CBRL Group, Inc. Announces 29% Increase in First Quarter Diluted Earnings Per Share, Reports Current Sales Trends, and Provides Earnings Guidance for Second Quarter of Fiscal 2003.Business Editors LEBANON Lebanon, country, Asia Lebanon (lĕb`ənən, –nŏn'), officially Republic of Lebanon, republic (2005 est. pop. 3,826,000), 4,015 sq mi (10,400 sq km), SW Asia. , Tenn.--(BUSINESS WIRE)--Nov. 21, 2002 CBRL CBRL CBRL Group, Inc (stock symbol) CBRL Council for British Research in the Levant (UK) Group, Inc. (the "Company") (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CBRL) today announced results for its first quarter of fiscal 2003 ended November November: see month. 1, 2002, reporting diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.45, up approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 29% from $0.35 in the year-earlier quarter. Diluted earnings per share were at the high end of the Company's earlier guidance and exceeded the First Call consensus estimate of $0.41. The Company also announced recent sales trends and earnings guidance for the second fiscal quarter and full fiscal year of 2003. Highlights of the fiscal 2003 first quarter results and sales trends and earnings guidance included:
-- Diluted earnings per share for the first quarter of fiscal 2003 up approximately 29% and net income up 17% from the first quarter of fiscal 2002 on a 6% increase in total revenue.
-- Store operating income margins for the quarter improved 0.9% as a percent of revenues compared with a year earlier.
-- Comparable store sales for the quarter up 1.5% for the Company's Cracker Barrel Old Country Store(R) ("Cracker Barrel") restaurant operations, marking the eleventh consecutive quarter of positive comparable restaurant sales; comparable store retail sales at Cracker Barrel declined 1.0%.
-- Comparable restaurant sales declined 0.1% in the Company's Logan's Roadhouse(R) ("Logan's") restaurants.
-- Approximately 0.8 million shares of the Company's outstanding common stock were repurchased at an average price of $22.48 during the first quarter.
-- Comparable store restaurant sales trends thus far in the second quarter of fiscal 2003 are up approximately 0-0.5% in Cracker Barrel, including an approximately 1.5% unfavorable effect on travel-related business from a one week later Thanksgiving holiday, and 2.5-3% in Logan's.
-- To date, fiscal 2003 second quarter comparable store retail sales trends in Cracker Barrel are down approximately 7%, including the unfavorable effect of a one week later Thanksgiving holiday on travel-related business.
-- Diluted earnings per share guidance for the second fiscal quarter of 2003 of a 10-15% increase from $0.37 in the prior fiscal year on total revenue growth of approximately 5%; full-year fiscal 2003 diluted earnings per share growth target of 15% or better compared with $1.64 for fiscal 2002.
Total revenue for the first quarter ended November 1, 2002, of $527.5 million increased 6.3% from the fiscal first quarter of 2002. Total revenues reflected a reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. of $1.4 million of net return fees for Cracker Barrel's Book-on-Audio program to net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight from other store operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , where the Company historically had reported the fees as a miscellaneous income credit to expenses. Return fees in the prior year also have been reclassified, increasing net sales by $1.1 million and increasing other store operating expenses by the same amount. Comparable store sales for the Cracker Barrel This article is about the restaurant-and-store chain. For the unrelated company marketing cheeses bearing the "Cracker Barrel" trademark, see Kraft Foods. Cracker Barrel Old Country Store, Inc. concept increased 1.5% for restaurants, including a 1.5% higher average check, approximately 0.8% of which reflected menu price increases. Comparable store retail sales at Cracker Barrel declined 1.0%. Logan's comparable restaurant sales for the quarter were down 0.1% after a 0.9% increase in average check, which included approximately 0.6% of menu price increases. During the quarter, the Company opened four new Cracker Barrel units and five new company-operated Logan's restaurants. The Company reported net income for the first quarter of fiscal 2003 of $23.0 million, or $0.45 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, reflecting increases of approximately 17% and 29%, respectively, from net income of $19.6 million and diluted earnings per share of $0.35 for the first quarter of fiscal 2002. The reported diluted earnings per share were at the high end of the Company's most recent guidance of "greater than $0.40," and the Company attributed the stronger results primarily to lower utilities expense, retail cost of goods sold Cost of goods sold The total cost of buying raw materials, and paying for all the factors that go into producing finished goods. cost of goods sold , and timing of general and administrative expenses relative