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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): May 19, 2005
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CBRL GROUP, INC.
Tennessee 0-25225 62-1749513
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(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
305 Hartmann Drive, Lebanon, Tennessee 37087
(615) 444-5533
Check the appropriate box 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.13e-4(c))
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Item 2.02. Results of Operations and Financial Condition.
On May 19, 2005, CBRL Group, Inc. (the "Company") issued the press release
that is furnished as Exhibit 99 to this Current Report on Form 8-K, which by
this reference is incorporated herein as if copied verbatim, with respect to
third quarter results, earnings guidance for the fourth fiscal quarter of 2005,
other information and the conference call to be held to discuss this
information.
Item 7.01. Regulation FD Disclosure.
The information set forth in Item 2.02 above is incorporated by reference
as if fully set forth herein.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements. None
(b) Pro Forma Financial Information. None
(c) Exhibits.
99 Press Release issued by CBRL Group, Inc. dated May 19, 2005.
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.
Dated: May 19, 2005 CBRL GROUP, INC.
By: /s/ N.B. Forrest Shoaf
------------------------------------
Name: N.B. Forrest Shoaf
Title: Senior Vice President, Secretary
and General Counsel
[Logo of CBRL GROUP, INC.] POST OFFICE BOX 787
LEBANON, TENNESSEE
37088-0787
PHONE 615.443.9869
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CBRL GROUP, INC.
- --------------------------------------------------------------------------------
Contact: Lawrence E. White
Senior Vice President/
Finance and
Chief Financial Officer
CBRL GROUP, INC. ANNOUNCES RESULTS FOR FISCAL 2005 THIRD QUARTER
Provides Guidance for Fiscal 2005 Fourth Quarter
LEBANON, Tenn. (May 19, 2005) -- CBRL Group, Inc. (the "Company") (NASDAQ: CBRL)
today announced results for its third quarter of fiscal 2005 ended April 29,
2005, reporting diluted net income per share of $0.52, a 6.1% increase from
$0.49 in the third quarter of fiscal 2004. The Company also reported
year-to-date results and provided guidance for its 2005 fourth fiscal quarter.
Highlights of the fiscal 2005 third-quarter and year-to-date results
include:
o Comparable store restaurant sales for the third fiscal quarter up 2.9%
for the Company's Cracker Barrel Old County Store(R) ("Cracker Barrel")
operations, and comparable store retail sales at Cracker Barrel down
3.8%.
o Comparable restaurant sales for the third fiscal quarter up 3.0% in the
Company's Logan's Roadhouse(R) ("Logan's") restaurants.
o Diluted net income per share for the third quarter up 6.1% and net income
up 2.9% from the year-ago quarter on a 7.5% increase in total revenue.
o Year-to-date net cash provided by operating activities of $223.0
million up sharply from $137.1 million of net cash provided by
operating activities in the comparable period of fiscal 2004.
o Repurchase of approximately 1.1 million shares of the Company's
outstanding common stock in the third quarter brought year-to-date
repurchases to approximately 3.4 million shares.
Third-Quarter Fiscal 2005 Results
Total revenue for the third fiscal quarter ended April 29, 2005 of $628.0
million increased 7.5% from the third fiscal quarter of 2004. Comparable store
restaurant sales for the third quarter for the Cracker Barrel concept increased
2.9%, including a 4.3% higher average check but 1.4% lower guest traffic.
Cracker Barrel's average menu price increase for the full quarter was
approximately 2.6%. This average menu increase included approximately 2.2% of
menu price increase that was implemented in April, including the effect of
somewhat higher menu pricing in Florida restaurants to offset partially the
impact of an increase in the minimum wage in that state. Comparable store retail
sales at Cracker Barrel decreased 3.8% for the quarter, reflecting slower sales
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CBRL Announces Third Quarter Results
Page 2
May 19, 2005
of older-themed product and, potentially, the effect of pressures on consumer
discretionary spending. Logan's comparable restaurant sales for the quarter were
up 3.0% as average check increased 4.0% and guest traffic decreased 1.0%.
