LEBANON, Tenn., Dec. 3, 2020 /PRNewswire/ -- Cracker Barrel
Old Country Store, Inc. ("Cracker Barrel" or the "Company")
(Nasdaq: CBRL) today reported its financial results for the
first quarter of fiscal 2021 ended October
30, 2020.
First Quarter Fiscal 2021 Highlights
- Comparable store sales improved significantly compared to the
fourth quarter, as comparable store restaurant sales decreased
16.4% in the first quarter compared to a decrease of 39.2% in the
fourth quarter, and comparable store retail sales declined 8.1% in
the first quarter compared to a decrease of 32.3% in the fourth
quarter.
- Comparable store off-premise sales grew 122% over the prior
year quarter and represented approximately 25% of restaurant
sales.
- GAAP earnings per diluted share were $7.18 compared to prior year quarter GAAP
earnings per diluted share of $1.79.
Adjusted earnings per diluted share were $0.69. (See non-GAAP reconciliation below.)
- Net income was $170.7 million,
and adjusted EBITDA was $54.1
million. (See non-GAAP reconciliation below.)
Commenting on the first quarter results, Cracker Barrel
President and Chief Executive Officer Sandra B. Cochran said, "I'm pleased with the
significant improvement we saw in both first quarter comparable
store restaurant and retail sales compared to the previous quarter,
and I believe these results reflect the effectiveness of our
strategy and the strength of our brand. However, given the recent
nationwide resurgences of COVID-19 and the resulting restrictions
that have been imposed in many of our communities, our outlook
remains cautious. While we anticipate headwinds in the coming
months, I am confident that we have ample liquidity and the right
plans in place to successfully navigate through the uncertain
environment."
First Quarter Fiscal 2021 Results
Revenue
The Company's sales recovery
continued into the first quarter, as both restaurant and retail
sales saw strong improvements compared to the fourth quarter of
fiscal 2020. The Company reported total revenue of $646.5 million for the first quarter of
fiscal 2021, representing a decrease of 13.7% compared to the first
quarter of the prior year. Cracker Barrel first quarter comparable
store restaurant sales decreased 16.4% compared to the prior year
quarter, which was comprised of an 18.3% decrease in comparable
store restaurant traffic partially offset by a 1.9% increase in
average check. Comparable store retail sales decreased 8.1%
compared to the prior year quarter.
Cracker Barrel comparable store restaurant and retail sales for
the third and fourth quarter of fiscal 2020 and the first quarter
of fiscal 2021 were as follows when compared to the prior year
comparable periods:
|
Third
Quarter
Ended
5/1
|
Fourth
Quarter
Ended
7/31
|
First
Quarter
Ended
10/30
|
Comparable store
restaurant sales
|
(41.7%)
|
(39.2%)
|
(16.4%)
|
Comparable store
retail sales
|
(45.5%)
|
(32.3%)
|
(8.1%)
|
Operating Income (EBIT), Net Income and Adjusted
EBITDA
GAAP operating income in the first quarter was
$237.1 million, or 36.7% of total
revenue. As previously disclosed, the Company closed a
sale-leaseback transaction in August in which it sold 62 properties
for a purchase price of approximately $150
million. Excluding the approximately $217.7 million gain on sale of assets from this
transaction, approximately $3.2
million in non-cash amortization of the asset recognized
from the gains on the sale-leaseback transactions, and
approximately $5.2 million in
expenses related to the proxy contest initiated by affiliates of
Sardar Biglari in connection with
the Company's 2020 annual meeting of shareholders, adjusted
operating income was $27.7 million, or 4.3% of total revenue
compared to prior year quarter operating income of $63.4 million, or 8.5% of total revenue. Net
income was $170.7 million, or 26.4%
of total revenue, and adjusted EBITDA was $54.1 million, or 8.4% of total revenue, in the
first quarter. (See non-GAAP reconciliation below.)
Earnings per Diluted Share
GAAP earnings per
diluted share were $7.18 compared to
prior year period GAAP earnings per diluted share of $1.79. Adjusted earnings per diluted share were
$0.69. (See non-GAAP reconciliation
below.)
Fiscal 2021 Outlook
As a result of the pandemic, the
sales performance of the Company's stores varies significantly and
is heavily influenced by factors outside the Company's control,
including, but not limited to, capacity restrictions,
jurisdictional regulations, and the extent that the local economy
is open. The Company anticipates these circumstances will continue
for the foreseeable future, and, in recognition of this
uncertainty, is not providing annual earnings guidance.
