Transcript Slide 1
Fact Book May 27, 2009 Safe-Harbor Statement The company uses caution in considering its current trends and the earnings disclosed in this Fact Book. The restaurant industry is highly competitive, and trends and guidance are subject to numerous factors and influences, some of which are discussed in the cautionary language other than its periodic filings on Forms 10-K, 10-Q, and 8-K (and any amendments to those forms) filed with the Securities and Exchange Commission (“SEC). Except for specific historical information, many of the matters discussed in this document may express or imply projections of revenues or expenditures, plans and objectives for future operations, growth or initiatives, expected future economic performance, or the expected outcome or impact of pending or threatened litigation. These and similar statements regarding events or results that Cracker Barrel Old Country Store, Inc.. (the “Company”) expects will or may occur in the future, are forward-looking statements that involve risks, uncertainties and other factors which may cause actual results and performance of the Company to differ materially from those expressed or implied by those statements. All forward-looking information is provided pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of these risks, uncertainties and other factors. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “trends,” “assumptions,” “target,” “guidance,” “outlook,” “opportunity”, “future,” “plans,” “goals,” “objectives,” “expectations,” “near-term,” “long-term,” “projection,” “may,” “will,” “would,” “could,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “potential,” “regular,” or “continue” (or the negative or other derivatives of each of these terms) or similar terminology. The Company believes the assumptions underlying these forward-looking statements are reasonable; however, any of the assumptions could be inaccurate, and therefore, actual results may differ materially from those projected in or implied by the forward-looking statements. Factors and risks that may result in actual results differing from this forward-looking information include, but are not limited to, those listed in Part I, Item 1A of the 2008 Annual Report on Form 10-K, as well as other factors including, without limitation, the factors described under “Critical Accounting Estimates” in that portion of the 2008 Annual Report that is incorporated by reference into Part II, Item 7 or, from time to time, in the Company’s filings with the SEC, press releases and other communications. Readers are cautioned not to place undue reliance on forward-looking statements made in this document, since the statements speak only as of the document’s date. The Company has no obligation, and does not intend, to publicly update or revise any of these forward-looking statements to reflect events or circumstances occurring after the date of this document or to reflect the occurrence of unanticipated events. Readers are advised, however, to consult any future public disclosures the Company may make on subjects related to those discussed in this document. Financial Data Financial information and data reported herein may include audited data or data extracted from audited financial statements, but readers should not rely on such data as being audited unless so designated. For audited financial information or more detailed footnote disclosure, the reader is directed to the Company’s periodic reports, which can be found at the SEC’s website, sec.gov, or the