CBRL Group, Inc. Announces Results for Fiscal 2006 First Quarter; Adopts New Accounting Rule For Expensing Stock Options Discusses Trends and Possible Effect on Fiscal 2006 Second Quarter and Full Fiscal Year.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. -- CBRL CBRL CBRL Group, Inc (stock symbol) CBRL Council for British Research in the Levant (UK) Group, Inc. (the "Company") (Nasdaq:CBRL) today announced results for the first quarter ended October October: see month. 28, 2005, reporting 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. net income per share of $0.51 compared with $0.57 in the first quarter of fiscal 2005. The Company noted that results for the first quarter of fiscal 2006 included approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $0.04 per diluted share of stock option expense after tax as a result of initial adoption of Statement of Financial Accounting Standards No. 123 Revised, "Share-Based Payment," ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System 123R"), which requires the Company to recognize as expense the fair value of options granted after the date of adoption and any unvested stock option grants at the date of adoption. In addition, the Company described how current trends could affect results for its second quarter and the 2006 full fiscal year. A summary of fiscal 2006 first-quarter results includes: --Comparable store restaurant sales were down 0.4% for 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. Old Country Store(R) ("Cracker Barrel"), and comparable store retail sales at Cracker Barrel were down 11.6%. --Comparable restaurant sales for the first fiscal quarter were up 0.5% for 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). (R) ("Logan's"). --Total revenue for the first quarter of $633.4 million increased 3.4% from the year-ago quarter. --Net income and diluted net income per share for the first quarter were $25.7 million and $0.51, respectively (including approximately $1.8 million and $0.04 per diluted share, respectively, of stock option expense after tax), compared to net income of $29.9 million and diluted net income per share of $0.57 in the year-ago quarter. --Operating income margin in the first quarter was 6.6% of total revenues (including an impact of approximately 0.4% of revenues attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to stock option expense) compared to 7.9% in the year-ago quarter. First-Quarter Fiscal 2006 Results Total revenue for the first quarter of fiscal 2006 ended October 28, 2005 of $633.4 million represented an increase of 3.4% above the first quarter of fiscal 2005. Comparable store restaurant sales for the first quarter for Cracker Barrel decreased 0.4%, including a 3.8% higher average check, while guest traffic was 4.2% lower. Cracker Barrel's average menu price increase for the full quarter was approximately 3.7% compared with last year. Comparable store retail sales at Cracker Barrel decreased 11.6% for the quarter. Logan's comparable restaurant sales for the quarter were up 0.5% as average check increased 2.3% while guest traffic decreased 1.8%. Logan's had approximately 2.5% of average menu price increase during the first quarter compared with last year. During the quarter, the Company lost approximately 243 store operating days due to closings for hurricane hurricane, tropical cyclone in which winds attain speeds greater than 74 mi (119 km) per hr. Wind speeds reach over 190 mi (289 km) per hr in some hurricanes. damage and related power outages This is a list of famous wide-scale power outages. 1965
The Company reported net income for the first quarter of fiscal 2006 of $25.7 million, or $0.51 per diluted share, compared to net income of $29.9 million and diluted net income per share of $0.57 for the first quarter of fiscal 2005. As a result of the Company's adoption of SFAS 123R during the first quarter of fiscal 2006, stock option expense for the quarter was approximately $1.8 million after income taxes, or $0.04 per diluted share. 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. for the first quarter of fiscal 2006 of $41.8 million was 6.6% of total revenue compared to 7.9% in the first quarter of fiscal 2005. Before the effect of stock option expense, operating income margin would have been 7.0% for the first quarter of fiscal 2006. The comparison of operating income margin to the first quarter of last year primarily reflected sales softness and higher 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. (including higher utilities, advertising and maintenance expenses) and higher general and administrative expenses (including stock option expense), partly offset by lower 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 , as lower food cost and lower retail sales benefited this cost. Commenting on the first-quarter results, CBRL Group, Inc. Chairman, 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 have faced a challenging sales environment this year, as many restaurant and retail companies have reported. Restaurant sales at Cracker Barrel were at the low end of our expectations, and retail sales, as well as Logan's restaurant sales, were below our expectations. In addition, we saw higher utility costs as energy prices increased even more sharply than we expected over