Logan's had approximately 3.8% of average menu price increase during the
quarter. Logan's average menu pricing included a system-wide average menu price
increase of approximately 1.5% effective in April, including the effect of
somewhat higher menu pricing in Logan's Florida restaurants to offset partially
the impact of the minimum wage increase. During the quarter, the Company opened
six new Cracker Barrel units and five new company-operated Logan's locations.
The Company reported net income for the third quarter of fiscal 2005 of $26.6
million, or $0.52 per diluted share, up 2.9% and 6.1%, respectively, from net
income of $25.8 million and diluted net income per share of $0.49 for the third
quarter of fiscal 2004. In the third quarter, the Company repurchased
approximately 1.1 million shares of its common stock for approximately $44.8
million.
Operating income for the third quarter increased 1.3% from the prior year and
was 6.8% of total revenue compared to 7.2% in the third quarter of fiscal 2004.
Compared with the third quarter of last year, operating income margin
reflected higher advertising, maintenance and utility expenses, partly offset by
lower cost of sales and general and administrative expenses. General and
administrative expenses included lower net legal expenses, including an
insurance recovery related to prior year legal expenses, and lower bonus
accruals, partly offset by higher professional fees related to lease accounting
changes and Sarbanes-Oxley 404 compliance. The Company's results also reflected
higher-than-expected labor and other expenses associated with rollout and
execution of Cracker Barrel's seasonal menus and expenses related to impairment
of an existing Cracker Barrel location that has been approved for future
relocation to a stronger site in the same market.
Commenting on the third-quarter results, CBRL Group, Inc. Chairman,
President and Chief Executive Officer Michael A. Woodhouse said, "We are pleased
to report solid restaurant sales results in Cracker Barrel and Logan's for the
quarter. These positive results were against a strong quarter a year ago and
were achieved during a period this year of somewhat uneven consumer sentiment
and pressure on discretionary spending. Our retail sales were below our
expectations, reflecting what we believe to be product freshness issues with
certain seasonal lines and some weakness in consumer discretionary spending. We
were encouraged by the guest appeal of our spring seasonal menu at Cracker
Barrel, but we experienced operational challenges executing against the variety
of new menu items, which negatively affected our margins unexpectedly. We have
plans underway to address these challenges, and, in spite of a difficult
quarter, we continue to be confident that we are moving our businesses forward
toward achieving our long-term objectives."
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CBRL Announces Third Quarter Results
Page 3
May 19, 2005
Nine-Month Fiscal 2005 Results
Total revenue for the nine months ended April 29, 2005 of $1.9 billion increased
7.6 % from the first nine months of fiscal 2004. Comparable store restaurant
sales for the nine months for the Cracker Barrel concept increased 2.8%,
including a 3.9% higher average check but 1.1% lower guest traffic. Comparable
store retail sales at Cracker Barrel decreased 2.9% for the first nine months of
fiscal 2005. Logan's comparable restaurant sales for the first nine months were
up 3.8% with a 4.4% increase in average check but 0.6% lower guest traffic. The
Company opened 16 new Cracker Barrel units and 16 new company-owned Logan's
locations; two new franchised Logan's restaurants also opened.
The Company reported net income for the first nine months of fiscal 2005 of
$89.1 million, or $1.72 per diluted share, reflecting increases of 8.2% and
11.0%, respectively, from net income of $82.3 million and diluted net income per
share of $1.55 for the first nine months of fiscal 2004.
The Company reported that year-to-date net cash provided by operating
activities of $223.0 million was up sharply from $137.1 million in the first
nine months of fiscal 2004, and well in excess of net cash used for the purchase
of property and equipment (capital expenditures) of $125.0 million. The
increased cash provided by operating activities reflected increased levels of
accounts payable from the relatively low levels at the end of fiscal 2004 as
well as the higher reported net income. Capital expenditures were higher than
the prior year's $100.0 million, primarily reflecting a greater number of new
store openings during fiscal 2005.
The Company repurchased approximately 3.4 million shares of its common stock
for approximately $131.9 million year-to-date and paid $17.1 million to
shareholders in dividends. As of the end of the third quarter, the Company had
approximately 1.5 million shares remaining to be repurchased under a previously
disclosed authorization.
The Company urges caution in considering its current trends and the earnings
guidance disclosed 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 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.