Quarter to date in the Company's second quarter of fiscal 2021,
preliminary comparable store restaurant sales and comparable store
retail sales each decreased approximately 20% compared to the prior
year period.
Fiscal 2021 First Quarter Conference Call
As
previously announced, the live broadcast of Cracker Barrel's
quarterly conference call will be available to the public on-line
at investor.crackerbarrel.com today beginning at 11:00 a.m. (ET). The on-line replay will be
available at 2:00 p.m. (ET) and
continue through December 17,
2020.
About Cracker Barrel Old Country
Store®
Cracker Barrel Old Country Store,
Inc. (Nasdaq: CBRL) shares warm welcomes and friendly service while
offering guests high-quality homestyle food and unique shopping —
all at a fair price. By creating a world filled with hospitality
through an experience that combines dining and shopping, guests are
cared for like family. 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.
CBRL-F
Except for specific historical information, certain of the
matters discussed in this press release may express or imply
projections of revenues or expenditures, statements of plans and
objectives or future operations or statements of future economic
performance. These, and similar statements are forward-looking
statements concerning matters that involve risks, uncertainties and
other factors which may cause the actual performance of Cracker
Barrel Old Country Store, Inc. and its subsidiaries to differ
materially from those expressed or implied by this discussion. All
forward-looking information is subject to completion of our
financial procedures for Q1 FY 2021 and is provided pursuant to the
safe harbor established under the Private Securities Litigation
Reform Act of 1995 and should be evaluated in the context of these
factors. Forward-looking statements generally can be identified by
the use of forward-looking terminology such as "trends,"
"assumptions," "target," "guidance," "outlook," "opportunity,"
"future," "plans," "goals," "objectives," "expectations,"
"near-term," "long-term," "projection," "may," "will," "would,"
"could," "expect," "intend," "estimate," "anticipate," "believe,"
"potential," "regular," "should," "projects," "forecasts," or
"continue" (or the negative or other derivatives of each of these
terms) or similar terminology and include the expected effects of
COVID-19 on our business, financial condition and results of
operations and of operational improvement initiatives, such as new
menu items and retail offerings. Factors which could materially
affect actual results include, but are not limited to: risks
and uncertainties associated with the COVID-19 pandemic, including
the duration of the 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 throughout our
operations, disruptions to our operations as a result of the spread
of COVID-19 in our workforce, and our increased level of
indebtedness brought on by additional borrowing necessitated by the
COVID-19 pandemic; general or regional economic
weakness, and weather on sales and customer travel; discretionary
income or personal expenditure activity of our customers;
information technology-related incidents, including data privacy
and information security breaches, whether as a result of
infrastructure failures, employee or vendor errors, or actions of
third parties; our ability to identify, acquire and sell successful
new lines of retail merchandise and new menu items at our
restaurants; our ability to sustain or 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
governmental or regulatory rules, regulations and interpretations
affecting tax, wage and hour matters, health and safety, pensions,
insurance or other undeterminable areas; the effects of plans
intended to promote or protect our brands and products; commodity
price increases; the ability of and cost to us to recruit, train,
and retain qualified hourly and management employees; the effects
of increased competition at our locations on sales and on labor
recruiting, cost, and retention; workers' compensation, group
health and utility price changes; consumer behavior based on
negative publicity or changes in consumer health or dietary trends
or safety aspects of our food or products or those of the
restaurant industry in general, including concerns about outbreaks
of infectious disease, as well as the possible effects of such
events on the price or availability of ingredients used in our
restaurants; the effects of our indebtedness and associated
restrictions on our financial and operating flexibility and ability
to execute or pursue our operating plans and objectives; changes in
interest rates, increases in borrowed capital or capital market
conditions affecting our financing costs and ability to refinance
all or portions of our indebtedness; the effects of business trends
on the outlook for individual restaurant locations and the effect
on the carrying value of those locations; our ability to retain key
personnel; the availability and cost of suitable sites for
restaurant development and our ability to identify those sites; our
ability to enter successfully into new geographic markets that may
be less familiar to us; changes in land, building materials and
construction costs; the actual results of pending, future or
threatened litigation or governmental investigations and the costs
and effects of negative publicity associated with these activities;
economic or psychological effects of natural disasters or
unforeseen events such as terrorist acts, social unrest or war and
the 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; implementation of new or changes in
interpretation of existing accounting principles generally accepted
in the United States of America
("GAAP"); and other factors described from time to time in our
filings with the Securities and Exchange Commission, press
releases, and other communications. Any forward-looking statement
made by us herein, or elsewhere, speaks only as of the date on
which made. We expressly disclaim any intent, obligation or
undertaking to update or revise any forward-looking statements made
herein to reflect any change in our expectations with regard
thereto or any change in events, conditions or circumstances on
which any such statements are based.
