8-K
CRACKER BARREL OLD COUNTRY STORE, INC (CBRL)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event
reported): December 2, 2022
CRACKER BARREL OLD COUNTRY STORE, INC.
(Exact Name of Registrant as Specified in its Charter)
| Tennessee | 001-25225 | 62-0812904 |
|---|---|---|
| (State or<br> Other Jurisdiction<br><br> <br>of Incorporation) | (Commission File Number) | (IRS Employer<br><br> <br>Identification No.) |
305 Hartmann Drive, Lebanon, Tennessee 37087
(Address of Principal Executive Offices) (Zip code)
(615) 444-5533
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which <br> registered |
|---|---|---|
| Common Stock (Par Value $0.01) Rights to Purchase Series A Junior Participating Preferred Stock (Par Value $0.01) | CBRL | The Nasdaq Stock Market LLC<br> (Nasdaq Global Select Market) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02. Results of Operations and Financial Condition.
On December 2, 2022, Cracker Barrel Old Country Store, Inc. (the “Company”) issued a press release (the “Press Release”) announcing the Company’s fiscal 2023 first quarter results of operations and projected outlook of certain items for fiscal year 2023. A copy of the Press Release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits. | |
|---|---|---|
| Exhibit No. | Description | |
| 99.1 | Press Release issued by Cracker Barrel Old Country Store, Inc. dated December 2, 2022 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| Date:<br>December 2, 2022 | CRACKER BARREL OLD COUNTRY STORE, INC. | |
|---|---|---|
| By: | /s/ Richard M. Wolfson | |
| Name: | Richard M. Wolfson | |
| Title: | Senior Vice President, General Counsel and Corporate Secretary |
Exhibit 99.1
| Investor Contact: | Adam Hanan |
|---|---|
| **** | (615) 443-9887 |
| Media Contact: | Heidi Pearce |
| **** | (615) 235-4135 |
CRACKER BARREL REPORTS FIRST QUARTER FISCAL2023 RESULTS
Board declares $1.30 quarterly dividend pershare; appoints William Moreton to Board of Directors
LEBANON,Tenn. – December 2, 2022 – Cracker Barrel Old Country Store, Inc. (“Cracker Barrel” or the “Company”) (Nasdaq: CBRL) today reported its financial results for the first quarter of fiscal 2023 ended October 28, 2022.
First Quarter Fiscal 2023 Highlights
| · | The Company reported first quarter total revenue of $839.5 million. Compared to the prior year first quarter,<br>total revenue increased 7.0%. |
|---|---|
| o | Comparable store restaurant sales increased 7.1%, while comparable store retail sales increased 4.3%. |
| --- | --- |
| · | GAAP operating income for the first quarter was $23.6 million, or 2.8% of total revenue, and adjusted^1^<br>operating income was $30.0 million, or 3.6% of total revenue. |
| --- | --- |
| · | GAAP net income was $17.1 million, or 2.0% of total revenue. Adjusted EBITDA^1^ was $54.8 million,<br>or 6.5% of total revenue. |
| --- | --- |
| · | GAAP earnings per diluted share were $0.77, and adjusted^1^ earnings per diluted share were $0.99. |
| --- | --- |
| · | The Company announced that its Board of Directors declared a regular quarterly dividend of $1.30 per share. |
| --- | --- |
| · | The Company has appointed veteran restaurant leader, William Moreton, to its Board of Directors. |
| --- | --- |
Commenting on the first quarter results, Cracker Barrel President and Chief Executive Officer, Sandra B. Cochran said, “We delivered topline performance and operating income results in line with our expectations. I was pleased with our teams’ ability to successfully operate in a challenging environment and with our progress on key initiatives including cost savings, digital experience, store technology, and hospitality. I remain confident in our strategy, and we continue to expect improved performance in the second half of the fiscal year. While the increased macroeconomic uncertainty and persistent inflationary pressures merit caution, we believe our value proposition and strong guest experience position us well to navigate the environment.”
