|
)
|
(112,515
|
)
|
(88,614
|
)
|
||||||
Net cash used in financing activities
|
(201,127
|
)
|
(273,352
|
)
|
(99,347
|
)
|
||||||
Net increase (decrease) in cash and cash equivalents
|
$
|
10,035
|
$
|
(114,489
|
)
|
$
|
146,094
|
2017
|
2016
|
2015
|
||||||||||
Capital expenditures, net of proceeds from insurance recoveries
|
$
|
110,108
|
$
|
113,360
|
$
|
90,490
|
July 28, 2017
|
||||
Borrowing capacity under the Revolving Credit Facility
|
$
|
750,000
|
||
Less: Outstanding borrowings under the Revolving Credit Facility
|
400,000
|
|||
Less: Standby letters of credit*
|
9,655
|
|||
Borrowing availability under the Revolving Credit Facility
|
$
|
340,345
|
2017
|
2016
|
2015
|
||||||||||
Dividends per share paid
|
$
|
8.10
|
$
|
10.65
|
$
|
4.00
|
2017
|
2016
|
2015
|
||||||||||
Working capital (deficit)
|
$
|
(16,971
|
)
|
$
|
(13,077
|
)
|
$
|
11,213
|
Payments due by Years
|
||||||||||||||||||||
Contractual Obligations
(a)
|
Total
|
2018
|
2019-2020
|
2021-2022
|
After 2022
|
|||||||||||||||
Revolving Credit Facility
(b)
|
$
|
400,000
|
$
|
--
|
$
|
400,000
|
$
|
--
|
$
|
--
|
||||||||||
Operating leases
(c)
|
707,158
|
65,253
|
101,400
|
60,365
|
480,140
|
|||||||||||||||
Purchase obligations
(d)
|
49,661
|
37,953
|
10,970
|
738
|
--
|
|||||||||||||||
Other long-term obligations
(e)
|
38,269
|
242
|
5,000
|
333
|
32,694
|
|||||||||||||||
Total contractual cash obligations
|
$
|
1,195,088
|
$
|
103,448
|
$
|
517,370
|
$
|
61,436
|
$
|
512,834
|
Amount of Commitment Expirations by Years
|
||||||||||||||||||||
Total
|
2018
|
2019-2020
|
2021-2022
|
After 2022
|
||||||||||||||||
Revolving Credit Facility
(b)
|
$
|
750,000
|
$
|
--
|
$
|
750,000
|
$
|
--
|
$
|
--
|
||||||||||
Standby letters of credit
(f)
|
9,655
|
9,655
|
--
|
--
|
--
|
|||||||||||||||
Guarantees
(g)
|
952
|
235
|
471
|
246
|
--
|
|||||||||||||||
Total commitments
|
$
|
760,607
|
$
|
9,890
|
$
|
750,471
|
$
|
246
|
$
|
--
|
(a)
|
At July 28, 2017, the entire liability for uncertain tax positions (including penalties and interest) is classified as a long-term liability. At this time, we are unable to make a reasonably reliable estimate of the amounts and timing of payments in individual years because of uncertainties in the timing of the effective settlement of tax positions. As such, the liability for uncertain tax positions of $26,859 is not included in the contractual cash obligations and commitments table above.
|
(b) |
Our Revolving Credit Facility expires on January 8, 2020. Even though the Revolving Credit Facility expires in 2020, we have the intent and ability to refinance our debt to maintain a sufficient amount of outstanding borrowings during the terms of our interest rate swaps that expire in 2021 and 2024. Using projected interest rates, we anticipate having interest payments of $13,374, $25,268, $24,334 and $21,864 in 2018, 2019-2020, 2021-2022 and after 2022, respectively. The projected interest rates for our swapped portion of our outstanding borrowings are our fixed rates under our interest rate swaps (see Note 6 to the Consolidated Financial Statements) plus our current credit spread of 1.00%. The projected interest rate for our unswapped portion of our outstanding borrowings is the average of the three-year and five-year swap rates at July 28, 2017 of 1.77% plus our current credit spread of 1.00%. Based on our outstanding borrowings under our Revolving Credit Facility, our standby letters of credit at July 28, 2017 and our current unused commitment fee as defined in the Revolving Credit Facility, our unused commitment fees in 2018 and 2019-2020 would be $516 and $740, respectively; however, the actual amount will differ based on actual usage of the Revolving Credit Facility in those years.
|
(c) |
Includes base lease terms and certain optional renewal periods for which, at the inception of the lease, it is reasonably assured that we will exercise.
|
(d) |
Purchase obligations consist of purchase orders for food and retail merchandise; purchase orders for capital expenditures, supplies, other operating needs and other services; and commitments under contracts for maintenance needs and other services. We have excluded contracts that do not contain minimum purchase obligations. We excluded long-term agreements for services and operating needs that can be cancelled within 60 days without penalty. We included long-term agreements and certain retail purchase orders for services and operating needs that can be cancelled with more than 60 days notice without penalty only through the term of the notice. We included long-term agreements for services and operating needs that only can be cancelled in the event of an uncured material breach or with a penalty through the entire term of the contract. Because of the uncertainties of seasonal demands and promotional calendar changes, our best estimate of usage for food, supplies and other operating needs and services is ratably over either the notice period or the remaining life of the contract, as applicable, unless we had better information available at the time related to each contract.
|
(e) |
Other long-term obligations include our Non-Qualified Savings Plan ($31,196, with a corresponding long-term asset to fund the liability; see Note 12 to the Consolidated Financial Statements), Deferred Compensation Plan ($1,741) and our long-term incentive plans ($5,332).
|
(f) |
Our standby letters of credit relate to securing reserved claims under workers’ compensation insurance and reduce our borrowing availability under the Revolving Credit Facility.
|
(g)
|
Consists solely of guarantees associated with lease payments for two properties. We are not aware of any non-performance under these arrangements that would result in us having to perform in accordance with the terms of these guarantees.
|
· |
management believes are most important to the accurate portrayal of both 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
|
· |
Retail Inventory Valuation
|
· |
Tax Provision
|
· |
Share-Based Compensation
|
· |
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 period commensurate with the three-year performance period.
|
· |
The risk-free interest rate is based on the U.S. Treasury rate assumption commensurate with the three-year performance period.
|
· |
The expected dividend yield is assumed to be zero since the award holders are entitled to any dividends paid over the performance period.
|
· |
The expected volatility is the historical volatility of our stock and the members of the peer group over the period commensurate with the performance period.
|
· |
The risk-free interest rate is based on the U.S. Treasury rate assumption commensurate with the performance period.
|
· |
The expected dividend yield is assumed to be zero since the award holders are entitled to any dividends paid over the performance period.
