Tennessee
|
62-1749513
|
|
(State
or Other Jurisdiction
|
(IRS
Employer
|
|
of
Incorporation or Organization)
|
Identification
No.)
|
|
305
Hartmann Drive, P. O. Box 787
|
||
Lebanon,
Tennessee 37088-0787
|
||
(Address
of Principal Executive Offices)
|
||
(Zip
Code)
|
||
615-443-9869
|
||
(Registrant’s
Telephonember, Including Area Code)
|
||
PART
I.
|
FINANCIAL
INFORMATION
|
Page |
Item
1
|
||
· Condensed
Consolidated Financial Statements (Unaudited)
|
||
a) Condensed Consolidated Balance Statement of Income for the Quarters Ended October 27, 2006 |
3
|
|
b)
Condensed
Consolidated Statement of Income for the Quarters Ended October 27,
2006
and
October 28,
2005
|
4
|
|
c)
Condensed
Consolidated Statement of Cash Flows for the Quarters Ended
October 27,
2006
and
October 28,
2005
|
5
|
|
d) Notes to Condensed Consolidated Financial Statements |
6
|
|
Item 2 | ||
· Mangement's
Discussion and Analysis of Financial Condition and Results
of
Operations
|
14
|
|
Item 3 | ||
· Quantitative and Qualitative Disclosures About Market Risk |
24
|
|
Item 4 | ||
· Controls and Procedures |
24
|
|
PART II. | OTHER INFORMATION | |
Item 1A | ||
· Risk Factors |
25
|
|
Item 4 | ||
· Submission of Matters to Vote a Security Holders |
25
|
|
Item 6 | ||
· Exhibits |
25
|
|
SIGNATURES |
26
|
October 27,
2006
|
July 28,
2006*
|
||||||
ASSETS
|
|||||||
Current
assets:
|
|||||||
Cash and cash equivalents
|
$
|
73,103
|
$
|
87,830
|
|||
Property held for sale
|
3,527
|
3,127
|
|||||
Receivables
|
10,686
|
11,434
|
|||||
Inventories
|
144,309
|
128,303
|
|||||
Prepaid expenses
|
11,328
|
4,395
|
|||||
Deferred income taxes
|
19,670
|
17,519
|
|||||
Current assets of discontinued operations (Note 15)
|
412,062
|
401,222
|
|||||
Total
current
assets
|
674,685
|
653,830
|
|||||
Property
and equipment
|
1,437,299
|
1,415,374
|
|||||
Less:
Accumulated depreciation and amortization of capital
leases
|
445,289
|
432,870
|
|||||
Property
and equipment - net
|
992,010
|
982,504
|
|||||
Other
assets
|
46,702
|
44,963
|
|||||
Total
assets
|
$
|
1,713,397
|
$
|
1,681,297
|
|||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|||||||
Current
liabilities:
|
|||||||
Accounts payable
|
$
|
69,123
|
$
|
70,944
|
|||
Taxes withheld and accrued
|
26,478
|
30,905
|
|||||
Other accrued expenses
|
149,756
|
148,923
|
|||||
Current maturities of long-term debt and other long-term
obligations
|
8,098
|
8,116
|
|||||
Current liabilities of discontinued operations (Note 15)
|
77,934
|
71,645
|
|||||
Total
current
liabilities
|
331,389
|
330,533
|
|||||
Long-term
debt (Note 12)
|
910,931
|
911,464
|
|||||
Other
long-term obligations
|
149,591
|
137,018
|
|||||
Commitments
and contingencies (Note 9)
|
|||||||
Shareholders’
equity:
|
|||||||
Preferred
stock - 100,000,000 shares of $.01 par
|
|||||||
value authorized; no shares issued
|
--
|
--
|
|||||
Common
stock - 400,000,000 shares of $.01 par
|
|||||||
value authorized; at October 27, 2006, 31,188,584
|
|||||||
shares issued and outstanding and at July 28, 2006,
|
|||||||
30,926,906 shares issued and outstanding
|
312
|
309
|
|||||
Additional
paid-in capital
|
15,462
|
4,257
|
|||||
Accumulated
other comprehensive loss (Note 10)
|
(11,584
|
)
|
(4,529
|
)
|
|||
Retained
earnings
|
317,296
|
302,245
|
