Cracker Barrel 2004 Annual Report Download

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Danny Don Leon Becky Mike Cheryl Linda Peggy Jeff Diane Suzanne Eric Georgetta Julie Sheree Gilbert Dewitt Sarah
Harold Lila Jimmie Judy Eric Charles Zeb Gerald Lindsea Evan Kathy Derrell Margareta Susan Juanita Nicki John David
Rochell Ronald Andy Rita Wanda Kathy Betty William Teresa Joyce Tony Martha Charlene Paul Brenda Diane George Ronnie
Donna Elizabeth Vernita Pearl Thomas Donna Sanford Michele Betty Sherry Heather Pamela Mark Terri Sarah Charles Bradley
Jerry Kevin Larry Janice Charles Roy James Mark Sara Jacquelyn Jim Mark Anna Terry Thomas Cheryl Aaron Shirley Mary
Kenneth Malinda Tr o y Bobby William Doris Linda Barb Charlene Patricia Edgar Tyronne Mark Marilyn Priscilla Al Carolyn
Matt Robert Mickey Janice Betty Sean Rosabelle Cy Thomas Brenda Kenard Juanita William ZelmaWendy Gerene Sharon
Glennia Helen Donald Zach Stella Phyllis Doris Mattie Cecilia Holly Lou Gail Evalena Chad Margaret Steven Patrice Mark Crystal
Jon Brian Jenny Andrea Adam Laura Mark Ben Cathy Bruce Charles Jodee Lindsay Michael Mervin Jessica Lisa Betsy David
Ruby Jacqueline Tammy Natasha Jason Shanta Sara Jack Terry Danny Dawn Laurie Christy Liz Tanya Charity Gail Brenda
Kayla Sherlanda Donna Gerry Daniel Loran Brandon Matthew William Stephen Noah James Michael Layne Casey James Ryan
Frank Diane Misty Gregory Ed Jeff Michael Joe Rosalind Andre Heidi Ashley Musfequs Danielle Robin Alejandro Michael
Linda Kim Kesha Guido Ed Dave Jerry Brandon Patricia Shawn Nicholas Crystal Christopher Aaron Emanuel Michelle Sara
Kyle Elizabeth Robert Rachel Angela Jeffrey Rex Susie Peter Ryan Gloria Linda Camille Tony Robert Audra Gregg Joel Robert
Sharon Joseph Ashleigh Craig Kelly Lori Stewart Katrina Julie Linda Princess Donna Sharon Tiffany Charlotte Kris Virginia Ann
Mary Jessica Daniel Brenda Leann Barbara Michael Ruth John Joseph Edward Erin Kari Carlene Sara Robert Philip Lonnie
Steven Bonnie Ed Brian Janet James William Joseph Beka Susan Phyllis Jennifer Michelle Linda Marla Ruby Dan Rochelle
Donna Mike Jamie Karen Anthony Dominique Colene Thomas Barbara Mary Eric James Scott
Cathy Dawn Michella Melanie Wealthie Jason Betty Jody Brenda Dylan Phil Catherine Stuart
Kelly Carl Marjie Mary Jill Charlie Tina Steve Dianna Jennifer Brenda Kenny Daniel William
Joseph Dan Randy Shirley Jason Jeffrey Trevor Christy Patricia Criado Emily Edward Jeremy
Brandi Grace Diana Jeannette Angela Jonathan Tonja Melissa Jeana Dawn Al Zandra Madelyn
Tina Christina Matthew Thomas Christi Casey Frank Vera Barbara Terry Karen Bobby Diane
Joshua Holly Maya Sandy George William Kevin Melissa Josh Necole Daniel Thomas Danette Leonard Leah James Karinn
Lindsey Rachel Karen Amanda Tiffany Mickey Recina Mark Andrea James To m Dee Stella Steve Lekeisha Jose Timothy Garrett
Bonnie Richard Robert Lewis William Tiffany Ruth Crystal Kyle Sid Steve Lora Amanda Paula Scott Tammy Delores Jamie
Robert Lonnie Lynn Danny Iron Linda Onia Beverly Patricia Matthew Greg James Robert Debbie Jon Madena Dianne Nicole
Carolyn Joseph Michael Bill David Suzzanne Danna Christina William Franco Melanie Tony Trey Angela Todd Diane David
Ivory Phil Raymond Jeff Margo Mary Ralph Janelle Janet Chris Paul Fay Josh Sara Kerri Jennifer Jeannie Frank Larry Brandy
Paula Cynthia Paul Eugene Dawn Lucan Connie Ruby Tamara Crystal Billie Stacy Deborah Matthew Mark Shawna DeAnna
Ebony Shirley Vicki Dennis Leslie William Sylvia Sheryl Andrew Alan Adam Natalie Danielle Shaffiena David Larry Teresa
Bonnie James Michael James Shannon Jim Latoya Paula Charles Jackie Keysha Karyn Ansley Gary Nikki Edward Scott Joseph
Arain Norman Loran Laura Angela Lebardo Dionne Lesley Rebecca James Graylin Denise Colby Doug Albert Phillip Christi
Angeline Jack Penny Nicole Cheryl Marilyn Amy Charles Duane Carol Amber Michelle Lacy Sherry Valerie Michael Gary
Jill Lindsay Connie Doug Donald Mark Angela Eduardo Ryan Tiffany Edward Margaret Gary Carlos Susan William Mark
Minerva Autumn Chica Ginny Laura Richard Joseph Vernon Christine Frederick Bessie Wendy William Jacqueline Denise
Richard Nicole Crystal Paul Janet Zeffelin Jo Anne Sharon Wesley Frederick Amanda Mark Jeffrey Karen Suzanne Roseanna
Donald Brenda Jeffrey Nicole Carrie Janet Valerie Meredith Heather Stephanie David Shona Mark Jennifer William Joel Shelby
Norman Peggy Alice Ginger Morgan Jay David Josh Jeri Melissa Chase Aaron Tamaria Michael Douglas Nolan Brian Stephen
Valerie Della Melanie Jodee Brenda Tara Edie Stacy Tiere Melissa Janina Debbie Andrew Shanda Charlene Eugene Jamie Cami
Gena Darren Elisa Heather Michael Fred Julie Michael Jermaine Reginald James Robert Lori Michelle Pamela Brett James
Priscilla Charles Samantha Greg Valerie William Mona Alana Darla Sue Linda Darrin Chris Melba Cessna Chris Kelly Carl
Noelle Brian Mike Donna Gary Kelli Michelle Robin To m Mike Dieter Amy Louise Janice Musfegus Lisa Markisa Courtney
Estella Emma Carrie Danielle Jackie Cory Chris Kevin Richard Delinda James Betty Teresa Doug Amber Jenell Anthony Brenda
Terresia Raymond Thomas Robert Peter Tamara Diantha Ruben Betty Michael Don Joy Kurt Pamela Christy Sarah Tiffany Glen
Robin Samuel Ricki Carl William Loran Jamie Marcia Josh Michael Loretta Alan Daniel Barbara Tamika Scott Cindy John Grace
Lisa Christi Alisha Rachel Jamie Timothy Barbie John William Heather Franco Marisa Ronald Dana Donna Brian Lori Matthew
2004 Annual Report