to expectations. Store operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. margins in the first quarter improved from 12.7% of total revenue last fiscal year to 13.6% in fiscal 2003. The improvement in margin of 0.9% as a percent of revenue primarily reflected lower cost of goods sold. Operating income margins in the first quarter improved 0.7% as a percent of revenue to 7.2%. During the first quarter of fiscal 2003, the Company repurchased approximately 0.8 million shares of its outstanding common stock at an average price of $22.48. Commenting on the results, CBRL Group, Inc. President and Chief Executive Officer Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. A. Woodhouse Wood´house` n. 1. A house or shed in which wood is stored, and sheltered from the weather. said, "We are very pleased to report outstanding results for the first quarter of our fiscal year. Diluted earnings per share were at the high end of our guidance and continued the momentum of strong operating performance achieved in recent quarters. Our operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: improvements continued as we realized reductions in food and retail product costs and ongoing benefits from our food cost management and restaurant wage administration initiatives, partly offset by higher workers compensation and maintenance costs and expenses related to the timing of new store openings." The Company urges caution in considering its current trends and the earnings guidance disclosed dis·close tr.v. dis·closed, dis·clos·ing, dis·clos·es 1. To expose to view, as by removing a cover; uncover. 2. To make known (something heretofore kept secret). in this press release. 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 at the end of this press release. The Company assumes no obligation to update disclosed information on trends or targets other than in its periodic filings under Forms 10-K, 10-Q, and 8-K with the Securities and Exchange Commission. The Company reported that quarter-to-date comparable store restaurant sales for the second quarter of fiscal 2003 in its Cracker Barrel units are up approximately 0-0.5% compared with the same period a year ago, including an increase in average check of approximately 2-2.5%. Comparable store restaurant sales for Cracker Barrel reflected, in part, a change in the timing of Thanksgiving Thanksgiving annual U.S. holiday celebrating harvest and yearly blessings; originated with Pilgrims (1621). [Am. Culture: EB, IX: 922] See : America Thanksgiving national holiday with luxurious dinner as chief ritual. [Am. Pop. holiday travel versus last year when Thanksgiving was one week earlier, which unfavorably affected quarter-to-date comparable store restaurant sales by approximately 1.5%. Quarter-to-date retail sales in the comparable units are down approximately 7%, partly reflecting difficult comparisons to strong patriotic apparel sales last year, the timing of Thanksgiving holiday travel, and the timing of comparison to a Porch porch Roofed structure, usually open at front and sides, projecting from the face of a building and used to protect an entrance. If colonnaded, it may be called a portico. Sale in the quarter-to-date period last year. Holiday retail merchandise MERCHANDISE. By this term is understood all those things which merchants sell either wholesale or retail, as dry goods, hardware, groceries, drugs, &c. It is usually applied to personal chattels only, and to those which are not required for food or immediate support, but such as remain is available in the stores as expected, despite logistical lo·gis·tic also lo·gis·ti·cal adj. 1. Of or relating to symbolic logic. 2. Of or relating to logistics. [Medieval Latin logisticus, of calculation issues with imported goods reported during the first fiscal quarter. Quarter-to-date comparable store sales in the Company's Logan's restaurants are up approximately 2.5-3% compared with last year, including approximately 0-0.5% higher guest traffic. President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Michael A. Woodhouse commented on the trends, "Despite the uncertainties that continue to dampen consumer sentiment Sentiment can refer to:
The Company's present guidance for diluted earnings per share for the second quarter of fiscal 2003, which ends on January January: see month. 31, 2003, is an increase of 10-15% from $0.37 in the year-ago quarter, on total revenue growth of approximately 5%. Earnings guidance reflects many assumptions, most of which cannot be known with certainty CERTAINTY, UNCERTAINTY, contracts. In matters of obligation, a thing is certain, when its essence, quality, and quantity, are described, distinctly set forth, Dig. 12, 1, 6. It is uncertain, when the description is not that of one individual object, but designates only the kind. Louis. , including, very importantly, sales expectations. The Company presently expects comparable restaurant sales to be approximately flat at Cracker Barrel and up approximately 1-3% at Logan's for the quarter. The Company anticipates that comparable store retail sales at Cracker Barrel will be down approximately 2-4%, including the effect of one less week in the pre-Christmas holiday shopping season because of Thanksgiving falling one week later this year than last year. The Company expects to open five new Cracker Barrel units and four company-operated Logan's restaurants in the second fiscal quarter. The Company also reaffirmed its earnings guidance for the full fiscal year of 2003 of meeting or exceeding the Company's goal of 15% or better increases in diluted earnings per share. Headquartered in Lebanon, Tennessee