year-ago levels. In the face of these challenges, we were pleased that our operating teams operating team Surgery The participants–surgeons, nurses, etc–in a sterile surgical procedure performed under general–less commonly, local anesthesia showed solid improvements managing product costs and hourly restaurant labor productivity." Woodhouse added, "Our retail sales have been disappointing, reflecting lower restaurant guest traffic and the fact that our customers have been spending less on average per retail purchase. On the other hand, we saw only a small decline in the incidence of retail purchases per guest during the quarter, and we continue to believe our strategy aimed at building the frequency of retail purchases by our significant traffic of restaurant guests provides us an opportunity to grow retail sales over time." The Company urges caution in considering its current trends and the possible effect on earnings 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 earnings 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 disclaims any 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 ("SEC"). Fiscal 2006 Trends and Possible Effect on Earnings The Company provided possible effects of current trends on earnings for its second quarter of fiscal 2006, which ends January January: see month. 27, 2006, and for the full fiscal year of 2006. The Company noted a high degree of uncertainty in its current sales trends, as consumer sentiment Sentiment can refer to:
adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. , however, by adaptation adaptation, in biology, has several meanings. It can mean the adjustment of living matter to environmental conditions and to other living things either in an organism's lifetime (physiological adaptation) or in a population over many many generations (evolutionary of consumer spending to moderating gasoline gasoline or petrol, light, volatile mixture of hydrocarbons for use in the internal-combustion engine and as an organic solvent, obtained primarily by fractional distillation and "cracking" of petroleum, but also obtained from natural gas, by prices, mild winter weather during the holiday travel season, increased purchases of seasonal retail product as the holiday shopping season begins, and an extended Spring travel season with a later Easter Easter [A.S. Eastre, name of a spring goddess], chief Christian feast, commemorating the resurrection of Jesus after his crucifixion. In the West, Easter is celebrated on the Sunday following the full moon next after the vernal equinox (see calendar); thus, it holiday this year. In light of these uncertainties, the Company estimates that a continuation continuation - continuation passing style of current trends in sales for the second quarter and full fiscal year could result in total revenues that range from 3% to 6% above prior year. Without a significant change in trends, comparable store restaurant sales at Cracker Barrel could range between down 1% to up 1% from prior year, and comparable store retail sales declines from last year could range between 5% and 10%. Trends in Logan's comparable restaurant sales could range from up 1% to 4% from prior year. With these revenue trends, the Company could see diluted net income per share between $0.57 to $0.63, including approximately $0.03 to $0.04 per diluted share of stock option expense, for the second quarter of fiscal 2006, compared with $0.63 per share in the second quarter last year. For the full year of fiscal 2006, diluted net income per share could range between $2.30 and $2.45, including approximately $0.12 to $0.14 per diluted share of stock option expense, compared with $2.45 for the full year of fiscal 2005. With these revenue trends, combined with expected improvements in cost of goods sold, but other cost pressures, the Company's operating income margins for the second quarter and full fiscal year, before an estimated 0.3% to 0.4% of total revenue effect from stock option expense, could fall below prior year. The Company presently expects to open three new Cracker Barrel units in the second quarter, one of which has already opened, five new Logan's company-operated units and one new Logan's franchised unit. For the full year of fiscal 2006, the Company continues to anticipate opening 26 new Cracker Barrel stores and presently expects to open 20 to 22 new Logan's company-owned units and two new Logan's franchised units. The Company presently expects its income tax rate for fiscal 2006 to be equal to fiscal 2005, and the Company still has 0.8 million shares remaining to be repurchased under a previously disclosed authorization The right or permission to use a system resource; the process of granting access. See access control. . Woodhouse concluded, "Our outlook, particularly in the near term, remains uncertain. While we are hopeful that moderating gasoline prices and other factors could boost consumer sentiment and spending, especially in the important post-Thanksgiving holiday shopping season, a significant improvement in our sales trends is not yet in evidence. In the meantime Adv. 1. in the meantime - during the intervening time; "meanwhile I will not think about the problem"; "meantime he was attentive to his other interests"; "in the meantime the police were notified" meantime, meanwhile , we will continue to focus on managing our costs and improving operating efficiencies throughout our company." Fiscal 2006 First-Quarter Conference Call The live broadcast of CBRL Group's quarterly conference call will be available to the public on-line at www.investorcalendar.com or cbrlgroup.com today beginning at 11:00 a.m. (EST EST electroshock therapy. EST abbr. electroshock therapy ). The on-line replay will follow immediately and continue through November November: see month. 