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December 2, 2022
Announcing the appointment of William Moreton to the Company’s Board of Directors, Ms. Cochran commented, “We are happy to announce that Bill Moreton has agreed to join our Board of Directors. Bill has over thirty-five years of leadership and financial experience in the restaurant space, including as the Chief Executive Officer and Executive Vice Chairman of Panera Bread Company, President and Chief Financial Officer of Potbelly Sandwich Works, Chief Executive Officer of Baja Fresh, and Executive Vice President and Chief Financial Officer of Houlihan’s Restaurant Group, as well as experience in banking and public accounting. With this background, Bill brings even more industry expertise and valuable perspective to our Board and adds to our Board’s already impressive level of strategic capabilities as we navigate industry challenges. Our other directors and our management team are looking forward to his contributions.”
First Quarter Fiscal 2023 Results
Revenue
The Company reported total revenue of $839.5 million for the first quarter of fiscal 2023, representing an increase of 7.0% compared to the first quarter of fiscal 2022. Cracker Barrel comparable store restaurant sales increased 7.1%, including total menu pricing of 7.8%. Comparable store retail sales increased 4.3% from the prior year quarter.
Operating Income
GAAP operating income for the first quarter was $23.6 million, or 2.8% of total revenue. Excluding the approximately $3.2 million in non-cash amortization related to the gains on the previously disclosed sale and leaseback transactions and approximately $3.2 million in proxy contest and settlement expenses incurred in the first quarter, adjusted^1^ operating income for the first quarter was $30.0 million, or 3.6% of total revenue, compared to $46.1 million, or 5.9%, of total revenue in the prior year quarter.
The decline in the Company’s adjusted operating income as a percent of total revenue versus the prior year is primarily the result of commodity, wage and other expense inflation in excess of pricing, higher retail cost of goods sold, and elevated maintenance expense.
Net Income, EBITDA, and Earnings per DilutedShare
GAAP net income for the first quarter was $17.1 million, or 2.0% of total revenue. This represented a 48.7% decrease compared to prior year quarter GAAP net income of $33.4 million, or 4.3% of total revenue. Adjusted EBITDA^1^ was $54.8 million, or 6.5% of total revenue, a 23.8% decrease compared to the prior year quarter EBITDA^1^ of $71.9 million, or 9.2% of total revenue.
GAAP earnings per diluted share for the first quarter were $0.77, a 45.4% decrease compared to the prior year quarter GAAP earnings per diluted share of $1.41. Adjusted^1^ earnings per diluted share were $0.99, a 34.9% decrease compared to the prior year quarter adjusted^1^ earnings per diluted share of $1.52.
Quarterly Dividend Declaration
The Company announced that its Board of Directors declared a quarterly dividend of $1.30 per share on the Company’s common stock. The quarterly dividend is payable on January 31, 2023 to shareholders of record as of January 13, 2023.
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Fiscal 2023 Outlook
The Company anticipates the near-term consumer environment will remain challenged due to continued inflation, low consumer confidence, and macroeconomic uncertainty. The Company expects the environment and results to improve, although later in the year than the Company forecasted last quarter. The Company has thus adjusted its outlook for the fiscal year as follows:
| · | Total revenue growth of 6% to 8% compared to the prior fiscal year; |
|---|---|
| · | Commodity inflation of 8% to 9%, with sequential moderation each quarter; |
| --- | --- |
| · | Wage inflation of 5% to 6%; |
| --- | --- |
| · | GAAP operating income margin rate in the low 4% range and adjusted operating income margin rate in the<br>high 4% range. |
| --- | --- |
The Company reiterated the following components of its outlook:
| · | Three to four new Cracker Barrel units and 15 to 20 new Maple Street Biscuit Company units |
|---|---|
| · | Cost savings and business model improvements that are expected to contribute between $20 million to $25<br>million to fiscal 2023 profitability; |
| --- | --- |
| · | Capital expenditures of approximately $125 million; and |
| --- | --- |
| · | An effective tax rate in the range of 10% to 15%. |
| --- | --- |
The Company reminds readers that the uncertainties created by current macroeconomic conditions may cause actual results to differ materially from those expected and that its outlook for fiscal 2023 reflects a number of assumptions, many of which are outside the Company’s control.