Table of contents

  • Page 1
    ... Jeannette Angela Jonathan Tina Christina Matthew Thomas Christi Casey 2004 Annual Report Steven Bonnie Ed Brian Janet James William Joseph Beka ...Amanda Mark Jeffrey Karen Suzanne Roseanna Donald Brenda Jeffrey Nicole Carrie Janet Valerie Meredith Heather Stephanie David Shona Mark Jennifer William...

  • Page 2
    The names you see on the cover of this year's Annual Report for CBRL Group, Inc. are just a few of our many employees - some who have been a part of our family for over 20 years, others who were specifically mentioned or thanked by a guest in 2004, and some who have simply done a wonderful job of ...

  • Page 3
    ... our entire company. And build we have. Today CBRL Group, Inc. has over 69,000 valued employees around the country working hard every day at our two restaurant concepts. They're at Cracker Barrel Old Country Store locations where we welcome guests to a comfortable, down-home restaurant combined with...

  • Page 4
    ..., on the very first day that he came to work at Cracker Barrel, one of the numerous artifacts that decorate our country store caught his eye - an antique red-speckled Huffy® Custom Liner that was hanging from the rafters. For the next two years, Leon rode his bicycle to work every day. And he was...

  • Page 5
    ... 30, 2004 Unless specifically noted otherwise, references in this annual report to "CBRL" or "The Company" refer to CBRL Group, Inc. and its subsidiaries; to "Cracker Barrel" refer to Cracker Barrel Old Country Store, Inc. or its Cracker Barrel Old Country Store® restaurant and gift shop concept...

  • Page 6
    ....6% in fiscal 2004. Logan's comparable restaurant sales improved 4.8%. We opened 24 new Cracker Barrel stores, reaching the 500 mark with a May opening in Missouri, and ending the year with 504 stores in 41 states. We also opened 11 company-operated and 4 franchised Logan's restaurants, bringing our...