28, 2005. 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 538 Cracker Barrel Old Country Store restaurants and gift shops located in 41 states and 129 company-operated and 23 franchised Logan's Roadhouse restaurants in 19 states. Except for specific historical information, many 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 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. concerning matters that involve risks, uncertainties and other factors which may cause the actual performance of CBRL Group, Inc. and its subsidiaries 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 "trends," "assumptions," "target," "guidance," "outlook," "plans," "goals," "objectives," "expectations," "near-term near-term adj. Of, for, or involving a short period of time in the near future. ," "long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. ," "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," "could," "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 could materially affect actual results include, but are not limited to: the effects of uncertain consumer confidence, higher costs for energy, consumer debt payments, or general or regional economic weakness on sales and customer travel, discretionary income Discretionary Income The amount of an individual's income available for spending after the essentials have been taken care of. Notes: Essentials are things like food, clothing, and shelter. or personal expenditure activity; the ability of the Company to identify, acquire and sell successful new lines of 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 ; competitive marketing and operational initiatives; the ability of the Company to sustain or the effects of plans intended to improve operational execution and performance; 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; actuarial ac·tu·ar·y n. pl. ac·tu·ar·ies A statistician who computes insurance risks and premiums. [Latin estimate uncertainties with respect to self-insured self-insured Self fund Health insurance adjective Referring to the practice of carrying an individual health insurance policy for oneself; self insurance is usually more expensive than group insurance workers' compensation, general liability and group health; the availability and cost of acceptable sites for development and the Company's ability to identify such sites; the ability of the Company to open and operate new locations successfully; changes in building materials Building materials used in the construction industry to create . These categories of materials and products are used by and construction project managers to specify the materials and methods used for . and construction costs; the effects of plans intended to promote or protect the Company's brands and products; the effects of increased competition at Company locations on sales and on labor recruiting, cost, and retention; changes in foreign exchange rates affecting the Company's future retail inventory purchases; consumer behavior based on negative publicity or concerns over nutritional nutritional pertaining to or emanating from nutrition. nutritional anemia see nutritional anemia. nutritional assessment or safety aspects of the Company's products or restaurant food in general; 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 tax, wage and hour matters, health and safety, pensions, insurance or other undeterminable areas; practical or psychological effects of natural disasters or terrorist acts or war and military or government responses; disruptions to the company's restaurant or retail supply chain; the ability of and cost to the Company to recruit RECRUIT. A newly made soldier. , train, and retain qualified hourly and management employees; changes in interest rates affecting the Company's financing costs; the actual results of pending, future 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; implementation of new or changes in interpretation of existing accounting principles generally accepted in the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "); effectiveness of internal controls over financial reporting and disclosure; changes in capital market conditions that could affect valuations of restaurant companies in general or the Company's goodwill in particular; and other factors described from time to time in the Company's filings with the SEC, press releases, and other communications.
CBRL GROUP, INC.
CONSOLIDATED INCOME STATEMENT
(Unaudited)
(In thousands, except share amounts)
First Quarter Ended
-----------------------------------
10/28/05 10/29/04 Change
----------- ----------- -----------
Total revenue $ 633,357 $ 612,653 3%
Cost of goods sold 199,321 199,842 -
----------- -----------
Gross profit 434,036 412,811 5
Labor & other related expenses 235,976 226,189 4