Fiscal 2005 Earnings Guidance
The Company's present guidance for the fourth quarter of fiscal 2005, which ends
July 29, 2005, is for diluted net income per share between $0.73 to $0.76
compared to $0.63 per share in the fourth quarter of last year (excluding the
prior year effect of a charge of $0.07 per diluted share related to
litigation settlement). Total revenue is projected to increase approximately 9%
to 11% from a year ago. Earnings guidance reflects many assumptions, many of
which cannot be known, including, very importantly, sales expectations.
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CBRL Announces Third Quarter Results
Page 4
May 19, 2005
The Company presently expects comparable store restaurant sales for the fourth
quarter to be up approximately 5% to 7% at Cracker Barrel (compared with a 0.6%
decrease in last year's fourth quarter), with comparable retail sales expected
to be flat to down 3% (compared with a 3.1% decrease in the year ago quarter).
The Company presently expects a comparable restaurant sales increase at Logan's
for the fourth quarter of approximately 2% to 4% (compared with a 5.6% increase
in the fourth quarter last year). In addition, the Company presently expects
operating income margins for the quarter to be higher than the fourth quarter of
last year, primarily reflecting lower product costs, partly offset by higher
general and administrative expenses. The Company presently has contracted an
estimated 85% to 90% of its expected food purchases for the fourth quarter and
expects percentage decreases in overall prices on food purchases of
approximately 0.5% to 1% from the fourth quarter of last year. The Company
presently expects to open nine new Cracker Barrel units in the fourth quarter,
four of which have already opened, and one new Logan's company-operated unit,
which has already opened. In addition, the Company presently expects two new
franchised Logan's restaurants to open in the fourth quarter, of which one has
opened already.
Commenting on the Company's guidance, Woodhouse said, "Despite ongoing
uncertainty about consumer sentiment and discretionary spending, we expect to
continue an improvement in our restaurant sales trends as we roll over the
softening in sales that we experienced in the fourth quarter last year. As
expected, we are beginning to experience some relief from commodities pressures,
and we have a high percentage of our purchases already under contract for this
quarter. Although we have been disappointed with retail sales results and the
fact that improvement has taken longer than we expected, we are encouraged by
current results for some of our new product themes, which are selling at or
slightly above our expectations."
Fiscal May Sales Reporting
Because of the Memorial Day holiday, the Company's May sales trends report,
originally scheduled for Tuesday, May 31, 2005, has been rescheduled to
Wednesday, June 1, 2005 before the market opens.
Fiscal 2005 Third-Quarter Conference Call
The live broadcast of CBRL Group's quarterly conference call will be available
to the public on-line at www.vcall.com or www.cbrlgroup.com today beginning at
11:00 a.m. (EDT). The on-line replay will follow immediately and continue
through May 26, 2005.
Headquartered in Lebanon, Tennessee, CBRL Group, Inc. presently operates 524
Cracker Barrel Old Country Store restaurants and gift shops located in 41
states and 124 company-operated and 23 franchised Logan's Roadhouse restaurants
in 18 states.
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CBRL Announces Third Quarter Results
Page 5
May 19, 2005
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 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 by this
discussion. All forward-looking information is provided by the Company 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 "assumptions", "target", "guidance",
"outlook", "plans", "projection", "may", "will", "would", "expect", "intend",
"estimate", "anticipate", "believe", "potential" or "continue" (or the negative
or other derivatives 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 or general or regional economic
weakness on sales and customer travel activity; the ability of the Company to
identify, acquire and sell successful new lines of retail merchandise;
competitive marketing and operational initiatives; 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 availability and cost of acceptable sites for development and the
Company's ability to identify such sites; commodity, workers' compensation,
group health and utility price changes; changes in foreign exchange rates
affecting the Company's future retail inventory purchases; increases in
construction costs; consumer behavior based on concerns over nutritional or
safety aspects of the Company's products or restaurant food in general; changes
in or implementation of additional governmental or regulatory rules, regulations
and interpretations affecting accounting, tax, wage and hour matters, health and
safety, pensions, insurance or other undeterminable areas; practical or
psychological effects of terrorist acts or war and military or government
responses; the ability of and cost to the Company to recruit, train, and retain
qualified restaurant hourly and management employees; disruptions to the
company's restaurant or retail supply chain; the actual results of pending or
threatened litigation or governmental investigations and the costs and effects
of negative publicity associated with these activities; changes in accounting
principles generally accepted in the United States of America or changes in
capital market conditions that could affect valuations of restaurant companies
in general or the Company's goodwill in particular; changes in interest rates
affecting the Company's financing costs; and other factors described from time
to time in the Company's filings with the SEC, press releases, and other
communications.
