Cracker Barrel 2004 Annual Report Download - page 36

CBRL GROUP, INC.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis provides information which management believes is relevant to an
assessment and understanding of the Company’s consolidated results of operations and financial condition. The
discussion should be read in conjunction with the Consolidated Financial Statements and notes thereto. All
applicable disclosures in the following discussion have been modified to reflect the restatement described in Note 2
to the Consolidated Financial Statements. Except for specific historical information, the matters discussed in this
Annual Report to Shareholders, as well as the Company’s Annual Report on Form 10-K/A filed with the Securities
and Exchange Commission (“SEC”) on March 30, 2005 for the year ended July 30, 2004, contain forward-looking
statements that involve risks, uncertainties and other factors which may cause actual results and performance of
the Company to differ materially from those expressed or implied by these statements. All forward-looking
information is provided by the Company pursuant to the safe harbor established under the Private Securities
Litigation Reform Act of 1995 and should be evaluated in the context of these factors. Forward-looking statements
generally can be identified by the use of forward-looking terminology such as “assumptions,” “target,” “guidance,”
“outlook,” “plans,” “projection,” “may,” “will,” “would,” “expect,” “intend,” “estimate,” “anticipate,” “believe,” “potential”
or “continue” (or the negative or other derivatives of each of these terms) or similar terminology. Factors which could
materially affect actual results include, but are not limited to: changes in or implementation of additional
governmental or regulatory rules, regulations and interpretations affecting accounting (including but not limited to,
accounting for convertible debt under Emerging Issues Task Force (“EITF”) Issue Abstract No. 04-08 of the
Financial Accounting Standards Board (“FASB”)), tax, wage and hour matters, health and safety, pensions,
insurance or other undeterminable areas; the effects of uncertain consumer confidence or general or regional
economic weakness on sales and customer travel activity; the ability of the Company to identify, acquire and sell
successful new lines 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 intended to improve
operational execution and performance; the actual results of pending or threatened litigation or governmental
investigations or charges and the costs and effects of negative publicity associated with these activities; practical or
psychological effects of terrorist acts or war and military or government responses; the effects of increased
competition at Company locations on sales and on labor recruiting, cost, and retention; the ability of and cost to the
Company to recruit, train, and retain qualified restaurant hourly and management employees; disruptions to the
Company's restaurant or retail supply chain; changes in foreign exchange rates affecting the Company’s future retail
inventory purchases; the availability and cost of acceptable sites for development and the Company’s ability to
identify such sites; changes in generally accepted accounting principles in the United States of America (“GAAP”) or
changes in capital market conditions that could affect valuations of restaurant companies in general or the
Company’s goodwill in particular; increases in construction costs; changes in interest rates affecting the Company’s
financing costs; and other factors described from time to time in the Company’s filings with the SEC, press releases,
and other communications.
All dollar amounts reported or discussed in Management’s Discussion and Analysis of Financial Condition
and Results of Operations are shown in thousands. References in Management’s Discussion and Analysis of
Financial Condition and Results of Operations to a year or quarter are to the Company’s fiscal year or quarter
unless otherwise noted.
EXECUTIVE OVERVIEW
CBRL Group, Inc. (the “Company,” “our” or “we”) is a publicly traded (Nasdaq: CBRL) holding company that,
through certain subsidiaries, is engaged in the operation and development of the Cracker Barrel Old Country Store®
(“Cracker Barrel”) and Logan’s Roadhouse® (“Logan’s”) restaurant and retail concepts. The Company was
organized under the laws of the state of Tennessee in August 1998 and maintains an Internet website at
http://www.cbrlgroup.com.
We are in the business of delivering excellent guest dining experiences, and we strive to do that in 41 states
at a collective total of 611 company-owned units and an additional 20 franchised units as of July 30, 2004. While
each restaurant concept offers its own unique atmosphere and an array of distinct menu items, both are equally
committed to executing outstanding guest service while focusing on delivery of high quality products at affordable
prices. During 2004 we served approximately 206 million meals in Cracker Barrel and approximately 27 million
meals in Logan’s.
Restaurant Industry
Our businesses operate in the full-service segment of the restaurant industry in the United States. The
restaurant business is highly competitive with respect to quality, variety and price of the food products offered. The
industry is often affected by changes in the taste and eating habits of the public, local and national economic
conditions affecting spending habits, and population and traffic patterns. There are many segments within the
restaurant industry, which overlap and often provide competition for widely diverse restaurant concepts.