Other store operating expenses 117,527 104,103 13
----------- -----------
Store operating income 80,533 82,519 (2)
General and administrative
expenses 38,704 34,376 13
----------- -----------
Operating income 41,829 48,143 (13)
Interest expense 2,498 2,095 19
----------- -----------
Pretax income 39,331 46,048 (15)
Provision for income taxes 13,609 16,118 (16)
Net income $ 25,722 $ 29,930 (14)
=========== ===========
Earnings per share:
Basic $ 0.55 $ 0.61 (10)
=========== ===========
Diluted $ 0.51 $ 0.57 (11)
=========== ===========
Weighted average shares:
Basic 46,672,202 48,712,161 (4)
Diluted 51,836,594 54,356,771 (5)
RATIO ANALYSIS
Net sales:
Restaurant 82.7% 80.7%
Retail 17.2 19.2
----------- -----------
Total net sales 99.9 99.9
Franchise fees and royalties 0.1 0.1
----------- -----------
Total revenue 100.0 100.0
Cost of goods sold 31.5 32.6
----------- -----------
Gross profit 68.5 67.4
Labor & other related expenses 37.3 36.9
Other store operating expenses 18.5 17.0
----------- -----------
Store operating income 12.7 13.5
General and administrative
expenses 6.1 5.6
----------- -----------
Operating income 6.6 7.9
Interest expense 0.4 0.4
----------- -----------
Pretax income 6.2 7.5
Provision for income taxes 2.1 2.6
----------- -----------
Net income 4.1% 4.9%
=========== ===========
CONSOLIDATED CONDENSED BALANCE SHEET
(Unaudited)
(In thousands)
10/28/05 7/29/05
----------- -----------
Assets
Cash and cash equivalents $ 19,987 $ 17,173
Other current assets 202,242 173,310
Property and equipment, net 1,235,122 1,218,298
Long-lived assets 126,586 124,491
----------- -----------
Total assets $1,583,937 $1,533,272
Liabilities and Shareholders' Equity
Current liabilities $ 292,602 $ 295,345
Long-term debt 236,140 212,218
Other long-term obligations 159,088 155,721
Shareholders' equity 896,107 869,988
----------- -----------
Total liabilities and shareholders' equity $1,583,937 $1,533,272
=========== ===========
CONSOLIDATED CONDENSED CASH FLOW STATEMENT
(Unaudited)
(In thousands)
First Quarter Ended
-----------------------
10/28/05 10/29/04
----------- -----------
Cash flow from operating activities:
Net income $ 25,722 $ 29,930
Depreciation and amortization 17,186 16,179
Loss on disposition of property and
equipment 742 527
Accretion on zero-coupon notes 1,423 1,382
Share-based compensation, net of excess tax
benefit 3,133 66
Net changes in other assets and liabilities (30,315) (10,176)
----------- -----------
Net cash provided by operating activities 17,891 38,510
----------- -----------
Cash flows from investing activities:
Purchase of property and equipment (34,788) (37,369)
Proceeds from sale of property and equipment 36 184
----------- -----------
Net cash used in investing activities (34,752) (37,185)
----------- -----------
Cash flows from financing activities:
Net Borrowings on credit facilities 22,447 19,952
Proceeds from exercise of stock options 2,298 12,143
Excess tax benefit from share-based
compensation 522 --
Purchase and retirement of common stock -- (39,873)
Dividends on common stock (5,592) (5,365)
----------- -----------
Net cash provided by (used in) financing
activities 19,675 (13,143)
----------- -----------
Net increase (decrease) in cash and cash
equivalents 2,814 (11,818)
Cash and cash equivalents, beginning of period 17,173 28,775
----------- -----------
Cash and cash equivalents, end of period $ 19,987 $ 16,957
=========== ===========
CBRL GROUP, INC.
Supplemental Information
(Unaudited)
As of As of As of
10/28/05 7/29/05 10/29/04
----------- ----------- -----------
Common shares outstanding 46,726,847 46,619,803 48,322,751
=========== =========== ===========
First Quarter Ended
-----------------------
Units in operation: 10/29/05 10/29/04
----------- -----------
Cracker Barrel
Open at beginning of period 529 504
Opened during period 8 5
----------- -----------
Open at end of period 537 509
Logan's Roadhouse -
company-owned
Open at beginning of period 124 107
Opened during period 5 7
----------- -----------
Open at end of period 129 114
Total company-owned units 666 623
Logan's Roadhouse - franchised
Open at beginning of period 23 20
Opened during period 0 0
----------- -----------
Open at end of period 23 20
System-wide units 689 643
=========== ===========
Total revenue in company-owned stores:
(In thousands)
Cracker Barrel - restaurant $ 426,645 $ 408,413
Cracker Barrel - retail 108,840 117,911
----------- -----------
Cracker Barrel - total 535,485 526,324
Logan's Roadhouse 97,327 85,800
----------- -----------
Total net sales 632,812 612,124
Franchise fees and royalties 545 529
----------- -----------
Total Revenue $ 633,357 $ 612,653
=========== ===========
Operating weeks - company-owned stores:
Cracker Barrel 6,938 6,573
Logan's Roadhouse 1,652 1,439
Average unit volume - company-owned stores:
(In thousands)
Cracker Barrel - restaurant $ 799.4 $ 807.8
Cracker Barrel - retail 204.0 233.2
----------- -----------
Cracker Barrel - total $ 1,003.4 $ 1,041.0
=========== ===========
Logan's Roadhouse $ 765.9 $ 775.1
=========== ===========
Q1 2006 vs. Q1 2005
-----------------------
Comparable store sales period to period Cracker
(decrease) increase: Barrel Logan's
Restaurant (0.4%) 0.5%
Retail (11.6%) --
Number of locations in comparable store base 488 103
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