Cracker Barrel 2005 Annual Report Download - page 65

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This lease period is consistent with the period over
which leasehold improvements are amortized. Rent
expense for each of the three years was:
Minimum Contingent Total
2005 $35,531 $913 $36,444
2004 33,111 852 33,963
2003 31,084 753 31,837
Rent expense under operating leases for billboards
for each of the three years was:
Minimum Contingent Total
2005 $23,374 — $23,374
2004 23,042 — 23,042
2003 22,811 — 22,811
11 EMPLOYEE SAVINGS PLANS
The Company sponsors a qualified defined contribution
retirement plan (“Plan I”) covering salaried and hourly
employees who have completed one year of service
and have attained the age of twenty-one. Plan I allows
eligible employees to defer receipt of up to 16% of
their compensation, as defined in the plan.
The Company also sponsors a non-qualified defined
contribution retirement plan (“Plan II”) covering
highly compensated employees, as defined in the plan.
Plan II allows eligible employees to defer receipt
of up to 50% of their base compensation and 100%
of their eligible bonuses, as defined in the plan.
Contributions under both Plan I and Plan II may be
invested in various investment funds at the
employee’s discretion. Such contributions, including
the Company matching contribution described below,
may not be invested in the Company’s common stock.
In 2005, 2004 and 2003, the Company matched
25% of employee contributions for each participant in
either Plan I or Plan II up to a total of 6% of the
employee’s compensation. Employee contributions vest
immediately while Company contributions vest 20%
annually beginning on the participant’s first anniver-
sary of employment. In 2005, 2004, and 2003, the
Company contributed approximately $1,250, $1,321
and $1,524, respectively, under Plan I and approxi-
mately $473, $345 and $280, respectively, under Plan
II. At the inception of Plan II, the Company estab-
lished a Rabbi Trust to fund Plan II obligations. The
market value of the trust assets of $20,211 is included
in other assets and the liability to Plan II participants
of $20,211 is included in other long-term obligations.
Company contributions under Plan I and Plan II are
recorded as other store operating expenses.
12 SALE-LEASEBACK
On July 31, 2000, Cracker Barrel completed a sale-
leaseback transaction involving 65 of its owned units.
Under the transaction, the land, buildings and build-
ing improvements at the locations were sold for net
consideration of $138,325 and were leased back for an
initial term of 21 years. Equipment was not included.
The leases include specified renewal options for
up to 20 additional years and have certain financial
covenants related to fixed charge coverage for the
leased units. At July 29, 2005 and July 30, 2004, the
Company was in compliance with all those covenants.
Net rent expense during the initial term is $14,963
annually, and the assets sold and leased back previ-
ously had depreciation expense of approximately
$2,707 annually. The gain on the sale is being amor-
tized over the initial lease term of 21 years.
13 QUARTERLY FINANCIAL DATA (UNAUDITED)
Quarterly financial data for 2005 and 2004 are summa-
rized as follows:
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter(b)
2005
Total revenue $612,653 $667,189 $627,999 $659,707
Gross profit 412,811 430,800 424,297 452,595
Income before
income taxes 46,048 49,533 40,625 57,359
Net income 29,930 32,578 26,571 37,561
Net income per
share – basic $ 0.61 $ 0.68 $ 0.56 $ 0.80
Net income per
share – diluted(a) $ 0.57 $ 0.63 $ 0.52 $ 0.74
2004
Total revenue $576,365 $612,801 $584,282 $607,499
Gross profit 390,465 399,274 393,564 411,941
Income before
income taxes 43,313 44,828 40,273 46,134
Net income 27,851 28,648 25,815 29,571
Net income per
share – basic $ 0.58 $ 0.58 $ 0.53 $ 0.61
Net income per
share – diluted(a) $ 0.53 $ 0.53 $ 0.49 $ 0.56
(a) Diluted net income pre share reflects the potential dilution effects
of the Company’s Notes (as discussed in Notes 2, 4 and 5) for all
quarters presented for 2005 and 2004.
(b) The Company recorded charges of $5,210 before taxes during the
quarter ended July 30, 2004, as a result of a settlement in principle
of certain previously reported lawsuits against its Cracker Barrel
subsidiary (see Note 10).