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CBRL Announces Third Quarter Results
Page 6
May 19, 2005
CBRL GROUP, INC.
CONSOLIDATED INCOME STATEMENT
(Unaudited)
(In thousands, except share amounts)
Third Quarter Ended Nine Months Ended
---------------------------------------- -------------------------------------------
4/29/05 4/30/04 Change 4/29/05 4/30/04 Change
---------- ----------- ------- ------------- ----------- -------
(As Restated) (As Restated)
Total revenue $ 627,999 $ 584,282 7% $ 1,907,841 $ 1,773,448 8%
Cost of goods sold 203,702 190,718 7 639,933 590,145 8
---------- ----------- ------------- -----------
Gross profit 424,297 393,564 8 1,267,908 1,183,303 7
Labor & other related expenses 237,574 221,230 7 696,512 654,540 6
Other store operating expenses 113,017 99,459 14 331,144 299,522 11
---------- ----------- ------------ -----------
Store operating income 73,706 72,875 1 240,252 229,241 5
General and administrative 30,860 30,595 1 97,626 94,534 3
---------- ----------- ------------ -----------
Operating income 42,846 42,280 1 142,626 134,707 6
Interest expense 2,221 2,007 11 6,516 6,298 3
Interest income -- -- -- 96 5 1820
---------- ----------- ------------ ----------
Pretax income 40,625 40,273 1 136,206 128,414 6
Provision for income taxes 14,054 14,458 (3) 47,127 46,100 2
---------- ----------- ------------ -----------
Net income $ 26,571 $ 25,815 3 $ 89,079 $ 82,314 8
========== =========== ============ ===========
Net income per share:
Basic $ 0.56 $ 0.53 6 $ 1.85 $ 1.68 10
========== =========== ============ ===========
Diluted $ 0.52 $ 0.49 6 $ 1.72 $ 1.55 11
========== =========== ============ ===========
Weighted average shares:
Basic 47,555,889 49,127,619 (3) 48,135,476 48,926,161 (2)
Diluted 53,149,295 55,101,555 (4) 53,774,355 55,142,364 (2)
Ratio Analysis
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Net sales:
Restaurant 83.3% 82.2% 79.8% 78.6%
Retail 16.6 17.7 20.1 21.3
---------- ----------- ------------ -----------
Total net sales 99.9 99.9 99.9 99.9
Franchise fees and royalties 0.1 0.1 0.1 0.1
---------- ----------- ------------ -----------
Total revenue 100.0 100.0 100.0 100.0
Cost of goods sold 32.4 32.6 33.5 33.3
---------- ----------- ------------ -----------
Gross profit 67.6 67.4 66.5 66.7
Labor & other related expenses 37.9 37.9 36.5 36.9
Other store operating expenses 18.0 17.0 17.4 16.9
---------- ----------- ------------ -----------
Store operating income 11.7 12.5 12.6 12.9
General and administrative 4.9 5.3 5.1 5.3
---------- ----------- ------------ -----------
Operating income 6.8 7.2 7.5 7.6
Interest expense 0.3 0.3 0.3 0.4
Interest income -- -- -- --
---------- ----------- ------------ -----------
Pretax income 6.5 6.9 7.2 7.2
Provision for income taxes 2.3 2.5 2.5 2.6
---------- ----------- ------------ -----------
Net income 4.2% 4.4% 4.7% 4.6%
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CBRL Announces Third Quarter Results
Page 7
May 19, 2005
CONSOLIDATED CONDENSED BALANCE SHEET
(Unaudited and in thousands)
4/29/05 7/30/04
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Assets
Cash and cash equivalents $ 21,415 $ 28,775
Other current assets 164,765 174,265
Property and equipment, net 1,190,584 1,118,573
Goodwill 93,724 93,724
Other assets 25,768 20,367
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Total assets $ 1,496,256 $ 1,435,704
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Liabilities and Stockholders' Equity
Accounts payable $ 99,568 $ 53,295
Current liabilities 206,823 188,940
Long-term debt 195,295 185,138
Other long-term obligations 144,718 134,995
Stockholders' equity 849,852 873,336
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Total liabilities and stockholders' equity $ 1,496,256 $ 1,435,704