|
Trade Date
|
Effective Date
|
Term
(in Years)
|
Notional Amount
|
Fixed
Rate
|
|||||||||
March 18, 2013
|
May 3, 2015
|
3
|
$
|
50,000
|
1.51
|
%
|
|||||||
April 22, 2013
|
May 3, 2015
|
3
|
25,000
|
1.30
|
%
|
||||||||
April 25, 2013
|
May 3, 2015
|
3
|
25,000
|
1.29
|
%
|
||||||||
June 18, 2014
|
May 3, 2015
|
4
|
120,000
|
2.51
|
%
|
||||||||
June 24, 2014
|
May 3, 2015
|
4
|
90,000
|
2.51
|
%
|
||||||||
July 1, 2014
|
May 5, 2015
|
4
|
90,000
|
2.43
|
%
|
||||||||
January 30, 2015
|
May 3, 2019
|
2
|
80,000
|
2.15
|
%
|
||||||||
January 30, 2015
|
May 3, 2019
|
2
|
60,000
|
2.16
|
%
|
||||||||
January 30, 2015
|
May 4, 2021
|
3
|
120,000
|
2.41
|
%
|
||||||||
January 30, 2015
|
May 3, 2019
|
2
|
60,000
|
2.15
|
%
|
||||||||
January 30, 2015
|
May 4, 2021
|
3
|
80,000
|
2.40
|
%
|
Percentage of Food Purchases
|
||||||||
2017
|
2016
|
|||||||
Beef
|
14
|
%
|
15
|
%
|
||||
Dairy (including eggs)
|
12
|
%
|
13
|
%
|
||||
Fruits and vegetables
|
12
|
%
|
12
|
%
|
||||
Poultry
|
11
|
%
|
11
|
%
|
||||
Pork
|
10
|
%
|
11
|
%
|
/s/ Deloitte & Touche LLP
|
Nashville, Tennessee
|
September 22, 2017
|
(In thousands except share data)
|
||||||||
ASSETS
|
July 28, 2017
|
July 29, 2016
|
||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
161,001
|
$
|
150,966
|
||||
Accounts receivable
|
18,116
|
19,389
|
||||||
Income taxes receivable
|
4,265
|
16,184
|
||||||
Inventories
|
156,367
|
152,308
|
||||||
Prepaid expenses and other current assets
|
16,047
|
14,573
|
||||||
Deferred income taxes
|
3,061
|
2,320
|
||||||
Total current assets
|
358,857
|
355,740
|
||||||
Property and Equipment:
|
||||||||
Land
|
306,105
|
303,416
|
||||||
Buildings and improvements
|
837,804
|
814,176
|
||||||
Buildings under capital leases
|
3,289
|
3,289
|
||||||
Restaurant and other equipment
|
604,413
|
572,551
|
||||||
Leasehold improvements
|
326,750
|
306,489
|
||||||
Construction in progress
|
15,087
|
11,924
|
||||||
Total
|
2,093,448
|
2,011,845
|
||||||
Less: Accumulated depreciation and amortization of capital leases
|
995,351
|
931,656
|
||||||
Property and equipment – net
|
1,098,097
|
1,080,189
|
||||||
Other assets
|
64,988
|
61,735
|
||||||
Total
|
$
|
1,521,942
|
$
|
1,497,664
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$
|
118,395
|
$
|
132,493
|
||||
Taxes withheld and accrued
|
36,725
|
37,561
|
||||||
Accrued employee compensation
|
70,945
|
61,187
|
||||||
Accrued employee benefits
|
26,759
|
27,928
|
||||||
Deferred revenues
|
72,376
|
64,028
|
||||||
Dividend payable
|
30,639
|
29,706
|
||||||
Other current liabilities
|
19,989
|
15,914
|
||||||
Total current liabilities
|
375,828
|
368,817
|
||||||
Long-term debt
|
400,000
|
400,000
|
||||||
Long-term interest rate swap liability
|
6,833
|
22,070
|
||||||
Other long-term obligations
|
129,353
|
126,608
|
||||||
Deferred income taxes
|
65,421
|
53,726
|
Shareholders’ Equity:
|
||||||||
Preferred stock – 100,000,000 shares of $.01 par value authorized; 300,000 shares designated as Series A Junior Participating Preferred Stock; no shares issued
|
--
|
--
|
||||||
Common stock – 400,000,000 shares of $.01 par value authorized; 2017 – 24,055,682 shares issued and outstanding; 2016 – 23,956,134 shares issued and outstanding
|
241
|
240
|
||||||
Additional paid-in capital
|
55,659
|
51,462
|
||||||
Accumulated other comprehensive loss
|
(4,229
|
)
|
(13,740
|
)
|
||||
Retained earnings
|
492,836
|
488,481
|
||||||
Total shareholders’ equity
|
544,507
|
526,443
|
||||||
Total
|
$
|
1,521,942
|
$
|
1,497,664
|
(In thousands except share data)
Fiscal years ended
|
||||||||||||
July 28, 2017
|
July 29, 2016
|
July 31, 2015
|
||||||||||
Total revenue
|
$
|
2,926,289
|
$
|
2,912,351
|
$
|
2,842,284
|
||||||
Cost of goods sold (exclusive of depreciation and rent)
|
891,293
|
928,176
|
924,171
|
|||||||||
Labor and other related expenses
|
1,017,124
|
1,006,188
|
992,382
|
|||||||||
Other store operating expenses
|
563,300
|
554,534
|
523,307
|
|||||||||
Store operating income
|
454,572
|
423,453
|
402,424
|
|||||||||
General and administrative expenses
|
141,414
|
142,982
|
147,544
|
|||||||||
Operating income
|
313,158
|
280,471
|
254,880
|
|||||||||
Interest expense
|
14,271
|
14,052
|
16,679
|
|||||||||
Income before income taxes
|
298,887
|
266,419
|
238,201
|
|||||||||
Provision for income taxes
|
96,988
|
77,120
|
74,298
|
|||||||||
Net income
|
$
|
201,899
|
$
|
189,299
|
$
|
163,903
|
||||||
Net income per share - basic
|
$
|
8.40
|
$
|
7.91
|
$
|
6.85
|
||||||
Net income per share - diluted
|
$
|
8.37
|
$
|
7.86
|
$
|
6.82
|
||||||
Basic weighted average shares outstanding
|
24,031,810
|
23,945,041
|
23,918,368
|
|||||||||
Diluted weighted average shares outstanding
|
24,118,288
|
24,074,273
|
24,048,924
|
(In thousands)
Fiscal years ended
|
||||||||||||
July 28, 2017
|
July 29, 2016
|
July 31, 2015
|
||||||||||
Net income
|
$
|
201,899
|
$
|
189,299
|
$
|
163,903
|
||||||
Other comprehensive income (loss) before income tax expense (benefit):
|
||||||||||||
Change in fair value of interest rate swaps
|
15,402
|
(16,188
|
)
|
1,641
|
||||||||
Income tax expense (benefit)
|
5,891
|
(6,173
|
)
|
633
|
||||||||
Other comprehensive income (loss), net of tax
|
9,511
|
(10,015
|
)
|
1,008
|
||||||||
Comprehensive income
|
$
|
211,410
|
$
|
179,284
|
$
|
164,911
|
Common Stock
|
Additional
Paid-In
|
Accumulated
Other
Comprehensive
|
Retained
|
Total
Shareholders’
|
||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Loss
|
Earnings
|
Equity
|
|||||||||||||||||||
Balances at August 1, 2014
|
23,821,227
|
$
|
238
|
$
|
39,969
|
$
|
(4,733
|
)
|
$
|
493,167
|
$
|
528,641
|
||||||||||||
Comprehensive Income:
|
||||||||||||||||||||||||
Net income
|
--
|
--
|
--
|
--
|
163,903
|
163,903
|
||||||||||||||||||
Other comprehensive income, net of tax
|
--
|
--
|
--
|
1,008
|
--
|
1,008
|
||||||||||||||||||
Total comprehensive income
|
--
|
--
|
--
|
1,008
|
163,903
|
164,911
|
||||||||||||||||||
Cash dividends declared - $7.10 per share
|
--
|
--
|
--
|
--
|
(171,383
|
)
|
(171,383
|
)
|
||||||||||||||||
Share-based compensation
|
--
|
--
|
16,210
|
--
|
--
|
16,210
|
||||||||||||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes
|
154,528
|
2
|