|||||
Total shareholders’ equity
|
321,486
|
302,282
|
|||||
Total
liabilities and shareholders’ equity
|
$
|
1,713,397
|
$
|
1,681,297
|
Quarter
Ended
|
|||||||
October 27, 2006 | October 28, 2005 | ||||||
Total
revenue
|
$
|
558,263
|
$
|
535,485
|
|||
Cost
of goods sold
|
172,856
|
166,612
|
|||||
Gross
profit
|
385,407
|
368,873
|
|||||
Labor
and other related expenses
|
212,174
|
204,418
|
|||||
Other
store operating expenses
|
97,722
|
95,184
|
|||||
Store
operating income
|
75,511
|
69,271
|
|||||
General
and administrative expenses
|
37,260
|
33,062
|
|||||
Operating
income
|
38,251
|
36,209
|
|||||
Interest
expense
|
15,177
|
2,487
|
|||||
Interest
income
|
598
|
--
|
|||||
Income
before income taxes
|
23,672
|
33,722
|
|||||
Provision
for income taxes
|
8,510
|
11,668
|
|||||
Income
from continuing operations
|
15,162
|
22,054
|
|||||
Income
from discontinued operations,
net
of taxes of
$3,940 and $1,941,
respectively
(see Note 15)
|
4,265
|
3,668
|
|||||
Net
income
|
$
|
19,427
|
$
|
25,722
|
|||
Basic
net income per share (see Note 6):
|
|||||||
Income
from
continuing operations
|
$
|
0.49
|
$
|
0.47
|
|||
Income
from
discontinued operations
|
$
|
0.14
|
$
|
0.08
|
|||
Net
income per
share
|
$
|
0.63
|
$
|
0.55
|
|||
Diluted
net income per share (see Note 6):
|
|||||||
Income
from
continuing operations
|
$
|
0.45
|
$
|
0.44
|
|||
Income
from
discontinued operations
|
$
|
0.12
|
$
|
0.07
|
|||
Net
income per
share
|
$
|
0.57
|
$
|
0.51
|
|||
Weighted
average shares (see Note 6):
|
|||||||
Basic
|
30,996,700
|
46,672,202
|
|||||
Diluted
|
36,011,802
|
51,836,594
|
Quarter
Ended
|
|||||||
October 27,
2006
|
October 28,
2005
|
||||||
Cash
flows from operating activities:
|
|||||||
Net
income
|
$
|
19,427
|
$
|
25,722
|
|||
Net
income from discontinued operations, net of tax
|
(4,265
|
)
|
(3,668
|
)
|
|||
Adjustments
to reconcile net income to net cash provided by
|
|||||||
operating
activities of continuing operations:
|
|||||||
Depreciation and amortization
|
13,723
|
13,556
|
|||||
Loss
on disposition of property and equipment
|
292
|
669
|
|||||
Accretion on zero-coupon contingently convertible senior
notes
|
1,467
|
1,423
|
|||||
Share-based compensation
|
2,645
|
3,655
|
|||||
Excess tax benefit from share-based compensation
|
(877
|
)
|
(522
|
)
|
|||
Changes
in assets and liabilities:
|
|||||||
Inventories
|
(16,006
|
)
|
(22,902
|
)
|
|||
Prepaid expenses
|
(6,933
|
)
|
(3,240
|
)
|
|||
Accounts payable
|
(1,821
|
)
|
(3,179
|
)
|
|||
Taxes withheld and accrued
|
(4,427
|
)
|
(76
|
)
|
|||
Income taxes payable
|
2,577
|
5,376
|
|||||
Accrued employee compensation
|
968
|
(11,497
|
)
|
||||
Other current assets and other current liabilities
|
(2,354
|
)
|
256
|
||||
Other assets and other long-term liabilities
|
(168
|
)
|
843
|
||||
Net
cash provided by operating activities of continuing
operations
|
4,248
|
6,416
|
|||||
Cash
flows from investing activities:
|
|||||||
Purchase
of property and equipment
|
(23,707
|
)
|
(23,095
|
)
|
|||
Proceeds
from insurance recoveries
|
91
|
-
|
|||||
Proceeds
from sale of property and equipment
|
79
|
36
|
|||||
Net
cash used in investing activities of continuing operations
|
(23,537
|
)
|
(23,059
|
)
|
|||
Cash
flows from financing activities:
|