Lebanon is a city in Wilson County, Tennessee, in the United States. The population was 20,235 at the 2000 census. , CBRL Group, Inc. presently operates 463 Cracker Barrel Old Country Store restaurants and gift shops located in 41 states and 91 company-operated and 12 franchised Logan's Roadhouse Logan's Roadhouse is a chain of restaurants that was founded in 1991, and in 1999 became a wholly owned subsidiary of the publicly held CBRL Group, Inc (which also owns Cracker Barrel). restaurants in 17 states. Except for specific historical information, the matters discussed in this press release are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks, uncertainties and other factors that may cause actual results and performance of CBRL Group, Inc. to differ materially from those expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by this discussion. All forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. information is provided by the Company pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. established under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 The terminology used in the computer and telecommunications field adds tremendous confusion not only for the lay person, but for the technicians themselves. What many do not realize is that terms are made up by anybody and everybody in a nonchalant, casual manner without any regard or such as "assumptions", "target", "guidance", "plans", "projection projection, in psychology: see defense mechanism. See rear-projection TV, front-projection TV and LCD panel. (theory) projection - In domain theory, a function, f, which is (a) idempotent, i.e. "; "may", "will", "would", "expect", "intend", "estimate", "anticipate", "believe", "potential" or "continue" (or the negative or other derivatives derivatives In finance, contracts whose value is derived from another asset, which can include stocks, bonds, currencies, interest rates, commodities, and related indexes. Purchasers of derivatives are essentially wagering on the future performance of that asset. of each of these terms) or similar terminology. Factors which will affect actual results include, but are not limited to: adverse general economic conditions including uncertain consumer confidence effects on sales, especially during the Company's important Christmas Christmas [Christ's Mass], in the Christian calendar, feast of the nativity of Jesus, celebrated in Roman Catholic and Protestant Churches on Dec. 25. In liturgical importance it ranks after Easter, Pentecost, and Epiphany (Jan. 6). retail-selling season; weather conditions and customer travel activity and retail buying trends; practical or psychological effects of terrorist acts, or military or government responses; the actual results of pending or threatened litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. or governmental investigations and the costs and effects of negative publicity associated with these activities; changes in generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting or in capital market conditions that could affect valuations of restaurant companies in general or the Company's goodwill in particular; commodity, workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. , group health and utility price changes; the effects of plans intended to improve operational execution and performance; the effects of increased competition at Company locations on sales and on labor recruiting, cost and retention; the ability of and cost to the Company to recruit RECRUIT. A newly made soldier. , train and retain qualified restaurant hourly and management employees; the ability of the Company to identify successful new lines of retail merchandise; the availability and cost of acceptable sites for development; the acceptance of the Company's concepts as the Company continues to expand into new markets and geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. regions; changes in interest rates affecting the Company's financing costs; changes in or implementation of additional governmental or regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. rules, regulations, and interpretations affecting accounting, tax, wage and hour matters, health and safety, pensions and insurance; other undeterminable areas of government or regulatory actions or regulations; and other factors described from time to time in the Company's filings with the Securities and Exchange Commission, press releases and other communications.
CBRL GROUP, INC.