(4,818
|
)
|
--
|
--
|
(4,816
|
)
|
||||||||||||||||
Tax benefit realized upon exercise of share-based compensation awards
|
--
|
--
|
4,705
|
--
|
--
|
4,705
|
||||||||||||||||||
Purchases and retirement of common stock
|
--
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||
Balances at July 31, 2015
|
23,975,755
|
240
|
56,066
|
(3,725
|
)
|
485,687
|
538,268
|
|||||||||||||||||
Comprehensive Income:
|
||||||||||||||||||||||||
Net income
|
--
|
--
|
--
|
--
|
189,299
|
189,299
|
||||||||||||||||||
Other comprehensive income, net of tax
|
--
|
--
|
--
|
(10,015
|
)
|
--
|
(10,015
|
)
|
||||||||||||||||
Total comprehensive income
|
--
|
--
|
--
|
(10,015
|
)
|
189,299
|
179,284
|
|||||||||||||||||
Cash dividends declared - $7.70 per share
|
--
|
--
|
--
|
--
|
(186,505
|
)
|
(186,505
|
)
|
||||||||||||||||
Share-based compensation
|
--
|
--
|
13,202
|
--
|
--
|
13,202
|
||||||||||||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes
|
80,379
|
1
|
(5,780
|
)
|
--
|
--
|
(5,779
|
)
|
||||||||||||||||
Tax benefit realized upon exercise of share-based compensation awards
|
--
|
--
|
2,626
|
--
|
--
|
2,626
|
||||||||||||||||||
Purchases and retirement of common stock
|
(100,000
|
)
|
(1
|
)
|
(14,652
|
)
|
--
|
--
|
(14,653
|
)
|
||||||||||||||
Balances at July 29, 2016
|
23,956,134
|
240
|
51,462
|
(13,740
|
)
|
488,481
|
526,443
|
|||||||||||||||||
Comprehensive Income:
|
||||||||||||||||||||||||
Net income
|
--
|
--
|
--
|
--
|
201,899
|
201,899
|
||||||||||||||||||
Other comprehensive income, net of tax
|
--
|
--
|
--
|
9,511
|
--
|
9,511
|
||||||||||||||||||
Total comprehensive income
|
--
|
--
|
--
|
9,511
|
201,899
|
211,410
|
||||||||||||||||||
Cash dividends declared - $8.15 per share
|
--
|
--
|
--
|
--
|
(197,544
|
)
|
(197,544
|
)
|
||||||||||||||||
Share-based compensation
|
--
|
--
|
8,458
|
--
|
--
|
8,458
|
||||||||||||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes
|
99,548
|
1
|
(6,897
|
)
|
--
|
--
|
(6,896
|
)
|
||||||||||||||||
Tax benefit realized upon exercise of share-based compensation awards
|
--
|
--
|
2,636
|
--
|
--
|
2,636
|
||||||||||||||||||
Purchases and retirement of common stock
|
--
|
--
|
--
|
--
|
--
|
--
|
||||||||||||||||||
Balances at July 28, 2017
|
24,055,682
|
$
|
241
|
$
|
55,659
|
$
|
(4,229
|
)
|
$
|
492,836
|
$
|
544,507
|
(In thousands)
Fiscal years ended
|
||||||||||||
July 28, 2017
|
July 29, 2016
|
July 31, 2015
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$
|
201,899
|
$
|
189,299
|
$
|
163,903
|
||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
86,319
|
78,223
|
72,955
|
|||||||||
Loss on disposition of property and equipment
|
5,585
|
7,146
|
6,872
|
|||||||||
Share-based compensation
|
8,458
|
13,202
|
16,210
|
|||||||||
Excess tax benefit from share-based compensation
|
(2,636
|
)
|
(2,626
|
)
|
(4,705
|
)
|
||||||
Changes in assets and liabilities:
|
||||||||||||
Accounts receivable
|
1,273
|
(1,339
|
)
|
4,654
|
||||||||
Income taxes receivable
|
14,555
|
(13,558
|
)
|
2,973
|
||||||||
Inventories
|
(4,059
|
)
|
750
|
12,368
|
||||||||
Prepaid expenses and other current assets
|
(1,274
|
)
|
(406
|
)
|
(2,170
|
)
|
||||||
Other assets
|
(4,344
|
)
|
130
|
(1,659
|
)
|
|||||||
Accounts payable
|
(14,098
|
)
|
(624
|
)
|
34,640
|
|||||||
Taxes withheld and accrued
|
(836
|
)
|
(1,500
|
)
|
2,800
|
|||||||
Accrued employee compensation
|
9,752
|
(6,246
|
)
|
6,485
|
||||||||
Accrued employee benefits
|
(1,169
|
)
|
211
|
1,667
|
||||||||
Deferred revenues
|
8,348
|
5,048
|
9,155
|
|||||||||
Other current liabilities
|
4,470
|
(3,705
|
)
|
4,034
|
||||||||
Other long-term obligations
|
3,461
|
(6,269
|
)
|
11,090
|
||||||||
Deferred income taxes
|
5,063
|
13,642
|
(7,217
|
)
|
||||||||
Net cash provided by operating activities
|
320,767
|
271,378
|
334,055
|
|||||||||
Cash flows from investing activities:
|
||||||||||||
Purchase of property and equipment
|
(110,591
|
)
|
(114,022
|
)
|
(90,855
|
)
|
||||||
Proceeds from insurance recoveries of property and equipment
|
483
|
662
|
365
|
|||||||||
Proceeds from sale of property and equipment
|
503
|
845
|
1,876
|
|||||||||
Net cash used in investing activities
|
(109,605
|
)
|
(112,515
|
)
|
(88,614
|
)
|
||||||
Cash flows from financing activities:
|
||||||||||||
Proceeds from issuance of long-term debt
|
--
|
--
|
406,250
|
|||||||||
(Taxes withheld) and proceeds from issuance of share-based compensation awards, net
|
(6,896
|
)
|
(5,779
|
)
|
(4,816
|
)
|
||||||
Principal payments under long-term debt and other long-term obligations
|
--
|
--
|
(406,250
|
)
|
||||||||
Purchases and retirement of common stock
|
--
|
(14,653
|
)
|
--
|
||||||||
Deferred financing costs
|
--
|
--
|
(3,537
|
)
|
||||||||
Dividends on common stock
|
(196,867
|
)
|
(255,546
|
)
|
(95,699
|
)
|
||||||
Excess tax benefit from share-based compensation
|
2,636
|
2,626
|
4,705
|
|||||||||
Net cash used in financing activities
|
(201,127
|
)
|
(273,352
|
)
|
(99,347
|
)
|
||||||
Net increase (decrease) in cash and cash equivalents
|
10,035
|
(114,489
|
)
|
146,094
|
||||||||
Cash and cash equivalents, beginning of year
|
150,966
|
265,455
|
119,361
|
|||||||||
Cash and cash equivalents, end of year
|
$
|
161,001
|
$
|
150,966
|
$
|
265,455
|
1.
|
Description of the Business
|
2.
|
Summary of Significant Accounting Policies
|
Years
|
||||
Buildings and improvements
|
30-45
|
|||
Buildings under capital leases
|
15-25
|
|||
Restaurant and other equipment
|
2-10
|
|||
Leasehold improvements
|
1-35
|
2017
|
2016
|
2015
|
||||||||||
Total depreciation expense
|
$
|
85,912
|
$
|
77,816
|
$
|
72,390
|
||||||
Depreciation expense related to store operations*
|
79,214
|
71,382
|
66,754
|
2017
|
2016
|
2015
|
||||||||||
Advertising expense
|
$
|
83,623
|
$
|
79,409
|
$
|
68,665
|
3.
|
Fair Value Measurements
|
· |
Quoted Prices in Active Markets for Identical Assets (“Level 1”) – quoted prices (unadjusted) for an identical asset or liability in an active market.
|
· |
Significant Other Observable Inputs (“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.
|
· |
Significant Unobservable Inputs (“Level 3”) – unobservable and significant to the fair value measurement of the asset or liability.