|||||||
Proceeds
from issuance of long-term debt
|
--
|
331,200
|
|||||
Principal
payments under long-term debt and other
|
|||||||
long-term
obligations
|
(2,035
|
)
|
(308,753
|
)
|
|||
Proceeds
from exercise of stock options
|
7,686
|
2,298
|
|||||
Excess
tax benefit from share-based compensation
|
877
|
522
|
|||||
Dividends
on common stock
|
(4,020
|
)
|
(5,592
|
)
|
|||
Net
cash provided by financing activities of continuing
operations
|
2,508
|
19,675
|
|||||
Cash
flows from discontinued operations:
|
|||||||
Net
cash provided by operating activities of discontinued
operations
|
12,871
|
10,300
|
|||||
Net
cash used in investing activities of discontinued
operations
|
(10,817
|
)
|
(11,693
|
)
|
|||
Net
cash provided by (used in) discontinued operations
|
2,054
|
(1,393
|
)
|
||||
Net
(decrease) increase in cash and cash equivalents
|
(14,727
|
)
|
1,639
|
||||
Cash
and cash equivalents, beginning of period
|
87,830
|
15,577
|
|||||
Cash
and cash equivalents, end of period
|
$
|
73,103
|
$
|
17,216
|
|||
Supplemental
disclosures of cash flow information:
|
|||||||
Cash
paid during the three months for:
|
|||||||
Interest, net of amounts capitalized
|
$
|
14,778
|
$
|
606
|
|||
Income taxes
|
$
|
6,638
|
$
|
7,275
|
October
27, 2006
|
July
28,
2006
|
||||||
Retail
|
$
|
111,643
|
$
|
97,799
|
|||
Restaurant
|
17,902
|
16,463
|
|||||
Supplies
|
14,764
|
14,041
|
|||||
Total
|
$
|
144,309
|
$
|
128,303
|
Quarter
Ended
|
|||||||
October
27,
2006
|
October
28,
2005
|
||||||
Income
from continuing operations per share numerator:
|
|||||||
Income from continuing operations
|
$
|
15,162
|
$
|
22,054
|
|||
Add: Interest and loan acquisition costs
associated
with
Senior Notes, net of
related
tax effects
|
1,125
|
931
|
|||||
Income
from continuing operations available to
common
shareholders
|
$
|
16,287
|
$
|
22,985
|
|||
Income
from continuing operations per share
denominator:
|
|||||||
Weighted average shares outstanding for basic
income
from continuing operations per share
|
30,996,700
|
46,672,202
|
|||||
Add potential dilution:
|
|||||||
Senior
Notes
|
4,582,788
|
4,582,788
|
|||||
Stock
options, nonvested stock and stock awards
|
432,314
|
581,604
|
|||||
Weighted average shares outstanding for diluted
income
from continuing operations per share
|
36,011,802
|
51,836,594
|
Quarter
Ended
|
|||||||
October 27,
2006
|
October
28, 2006
|
||||||
Net
sales in Company-owned stores
from continuing operations
|
|||||||
Restaurant
|
$
|
442,327
|
$
|
426,645
|
|||
Retail
|
115,936
|
108,840
|
|||||
Total revenue
|
$
|
558,263
|
$
|
535,485
|
October
27, 2006
|
October
28, 2005
|
||||||
Net
income
|
$
|
19,427
|
$
|
25,722
|
|||
Other
comprehensive loss:
Change
in fair value of interest rate swap , net of tax
|
(7,055
|
)
|
--
|
||||
Total
comprehensive income
|
$
|
12,372
|
$
|
25,722
|
October
27,
2006
|
July
28,
2006
|
||||||
Term
Loan B
|
|||||||
Payable $2,000 per quarter with the remainder due
on April 27, 2013
|
$
|
721,000
|
$
|
723,000
|
|||
3.0%
Zero-Coupon Contingently convertible
Senior Notes payable on or before April 2, 2032
|
197,931
|
196,464
|
|||||
918,931
|
919,464
|
||||||
Current
maturities of Term Loan B
|
(8,000
|
)
|
(8,000
|
)
|
|||
Long-term
debt
|
$
|
910,931
|
$
|
911,464
|
Quarter
Ended