***^1^***For Non-GAAP reconciliations, please refer to the Reconciliation of GAAP-basis operating results to non-GAAP operating results sectionof this release.
Fiscal 2023 First Quarter Conference Call
As previously announced, the live broadcast of Cracker Barrel’s quarterly conference call will be available to the public online at investor.crackerbarrel.com today beginning at 11:00 a.m. (ET). The online replay will be available at 2:00 p.m. (ET) and continue through December 16, 2022.
AboutCracker Barrel Old Country Store**^®^**
Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL) provides a caring and friendly home-away-from-home experience while offering guests high-quality homestyle food to enjoy in-store or to-go and unique shopping — all at a fair price. Established in 1969 in Lebanon, Tenn., Cracker Barrel and its affiliates operate more than 660 company-owned Cracker Barrel Old Country Store® locations in 45 states and own the fast-casual Maple Street Biscuit Company. For more information about the Company, visit crackerbarrel.com.
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CBRL-F
Except for specific historical information,certain of the matters discussed in this press release may express or imply projections of revenues or expenditures, statements of plansand objectives or future operations or statements of future economic performance. These, and similar statements are forward-looking statementsconcerning matters that involve risks, uncertainties and other factors which may cause the actual performance of Cracker Barrel Old CountryStore, Inc. and its subsidiaries to differ materially from those expressed or implied by this discussion. All forward-looking informationis subject to completion of our financial procedures for Q1 FY 2023 and is provided pursuant to the safe harbor established under thePrivate Securities Litigation Reform Act of 1995 and should be evaluated in the context of these factors. Forward-looking statements generallycan be identified by the use of forward-looking terminology such as "trends," "assumptions," "target," "guidance," "outlook," "opportunity," "future," "plans," "goals," "objectives," "expectations," "near-term," "long-term," "projection," "may," "will," "would," "could," "expect," "intend," "estimate," "anticipate," "believe," "potential," "regular," "should," "projects," "forecasts," or "continue" (or the negative or other derivatives of eachof these terms) or similar terminology and include the expected effects of COVID-19 on our business, financial condition and results ofoperations and of operational improvement initiatives, such as new menu items and retail offerings. Factors which could materially affectactual results include, but are not limited to: risks and uncertainties associated with inflationary conditions with respect to the costfor food, ingredients, retail merchandise, transportation, distribution, labor and utilities and their effects on the availability ofkey inputs to our business as well as consumer spending, travel and demand generally; the COVID-19 pandemic, including the duration ofthe COVID-19 pandemic and its ultimate impact on our business, levels of consumer confidence in the safety of dine-in restaurants, restrictions(including occupancy restrictions) imposed by governmental authorities, the effectiveness of cost saving measures undertaken throughoutour operations, disruptions to our operations as a result of the spread of COVID-19 in our workforce, and our level of indebtedness, orconstraints on our expenditures, ability to service our debt obligations or make cash distributions to our shareholders or cash managementgenerally; general or regional economic weakness, business and societal conditions, and weather on sales and customer travel; discretionaryincome or personal expenditure activity of our customers; information technology-related incidents, including data privacy and informationsecurity breaches, whether as a result of infrastructure failures, employee or vendor errors, or actions of third parties; our abilityto identify, acquire and sell successful new lines of retail merchandise and new menu items at our restaurants; our ability to sustainor the effects of plans intended to improve operational or marketing execution and performance; uncertain performance of acquired businesses,strategic investments and other initiatives that we may pursue now or in the future; changes