|
Level 1
|
Level 2
|
Level 3
|
Fair Value
|
|||||||||||||
Cash equivalents*
|
$
|
82,524
|
$
|
--
|
$
|
--
|
$
|
82,524
|
||||||||
Interest rate swap asset (see Note 6)
|
--
|
32
|
--
|
32
|
||||||||||||
Deferred compensation plan assets**
|
31,196
|
--
|
--
|
31,196
|
||||||||||||
Total assets at fair value
|
$
|
113,720
|
$
|
32
|
$
|
--
|
$
|
113,752
|
||||||||
Interest rate swap liability (see Note 6)
|
$
|
--
|
$
|
6,880
|
$
|
--
|
$
|
6,880
|
||||||||
Total liabilities at fair value
|
$
|
--
|
$
|
6,880
|
$
|
--
|
$
|
6,880
|
Level 1
|
Level 2
|
Level 3
|
Fair Value
|
|||||||||||||
Cash equivalents*
|
$
|
76,084
|
$
|
--
|
$
|
--
|
$
|
76,084
|
||||||||
Interest rate swap asset (see Note 6)
|
--
|
--
|
--
|
--
|
||||||||||||
Deferred compensation plan assets**
|
27,764
|
--
|
--
|
27,764
|
||||||||||||
Total assets at fair value
|
$
|
103,848
|
$
|
--
|
$
|
--
|
$
|
103,848
|
||||||||
Interest rate swap liability (see Note 6)
|
$
|
--
|
$
|
22,250
|
$
|
--
|
$
|
22,250
|
||||||||
Total liabilities at fair value
|
$
|
--
|
$
|
22,250
|
$
|
--
|
$
|
22,250
|
July 28, 2017
|
July 29, 2016
|
|||||||
Retail
|
$
|
119,446
|
$
|
114,610
|
||||
Restaurant
|
20,252
|
21,522
|
||||||
Supplies
|
16,669
|
16,176
|
||||||
Total
|
$
|
156,367
|
$
|
152,308
|
Trade Date
|
Effective Date
|
Term
(in Years)
|
Notional Amount
|
Fixed
Rate
|
|||||||||
March 18, 2013
|
May 3, 2015
|
3
|
$
|
50,000
|
1.51
|
%
|
|||||||
April 22, 2013
|
May 3, 2015
|
3
|
25,000
|
1.30
|
%
|
||||||||
April 25, 2013
|
May 3, 2015
|
3
|
25,000
|
1.29
|
%
|
||||||||
June 18, 2014
|
May 3, 2015
|
4
|
120,000
|
2.51
|
%
|
||||||||
June 24, 2014
|
May 3, 2015
|
4
|
90,000
|
2.51
|
%
|
||||||||
July 1, 2014
|
May 5, 2015
|
4
|
90,000
|
2.43
|
%
|
||||||||
January 30, 2015
|
May 3, 2019
|
2
|
80,000
|
2.15
|
%
|
||||||||
January 30, 2015
|
May 3, 2019
|
2
|
60,000
|
2.16
|
%
|
||||||||
January 30, 2015
|
May 4, 2021
|
3
|
120,000
|
2.41
|
%
|
||||||||
January 30, 2015
|
May 3, 2019
|
2
|
60,000
|
2.15
|
%
|
||||||||
January 30, 2015
|
May 4, 2021
|
3
|
80,000
|
2.40
|
%
|
(See Note 3)
|
Balance Sheet Location
|
July 28, 2017
|
July 29, 2016
|
||||||
Interest rate swaps
|
Prepaid expenses and other current assets
|
$
|
32
|
$
|
--
|
||||
Interest rate swaps
|
Other current liabilities
|
$
|
47
|
$
|
180
|
||||
Interest rate swaps
|
Long-term interest rate swap liability
|
6,833
|
22,070
|
||||||
Total liabilities
|
$
|
6,880
|
$
|
22,250
|
Amount of Income (Loss) Recognized
in AOCL on Derivatives (Effective
Portion)
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Cash flow hedges:
|
||||||||||||
Interest rate swaps
|
$
|
15,402
|
$
|
(16,188
|
)
|
$
|
1,641
|
July 28,
2017
|
July 29,
2016
|
July 31,
2015
|
||||||||||
Beginning AOCL balance
|
$
|
(13,740
|
)
|
$
|
(3,725
|
)
|
$
|
(4,733
|
)
|
|||
Other comprehensive income (loss) before reclassifications
|
12,082
|
(6,683
|
)
|
5,955
|
||||||||
Amounts reclassified from AOCL into earnings
|
(2,571
|
)
|
(3,332
|
)
|
(4,947
|
)
|
||||||
Other comprehensive income (loss), net of tax
|
9,511
|
(10,015
|
)
|
1,008
|
||||||||
Ending AOCL balance
|
$
|
(4,229
|
)
|
$
|
(13,740
|
)
|
$
|
(3,725
|
)
|
Affected Line Item in
the Consolidated
|
|||||||||||||
Details about AOCL
|
July 28, 2017
|
July 29, 2016
|
July 31, 2015
|
Statement of Income
|
|||||||||
Loss on cash flow hedges:
|
|||||||||||||
Interest rate swaps
|
$
|
(4,163
|
)
|
$
|
(5,395
|
)
|
$
|
(8,052
|
)
|
Interest expense
|
|||
Tax benefit
|
1,592
|
2,063
|
3,105
|
Provision for income taxes
|
|||||||||
$
|
(2,571
|
)
|
$
|
(3,332
|
)
|
$
|
(4,947
|
)
|
Net of tax
|
7.
|
Share Repurchases
|
8.
|
Segment Information
|
2017
|
2016
|
2015
|
||||||||||
Restaurant
|
$
|
2,351,212
|
$
|
2,323,199
|
$
|
2,269,610
|
||||||
Retail
|
575,077
|
589,152
|
572,674
|
|||||||||
Total revenue
|
$
|
2,926,289
|
$
|
2,912,351
|
$
|
2,842,284
|
9.
|
Leases
|
Year
|
Minimum
|
Contingent
|
Total
|
|||||||||
2017
|
$
|
75,000
|
$
|
252
|
$
|
75,252
|
||||||
2016
|
74,405
|
263
|
74,668
|
|||||||||
2015
|
72,877
|
252
|
73,129
|
Year
|
Total
|
|||
2018
|
$
|
65,253
|
||
2019
|
53,102
|
|||
2020
|
48,298
|
|||
2021
|
29,993
|
|||
2022
|
30,372
|
|||
Later years
|
480,140
|
|||
Total
|
$
|
707,158
|
10.
|
Share-Based Compensation
|
2010 Omnibus Plan
|
131,575
|
|||
2002 Omnibus Incentive Compensation Plan
|
4,000
|
|||
Total
|
135,575
|
Long-Term Performance Plan (“LTPP”)
|
Performance Period
|
Vesting Period
(in Years)
|
2017 LTPP
|
2017 – 2018
|
2 or 3
|
2016 LTPP
|
2016 – 2017
|
2 or 3
|
2017 LTPP
|
13,704
|
|||
2016 LTPP
|
28,797
|
Nonvested Stock
|
Shares
|
Weighted-Average Grant
Date Fair Value
|
||||||
Unvested at July 29, 2016
|
40,437
|
$
|
112.52
|
|||||
Granted
|
94,432
|
154.63
|
||||||
Vested
|
(102,852
|
)
|
142.93
|
|||||
Forfeited
|
--
|
--
|
||||||
Unvested at July 28, 2017
|
32,017
|
$
|
139.04
|
2017
|
2016
|
2015
|
||||||||||
Total fair value of nonvested stock
|
$
|
14,700
|
$
|
8,418
|
$
|
8,152
|
· |
The expected volatilities are the historical volatilities of the Company’s stock and the members of the peer group over the period commensurate with the three-year performance period.
|
· |
The risk-free interest rate is based on the U.S. Treasury rate assumption commensurate with the three-year performance period. The risk-free rates for the nonvested stock units granted in 2017 ranged from 1.0% to 1.4%.