  • Page 7
    ... gasoline prices rose. And, concern over consumer sentiment seems to have caused most restaurant operators to be moderate in their menu price increases. Unlike grocery prices, which rise and fall with market conditions, restaurant prices tend to increase gradually over time more in line with general...

  • Page 8
    ... and service, with reasonable and affordable prices. In fiscal 2004, Cracker Barrel pursued its mission with a number of initiatives and achievements. A new, easier-to-read menu was introduced that featured several new products, including a different daily dinner feature for each day of the week to...

  • Page 9
    ... is to develop a new kitchen design and service processes for use in new stores and for costeffective retro-fitting of our existing store base. The development strategy at Cracker Barrel continues to focus on building out our Interstate Highway presence in core markets while building selectively on...

  • Page 10
    ... good food and quality retail products. Danny's approach to business led to the company's mission statement of "pleasing people," and he frequently says that this mission statement applies to all people - guests, employees, suppliers, and shareholders. I am honored and excited to have been selected...

  • Page 11
    ... of this process by naming a member of the ET and 26-year Cracker Barrel veteran, Cy Taylor, to become Don's successor. Cy started at Cracker Barrel as an associate manager and has worked his way up through a variety of increasing responsibilities and exposure to new experiences. He is highly...

  • Page 12
    H a l f R e s t a u r a n t . H a l f S t o r e . A l l C o u n t r y .® 10

  • Page 13
    Cr ra a r ro em l O l da ' Cs o uP nt y c Sa to e Breakfast Cracker Ba rcek le'rs B M m ar n kr e 11

  • Page 14
    .... Thirty-five years and more than 500 locations later, it seems that our hunch was right. We like to think that's because ever since we opened that very first Cracker Barrel store alongside a stretch of Highway 109 in Lebanon, Tennessee, we've been taking great traditions and trying our best to make...

  • Page 15
    ... fried chicken, 400 pounds of mashed potatoes, and 3,200 biscuits and cornbread. All while still cooking regular orders for guests in the restaurant. Later, the firefighters asked the Arizona Bureau of Land Management to work specifically with Cracker Barrel, because Cracker Barrel employees really...

  • Page 16
    Cracker Barrel Old Country Store 14

  • Page 17
    ..., and are easier to read overall, making it simpler for guests to find and order their favorite Cracker Barrel meals. One important menu change was the addition of our new "Daily Dinner Feature" section where, every day of the week, a different special made with quality ingredients is offered for an...

  • Page 18
    H a l f R e s t a u r a n t . H a l f S t o r e . A l l C o u n t r y .® C 16 r a c k e r B a r r e l 's T h u r s d a y D i n n e r F e a t u r e - Tu r k e y n ' D r e s s i n g

  • Page 19
    Cracker Barrel Old Country Store 17

  • Page 20
    ... of restaurant and retail offerings makes Cracker Barrel Old Country Store arguably one of the most differentiated concepts in the industry. Over the course of this past year, we were particularly pleased with the performance of our retail business, which benefited not only from improved merchandise...

  • Page 21
    .... That's why, before they shipped out, the National Guard's 165th Airlift Wing was looking for an American flag to carry with them into the Persian Gulf. They decided to stop by the Cracker Barrel store in Pooler, Georgia before heading out to find one. During breakfast, the men noticed that the...

  • Page 22
    Cracker Barrel Old Country Store 20

  • Page 23
    ...comfortable in Cracker Barrel Rockers on their front porch as they are on ours. All told, by the end of fiscal 2004, we'd sold over 150,000 rockers. We also continued our target retail item program, in which we select items to actively promote in our retail store. One of our best efforts came around...

  • Page 24
    ... this year. The new eLEARNING*PAR program makes it easier for our hourly employees to learn, improve their skills, and advance in wages, benefits and position. Why is this so exciting? After all, our well-trained and dedicated employees are a major reason consumer surveys have named us "Best In...

  • Page 25
    Cracker Barrel Old Country Store 23

  • Page 26
    ... Barrel to carry on the traditions and values that have taken us so far over these past 35 years. And, of course, we can never forget the more than half a million daily guests, neighbors and friends whom we are privileged to welcome to our Cracker Barrel Old Country Store locations for some good...

  • Page 27
    ... apiece. And at every one, they've helped our new store managers and employee trainers to hire over 200 employees, to teach these employees what the Cracker Barrel family is all about, and to help get them ready for when the first guests arrive. Cheryl, Linda and Peggy have all seen that deer-in...

  • Page 28
    26

  • Page 29
    Logan's 9 oz. Sirloin Dinner 27

  • Page 30
    ...and sandals - for lots of different dining occasions. So we set out to achieve and maintain our operational excellence by building a strong leadership team that combines some new faces with some Logan's veterans. Then we began work on sharpening our brand appeal. That meant emphasizing our strengths...