CRACKER BARREL OLD
COUNTRY STORE, INC.
CONDENSED CONSOLIDATED INCOME STATEMENT
(Unaudited)
(In thousands, except share and per share amounts, percentages
and ratios)
|
|
|
First
Quarter Ended
|
|
|
|
|
|
Percentage
|
10/30/20
|
|
11/1/19
|
|
Change
|
Total
revenue
|
$646,454
|
|
$749,040
|
|
(14%)
|
Cost of goods sold,
exclusive of
depreciation and rent
|
199,044
|
|
219,814
|
|
(9)
|
Labor and other
related expenses
|
227,188
|
|
263,314
|
|
(14)
|
Other store operating
expenses
|
161,274
|
|
162,908
|
|
(1)
|
General and
administrative expenses
|
39,564
|
|
39,631
|
|
(0)
|
Gain on
sale-leaseback
|
(217,722)
|
|
0
|
|
|
Operating
income
|
237,106
|
|
63,373
|
|
274
|
Interest
expense
|
10,715
|
|
3,580
|
|
199
|
Income before income
taxes
|
226,391
|
|
59,793
|
|
279
|
Provision for income
taxes
|
55,711
|
|
10,590
|
|
426
|
Loss from
unconsolidated subsidiary
|
0
|
|
(5,980)
|
|
|
Net income
|
$170,680
|
|
$43,223
|
|
295
|
|
|
|
|
|
|
Earnings per share –
basic:
|
$7.20
|
|
$1.80
|
|
300
|
Earnings per share –
diluted:
|
$7.18
|
|
$1.79
|
|
301
|
|
|
|
|
|
|
Weighted average
shares:
|
|
|
|
|
|
Basic
|
23,707,750
|
|
24,038,354
|
|
(1)
|
Diluted
|
23,771,230
|
|
24,103,922
|
|
(1)
|
|
|
|
|
|
|
Ratio
Analysis
|
|
|
|
|
|
Total
revenue:
|
|
|
|
|
|
Restaurant
|
79.7%
|
|
81.0%
|
|
|
Retail
|
20.3
|
|
19.0
|
|
|
Total revenue
|
100.0
|
|
100.0
|
|
|
Cost of goods sold,
exclusive of
depreciation and rent
|
30.8
|
|
29.3
|
|
|
Labor and other
related expenses
|
35.1
|
|
35.2
|
|
|
Other store operating
expenses
|
25.0
|
|
21.7
|
|
|
General and
administrative expenses
|
6.1
|
|
5.3
|
|
|
Gain on
sale-leaseback
|
(33.7)
|
|
0.0
|
|
|
Operating
income
|
36.7
|
|
8.5
|
|
|
Interest
expense
|
1.7
|
|
0.5
|
|
|
Income before income
taxes
|
35.0
|
|
8.0
|
|
|
Provision for income
taxes
|
8.6
|
|
1.4
|
|
|
Loss from
unconsolidated subsidiary
|
0.0
|
|
(0.8)
|
|
|
Net income
|
26.4%
|
|
5.8%
|
|
|
CRACKER BARREL OLD
COUNTRY STORE, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited and in thousands, except share
amounts)
|
|
|
10/30/20
|
|
11/1/19
|
Assets
|
|
|
|
Cash and
cash equivalents
|
$597,619
|
|
$43,209
|
Accounts
receivable
|
22,338
|
|
22,104
|
Inventories
|
155,737
|
|
188,719
|
Prepaid
expenses and other current assets
|
49,169
|
|
39,381
|
Property
and equipment, net
|
1,006,371
|
|
1,177,969
|
Operating lease right-of-use assets, net
|
1,009,509
|
|
473,488
|
Investment in unconsolidated subsidiary
|
0
|
|
83,120
|
Other
assets
|
79,379
|
|
109,897
|
Total assets
|
$2,920,122
|
|
$2,137,887
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Accounts
payable
|
$136,051
|
|
$145,945
|
Other
current liabilities
|
308,565
|
|
296,712
|
Long-term debt
|
910,000
|
|
485,000
|
Long-term operating lease liabilities
|
773,204
|
|
467,085
|
Other
long-term obligations
|
117,965
|
|
81,177
|
Deferred
income taxes
|
82,725
|
|
56,184
|
Shareholders' equity, net
|
591,612
|
|
605,784
|
Total liabilities and shareholders' equity
|
$2,920,122
|
|
$2,137,887
|
|
|
|
|
Common shares issued
and outstanding
|
23,720,324
|
|
23,975,958
|
CRACKER BARREL OLD
COUNTRY STORE, INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
(Unaudited and in thousands)
|
|
|
Three Months
Ended
|
|
10/30/20
|
|
11/1/19
|
Cash flows from
operating activities:
|
|
|
|
Net
income
|
$170,680
|
|
$43,223
|
Loss from unconsolidated subsidiary