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CONSOLIDATED CONDENSED CASH FLOW STATEMENT
(Unaudited and in thousands)
Nine Months Ended
-----------------------------
4/29/05 4/30/04
----------- ------------
(As Restated)
Cash flow from operating activities:
Net income $ 89,079 $ 82,314
Depreciation and amortization 50,311 47,160
Loss on disposition of property and equipment 2,278 1,846
Impairment 431 --
Accretion on zero-coupon notes 4,156 4,027
Net changes in other assets and liabilities 76,718 1,761
----------- ------------
Net cash provided by operating activities 222,973 137,108
----------- ------------
Cash flows from investing activities:
Purchase of property and equipment (125,034) (99,982)
Proceeds from sale of property and equipment 1,067 777
----------- ------------
Net cash used in investing activities (123,967) (99,205)
Cash flows from financing activities:
Proceeds from issuance of long-term debt 396,600 150,000
Principal payments under long-term obligations (390,741) (157,082)
Proceeds from exercise of stock options 36,751 48,869
Purchase and retirement of common stock (131,916) (69,206)
Dividends on common stock (17,060) (10,837)
Other -- (1)
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Net cash used in financing activities (106,366) (38,257)
------------ -----------
Net decrease in cash and cash equivalents (7,360) (354)
Cash and cash equivalents, beginning of period 28,775 14,389
------------ -----------
Cash and cash equivalents, end of period $ 21,415 $ 14,035
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CBRL Announces Third Quarter Results
Page 8
May 19, 2005
CBRL GROUP, INC.
Supplemental Information
(Unaudited)
As of As of As of
4/29/05 7/30/04 4/30/04
---------- ---------- ----------
Common shares outstanding 47,168,383 48,769,368 48,706,391
========== ========== ==========
Units in operation:
Cracker Barrel 520 504 496
Logan's Roadhouse - company-owned 123 107 107
----------- ----------- ---------
Total company-owned units 643 611 603
Logan's Roadhouse - franchised 22 20 19
----------- ----------- ---------
System-wide units 665 631 622
=========== =========== =========
Third Quarter Ended Nine Months Ended
Net sales in company-owned stores: 4/29/05 4/30/04 4/29/05 4/30/04
------------- ------------- -------------- -------------
(In thousands)
Cracker Barrel - restaurant $ 424,149 $ 394,926 $ 1,242,949 $ 1,157,117
Cracker Barrel - retail 103,973 103,715 384,225 378,467
------------- ------------- -------------- -------------
Cracker Barrel - total 528,122 498,641 1,627,174 1,535,584
Logan's Roadhouse 99,274 85,106 278,943 236,454
------------- ------------- -------------- -------------
Total net sales 627,396 583,747 1,906,117 1,772,038
Franchise fees and royalties 603 535 1,724 1,410
------------- ------------- -------------- -------------
Total revenue $ 627,999 $ 584,282 $ 1,907,841 $ 1,773,448
============= ============= ============== =============
Operating weeks - company-owned stores:
Cracker Barrel 6,731 6,417 19,965 19,000
Logan's Roadhouse 1,571 1,366 4,526 3,962
Average comparable store sales -
company-owned stores: (In thousands)
Cracker Barrel - restaurant $ 822.2 $ 798.9 $ 2,441.4 $ 2,374.3
Cracker Barrel - retail 199.4 207.3 745.7 767.8
------------- ------------- -------------- -------------
Cracker Barrel - total (480 and 466 units) $ 1,021.6 $ 1,006.2 $ 3,187.1 $ 3,142.1
============= ============= ============== =============
Logan's Roadhouse (96 and 93 units) $ 819.7 $ 795.5 $ 2,385.5 $ 2,297.3
============= ============= ============== =============
Capitalized interest $ 232 $ 140 $ 592 $ 428
============= ============= ============== =============
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