|
· |
The expected dividend yield is assumed to be zero since the award holders are entitled to any dividends paid over the performance period.
|
· |
The expected volatility is a blend of implied volatility based on market-traded options on the Company’s stock and historical volatility of our stock over the period commensurate with the three-year performance period.
|
· |
The risk-free interest rate is based on the U.S. Treasury rate assumption commensurate with the three-year performance period.
|
· |
The expected dividend yield is assumed to be zero since the award holders are entitled to any dividends paid over the performance period.
|
Year Ended
|
||||||||
July 29, 2016
|
July 31, 2015
|
|||||||
Dividend yield***
|
--
|
--
|
||||||
Expected volatility
|
23% - 24
|
%
|
21
|
%
|
||||
Risk-free interest rate range
|
0.9% - 1.0
|
%
|
1.0
|
%
|
Shares
|
||||
2015 MSU Grants
|
39,467
|
|||
2016 MSU Grants
|
14,565
|
Fixed Options
|
Shares
|
Weighted-
Average
Price
|
Weighted-Average
Remaining
Contractual Term
|
Aggregate
Intrinsic
Value
|
||||||||||||
Outstanding at July 29, 2016
|
12,683
|
$
|
32.71
|
|||||||||||||
Granted
|
--
|
--
|
||||||||||||||
Exercised
|
(8,683
|
)
|
32.64
|
|||||||||||||
Forfeited
|
--
|
--
|
||||||||||||||
Canceled
|
--
|
--
|
||||||||||||||
Outstanding at July 28, 2017
|
4,000
|
$
|
32.86
|
0.33
|
$
|
490
|
||||||||||
Exercisable
|
4,000
|
$
|
32.86
|
0.33
|
$
|
490
|
2017
|
2016
|
2015
|
||||||||||
Total intrinsic values of options exercised*
|
$
|
1,070
|
$
|
917
|
$
|
4,652
|
2017
|
2016
|
2015
|
||||||||||
Nonvested stock awards and units
|
$
|
6,654
|
$
|
10,277
|
$
|
13,243
|
||||||
MSU Grants
|
1,804
|
2,925
|
2,967
|
|||||||||
Total compensation expense
|
$
|
8,458
|
$
|
13,202
|
$
|
16,210
|
Nonvested
Stock Awards
|
Nonvested
Stock Units
|
MSU Grants
|
||||||||||
Total unrecognized compensation
|
$
|
2,692
|
$
|
770
|
$
|
862
|
||||||
Weighted-average period in years
|
2.12
|
2.01
|
1.02
|
2017
|
2016
|
2015
|
||||||||||
Total income tax benefit
|
$
|
2,740
|
$
|
3,819
|
$
|
5,056
|
11.
|
Shareholder Rights Plan
|
· |
will not be redeemable.
|
· |
will entitle holders to quarterly dividend payments of $0.01 per share, or an amount equal to the dividend paid on one share of common stock, whichever is greater.
|
· |
will entitle holders upon liquidation either to receive $1.00 per share or an amount equal to the payment made on one share of common stock, whichever is greater.
|
· |
will have the same voting power as one share of common stock.
|
· |
if shares of the Company’s common stock are exchanged via merger, consolidation, or a similar transaction, will entitle holders to a per share payment equal to the payment made on one share of common stock.
|
12.
|
Employee Savings Plans
|
2017
|
2016
|
2015
|
||||||||||
401(k) Savings Plan
|
$
|
2,501
|
$
|
2,528
|
$
|
2,364
|
||||||
Non-Qualified Savings Plan
|
291
|
296
|
234
|
13.
|
Income Taxes
|
2017
|
2016
|
2015
|
||||||||||
Current:
|
||||||||||||
Federal
|
$
|
83,743
|
$
|
62,054
|
$
|
71,386
|
||||||
State
|
7,567
|
6,447
|
6,050
|
|||||||||
Deferred:
|
||||||||||||
Federal
|
4,696
|
12,477
|
(6,178
|
)
|
||||||||
State
|
982
|
(3,858
|
)
|
3,040
|
||||||||
Total provision for income taxes
|
$
|
96,988
|
$
|
77,120
|
$
|
74,298
|
2017
|
2016
|
2015
|
||||||||||
Provision computed at federal statutory income tax rate
|
$
|
104,611
|
$
|
93,247
|
$
|
83,370
|
||||||
State and local income taxes, net of federal benefit
|
5,856
|
1,427
|
6,378
|
|||||||||
Employer tax credits for FICA taxes paid on employee tip income
|
(11,543
|
)
|
(11,048
|
)
|
(10,681
|
)
|
||||||
Other employer tax credits
|
(2,814
|
)
|
(7,326
|
)
|
(5,058
|
)
|
||||||
Other-net
|
878
|
820
|
289
|
|||||||||
Total provision for income taxes
|
$
|
96,988
|
$
|
77,120
|
$
|
74,298
|
July 28, 2017
|
July 29, 2016
|
|||||||
Deferred tax assets:
|
||||||||
Compensation and employee benefits
|
$
|
10,110
|
$
|
13,937
|
||||
Deferred rent
|
18,270
|
17,183
|
||||||
Accrued liabilities
|
13,233
|
12,466
|
||||||
Insurance reserves
|
12,401
|
11,444
|
||||||
Inventory
|
4,411
|
4,368
|
||||||
Other
|
2,767
|
8,718
|
||||||
Deferred tax assets
|
$
|
61,192
|
$
|
68,116
|
||||
Deferred tax liabilities:
|
||||||||
Property and equipment
|
$
|
100,373
|
$
|
97,695
|
||||
Inventory
|
10,906
|
9,803
|
||||||
Other
|
12,273
|
12,024
|
||||||
Deferred tax liabilities
|
123,552
|
119,522
|
||||||
Net deferred tax liability
|
$
|
62,360
|
$
|
51,406
|
July 28, 2017
|
July 29, 2016
|
July 31, 2015
|
||||||||||
Balance at beginning of year
|
$
|
21,899
|
$
|
25,507
|
$
|
22,832
|
||||||
Tax positions related to the current year:
|
||||||||||||
Additions
|
4,003
|
4,860
|
3,994
|
|||||||||
Reductions
|
--
|
--
|
--
|
|||||||||
Tax positions related to the prior year:
|
||||||||||||
Additions
|
582
|
2,186
|
118
|
|||||||||
Reductions
|
(2,966
|
)
|
(6,896
|
)
|
(227
|
)
|
||||||
Settlements
|
(1,027
|
)
|
(2,324
|
)
|
(204
|
)
|
||||||
Expiration of statute of limitations
|
(1,760
|
)
|
(1,434
|
)
|
(1,006
|
)
|
||||||
Balance at end of year
|
$
|
20,731
|
$
|
21,899
|
$
|
25,507
|
2017
|
2016
|
2015
|
||||||||||
Uncertain tax positions
|
$
|
13,475
|
$
|
14,234
|
$
|
16,579
|
14.
|
Net Income Per Share and Weighted Average Shares
|
2017
|
2016
|
2015
|
||||||||||
Net income per share numerator
|
$
|
201,899
|
$
|
189,299
|
$
|
163,903
|
||||||
Net income per share denominator:
|
||||||||||||
Basic weighted average shares outstanding
|
24,031,810
|
23,945,041
|
23,918,368
|
|||||||||
Add potential dilution:
|
||||||||||||
Stock options, nonvested stock awards and MSU Grants
|
86,478
|
129,232
|
130,556
|
|||||||||
Diluted weighted average shares outstanding
|
24,118,288
|
24,074,273
|
24,048,924
|
15.
|
Commitments and Contingencies
|
16.
