Cracker Barrel 2008 Annual Report Download - page 44

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dividend in any quarter by an amount not to exceed
the greater of $.01 or 10% of the amount of the dividend
paid in the prior fiscal quarter.
During the first quarter of 2008, the Board declared a
quarterly dividend of $0.18 per common share (an annual
equivalent of $0.72 per share), an increase from the
quarterly dividend of $0.14 paid in 2007. We paid dividends
of $0.18 per share during the second, third and fourth
quarters of 2008. Additionally on September 18, 2008,
the Board declared a dividend of $0.20 per share payable
on November 5, 2008 to shareholders of record on
October 17, 2008.
During 2008, we received proceeds of $306 from the
exercise of options to purchase 276,166 shares of our
common stock and the tax deficiency upon exercise of
stock options was $1,071.
Working Capital
We had negative working capital of $44,080 at August 1,
2008 versus negative working capital of $74,388 at
August 3, 2007. In the restaurant industry, substantially
all sales are either for cash or third-party credit card. Like
many other restaurant companies, we are able to, and
often do operate with negative working capital.
Restaurant inventories purchased through our principal
food distributor are on terms of net zero days, while
restaurant inventories purchased locally generally are
financed from normal trade credit. Retail inventories
purchased domestically generally are financed from normal
trade credit, while imported retail inventories generally
are purchased through wire transfers. These various trade
terms are aided by rapid turnover of the restaurant
inventory. Employees generally are paid on weekly, bi-
weekly or semi-monthly schedules in arrears for hours
worked, and certain expenses such as certain taxes and
some benefits are deferred for longer periods of time.
The change in working capital compared with August 3,
2007 reflected timing of payments for income taxes,
interest and retail inventory purchases. The decrease in
income taxes payable also was due to the reclassification
of our liability for uncertain tax positions from income
taxes payable to other long-term obligations upon
adoption of Financial Accounting Standards Board (“FASB”)
Interpretation No. 48, “Accounting for Uncertainty in
Income Taxes – an interpretation of FASB Statement No.
109” (“FIN 48”) (see Note 12 to the accompanying
Consolidated Financial Statements).
Capital Expenditures
Capital expenditures (purchase of property and
equipment) were $87,849, $96,447 and $89,167 in 2008,
2007 and 2006, respectively. Capital expenditures in
2008, 2007 and 2006 are net of proceeds from insurance
recoveries of $178, $91 and $548, respectively. Costs of
new locations accounted for the majority of these
expenditures. The decrease in capital expenditures from
2007 to 2008 is primarily due to a reduction in the
number of new locations acquired and under construction
as compared to the prior year. The increase in capital
expenditures from 2006 to 2007 is due to the timing of
2008 stores under construction in 2007. We estimate
that our capital expenditures (purchase of property and
equipment) during 2009 will be up to $98,000. This
estimate includes costs related to the acquisition of sites
and construction of 12 new Cracker Barrel stores
and openings that will occur during 2009, as well as for
acquisition and construction costs for locations to
be opened in 2010, capital expenditure maintenance
programs and operational innovation initiatives.
We believe that cash at August 1, 2008, along with
cash generated from our operating activities, stock option
exercises and available borrowings under the 2006 Credit
Facility, will be sufficient to finance our continued
operations, our continued expansion plans, principal
payments on our debt, our share repurchase authorization
and our dividend payments for at least the next twelve
months and thereafter for the foreseeable future.
Off-Balance Sheet Arrangements
Other than various operating leases, which are disclosed
more fully in “Material Commitments” below and Note 14
to our Consolidated Financial Statements, we have no
other material off-balance sheet arrangements.