Company’s website at crackerbarrel.com. “Non-GAAP financial measures,” as that term is defined by the SEC in regulation G, are included in this document. The reconciliations to GAAP measures are reflected in the Appendix at the end of this document and are also available on our web site, crackerbarrel.com. Certain numbers in this supplement are from the Company’s audited financial statements, but readers should refer only to the audited financial statements themselves to rely on audited results. Corporate Profile Corporate Profile The principal activity of Cracker Barrel Old Country Store, Inc. (“Cracker Barrel,” “our,” and “we”) (Nasdaq: CBRL) is to operate and develop the Cracker Barrel Old Country Store® restaurant and retail concept. Cracker Barrel operates more than 580 Cracker Barrel Old Country Store restaurants and gift shops located in 41 states. The restaurants serve breakfast, lunch and dinner. The retail area offers a variety of decorative and functional items specializing in rocking chairs, holiday gifts and toys, apparel and foods. The Cracker Barrel Brand In 1969, Cracker Barrel’s founder, Dan Evins, recognized the potential to offer interstate highway travelers quality food, service and value consistently and conveniently by focusing on a mission of “pleasing people.” The initial success of the concept drove continued expansion along the interstate system, and today Cracker Barrel has evolved into an indelible part of the automotive travel experience. It is now one of the leading and most highly differentiated restaurant chains in the United States. Cracker Barrel welcomes 7,350 people each week in each restaurant, serving meals for three day-parts and offering breakfast all day through its more than 580 stores. Each location also has one of our unique retail shops that generated in fiscal 2008 an average of more than $900,000 in retail sales on a 52 week basis, or $428 per square foot of retail selling space, driven primarily by the high level of restaurant guest traffic. Cracker Barrel is a recognized guest favorite, having been named “Best in Family Dining” by Restaurants and Institutions magazine’s “Choice in Chains” consumer survey for the 18th consecutive year. The Good Sam Club named Cracker Barrel “the Most RV Friendly Sit-Down Restaurant in America” for the 8th year in a row. Awards & Accolades Best Family Dining Restaurant – 18 yrs - Restaurants and Institutions “Choice in Chains” One of Two Casual Dining Chains that had scores above 30 for favorable perceptions of value among consumers compared with average of 10.8 for 29 other casual dining chains -October 2008 Study by YougovPolimetrix’s BrandIndex Most RV Friendly Sit Down Restaurant in America – 8 yrs - The Good Sam Club Fun Facts 1. 2. 3. 4. How many CDs have Cracker Barrel Old Country Store® retail shops sold? What is the best selling retail product? How many miles of thin stick candy do we sell every year? How many did we serve last year-approximately? Bacon? • 72 million slices • 102 million slices • 122 million slices Eggs? • 111 million • 151 million • 181 million Chicken ‘N” Dumplins? 5. 6. 7. • 6 million • 11 million • 17 million Where did Moon Pies originate? How much pancake mix did we sell? What percentage of our locations are on the interstate? Answers 1. 2. 3. 4. 5. 6. 7. Over 3 million CDs sold Rockers— 170,000 in fiscal 2008 If laid end-to-end, the thin sticks would stretch 940 miles. 