|
|||||||
October
27,
2006
|
October
28,
2005
|
||||||
Revenues
|
$
|
110,638
|
$
|
97,872
|
|||
Income
before provision for income taxes from discontinued
operations
|
8,205
|
5,609
|
|||||
Provision
for income taxes
|
3,940
|
1,941
|
|||||
Net
income from
discontinued operations
|
$
|
4,265
|
$
|
3,668
|
October
27, 2006
|
July
28,
2006
|
||||||
Cash
and cash equivalents
|
$
|
3,363
|
$
|
1,732
|
|||
Property
held for sale
|
--
|
1,589
|
|||||
Receivables
|
5,191
|
3,194
|
|||||
Inventories
|
9,198
|
9,874
|
|||||
Prepaid
expenses
|
2,732
|
1,601
|
|||||
Property
and equipment, net
|
295,785
|
287,580
|
|||||
Goodwill
|
93,725
|
93,725
|
|||||
Other
assets
|
2,068
|
1,927
|
|||||
Current
assets of
discontinued operations
|
$
|
412,062
|
$
|
401,222
|
|||
Accounts
payable
|
$ |
12,485
|
$ |
12,901
|
|||
Other
accrued expenses
|
29,922
|
23,891
|
|||||
Other
long-term obligations
|
12,484
|
11,790
|
|||||
Deferred
income taxes
|
23,043
|
23,063
|
|||||
Current
liabilities
of discontinued operations
|
$
|
77,934
|
$
|
71,645
|
Quarter
Ended
|
|||||||
October
27, 2006
|
October
28, 2005
|
||||||
Total
revenue
|
100.0
|
%
|
100.0
|
%
|
|||
Cost
of goods sold
|
31.0
|
31.1
|
|||||
Gross
profit
|
69.0
|
68.9
|
|||||
Labor
and other related expenses
|
38.0
|
38.2
|
|||||
Other
store operating expenses
|
17.5
|
17.8
|
|||||
Store
operating income
|
13.5
|
12.9
|
|||||
General
and administrative expenses
|
6.6
|
6.1
|
|||||
Operating
income
|
6.9
|
6.8
|
|||||
Interest
expense
|
2.8
|
0.5
|
|||||
Interest
income
|
0.1
|
--
|
|||||
Income
before income taxes
|
4.2
|
6.3
|
|||||
Provision
for income taxes
|
1.5
|
2.2
|
|||||
Income
from continuing operations
|
2.7
|
4.1
|
|||||
Income
from discontinued operations
net
of taxes
|
0.8
|
0.7
|
|||||
Net
income
|
3.5
|
%
|
4.8
|
%
|
Quarter
Ended
|
|||||||
October
27, 2006
|
October
28, 2005
|
||||||
Net
sales:
|
|||||||
Cracker Barrel restaurant
|
79.2
|
%
|
79.7
|
%
|
|||
Cracker Barrel retail
|
20.8
|
20.3
|
|||||
Total
revenue
|
100.0
|
%
|
100.0
|
%
|
Quarter
Ended
|
|||||||
October 27, 2006 | October 28, 2006 | ||||||
Cracker
Barrel:
|
|||||||
Open
at beginning
of period
|
543
|
529
|
|||||
Opened
during
period
|
5
|
8
|
|||||
Open
at end of
period
|
548
|
537
|
|||||
Quarter
Ended
|
|||||||
October 27, 2006 | October 28, 2005 | ||||||
Cracker
Barrel
|
|||||||
Net sales:
|
|||||||
Restaurant
|
$
|
812.6
|
$
|
799.4
|
|||
Retail
|
213.0
|
204.0
|
|||||
Total
net sales
|
$
|
1,025.6
|
$
|
1,003.4
|
(a)
|
Although
no items were submitted to a vote of security holders during
the quarter
ended October 27, 2006, the annual meeting of shareholders
(the “Annual
Meeting”) was held on November 28,
2006.
|
(b)
|
Proxies
for the Annual Meeting were solicited in accordance with
Regulation 14 of
the Exchange Act; there was no solicitation in opposition
to management’s
nominees and all of management’s nominees were elected. Each director is
elected to serve for a 1-year term and until his or her successor
is
elected and qualified.
|
FOR
|
WITHHOLD
AUTHORITY
|
|
James
D. Carreker
|
27,959,575
|
433,568
|
Robert
V. Dale
|
27,489,070
|
904,073
|
Richard
J. Dobkin
|
27,721,134
|
672,009
|
Robert
C. Hilton
|
27,493,548
|
899,595
|
Charles
E. Jones, Jr.
|
27,902,546
|
490,597
|
B.