|
Quarterly Financial Data (Unaudited)
|
1
st
Quarter
|
2
nd
Quarter
|
3
rd
Quarter
|
4
th
Quarter
|
|||||||||||||
2017
|
||||||||||||||||
Total revenue
|
$
|
709,971
|
$
|
772,682
|
$
|
700,410
|
$
|
743,226
|
||||||||
Store operating income
|
109,832
|
117,513
|
107,478
|
119,749
|
||||||||||||
Income before income taxes
|
72,068
|
79,058
|
68,089
|
79,672
|
||||||||||||
Net income
|
48,355
|
52,727
|
46,924
|
53,893
|
||||||||||||
Net income per share – basic
|
2.01
|
2.19
|
1.95
|
2.24
|
||||||||||||
Net income per share – diluted
|
2.01
|
2.19
|
1.95
|
2.23
|
||||||||||||
2016
|
||||||||||||||||
Total revenue
|
$
|
702,629
|
$
|
764,002
|
$
|
700,136
|
$
|
745,584
|
||||||||
Store operating income
|
99,627
|
106,032
|
103,419
|
114,375
|
||||||||||||
Income before income taxes
|
61,764
|
66,956
|
63,592
|
74,107
|
||||||||||||
Net income
|
40,865
|
48,242
|
49,169
|
51,023
|
||||||||||||
Net income per share – basic
|
1.71
|
2.02
|
2.05
|
2.13
|
||||||||||||
Net income per share – diluted
|
1.70
|
2.01
|
2.04
|
2.12
|
/s/Sandra B. Cochran
|
|
Sandra B. Cochran
|
|
President and Chief Executive Officer
|
/s/Jill M. Golder
|
|
Jill M. Golder
|
|
Senior Vice President and Chief Financial Officer
|
/s/ Deloitte & Touche LLP
|
Nashville, Tennessee
|
September 22, 2017
|
ITEM 12. |
(a)
|
List of documents filed as part of this report:
|
1.
|
All financial statements – see Item 8.
|
|
2.
|
All schedules have been omitted since they are either not required or not applicable, or the required information is included.
|
|
3.
|
The exhibits listed in the accompanying Index to Exhibits immediately prior to the signature page to this Annual Report on Form 10-K.
|
(1)
|
Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed under the Exchange Act on April 10, 2012 (Commission File No. 000-25225).
|
(2)
|
Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed under the Exchange Act on February 24, 2012 (Commission File No. 000-25225).
|
(3)
|
Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed under the Exchange Act on January 9, 2015.
|
(4)
|
Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed under the Exchange Act on April 9, 2015.
|
(5)
|
Incorporated by reference to Exhibit 10(l) to the Company’s Annual Report on Form 10-K filed under the Exchange Act for the fiscal year ended July 29, 2005 (Commission File No. 000-25225).
|
(6)
|
Incorporated by reference to Exhibit 10(r) to the Company’s Annual Report on Form 10-K filed under the Exchange Act for the fiscal year ended July 28, 2000 (Commission File No. 000-25225).
|
(7)
|
Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed under the Exchange Act for the quarterly period ended January 30, 2009 (Commission File No. 000-25225).
|
(8)
|
Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed under the Exchange Act for the quarterly period ended May 1, 2009 (Commission File No. 000-25225).
|
(9)
|
Incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed under the Exchange Act for the quarterly period ended January 29, 2010 (Commission File No. 000-25225).
|
(10)
|
Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed under the Exchange Act on December 7, 2010 (Commission File No. 000-25225).
|
(11)
|
Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed under the Exchange Act on December 7, 2010 (Commission File No. 000-25225).
|
(12)
|
Incorporated by reference to Exhibit 10(aa) to the Company’s Annual Report on Form 10-K filed under the Exchange Act for the fiscal year ended July 29, 2011 (Commission File No. 000-25225).
|
(13)
|
Incorporated by reference to Exhibit 10(bb) to the Company’s Annual Report on Form 10-K filed under the Exchange Act for the fiscal year ended July 29, 2011 (Commission File No. 000-25225).
|
(14)
|
Incorporated by reference to Exhibit 10(cc) to the Company’s Annual Report on Form 10-K filed under the Exchange Act for the fiscal year ended July 29, 2011 (Commission File No. 000-25225).
|
(15)
|
Incorporated by reference to Exhibit 10(dd) to the Company’s Annual Report on Form 10-K filed under the Exchange Act for the fiscal year ended August 2, 2013.
|
(16)
|
Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed under the Exchange Act on July 31, 2013.
|
(17)
|
Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed under the Exchange Act on October 7, 2014.
|
(18)
|
Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed under the Exchange Act on May 22, 2015.
|
(19)
|
Incorporated by reference to Exhibit 10(z) to the Company’s Annual Report on Form 10-K filed under the Exchange Act on September 29, 2015.
|
(20)
|
Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed under the Exchange Act on September 30, 2015.
|
(21)
|
Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed under the Exchange Act on April 29, 2016.
|
(22)
|
Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed under the Exchange Act on October 28, 2016.
|
(23)
|
Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed under the Exchange Act on October 28, 2016.
|
†
Denotes management contract or compensatory plan, contract or arrangement.
|
CRACKER BARREL OLD COUNTRY STORE, INC.
|
||
By: | ||
/s/Sandra B. Cochran
|
||
Sandra B. Cochran,
|
||
President and Chief Executive Officer
|
Name
|
Title |
/s/Sandra B. Cochran
Sandra B. Cochran
|
President, Chief Executive Officer and Director
|
/s/Jill M. Golder
Jill M. Golder
|
Senior Vice President and Chief Financial Officer (Principal Financial Officer)
|
/s/Jeffrey M. Wilson
Jeffrey M. Wilson
|
Vice President, Corporate Controller (Principal Accounting Officer)
|
/s/Thomas H. Barr
Thomas H. Barr
|
Director
|
/s/James W. Bradford
James W. Bradford
|
Director and Chairman of the Board
|
/s/Meg G. Crofton
Meg G. Crofton
|
Director
|
/s/Glenn A. Davenport
Glenn A. Davenport
|
Director
|
/s/Richard J. Dobkin
Richard J. Dobkin
|
Director
|
/s/Norman E. Johnson
Norman E. Johnson
|
Director
|
/s/William W. McCarten
William W. McCarten
|
Director
|
/s/Coleman H. Peterson
Coleman H. Peterson
|
Director
|
/s/Andrea M. Weiss
Andrea M. Weiss
|
Director
|
Dennis
L.
Ruben, Esq.
|
||||
Executive Vice President, General Counsel and Secretary
|
||||
FFCA Funding Corporation | ||||
17207 North Perimeter Drive | ||||
Scottsdale, AZ
85255
|
||||
Telephone:
|
(480) 585-4500
|
|||
Telecopy:
|
(480) 585-2226
|
|
LESSOR:
|
|
|
COUNTRY STORES PROPERTY I, LLC,
|
|
|
a Delaware limited liability company
|
|
|
|
|
|
By
|
Country Stores Equity I, LLC, a Delaware limited
liability company, its member
|
|
|
|
By: | /s/ Jamie Elliott |
Printed Name: | Jamie Elliott |
Its: | Vice President | |
LESSEE:
|
||
CRACKERBARRELOLDCOUNTRY
ST
O
RE
INC., a Tennessee corporation
|
||
By: | /s/ James F. Blackstock |
Printed Name: | James F. Blackstock |
Its: | Senior Vice President | |
Lessee's Tax Identification Number: 62-0812904
|
STATE OF ARIZONA
|
]
|
|
] ss.
|
COUNTY OF MARICOPA
|
]
|
|
/s/ Susan M. Goldberg
|
|
Notary Public
|
|
/s/ Susan M. Goldberg
|
|
Notary Public
|
|
|
My Commission
Expires:
|
|
July 17, 2002
|
|
If
to Lessee:
|
Cracker Barrel Old Country Store, Inc.