  • Page 31
    L o g a n 's R o a d h o u s e 29

  • Page 32
    ... also to increase year-over-year revenues at Logan's by almost 17% in fiscal 2004. Of course, Logan's has long been known for value, and that's what you'll find in meals like our 9 oz. USDA Choice sirloin dinner that comes with a salad, side dish - like a large baked yam or loaded potato - all the...

  • Page 33
    ... Too Big, Or Small. JEFF DIONNE L O G A N ' S ROA D H O U S E WA L K E R , M I C H I G A N One winter day, a guest named Robin and her family were visiting some relatives who decided to bring everybody to one of their favorite restaurants, Logan's Roadhouse, in Walker, Michigan. The group was...

  • Page 34
    ... obligations Shareholders' equity Selected Cash Flow Data: Cash provided by operating activities Purchase of property and equipment Share repurchases Selected Other Data: Common Shares outstanding at end of year Stores Open at End of Year: Cracker Barrel Logan's company-operated Logan's franchised...

  • Page 35
    ... management changes and the resulting refocused operating priorities. MARKET PRICE AND DIVIDEND INFORMATION The following table indicates the high and low sales prices of the Company's common stock, as reported by The Nasdaq Stock Market (National Market), and dividends paid. Fiscal Year 2004 Prices...

  • Page 36
    ... of retail merchandise; commodity, workers' compensation, group health and utility price changes; consumer behavior based on concerns over nutritional or safety aspects of the Company's products or restaurant food in general; competitive marketing and operational initiatives; the effects of plans...

  • Page 37
    ... performance of existing stores as the impact of new stores openings are excluded. Percentage of restaurant sales by day-part assists management in identifying the breakdown of sales provided by meals served for breakfast, lunch or dinner. This measure not only provides a financial measure of...

  • Page 38
    ... merchandise selection with broader appeal and greater variety at lower price points, improved merchandise planning, and retail staff sales training as well as the restaurant guest traffic increase. In 2004 total net sales (restaurant and retail) in the 445 Cracker Barrel comparable stores averaged...

  • Page 39
    ... menu pricing, lower hourly labor, including wage rates, decreased compensation under unit-level bonus programs and decreased workers' compensation costs offset partially by increases in manager wages and increased group health costs versus the prior year. Other Store Operating Expenses Other store...

  • Page 40
    ... all sales are either for cash or third-party credit card. Like many other restaurant companies, the Company is able to, and may from time to time, operate with negative working capital. Restaurant inventories purchased through the Company's principal food distributor are on terms of net zero days...

  • Page 41
    ... sites and construction of 25 new Cracker Barrel stores and 18 new Logan's restaurants and openings that will occur after 2005. Management believes that cash at July 30, 2004, along with cash generated from the Company's operating activities, stock option exercises and its available Revolving Credit...

  • Page 42
    ... demands and promotional calendar changes, our best estimate of usage for food, supplies and other operating needs and services is ratably over either the notice period or the remaining life of the contract, as applicable, unless we had better information available at the time related to each...

  • Page 43
    ...party administrator. The Company's accounting policies regarding insurance reserves include certain actuarial assumptions or management judgments regarding economic conditions, the frequency and severity of claims and claim development history and settlement practices. Unanticipated changes in these...

  • Page 44
    ...estimates include employer tax credits for items such as FICA taxes paid on employee tip income, Work Opportunity and Welfare to Work, as well as estimates related to certain depreciation and capitalization policies. These estimates are made based on the best available information at the time of the...

  • Page 45
    ...1, 2004 2003 (As Restated, see Note 2) (As Restated, see Note 2) ASSETS Current Assets: Cash and cash equivalents Receivables Inventories Prepaid expenses Deferred income taxes Total current assets Property and Equipment: Land Buildings and improvements Buildings under capital leases Restaurant and...

  • Page 46
    CBRL GROUP, INC. Consolidated Statement of Income (In thousands except share data) Fiscal years ended July 30, August 1, 2004 2003 (As Restated, see Note 2) (As Restated, see Note 2) August 2, 2002 (As Restated, see Note 2) Total revenue Cost of goods sold Gross profit Labor & other related ...

  • Page 47
    ... 2) Cash dividends declared - $.33 per share Exercise of stock options Tax benefit realized upon exercise of stock options Purchases and retirement of common stock Net income (As Restated, see Note 2) Balances at July 30, 2004 (As Restated, see Note 2) See Notes to Consolidated Financial Statements.