F. “Jack” Lowery
|
27,301,546
|
1,091,597
|
Martha
M. Mitchell
|
26,590,682
|
1,802,461
|
Erik
Vonk
|
27,702,899
|
690,244
|
Andrea
M. Weiss
|
28,031,624
|
361,519
|
Jimmie
D. White
|
26,479,133
|
1,914,010
|
Michael
A. Woodhouse
|
27,492,563
|
900,580
|
Votes cast for |
27,760,54
|
|
Votes cast against |
604,939
|
|
Votes cast to abstain |
27,660
|
Exhibit
No.
|
Description
|
10.1
|
CBRL
Group, Inc. FY 2007 Annual Bonus Plan (incorporated by reference
to
Exhibit 10.1 to the Company’s Current Report on Form 8-K dated July 27,
2006 and filed with the Commission on August 1, 2006)
|
10.2
|
CBRL
Group, Inc. FY 2007 Mid-Term Incentive and Retention Plan (incorporated
by
reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
dated July 27, 2006 and filed with the Commission on August 1,
2006)
|
10.3
|
CBRL
Group, Inc. Severance Policy (incorporated by reference to Exhibit
10.3 to
the Company’s Current Report on Form 8-K dated July 27, 2006 and filed
with the Commission on August 1, 2006)
|
10.4
|
Severance
Agreement with David L. Gilbert (incorporated by reference to Exhibit
10.1
to the Company’s Current Report on Form 8-K dated August 14, 2006 and
filed with the Commission on August 15, 2006)
|
10.5
|
Retention
Agreement for Douglas E. Barber (incorporated by reference to Exhibit
10.2
to the Company’s Current Report on Form 8-K dated August 14, 2006 and
filed with the Commission on August 15, 2006)
|
10.6
|
Retention
Agreement for Terry A. Maxwell (incorporated by reference to Exhibit
10.3
to the Company’s Current Report on Form 8-K dated August 14, 2006 and
filed with the Commission on August 15, 2006)
|
10.7
|
Retention
Agreement for Simon Turner (incorporated by reference to Exhibit
10.8 to
the Company’s Current Report on Form 8-K dated August 14, 2006 and filed
with the Commission on August 15, 2006)
|
10.8
|
Changes
to or adoption of Compensatory Plans and Arrangements described
in the
Company’s Current Report on Form 8-K dated and filed with the Commission
on October 18, 1006 and incorporated herein by this
reference
|
10.9
|
Stock
Purchase Agreement dated October 30, 2006 between CBRL Group, Inc.
and LRI
Holdings, Inc. (incorporated by reference to Exhibit 2.1 to the
Company’s
Current Report on Form 8-K dated October 30, 2006 and filed with
the
Commission on November 3, 2006)
|
10.10
|
Agreement
for Purchase and Sale between Logan’s Roadhouse, Inc., as Seller and
Wachovia Development Corporation, or its assigns, as Buyer, dated
October
30, 3006 (incorporated by reference to Exhibit 2.2 to the Company’s
Current Report on Form 8-K dated October 30, 2006 and filed with
the
Commission on November 3, 2006)
|
10.11
|
Agreement
for Purchase and Sale between Logan’s Roadhouse, Inc., as Seller and
Trustreet Properties, Inc., or its assigns, as Buyer dated October
30,
2006*
|
10.12
|
Agreement
for Purchase and Sale between Logan’s Roadhouse, Inc., as Seller and
National Retail Properties, Inc., or its assigns, as Buyer, dated
October
30, 2006*
|
31
|
Rule
13a-14(a)/15d-14(a) Certifications
|
32
|
Section
1350 Certifications
|