305 Hartmann Drive
P.O.
Box 787
Lebanon, TN 37088-0787
Attention: Chief Financial Officer
|
||
Telephone: |
(615) 443-9574
|
||
Facsimile:
|
(615) 443-9818
|
||
With a copy to:
|
|||
General Counsel
|
|||
Cracker Barrel Old Country Store, Inc.
305 Hartmann Drive
|
|||
P.O. Box 787
|
|||
Lebanon, TN 37088-0787
|
|||
Telephone:
|
(615) 443-9180 | ||
Facsimile:
|
(615) 443-9818
|
||
With
a
copy to Guarantor:
|
|||
CBRL Group, Inc.
Attention: General Counsel
305 Hartmann Drive
|
|||
P.O. Box 787
|
|||
Lebanon, TN 37088-0787
|
|||
Telephone:
|
(615) 443-9180 | ||
Facsimile:
|
(615) 443-9818
|
||
If
to Lessor:
|
|||
Country Stores Property I, LLC
c/o U.S. Realty Advisors LLC
1370 Avenue of the Americas
New York, NY 10019
|
|||
Attention:
|
Mr. David M. Ledy | ||
Telephone:
|
(212) 581-4540 | ||
Facsimile:
|
(212) 581-4950
|
||
With a copy to:
|
|||
Proskauer Rose LLP
1585 Broadway
|
|||
New York, NY 10036
|
|||
Attention:
|
Kenneth S. Hilton, Esq.
|
||
Telephone: | (212) 969-3000 | ||
Facsimile:
|
(212) 969-2900
|
Dennis
L.
Ruben, Esq.
|
||
Executive Vice President, General Counsel and Secretary
|
||
FFCA Funding Corporation
17207 North Perimeter Drive
Scottsdale, AZ
85255
|
||
Telephone:
|
(480) 585-4500 | |
Telecopy:
|
(480) 585-2226
|
LESSOR:
|
||
COUNTRY STORES PROPERTY I, LLC,
|
||
a Delaware limited liability company
|
||
By
|
Country Stores Equity I, LLC, a Delaware limited liability company, its member | |
By: | Jamie Elliott |
Printed Name: | Jamie Elliott |
Its: | Vice President | |
LESSEE:
|
||
|
||
CRACKER BARREL OLD COUNTRY ST O RE, INC., a Tennessee corporation | ||
By: | James F. Blackstock |
Printed Name: | James F. Blackstock |
Its: | Senior Vice President | |
Lessee's Tax Identification Number: 62-0812904
|
STATE OF ARIZONA
|
]
|
|
] ss.
|
|
|
COUNTY OF MARICOPA |
]
|
|
/s/ Susan M. Goldberg
|
|
|
Notary Public
|
|
|
|
|
My Commission
Expires:
|
|
|
July 17, 2002
|
|
If
to Lessee:
|
Cracker Barrel Old Country Store, Inc.
305 Hartmann Drive
|
P.O.
Box 787
|
|
Lebanon, TN 37088-0787
Attention: Chief Financial Officer
Telephone: (615) 443-9574
|
|
Facsimile: (615) 443-9818
|
|
With a copy to:
|
General Counsel
|
Cracker Barrel Old Country Store, Inc.
305 Hartmann Drive
|
|
P.O. Box 787
|
|
Lebanon, TN 37088-0787
|
|
Telephone: (615) 443-9180
|
|
Facsimile: (615) 443-9818
|
|
With
a
copy to Guarantor:
|
CBRL Group, Inc.
Attention: General Counsel
305 Hartmann Drive
|
P.O. Box 787
|
|
Lebanon, TN 37088-0787
|
|
Telephone: (615) 443-9180
|
|
Facsimile: (615) 443-9818
|
|
If
to Lessor:
|
Country Stores Property I, LLC
c/o U.S. Realty Advisors LLC
1370 Avenue of the Americas
New York, NY 10019
Attention: Mr. David M. Ledy
|
Telephone: (212) 581-4540
|
|
Facsimile: (212) 581-4950
|
|
With a copy to:
|
Proskauer Rose LLP
1585 Broadway
|
New York, NY 10036
|
|
Attention: Kenneth S. Hilton, Esq.
Telephone: (212) 969-3000
|
|
Facsimile: (212) 969-2900
|
Dennis
L.
Ruben, Esq.
Executive Vice President, General Counsel and Secretary
FFCA Funding Corporation 17207 North Perimeter Drive Scottsdale, AZ
85255
Telephone: (480) 585-4500
Telecopy:
(480) 585-2226
|
LESSOR:
|
|
COUNTRY STORES PROPERTY I, LLC,
a Delaware limited liability company
|
|
By Country Stores Equity I, LLC, a Delaware limited liability company, its member
|
By: | /s/ Jamie Elliott | |
Printed Name: | Jamie Elliott | |
Its: | Vice President |
LESSEE:
|
|
|
|
CRACKERBARRELOLDCOUNTRY
ST
O
RE, INC., a Tennessee corporation
|
By: | /s/ James F. Blackstock | |
Printed Name: |
James F. Blackstock
|
|
Its: | Senior Vice President | |
Lessee's Tax Identification Number: 62-0812904
|
STATE OF ARIZONA
|
]
|
] ss.
|
|
COUNTY OF MARICOPA
|
]
|
|
/s/ Susan M. Goldberg
|
Notary Public |
|
/s/Susan M. Goldberg
|
Notary Public
|
My Commission
Expires:
|
|
|
|
July 17, 2002
|
|
(a) |
personal dishonesty or willful misconduct in connection with any material aspect of your duties to the Company;
|
(b) |
breach of fiduciary duty;
|
(c) |
your conviction for, or your pleading guilty or no contest to, any felony or crime involving moral turpitude; or
|
(d) |
your willful or intentional misconduct that causes (or is reasonably believed by the Company to have caused) material and demonstrable injury, monetarily or otherwise, to the Company;
|
CRACKER BARREL OLD COUNTRY STORE, INC.
|
||
By:
|
/s/Michael J. Zlystra
|
Company Employee’s Signature:
|
/s/Nicholas v. Flanagan
|
Please Print or Type Name:
|
Nicholas V Flanagan
|
Please Print or Type Title:
|
SVP RESTAURANT & RETAIL OPERATIONS
|
Position
|
Severance Benefit
|
|
Senior Vice President and General Counsel
|
12 months base salary plus one additional week of severance for each year of service in excess of 15 years (not to exceed 18 months total severance)
|
1.
|
I understand that any payments or benefits paid (or the right to obtain such payments or benefits granted to me subject to compliance with Section 5) under Section 2 or 3 of the Agreement represent, in part, consideration for signing this General Release and are not salary, wages or benefits to which I was already entitled. I understand and agree that I will not receive the payments and benefits specified in Section 2 or Section 3 of the Agreement unless I execute this General Release and do not revoke this General Release within the time period permitted hereafter or breach this General Release. Such payments and benefits will not be considered compensation for purposes of any employee benefit plan, program, policy or arrangement maintained or hereafter established by the Company or its affiliates. I also acknowledge and represent that I have received all payments and benefits that I am entitled to receive (as of the date hereof) by virtue of any employment by the Company.