122 million slices of bacon; 151 million eggs, and 11 million orders of Chicken N’ Dumplins Moon Pies were first made to fill miners’ lunch pails in 1917. They are made by the Chattanooga Bakery in Chattanooga, TN. We sold enough pancake mix to make 8.7 million pancakes—a stack 34 miles high. 85 percent of our locations are on the interstate Our Vision To be the best restaurant company in America Our Mission Pleasing People Our Familiar Brand Crosses the Nation with 588 Restaurants in 41 States 2 1 1 4 1 1 5 1 8 1 16 4 13 4 21 3 2 22 27 31 4 17 7 4 11 29 6 29 34 50 22 11 28 40 10 42 9 59 As of May 27, 2009 2 = areas under development 1 5 We serve multi-generation families--Travelers and neighbors alike™ 65+ 32% 18-34 11% 35-49 24% Our mix of age groups 50-64 33% Our mix of travelers and neighbors Local 60% Travelers 40% Source: 2008 Full Service Restaurant National Awareness & Usage Survey conducted by Marketing Workshop and 2008 Guest Loyalty Program conducted by Service Management Group Opportunities in all 3 day-parts Breakfast Lunch 23% 37% 40% $8.59 $8.84 3.4% 3.1% $8.31 1.4% Dinner FY 07 FY 08 3QFY09 Avg. check increase Deep Industry Experience Name Position Years at Cracker Barrel Years in Industry Mike Woodhouse Chairman, President & CEO 13 24 + 151 Doug Barber EVP, Chief Operating Officer 5 29 Sandy Cochran EVP, Chief Financial Officer 0 171 Doug Couvillion SVP, Finance 7 15 Kathy Dilley VP, Retail Operations 17 27 Bob Doyle VP, Product Development 4 26 Deb Evans VP, General Merchandise Manager/Product Development 2 261 Brian Eytchison VP, Financial Planning & Analysis 8 17 Nick Flanagan VP, Restaurant Operations 4 19 Ed Greene SVP, Strategic Initiatives 3 30 Rob Harig SVP, Human Resources 8 31 Terry Maxwell SVP, Retail 28 28 Forrest Shoaf SVP, Chief Legal Officer 3 13 Diana Wynne SVP, Corporate Affairs 3 29 1) Retail Historical Perspective: Retail Sales 24% 6% 23.6% 23% 2% 22.6% 0% 22% 21.6% -2% 21.5% -4% 21.2% 21% -6% -8% 20% -10% 2004 2005 Retail % To Total 2006 2007 Fiscal Year 2008 Comp Store Retail Sales Changes Retail SSS Change Retail % to Total 4% Cracker Barrel Old Country Store® Restaurant Comparable Stores Sales Growth FY 06 FY 07 FY 08 FY 09 2.0% 0.0% -2.0% -4.0% Q106 Q306 Q107 Q307 Q108 Q308 Q109 Q309 Consolidated Financial HighlightsContinuing Operations Net Sales $2,500 $2,060 $ in millions $2,000 $2,191 $2,219 $2,385 $507 $512 $1,748 $1,845 $1,872 FY06 FY07 FY08 $494 $471 $1,574 $1,697 FY04 FY05 $486 $2,352* $1,500 $1,000 $500 $0 Restaurant Retail * Includes $46 million sales from 53rd week EPS from Continuing Operations $3.00 $2.79 $2.52* $2.50 $2.00 $2.04 $2.07 FY05 FY06 $1.78 $1.50 $1.00 $0.50 $0.00 FY04 FY07 FY08 •Includes $0.14 per share from 53rd week All Numbers exclude Logan’s Roadhouse, Inc. Consolidated Financial Highlights-Continuing Operations Income From Continuing Operations * Includes $4 million from 53rd week $120 $ in millions $100 $105 $93 $95 $76* $80 $59 $60 $40 $65 $57 $22 $20 $8 $9 FY04 FY05 $0 FY06 FY07 FY08 Income from continuing ops. Pretax Interest Expense Average Shares Outstanding Million shares 60 55.0 53.4 48.0 50 40 48.9 47.8 42.9 31.8 30 23.4 27.6 20 22.8 10 0 FY04 FY05 FY06 Basic Diluted FY07 FY08 All Numbers exclude Logan’s Roadhouse, Inc. Return to Shareholders $3,000 $40 $35 $2,500 $30 $ in millions $25 $1,500 $20 $15 $1,000 $10 $500 $5 $0 $0 FY99 FY00 FY01 Market capitalization FY02 FY03 FY04 FY05 Cumulative share repurchase FY06 FY07 FY08 Cumulative Dividends 3Q09 Share price Year-end share price $2,000 Free Cash Flow* Net cash provided by operating activities $250 $230 Cash used to purchase property and equipment $200 $ in Millions $175 Includes $94 million of cash used on Logan’s disposition & taxes/expenses for LYONs redemption $162 $ 15 0 $125 Cash used for dividends $125 $108 $97 $ 10 0 $97 $90 $88 $50 $23 $24 $16 $16 $16 $0 F Y0 4 F Y0 5 F Y0 6 F Y0 7 F Y0 8 •Free Cash Flow is a non-GAAP financial measure derived from indicated GAAP components found on Statement of Cash Flow Operating Metrics Operating Margin 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Return on Invested Capital* 14% 7.5% 7.7% 7.3% 7.2% 6.3% 12.2% 12% 10% 9.7% 10.3% 9.6% 10.6% 8% 6% 4% 2% 0% FY04 FY05 FY06 FY07 FY08 FY04 FY05 FY06 FY07 FY08 $0.80 Dividends Paid/Share $0.70 $0.68 $600 $400 $200 $185 $212 $750 $ in millions $ in millions $0.55 $0.60 $0.51 $0.47 $0.50 $0.40 $0.33 $0.30 $0.20 $0.10 Total Long-Term Debt $0.00 $1,000 $911 FY04 FY05 FY06 FY07 FY08 $756 $779 Debt Maturity Schedule $800 $9 $9 $12 $9 $0 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 *See Reconciliation Table on Last Page $ in millions Quarterly Results— FY2009 Q1 Q2 Q3 Restaurant $456.0 $468.9 $466.6 Retail Total revenue 117.0 $573.9 161.3 101.0 $630.2 $567.6 Cost of goods sold Labor & other related expenses Other store operating expenses Impairment & store closing costs Store operating income 181.4 222.4 106.0 -$64.2 222.5 234.1 105.7 -$67.8 176.3 230.0 104.2 -$57.0 31.6 General & administrative expense Operating income $32.6 Net Interest expense 14.0 Pretax income $18.5 5.7 Provision for income taxes Income from continuing $12.8 operations Diluted EPS from continuing $0.57 operations 28.5 $39.3 13.3 28.0 $29.0 12.7 $26.0 7.6 $16.3 4.3 $18.4 $11.9 $0.81 $0.52 Weighted average shares 22.67 22.60 22.83 Restaurant, % of total 79.4% 74.4% 82.2% Retail % of total sales Total revenue Cost of goods sold 20.6 25.6 17.8 100.0% 100.0% 100.0% 31.1 31.6 35.3 Ratios Gross margin Labor & other related expenses Other store operating expenses Impairment & store closing costs Store operating income General & administrative expense Operating margin Net Interest expense Pretax income Tax rate=provision for income tax/pretax income Income from continuing operations 68.4% 64.7% 37.1 68.9% 40.5 16.8 -- 18.4 -- 10.8% 10.0% 5.5 4.6 4.9 5.7% 6.2% 2.5 2.1 2.2 3.2% 4.1% 2.9% 30.7% 29.4% 26.6% 2.2% 2.9% 2.1% 38.7 18.5 -- 11.2% 5.1% Q4 FY2009 $ in millions Quarterly Results— FY2008 Q1 Q2 Q3 FY2008 Restaurant $462.8 $465.1 $483.4 $1,872.1 Retail Total revenue 118.4 $581.2 169.3 106.7 117.9 $634.4 $567.1 $601.8 180.6 189.2 223.7 229.1 226.9 227.9 106.5 103.2 107.4 0.1 -$75.0 $56.5 $77.2 35.6 29.6 28.8 $45.4 $27.7 $41.6 14.3 14.2 13.9 $31.1 $13.5 $27.7 10.9 3.0 7.1 $20.2 $10.5 $20.6 512.4 $2,384.5 773.8 909.5 422.3 0.9 $278.0 127.3 $150.8 Cost of goods sold Labor & other related expenses Other store operating expenses Impairment & store closing costs Store operating income 180.2 225.7 105.2 0.8 $69.2 General & administrative expense 33.2 Operating income $36.0 Net Interest expense 14.9 Pretax income $21.2 Provision for income taxes 7.2 Income from continuing $14.0 operations Diluted EPS from continuing $0.57 operations Weighted average shares 24.44 $460.4 Q4 57.3 $93.5 28.2 $65.3 $0.85 $0.46 $0.91 $2.79 23.76 22.81 22.61 23.41 80.4% 19.6 78.5% 21.5 100.0% 100.0% 100.0% 35.3 31.8 31.4 100.0% 32.4 Ratios Restaurant, % of total Retail % of total sales Total revenue Cost of goods sold Gross margin Labor & other related expenses Other store operating expenses Impairment & store closing costs 79.6% 20.4 100.0% 31.0 69.0% 64.7% 68.2% 38.8 18.1 0.2 36.1 16.8 --- 40.0 18.2 --- Store operating income 11.9% 5.7 General & administrative expense Operating margin 73.3% 81.2% 26.7 18.8 11.8% 4.6 68.6% 37.9 17.9 67.6% 38.2 17.7 --- --- 10.0% 5.1 12.8% 5.9 11.7% 5.4 6.2% 7.2% 4.9% 6.9% 6.3% Net Interest expense 2.6 2.3 2.5 2.3 2.4 Pretax income Tax rate=provision for income tax/pretax income 3.6% 4.9% 2.4% 3.9% 33.9% 34.9% 22.5% 4.6% 25.7% 30.2% Income from continuing operations 2.4% 3.2% 1.8% 3.4% 2.7% Retail Quarterly Results— FY2007 Q2 Q3 Q4* FY2007* $442.3 115.9 $558.3 172.9 $447.8 164.4 $612.1 210.4 $444.9 104.1 $549.1 167.9 $509.8 122.4 $632.1 193.1 $1,844.8 506.8 $2,351.6 744.3 212.2 219.6 219.0 242.1 97.7 - 105.9 - 100.5 - 106.0 - 892.8 410.1 General & administrative expense $75.5 37.3 $76.3 34.0 $61.6 31.5 $91.0 33.4 $304.3 136.2 Operating income $38.3 $42.2 $30.1 $57.6 $168.1 14.6 10.8 11.6 14.7 51.7 Pretax income Provision for income taxes $23.7 8.5 $31.5 11.0 $18.5 6.4 $42.9 14.7 $116.5 40.5 Income from continuing operations Diluted EPS from continuing operations $15.2 $20.5 $12.1 $28.2 $76.0 $ in millions Restaurant Retail Total revenue Cost of goods sold Labor & other related expenses Other store operating expenses Impairment & store closing costs Store operating income Net Interest expense Weighted average shares Q1 $0.45 $0.60 36.01 36.02 $0.44 30.18 - $1.15 $2.52 25.06 31.76 Ratios Restaurant, % of total sales Retail % of total sales Total revenue Cost of goods sold Gross margin Labor & other related expenses Other store operating expenses Impairment & store closing costs Store operating income General & administrative expense 73.2% 81.0% 19.0 26.8 100.0% 100.0% 100.0% 31.0 34.4 30.6 79.2% 20.8 69.0% 38.0 17.5 0.0 13.5% 65.6% 35.8 17.3 0.0 12.5% 69.4% 39.9 18.3 0.0 11.2% 6.6 5.6 5.7 Operating Margin 6.9% 6.9% 5.5% Net Interest expense Pretax income Tax rate=provision for income tax/pretax income 2.7 4.2% 1.8 5.1% 2.1 3.4% 35.9% 34.9% 34.4% Income from continuing operations 2.7% 3.3% 2.2% 80.6% 19.4 100.0% 30.6 69.4% 38.3 16.7 0.0 14.4% 5.3 78.4% 21.6 100.0% 31.7 68.3% 38.0 17.4 0.0 12.9% 5.7 9.1% 7.2% 2.3 6.8% 2.2 5.0% 34.2% 4.4% *Includes 53rd week which increased Total revenues by $46.3 million, Operating Income by $7.8 million, and Income from continuing operations by $4.4 million. 34.8% 3.2% Quarterly Results— FY2006 $ in millions Restaurant Retail Q1 Q2 Q3 Q4 FY2006 $426.6 108.8 $434.4 152.3 $432.1 101.9 $455.1 108.2 $1,748.2 471.3 Total revenue $535.5 Cost of goods sold 166.6 Labor & other related expenses 204.4 Other store operating expenses 95.2 Impairment & store closing costs - $586.7 $534.0 $563.3 200.2 208.2 165.8 209.4 173.5 210.9 $2,219.5 706.1 832.9 99.9 3.7 94.3 3.2 Store operating income $69.3 General & administrative expense 33.1 $74.6 31.9 $61.4 31.1 $85.3 32.8 $290.6 128.8 Operating income Net Interest expense $36.2 2.5 $42.7 2.2 $30.3 2.7 $52.6 14.1 $161.8 21.4 Pretax income Provision for income taxes Income from continuing operations $33.7 11.7 $40.5 13.8 $27.6 9.3 $38.5 10.1 $140.4 44.9 $22.1 $26.7 $18.3 $28.4 $95.5 95.0 (1.5) 384.4 5.4 Diluted EPS $0.44 $0.53 $0.37 $0.82 $2.07 Weighted average shares 51.84 51.84 52.52 35.97 48.04 Ratios Restaurant, % of total Retail % of total sales 79.7% 20.3 74.0% 26.0 80.9% 19.1 80.8% 19.2 78.8% 21.2 100.0% 31.1 100.0% 34.1 100.0% 31.0 100.0% 30.8 100.0% 31.8 68.9% 65.9% 69.0% 69.2% 68.2% 35.5 17.1 0.6 39.2 17.7 0.6 37.4 16.9 0.3 37.5 17.3 11.5% 5.8 15.2% 5.9 13.1% 5.8 5.7% 9.3% 7.3% 0.5 5.2% 2.5 6.8% 1.0 6.3% 26.3% 32.0% Total revenue Cost of goods sold Gross margin Labor & other