|
0
|
|
5,980
|
Depreciation and amortization
|
26,351
|
|
28,678
|
Loss on disposition of property and equipment
|
801
|
|
1,740
|
Gain on sale-leaseback
|
(217,722)
|
|
0
|
Impairment
|
0
|
|
664
|
Share-based compensation, net of excess tax benefit
|
1,974
|
|
1,798
|
Noncash lease expense
|
13,888
|
|
15,330
|
Amortization of asset recognized from gain on sale and leaseback
transaction
|
3,184
|
|
0
|
Increase in inventories
|
(16,646)
|
|
(33,534)
|
Increase in accounts payable
|
32,547
|
|
11,848
|
Net changes in other assets and liabilities
|
41,934
|
|
(30,892)
|
Net cash provided by operating activities
|
56,991
|
|
44,835
|
Cash flows from
investing activities:
|
|
|
|
Purchase of property and equipment, net of insurance
recoveries
|
(11,214)
|
|
(27,828)
|
Proceeds from sale of property and equipment
|
149,829
|
|
1,534
|
Notes receivable from unconsolidated subsidiary
|
0
|
|
(16,000)
|
Acquisition of business, net of cash acquired
|
(1,500)
|
|
(32,971)
|
Net cash provided by (used in) investing activities
|
137,115
|
|
(75,265)
|
Cash flows from
financing activities:
|
|
|
|
Net proceeds from long-term debt
|
0
|
|
85,000
|
(Taxes withheld) from issuance of share-based compensation
awards
|
(1,992)
|
|
(1,994)
|
Purchases and retirement of common stock
|
0
|
|
(14,188)
|
Dividends on common stock
|
(31,491)
|
|
(32,063)
|
Net cash provided by (used in) financing activities
|
(33,483)
|
|
36,755
|
|
|
|
|
Net increase in cash
and cash equivalents
|
160,623
|
|
6,325
|
Cash and cash
equivalents, beginning of period
|
436,996
|
|
36,884
|
Cash and cash
equivalents, end of period
|
597,619
|
|
43,209
|
|
CRACKER BARREL OLD
COUNTRY STORE, INC.
Supplemental
Information
(Unaudited)
|
|
|
First Quarter
Ended
|
|
10/30/20
|
|
11/1/19
|
Net Change in
Company-Owned Units During
Quarter:
|
|
|
|
Cracker Barrel
|
0
|
|
0
|
Maple Street Biscuit Company*
|
0
|
|
28
|
|
|
|
|
Company-Owned Units
in Operation at End of
Quarter:
|
|
|
|
Cracker Barrel
|
663
|
|
660
|
Maple Street Biscuit Company*
|
35
|
|
28
|
Holler & Dash*
|
0
|
|
7
|
Total
|
698
|
|
695
|
|
|
|
|
Note*: The Company
acquired 28 Maple Street Biscuit Company locations in the first
quarter of fiscal 2020. After the acquisition, the Company
converted six Holler & Dash locations into Maple Street units,
permanently closed one Holler & Dash, and opened an additional
Maple Street location during fiscal 2020.
|
|
First Quarter
Ended
|
|
10/30/20
|
|
11/1/19
|
|
|
|
|
Total revenue**: (In
thousands)
|
|
|
|
Restaurant
|
$507,241
|
|
$604,568
|
Retail
|
131,230
|
|
141,953
|
Total
revenue
|
$638,471
|
|
$746,521
|
|
|
|
|
Cost of goods sold**
(exclusive of depreciation and
rent): (In thousands)
|
|
|
|
Restaurant
|
$130,814
|
|
$148,861
|
Retail
|
66,431
|
|
70,352
|
Total cost of goods sold
|
$197,245
|
|
$219,213
|
|
|
|
|
Average unit
volume**: (In thousands)
|
|
|
|
Restaurant
|
$765.0
|
|
$916.0
|
Retail
|
197.9
|
|
215.1
|
Total
|
$962.9
|
|
$1,131.1
|
|
|
|
|
Operating
Weeks**
|
8,620
|
|
8,580
|
|
Note**: This
information is for Cracker Barrel stores only and excludes Maple
Street Biscuit Company and Holler & Dash
|
|
|
Q1 2021 vs. Q1
2020
|
|
Comparable Cracker
Barrel store sales period to period decrease:
|
|
|
Restaurant
Retail
Number of Cracker
Barrel locations in comparable store base:
|
(16.4%)
(8.1%)
655
|
CRACKER BARREL OLD
COUNTRY STORE, INC.