|
2. |
Except as provided in paragraph 4 below, I knowingly and voluntarily (for myself, my heirs, executors, administrators and assigns) release and forever discharge the Company and the other Released Parties from any and all claims, suits, controversies, actions, causes of action, cross-claims, counter-claims, demands, debts, compensatory damages, liquidated damages, punitive or exemplary damages, other damages, claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in law and in equity, both past and present (through the date this General Release becomes effective and enforceable) and whether known or unknown, suspected, or claimed against the Company or any of the Released Parties which I, my spouse, or any of my heirs, executors, administrators or assigns, may have, which arise out of or are connected with my employment with, or my separation or termination from, the Company (including, but not limited to, any allegation, claim or violation, arising under: Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as amended (including the Older Workers Benefit Protection Act); the Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the Employee Retirement Income Security Act of 1974; the Genetic Information Nondiscrimination Act of 2008; any applicable Executive Order Programs; the Fair Labor Standards Act; or their state or local counterparts; or under any other federal, state or local civil or human rights law, or under any other local, state, or federal law, regulation or ordinance; or under any public policy, contract or tort, or under common law; or arising under any policies, practices or procedures of the Company; or any claim for wrongful discharge, breach of contract, infliction of emotional distress, defamation; or any claim for costs, fees, or other expenses, including attorneys’ fees incurred in these matters) (all of the foregoing collectively referred to herein as the “
Claims
”).
|
3. |
I represent that I have made no assignment or transfer of any right, claim, demand, cause of action, or other matter covered by paragraph 2 above.
|
4. |
In signing this General Release, I acknowledge and intend that it shall be effective as a bar to each and every one of the Claims hereinabove mentioned or implied. I expressly consent that this General Release shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected Claims (notwithstanding any state statute that expressly limits the effectiveness of a general release of unknown, unsuspected and unanticipated Claims), if any, as well as those relating to any other Claims hereinabove mentioned or implied. I acknowledge and agree that this waiver is an essential and material term of this General Release and that without such waiver the Company would not have agreed to the terms of the Agreement. I further agree that in the event I should bring a Claim seeking damages against the Company, or in the event I should seek to recover against the Company in any Claim brought by a governmental agency on my behalf, this General Release shall serve as a complete defense to such Claims. I further agree that I am not aware of any pending charge or complaint of the type described in paragraph 2 as of the execution of this General Release.
|
5. |
I agree that neither this General Release, nor the furnishing of the consideration for this General Release, shall be deemed or construed at any time to be an admission by the Company, any Released Party or myself of any improper or unlawful conduct.
|
6. |
I agree that if I violate this General Release by suing the Company or the other Released Parties for any claim that does not arise under the Age Discrimination in Employment Act, I will pay all costs and expenses of defending against the suit incurred by the Released Parties, including reasonable attorneys’ fees, and return all payments received by me pursuant to the Agreement.
|
7. |
I agree that this General Release is confidential and agree not to disclose any information regarding the terms of this General Release, except to my immediate family and any tax, legal or other counsel I have consulted regarding the meaning or effect hereof or as required by law, and I will instruct each of the foregoing not to disclose the same to anyone. Notwithstanding anything herein to the contrary, each of the parties (and each affiliate and person acting on behalf of any such party) agree that each party (and each employee, representative, and other agent of such party) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of this transaction contemplated in the Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to such party or such person relating to such tax treatment and tax structure, except to the extent necessary to comply with any applicable federal or state securities laws. This authorization is not intended to permit disclosure of any other information including (without limitation) (i) any portion of any materials to the extent not related to the tax treatment or tax structure of this transaction, (ii) the identities of participants or potential participants in the Agreement, (iii) any financial information (except to the extent such information is related to the tax treatment or tax structure of this transaction), or (iv) any other term or detail not relevant to the tax treatment or the tax structure of this transaction.
|
8. |
Any non-disclosure provision in this General Release does not prohibit or restrict me (or my attorney) from responding to any inquiry about this General Release or its underlying facts and circumstances by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), any other self-regulatory organization or governmental entity.
|
9. |
I agree to reasonably cooperate with the Company in any internal investigation, any administrative, regulatory, or judicial proceeding or any dispute with a third party.
|
10. |
I agree not to disparage the Company, its past and present investors, officers, directors or employees or its affiliates and to keep all confidential and proprietary information about the past or present business affairs of the Company and its affiliates confidential in accordance with the terms of the Agreement unless a prior written release from the Company is obtained. I further agree that as of the date hereof, I have returned to the Company any and all property, tangible or intangible, relating to its business, which I possessed or had control over at any time (including, but not limited to, Company-provided credit cards, building or office access cards, keys, computer equipment, manuals, files, documents, records, software, customer data base and other data) and that I shall not retain any copies, compilations, extracts, excerpts, summaries or other notes of any such manuals, files, documents, records, software, customer data base or other data. Nothing in this Agreement will prohibit the making of any truthful statements made by any Person in response to a lawful subpoena or legal proceeding or to enforce such Person’s rights under this Agreement, or any other agreement between you, the Company, and its Subsidiaries.
|
11. |
Notwithstanding anything in this General Release to the contrary, this General Release shall not relinquish, diminish, or in any way affect (i) any rights or claims arising out of any breach by the Company or by any Released Party of the Agreement after the date hereof, (ii) any rights or obligations under applicable law which cannot be waived or released pursuant to an agreement, including my right to file a charge at discrimination with the Equal Employment Opportunity Commission (“EEOC”) although I have waived and do waive: (a) the right to file a lawsuit based upon such charge and (b) any damages or relief obtained on my behalf by the EEOC or any other third party, (iii) any rights to payments or benefits under Section 2 or Section 3 of the Agreement, (iv) my rights of indemnification and directors and officers insurance coverage to which I may be entitled solely with regards to my service as an officer or director of the Company; (v) my rights with regard to accrued benefits under any employee benefit plan, policy or arrangement maintained by the Company or under COBRA; and (vi) my rights as a stockholder or other equity holder of the Company and/or its affiliates.
|
12. |
Whenever possible, each provision of this General Release shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this General Release is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this General Release shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.
|
(a) |
I HAVE READ IT CAREFULLY;
|
(b) |
I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;
|
(c)
|
I VOLUNTARILY CONSENT TO EVERYTHING IN IT;
|
(d) |
I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION;
|
(e) |
I HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON
[ ,
] TO CONSIDER IT;
|
(f) |
THE CHANGES TO THE AGREEMENT SINCE [
,
] EITHER ARE NOT MATERIAL OR WERE MADE AT MY REQUEST.
|
(g) |
I UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED;
|
(h) |
I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND
|
(i) |
I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME.
|
DATE:
|
||||
Name:
|
||||
(Print)
|
ACCEPTED:
|
||
CRACKER BARREL OLD COUNTRY STORE, INC.
|
||
By:
|
||
Title:
|
||
Date:
|
DATE:
|
5/18/15
|
/s/Nicholas V. Flanagan
|
||
Name:
|
Nicholas V Flanagan
|
|||
(Print)
|
Parent
|
State of
Incorporation
|
Cracker Barrel Old Country Store, Inc.
|
Tennessee
|
Subsidiaries
|
|
CBOCS Distribution, Inc.
|
|
(dba Cracker Barrel Old Country Store)
|
Tennessee
|
CBOCS Properties, Inc.
|
|
(dba Cracker Barrel Old Country Store)
|
Michigan
|
CBOCS West, Inc.
|
|
(dba Cracker Barrel Old Country Store)
|
Nevada
|
Rocking Chair, Inc.
|
Nevada
|
CBOCS Texas, LLC
|
|
(dba Cracker Barrel Old Country Store)
|
Tennessee
|
EXHIBIT 31.1
|
CERTIFICATION
|
1. |
I have reviewed this Annual Report on Form 10-K 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 control 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.
|
EXHIBIT 31.2
|
CERTIFICATION
|
1. |
I have reviewed this Annual Report on Form 10-K 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 control 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:
|
September 22, 2017
|
By:
|
/s/Sandra B. Cochran
|
Sandra B. Cochran
|
|||
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:
|
September 22, 2017
|
By:
|
/s/Jill M. Golder
|
Jill M. Golder,
|
|||
Senior Vice President and Chief Financial Officer
|