related expenses 38.2 17.8 Other store operating expenses 0.0 Impairment & store closing costs Store operating income 12.9% General & administrative expense 6.1 12.7% 5.4 Operating Margin 6.8% 7.3% Net Interest expense Pretax income Tax rate=provision for income tax/pretax income 0.5 6.3% 0.4 6.9% 34.6% 34.1% 33.6% Income from continuing operations 4.1% 4.6% 3.4% 5.0% 0.3 4.3% Strategic Initiatives • Fiscal 2006: – Established $1.25 billion credit facility – Acquired 16.75 million shares in Dutch Auction Tender Offer ($42.00 per share) • Fiscal 2007: – Divested Logan’s Roadhouse ($485 million – – – – total consideration) Reduced debt by $75 million Completed 2nd Dutch Auction Tender Offer acquiring 5.43 million shares ($46.00 per share) Redeemed Senior Convertible Notes ($405 million principal amount at maturity) Purchased 3.33 million shares for $155.4 million • Fiscal 2008: – Purchased 1.6 million shares for $52 million Restaurant Data FY2008 • Store size: 10,000 sq. ft on approximately 2.5 acres of land • Seats per restaurant: 200 • Average number of employees per store: 104 • Average unit volume: $3.28 million • Average weekly traffic: 7,350 • Meal mix – Breakfast—23% – Lunch--37% – Dinner—40% • Commodity breakdown in FY08 – Dairy (including eggs) 15% – Beef 12 – Poultry 11 – Pork 10 – >90% of purchases contracted for remainder of fiscal year as of 5/1/2009 3Q09 • Average check per guest: $8.93 • Leased vs owned: 413 locations owned, 70.2% • % on-interstate vs off: 15.2% off-interstate – 50% off-interstate locations planned in FY10 • Hourly turnover: <80% Retail Data— Fiscal 2008 • Size of retail – 21.5% of sales – 22% of square feet • 3,200 SKUs • $428/sq. ft. • Average unit volume: $.90 million • Sales categories – Apparel: 20% – Seasonal: 16% – Food: 16% – Home: 15% – Toys: 13% • 32% of customers purchase retail • Second quarter highest retail sales due to Christmas holiday shopping Unit Growth Units 650 600 550 529 543 FY05 FY06 562 577 588 595 FY08 FY09 FY10 Planned 504 500 450 400 350 300 FY04 FY07 Fiscal 2009 Outlook (As of May 27, 2009 Press Release) • Comparable store restaurant sales growth: (1.5-2)% • Comparable store retail sales growth: (6-7)% • 11 new stores opened in FY09; FY10: 7 new stores • Revenue growth: flat to (0.5)% • Q4 commodity cost inflation: flat to 0.5% – >90% of products contracted through remainder of FY09 • Depreciation: $60 million • Operating margin: 5.8% to 6.1% compared with 6.3% in FY08 • Net interest expense: $52 to $52.5 million • Annual effective tax rate: 26% to 27% • Diluted EPS: $2.70 to $2.90 • Diluted shares: 22.5-23 million • Capital expenditures: $65 million Reconciliation Table Continuing operations FY04 FY05 FY06 FY07 FY08 $ in millions Total sales $2,060.5 $2,190.9 $ 154.0 $ 168.8 Operating Income Net Interest Income before income taxes 8.4 $ 145.6 52.3 Provision for income taxes Net Income $ Operating margin = operating income/total sales Tax Rate Net Operating Profit After Tax $ 93.3 8.6 $ 160.2 $ 2,219.5 $ 161.8 21.5 $ 140.3 $2,3 51.6 $ 168.1 51.7 $ 116.5 $ 2,384.5 $ 150.8 57.3 $ 93.5 55.4 44.9 40.5 28.2 $ 104.8 $ 95.5 $ 76.0 $ 65.3 7.5% 7.7% 7.3% 35.9% 34.6% 32.0% $ 110.1 7.2% 34.8% 30.2% 98.7 $ 110.4 Total shareholders' equity 873 870 302 104 93 Long-term debt Invested capital = equity + debt 185 212 912 756 779 1,058 1,082 1,214 860 872 Average invested capital 1,020 1,071 1,152 1,045 866 Return on invested capital= net operating income after tax /average invested capital 9.7% 10.3% 9.6% $ 109.7 6.3% 10.6% $ 105.3 12.2%