Reconciliation of GAAP-basis operating results to non-GAAP
operating results
(Unaudited)
|
Adjusted Operating
Income and Earnings Per Share
|
In the accompanying
press release, the Company makes reference to its first quarter
fiscal 2021 adjusted operating income and earnings per share. This
reconciliation excludes the gain on sale of assets from the
sale-leaseback transaction that closed in the first quarter,
non-cash amortization of the asset recognized from the gains on
sale-leaseback transactions, expenses related to the proxy contest
initiated by Sardar Biglari in connection with the Company's 2020
annual meeting of shareholders, and the related tax impacts of
these items. The Company believes excluding these items from its
financial results provides investors with an enhanced understanding
of the Company's financial results. 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 30, 2020
|
|
|
As
Reported
|
Adjustment
|
As
Adjusted
|
|
|
|
|
|
Total
Revenue
|
|
$646,454
|
-
|
$646,454
|
Store operating
expense (1)
|
|
587,506
|
(3,184)
|
584,322
|
General and
administrative expense (2)
|
|
39,564
|
(5,154)
|
34,410
|
Gain on
sale-leaseback (3)
|
|
(217,722)
|
217,722
|
-
|
Operating
income
|
|
237,106
|
(209,384)
|
27,722
|
Interest
expense
|
|
10,715
|
-
|
10,715
|
Income before income
taxes
|
|
226,391
|
(209,384)
|
17,007
|
Provision for income
taxes (4)
|
|
55,711
|
(55,038)
|
673
|
Loss from
unconsolidated subsidiary
|
|
-
|
-
|
-
|
Net income
|
|
$170,680
|
($153,346)
|
$16,334
|
Earnings per share –
basic
|
|
$7.20
|
($6.51)
|
$0.69
|
Earnings per share –
diluted
|
|
$7.18
|
($6.49)
|
$0.69
|
|
(1) Adjusted for the
non-cash amortization of asset recognized from the gain on
sale-leaseback transactions.
|
(2) Adjusted for
proxy contest-related expenses.
|
(3) Adjusted for the
gain on sale of assets related to the sale-leaseback
transaction.
|
(4) Adjusted for the
tax impacts of (1), (2), and (3) above.
|
EBITDA and
Adjusted EBITDA
|
In the accompanying
press release, the Company makes reference to its first quarter
fiscal 2021 EBITDA and adjusted EBITDA. The Company defines EBITDA
as net income excluding depreciation and amortization, non-cash
amortization of the asset recognized from the gains on
sale-leaseback transactions, interest expense and tax expense. This
reconciliation further excludes the gain on sale of assets from the
first quarter sale-leaseback transaction, and expenses related to
the proxy contest initiated by affiliates of Sardar Biglari in
connection with the Company's 2020 annual meeting of shareholders
resulting in adjusted EBITDA. The Company believes excluding these
items from its financial results provides investors with an
enhanced understanding of the Company's financial results and
clearer comparability to prior period results. 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 30, 2020
|
Net Income
|
|
|
$170,680
|
(+) Depreciation
& amortization
|
|
|
26,351
|
(+) Amortization of
asset recognized from the gains on sale-leaseback
transactions
|
3,184
|
(+) Interest
expense
|
|
|
10,715
|
(+) Tax
expense
|
|
|
55,711
|
EBITDA
|
|
|
$266,641
|
Adjustments
|
|
|
|
(-) Gain on
sale-leaseback
|
|
|
(217,722)
|
(+) Proxy
contest-related expenses
|
|
|
5,154
|
Adjusted
EBITDA
|
|
|
$54,073
|
Investor
Contact:
|
Adam
Hanan
|
|
(615)
443-9887
|
|
|
Media
Contact:
|
Heidi
Pearce
|
|
(615)
235-4135
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/cracker-barrel-reports-first-quarter-fiscal-2021-results-301185186.html
SOURCE Cracker Barrel Old Country Store, Inc.