in or implementation of additional governmentalor regulatory rules, regulations and interpretations affecting tax, wage and hour matters, health and safety, pensions, insurance or otherundeterminable areas; the effects of plans intended to promote or protect our brands and products; commodity price increases; the abilityof and cost to us to recruit, train, and retain qualified hourly and management employees; the effects of increased competition at ourlocations on sales and on labor recruiting, cost, and retention; workers' compensation, group health and utility price changes; consumerbehavior based on negative publicity or changes in consumer health or dietary trends or safety aspects of our food or products or thoseof the restaurant industry in general, including concerns about outbreaks of infectious disease, as well as the possible effects of suchevents on the price or availability of ingredients used in our restaurants; the effects of our indebtedness, including under our creditfacility and our convertible senior notes, and associated restrictions on our financial and operating flexibility and ability to executeor pursue our operating plans and objectives; changes in interest rates, increases in borrowed capital or capital market conditions affectingour financing costs and ability to refinance all or portions of our indebtedness; the effects of dilution of our existing stockholders’ownership interest that may ensue from any conversions of our convertible senior notes or the related warrants issued in connection withour convertible note hedging transactions; the effects of business trends on the outlook for individual restaurant locations and the effecton the carrying value of those locations; our ability to retain key personnel; the availability and cost of suitable sites for restaurantdevelopment and our ability to identify those sites; our ability to enter successfully into new geographic markets that may be less familiarto us; changes in land, building materials and construction costs; the actual results of pending, future or threatened litigation or governmentalinvestigations and the costs and effects of negative publicity or our ability to manage the impact of social media associated with theseactivities; economic or psychological effects of natural disasters or unforeseen events such as terrorist acts, social unrest or war andthe military or government responses to such events; disruptions to our restaurant or retail supply chain, including as a result of COVID-19;changes in foreign exchange rates affecting our future retail inventory purchases; the impact of activist shareholders; our reliance onlimited distribution facilities and certain significant vendors; implementation of new or changes in interpretation of existing accountingprinciples generally accepted in the United States of America ("GAAP"); and other factors described from time to time in ourfilings with the Securities and Exchange Commission, press releases, and other communications. Any forward-looking statement made by usherein, or elsewhere, speaks only as of the date on which made. We expressly disclaim any intent, obligation or undertaking to updateor revise any forward-looking statements made herein to reflect any change in our expectations with regard thereto or any change in events,conditions or circumstances on which any such statements are based.
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CRACKER BARREL OLD COUNTRY STORE, INC.
CONDENSED CONSOLIDATED INCOME STATEMENT
(Unaudited)
(In thousands, except share and per share amounts,percentages and ratios)
| First Quarter Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 10/28/22 | 10/29/21 | Percentage Change | |||||||
| Total revenue | $ | 839,519 | $ | 784,930 | 7 | % | |||
| Cost of goods sold, (exclusive of depreciation & rent) | 281,540 | 242,771 | 16 | ||||||
| Labor and other related expenses | 291,708 | 274,657 | 6 | ||||||
| Other store operating expenses | 196,704 | 183,679 | 7 | ||||||
| General and administrative expenses | 45,948 | 40,910 | 12 | ||||||
| Operating income | 23,619 | 42,913 | (45 | ) | |||||
| Interest expense | 3,532 | 2,629 | 34 | ||||||
| Income before income taxes | 20,087 | 40,284 | (50 | ) | |||||
| Provision for income taxes | 2,958 | 6,908 | (57 | ) | |||||
| Net income | $ | 17,129 | $ | 33,376 | (49 | ) | |||
| Earnings per share – Basic: | $ | 0.77 | $ | 1.42 | (46 | ) | |||