  • Page 48
    ... reconcile net income to net cash provided by operating activities: Depreciation and amortization Loss (gain) on disposition of property and equipment Accretion on zero-coupon contingently convertible senior notes Tax benefit realized upon exercise of stock options Changes in assets and liabilities...

  • Page 49
    ... or part of five states. CBRL Group, Inc. Common Stock is traded on The Nasdaq Stock Market (National Market) under the symbol CBRL. 2. RESTATEMENT OF FINANCIAL STATEMENTS On February 17, 2005, the Company announced that it was restating certain prior financial results because of changes it made in...

  • Page 50
    ... ask prices as of July 30, 2004. Cash and cash equivalents - The Company's policy is to consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Inventories - Inventories are stated at the lower of cost or market. Cost of restaurant...

  • Page 51
    ...party administrator. The Company's accounting policies regarding insurance reserves include certain actuarial assumptions or management judgments regarding economic conditions, the frequency and severity of claims and claim development history and settlement practices. Unanticipated changes in these...

  • Page 52
    year. Additionally, an assessment is performed between annual assessments if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Revenue recognition - The Company records revenue from the sale of products as ...

  • Page 53
    ... on the Company's Consolidated Financial Statements. During 2004, 2003 and 2002, the Company had no derivative financial instruments that required fair value accounting treatment. The Company is exposed to market risk, such as changes in interest rates and commodity prices. To manage the volatility...

  • Page 54
    ... 4) certain specified corporate events. The accreted conversion price is equal to the issue price of the Note plus accrued original issue discount divided by 10.8584 shares, and was $40.40 per share at July 30, 2004. The Company's closing share price, as reported by Nasdaq, on July 30, 2004 was $33...

  • Page 55
    ...fair market value of a share of the Company's common stock based on the closing price on the day preceding the day the option is granted. Additionally, non-employee directors newly elected or appointed between the Annual Shareholders Meeting and July 31 of the next year receive an option to purchase...

  • Page 56
    ...fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions used for grants in 2004, 2003 and 2002: Dividend yield range Expected volatility range Risk-free interest rate range Expected lives (in years...

  • Page 57
    ... the Cracker Barrel and Logan's restaurant and retail components in determining how to allocate resources and in assessing performance. Accordingly, the Company manages its business on the basis of one reportable operating segment. All of the Company's operations are located within the United States...

  • Page 58
    ...terms and conditions of its contracts. See Note 3 for a further discussion of insurance and insurance reserves. As of July 30, 2004, the Company operated 141 Cracker Barrel stores and 51 Logan's Roadhouse restaurants from leased facilities and also leased certain land and advertising billboards (see...

  • Page 59
    ...certain lease terms. The following is a schedule by year of the future minimum rental payments required under operating leases, excluding leases for advertising billboards, as of July 30, 2004. Included in the amounts below are optional renewal periods associated with such leases that the Company is...

  • Page 60
    ... $2,707 annually. The gain on the sale is being amortized over the initial lease term of 21 years. 13. QUARTERLY FINANCIAL DATA (UNAUDITED) Quarterly financial data for 2004 and 2003 are summarized as follows: 1 Quarter (As Previously Reported) 2004 Total revenue Gross profit Income before...

  • Page 61
    ... - basic $0.74 (0.01) $0.73 Net income per share - diluted $0.70 -$0.70 *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).

  • Page 62
    ... August 1, 2003, and the related consolidated statements of income, changes in shareholders' equity, and cash flows for each of the three fiscal years in the period ended July 30, 2004. These financial statements are the responsibility of the Company's management. Our responsibility is to express an...

  • Page 63
    ... MEETING The annual meeting of shareholders will be held at 10:00 a.m. Tuesday, November 23, 2004, at the Cracker Barrel Old Country Store offices on Hartmann Drive, Lebanon, Tennessee. There were 14,128 shareholders of record as of September 24, 2004. DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN...

  • Page 64
    .../Information Services Carol L. Norman Vice President/General Merchandise Manager Stanley T. Warner Regional Vice President/Restaurant Operations (d) (e) Member of Executive Committee Member of Audit Committee Member of Compensation and Stock Option Committee Member of Nominating and Corporate...

  • Page 65

  • Page 66
    ...Marie Paul Richard Tyronne Christine Jonathan Scott Melissa Daniel Dennis Al Candie Doug Jennifer Sherry Sarah Clay Jacqueline Tony Natasha Tommy Robyn Jennifer...Melissa Robin Robert Juliar Melissa Katrina Liz Leslie PO Box 787, Lebanon, TN 37088-0787 Sanford Joseph Nicole Jean Nicholas Brent Steven ...