CONSOLIDATED INCOME STATEMENT
(Unaudited)
(In thousands, except per share amounts)
First Quarter Ended
---------------------------------
11/01/02 11/02/01 Change
Net sales: ----------- ----------- ------
Restaurant $ 423,742 $ 395,737 7%
Retail 103,517 100,399 3
----------- -----------
Total net sales 527,259 496,136 6
Franchise fees and royalties 280 220 27
----------- -----------
Total revenue 527,539 496,356 6
Cost of goods sold 165,965 163,200 2
----------- -----------
Gross profit 361,574 333,156 9
Labor & other related expenses 199,267 186,895 7
Other store operating expenses 90,580 83,171 9
----------- -----------
Store operating income 71,727 63,090 14
General and administrative 33,904 30,734 10
----------- -----------
Operating income 37,823 32,356 17
Interest expense 2,261 1,753 29
Interest income 73 -- -
----------- -----------
Pretax income 35,635 30,603 16
Provision for income taxes 12,650 10,956 15
----------- -----------
Net income $ 22,985 $ 19,647 17
=========== ===========
Earnings per share:
Basic $ 0.46 $ 0.36 28
=========== ===========
Diluted $ 0.45 $ 0.35 29
=========== ===========
Weighted average shares:
Basic 50,060 54,936 (9)
Diluted 51,319 56,182 (9)
RATIO ANALYSIS Net sales:
Restaurant 80.3% 79.8%
Retail 19.6 20.2
----------- -----------
Total net sales 99.9 100.0
Franchise fees and royalties 0.1 --
----------- -----------
Total revenue 100.0 100.0
Cost of goods sold 31.5 32.9
----------- -----------
Gross profit 68.5 67.1
Labor & other related expenses 37.8 37.7
Other store operating expenses 17.1 16.7
----------- -----------
Store operating income 13.6 12.7
General and administrative 6.4 6.2
----------- -----------
Operating income 7.2 6.5
Interest expense 0.4 0.3
Interest income -- --
----------- -----------
Pretax income 6.8 6.2
Provision for income taxes 2.4 2.2
----------- -----------
Net income 4.4% 4.0%
=========== ===========
CONSOLIDATED CONDENSED BALANCE SHEET
(Unaudited)
(In thousands)
11/01/02 8/02/02
Assets ------------ ------------
Cash and cash equivalents $ 14,941 $ 15,074
Other current assets 170,770 156,508
Property and equipment, net 998,806 984,817
Goodwill, net 92,882 92,882
Other assets 15,956 14,550
------------ ------------
Total assets $ 1,293,355 $ 1,263,831
============ ============
Liabilities and Stockholders'
Equity
Current liabilities $ 239,240 $ 233,169
Long-term debt 210,777 194,476
Other long-term obligations 53,115 53,192
Stockholders' equity 790,223 782,994
------------ ------------
Total liabilities and
stockholders' equity $ 1,293,355 $ 1,263,831
============ ============
CONSOLIDATED CONDENSED CASH FLOW STATEMENT
(Unaudited)
(In thousands)
First Quarter Ended
--------------------------
11/01/02 11/02/01
Cash flow from operating activities: ----------- -----------
Net income $ 22,985 $ 19,647
Depreciation and amortization 16,191 14,760
Loss on disposition of
property and equipment 103 33
Accretion on zero-coupon notes 1,302 --
Net changes in other assets
and liabilities (10,184) (23,153)
----------- -----------
Net cash provided by operating
activities 30,397 11,287
----------- -----------
Cash flows from investing activities:
Purchase of property and
equipment (30,891) (22,785)
Proceeds from sale of property
and equipment 1,136 346
----------- -----------
Net cash used in investing
activities (29,755) (22,439)
------------ -----------
Cash flows from financing activities:
Proceeds from issuance of long-
term debt 142,500 145,000
Principal payments under long-
term obligations (127,519) (135,025)
Proceeds from exercise of
stock options 1,599 11,476
Purchase and retirement of
common stock (17,355) (9,596)
----------- ------------
Net cash (used in) provided
by financing activities (775) 11,855
----------- -----------
Net (decrease) increase in cash
and cash equivalents (133) 703
Cash and cash equivalents,
beginning of period 15,074 11,807
----------- -----------
Cash and cash equivalents, end
of period $ 14,941 $ 12,510
=========== ===========
CBRL GROUP, INC.
Supplemental Information
As of As of As of
11/01/02 8/02/02 11/02/01
----------- ---------- -------------
Common shares outstanding 49,622,460 50,272,459 55,251,347
=========== ========== =============
Units in operation:
Cracker Barrel 461 457 440
Logan's Roadhouse -
company-owned 89 84 79
----------- ---------- -----------
Total company-owned units 550 541 519
Logan's Roadhouse -
franchised 12 12 9
----------- ---------- -----------
System-wide units 562 553 528
=========== ========== ===========
First Quarter Ended
--------------------------
Net sales in company-owned stores: 11/01/02 11/02/01
(In thousands) ------------ ------------
Cracker Barrel - restaurant $ 360,667 $ 340,004
Cracker Barrel - retail 103,517 100,399
------------ ------------
Cracker Barrel - total 464,184 440,403
Logan's Roadhouse 63,075 55,733
------------ ------------
Total net sales $ 527,259 $ 496,136
============ ============
Operating weeks - company-owned stores:
Cracker Barrel 5,955 5,702
Logan's Roadhouse 1,121 998
Average comparable store sales -
company-owned stores: (In thousands)
Cracker Barrel - restaurant $ 786.2 $ 774.4
Cracker Barrel - retail 223.4 225.7
------------ -------------
Cracker Barrel - total $ 1,009.6 $ 1,000.1
============ ============
Logan's Roadhouse $ 719.7 $ 720.2
============ ============
Capitalized interest $ 121 $ 110
============ =============
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