| Earnings per share – Diluted: | $ | 0.77 | $ | 1.41 | (45 | ) | |||
| Weighted average shares: | |||||||||
| Basic | 22,193,774 | 23,507,361 | (6 | ) | |||||
| Diluted | 22,292,654 | 23,593,882 | (6 | ) | |||||
| Ratio Analysis | |||||||||
| Total revenue: | |||||||||
| Restaurant | 78.9 | % | 78.4 | % | |||||
| Retail | 21.1 | 21.6 | |||||||
| Total revenue | 100.0 | 100.0 | |||||||
| Cost of goods sold, (exclusive of depreciation & rent) | 33.5 | 30.9 | |||||||
| Labor and other related expenses | 34.8 | 35.0 | |||||||
| Other store operating expenses | 23.4 | 23.4 | |||||||
| General and administrative expenses | 5.5 | 5.2 | |||||||
| Operating income | 2.8 | 5.5 | |||||||
| Interest expense | 0.4 | 0.4 | |||||||
| Income before income taxes | 2.4 | 5.1 | |||||||
| Provision for income taxes | 0.4 | 0.8 | |||||||
| Net income | 2.0 | % | 4.3 | % |
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CRACKER BARREL OLD COUNTRY STORE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share amounts)
| 10/28/22 | 10/29/21 | |||
|---|---|---|---|---|
| Assets | ||||
| Cash and cash equivalents | $ | 38,705 | $ | 125,865 |
| Accounts receivable | 32,943 | 30,197 | ||
| Inventories | 231,010 | 159,633 | ||
| Prepaid expenses and other current assets | 28,583 | 41,528 | ||
| Property and equipment, net | 965,795 | 967,099 | ||
| Operating lease right-of-use assets, net | 918,725 | 966,866 | ||
| Intangible Assets | 21,191 | 21,267 | ||
| Other assets | 45,411 | 55,592 | ||
| Goodwill | 4,690 | 4,690 | ||
| Total assets | $ | 2,287,053 | $ | 2,372,737 |
| Liabilities and Shareholders’ Equity | ||||
| Accounts payable | $ | 135,480 | $ | 138,199 |
| Other current liabilities | 334,040 | 311,448 | ||
| Long-term debt | 483,679 | 376,974 | ||
| Long-term operating lease liabilities | 714,155 | 744,150 | ||
| Other long-term obligations | 52,110 | 86,562 | ||
| Deferred income taxes | 80,076 | 86,189 | ||
| Shareholders’ equity, net | 487,513 | 629,215 | ||
| Total liabilities and shareholders’ equity | $ | 2,287,053 | $ | 2,372,737 |
| Common shares issued and outstanding | 22,195,467 | 23,519,857 |
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CRACKER BARREL OLD COUNTRY STORE, INC. CONDENSED CONSOLIDATED CASH FLOW STATEMENT (Unaudited and in thousands)
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| 10/28/22 | 10/29/21 | |||||
| Cash flows from operating activities: | ||||||
| Net income | $ | 17,129 | $ | 33,376 | ||
| Depreciation and amortization | 24,791 | 25,788 | ||||
| Amortization of debt issuance costs | 431 | 479 | ||||
| Loss on disposition of property and equipment | 683 | 1,870 | ||||
| Share-based compensation | 2,422 | 2,309 | ||||
| Noncash lease expense | 15,013 | 14,329 | ||||
| Amortization of asset recognized from gain on sale and leaseback transaction | 3,184 | 3,184 | ||||
| Increase in inventories | (17,761 | ) | (21,313 | ) | ||
| Increase in accounts payable | (34,391 | ) | 3,023 | |||
| Net changes in other assets and liabilities | (12,101 | ) | (40,022 | ) | ||
| Net cash (used in) provided by operating activities | (600 | ) | 23,023 | |||
| Cash flows from investing activities: | ||||||
| Purchase of property and equipment, net of insurance recoveries | (21,626 | ) | (14,053 | ) | ||
| Proceeds from sale of property and equipment | 166 | 14 | ||||
| Acquisition of business, net of cash acquired | 0 | (1,500 | ) | |||
| Net cash used in investing activities | (21,460 | ) | (15,539 | ) | ||
| Cash flows from financing activities: | ||||||
| Proceeds under long-term debt | 60,000 | 0 | ||||
| Taxes withheld from issuance of share-based compensation awards | (2,380 | ) | (2,309 | ) | ||
| Purchases and retirement of common stock | (12,448 | ) | 0 | |||
| Dividends on common stock | (29,512 | ) | (23,903 | ) | ||
| Net cash provided by (used in) financing activities | 15,660 | (26,212 | ) | |||
| Net decrease in cash and cash equivalents | (6,400 | ) | (18,728 | ) | ||
| Cash and cash equivalents, beginning of period | 45,105 | 144,593 | ||||
| Cash and cash equivalents, end of period | $ | 38,705 | $ | 125,865 |
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CRACKER BARREL OLD COUNTRY STORE, INC. Supplemental Information (Unaudited)
| First Quarter Ended | ||||
|---|---|---|---|---|
| 10/28/22 | 10/29/21 | |||
| Net Change in Company-Owned Units During Quarter: | ||||
| Cracker Barrel | 0 | 0 | ||
| Maple Street Biscuit Company | 3 | 0 | ||
