Cracker Barrel 2008 Annual Report Download - page 35

Download and view the complete annual report

Please find page 35 of the 2008 Cracker Barrel annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 82

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82

33
•
Our distribution risks are heightened because of our
single distribution facility; in addition, our reliance on
certain significant vendors, particularly for foreign-
sourced products, subjects us to numerous risks,
including possible interruptions in supply, which could
adversely affect our business.
•
Our plans depend significantly on initiatives designed
to improve the efficiencies, costs and effectiveness
of our operations, and failure to achieve or sustain these
plans could affect our performance adversely.
•
We incurred substantial indebtedness to finance our
2006 strategic initiatives, which may decrease our
flexibility and increase our borrowing costs.
•
Our advertising is heavily dependent on billboards,
which are highly regulated; a shift away from billboard
advertising poses a risk of increased advertising and
marketing costs that could adversely affect our results
of operations.
•
Our business is somewhat seasonal and also can be
affected by extreme weather conditions and natural
disasters.
•
If we fail to execute our business strategy, which
primarily depends on our ability to find new restaurant
locations and open new restaurants that are profitable,
our business could suffer.
•
Individual restaurant locations are affected by local
conditions that could change and affect the carrying
value of those locations adversely.
•
Health concerns and government regulation relating
to the consumption of food products could affect
consumer preferences and could negatively affect our
results of operations.
•
Litigation may adversely affect our business, financial
condition and results of operations.
•
Unfavorable publicity could harm our business.
•
The loss of key personnel or difficulties in recruiting
and retaining qualified personnel could jeopardize
our success.
•
We are subject to a number of risks relating to federal,
state and local regulation of our business that may
increase our costs and decrease our profit margins.
•
Our current insurance may expose us to unexpected
costs.
•
A material disruption in our information technology
and telecommunication systems could adversely affect
our business or results of operations.
•
A privacy breach could adversely affect our business.
•
Our reported results can be affected adversely and
unexpectedly by the implementation of new, or
changes in the interpretation of existing, accounting
principles or financial reporting requirements.
•
Failure of our internal control over financial reporting
could harm our business and financial results.
•
Our annual and quarterly operating results may fluctuate
significantly and could fall below the expectations
of securities analysts, rating agencies and investors due
to a number of factors, some of which are beyond our
control, resulting either in volatility or a decline in the
price of our securities.
•
We are a holding company and depend on our
subsidiaries to generate sufficient cash flow to pay
dividends and meet our debt service obligations.