| Company-Owned Units in Operation at End of Quarter: | ||||
| Cracker Barrel | 664 | 664 | ||
| Maple Street Biscuit Company | 54 | 37 | ||
| First Quarter Ended | ||||
| --- | --- | --- | --- | --- |
| 10/28/22 | 10/29/21 | |||
| Total revenue*: (In thousands) | ||||
| Restaurant | $ | 647,245 | $ | 604,278 |
| Retail | 177,141 | 169,386 | ||
| Total revenue | $ | 824,386 | $ | 773,664 |
| Cost of goods sold* (exclusive of depreciation and rent): (In thousands) | ||||
| Restaurant | $ | 188,505 | $ | 157,787 |
| Retail | 88,926 | 82,376 | ||
| Total cost of goods sold | $ | 277,431 | $ | 240,163 |
| Average unit volume*: (In thousands) | ||||
| Restaurant | $ | 974.9 | $ | 910.1 |
| Retail | 266.8 | 255.1 | ||
| Total | $ | 1,241.7 | $ | 1,165.2 |
| Operating weeks*: | 8,631 | 8,632 | ||
| Note*: This information is for Cracker Barrel stores only and excludes Maple Street Biscuit Company | ||||
| --- | --- | --- | --- | |
| Q1 2023 vs. Q1 2022 | ||||
| Comparable Cracker Barrel store sales period to period increase: | ||||
| Restaurant | 7.1 | % | ||
| Retail | 4.3 | % | ||
| Total | 6.5 | % | ||
| Number of Cracker Barrel locations in comparable store base | 662 |
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CRACKER BARREL OLD COUNTRY STORE, INC.
Reconciliation of GAAP-basis operating resultsto non-GAAP operating results
(Unaudited and in thousands, except per shareamounts)
Adjusted Operating Income and Earnings PerShare
In the accompanying press release, the Company makes reference to its first quarter fiscal 2023 adjusted operating income and earnings per share. In regards to fiscal 2022, this reconciliation excludes non-cash amortization of the asset recognized from the gains on the sale and leaseback transactions and the related tax impact. In regard to fiscal 2023, this reconciliation excludes non-cash amortization of the asset recognized from the gains on the sale and leaseback transactions and the related tax impact and expenses related to proxy contest and settlement expenses in connection with the Company’s 2022 annual meeting of shareholders. The Company believes excluding these items from its financial results provides investors with an enhanced understanding of the Company's financial results and enhances comparability across periods. This information is not intended to be considered in isolation or as a substitute for operating income or earnings per share information prepared in accordance with GAAP.
| First Quarter Ended October 28, 2022 | |||||||
|---|---|---|---|---|---|---|---|
| As Reported | Adjustment | As Adjusted | |||||
| (1)(2)(3) | |||||||
| Total Revenue | $ | 839,519 | $ | 0 | $ | 839,519 | |
| Store operating expense | 769,952 | (3,184 | ) | 766,768 | |||
| General and administrative expense | 45,948 | (3,198 | ) | 42,750 | |||
| Operating income | 23,619 | 6,382 | 30,001 | ||||
| Interest expense | 3,532 | 0 | 3,532 | ||||
| Income before income taxes | 20,087 | 6,382 | 26,469 | ||||
| Provision for income taxes | 2,958 | 1,500 | 4,458 | ||||
| Net income | $ | 17,129 | $ | 4,882 | $ | 22,011 | |
| Earnings per share – basic | $ | 0.77 | $ | 0.22 | $ | 0.99 | |
| Earnings per share – diluted | $ | 0.77 | $ | 0.22 | $ | 0.99 |
(1) Adjusted for the non-cash amortization of asset recognized from the gain on sale and leaseback transactions
(2) Adjusted for expenses related to proxy contest and settlement expenses
(3) Adjusted for the tax impacts of (1) and (2) above
| First Quarter Ended October 29, 2021 | |||||||
|---|---|---|---|---|---|---|---|
| As Reported | Adjustment | As Adjusted | |||||
| (1) | |||||||
| Total Revenue | $ | 784,930 | - | $ | 784,930 | ||
| Store operating expense | 701,107 | (3,184 | ) | 697,923 | |||
| General and administrative expense | 40,910 | - | 40,910 | ||||
| Operating income | 42,913 | 3,184 | 46,097 | ||||
| Interest expense | 2,629 | - | 2,629 | ||||
| Income before income taxes | 40,284 | 3,184 | 43,468 | ||||
| Provision for income taxes | 6,908 | 748 | 7,656 | ||||
| Net income | $ | 33,376 | $ | 2,436 | $ | 35,812 | |
| Earnings per share – basic | $ | 1.42 | $ | 0.10 | $ | 1.52 | |
| Earnings per share – diluted | $ | 1.41 | $ | 0.11 | $ | 1.52 |
(1) Adjusted for the non-cash amortization of the asset recognized from the gain on sale and leaseback transactions and related tax impacts
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CRACKER BARREL OLD COUNTRY STORE, INC.
Reconciliation of GAAP-basis operating resultsto non-GAAP operating results (Unaudited and in thousands)
EBITDA
In the accompanying press release, the Company makes reference to its first quarter fiscal 2023 EBITDA. The Company defines EBITDA as net income excluding depreciation and amortization, non-cash amortization of the asset recognized from the gains on sale and leaseback transactions, interest expense and tax expense. The Company believes that presentation of EBITDA provides investors with an enhanced understanding of the Company's operating performance and debt leverage metrics, and that the presentation of this non-GAAP financial measure, when combined with the primary presentation of net income, is beneficial to an investor’s complete understanding of its operating performance. This information is not intended to be considered in isolation or as a substitute for net income prepared in accordance with GAAP.
| First Quarter Ended October 28, 2022 | ||
|---|---|---|
| Net Income | $ | 17,129 |
| (+) Depreciation& Amortization | 24,791 | |
| (+) Amortization of asset recognized from gain on sale and leaseback transactions | 3,184 | |
| (+) Interest Expense | 3,532 | |
| (+) Tax (Benefit) Expense | 2,958 | |
| EBITDA | $ | 51,594 |
| Adjustments | ||
| (+) Expenses related to proxy contest and settlement expenses | 3,198 | |
| Adjusted EBITDA | $ | 54,792 |
| First Quarter Ended<br> October 29, 2021 | ||
| --- | --- | --- |
| Net Income | $ | 33,376 |
| (+) Depreciation& Amortization | 25,788 | |
| (+) Amortization of asset recognized from gain on sale and leaseback transactions | 3,184 | |
| (+) Interest Expense | 2,629 | |
| (+) Tax Expense | 6,908 | |
| EBITDA | $ | 71,885 |
Reconciliation of GAAP-basis Operating IncomeMargin outlook to non-GAAP Operating Income Margin outlook
In the accompanying press release, the Company provides its current outlook for adjusted operating income margin, a non-GAAP financial measure, for fiscal 2023. The Company’s adjusted operating income margin outlook excludes the expected non-cash amortization of the asset recognized from the gains on the sale and leaseback transactions and expenses related to proxy contest and settlement expenses in connection with the Company’s 2022 annual meeting of shareholders. The Company believes presenting its current outlook for adjusted operating income margin that excludes these items provides investors with an enhanced understanding of the Company's expected margin performance and enhances comparability with the Company’s historical results. This information is not intended to be considered in isolation or as a substitute for operating income margin outlook reported in accordance with GAAP.
| Reconciliation of Fiscal 2023 Reported to Adjusted Operating Income Margin Outlook | ||||
|---|---|---|---|---|
| Reported Operating Income Margin Outlook | 4.1 | % | 4.4 | % |
| 12.7M non-cash amortization of the asset recognized from the gain on sale and leaseback transactions | 0.4 | % | 0.4 | % |
| 3.2M in expenses related to proxy contest & settlement | 0.1 | % | 0.1 | % |
| Adjusted Operating Income Margin Outlook | 4.6 | % | 4.9 | % |
All values are in US Dollars.
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