Cracker Barrel 2015 Annual Report Download - page 48

Company’snancial statements at July 31, 2015 by approxi-
mately$3,000 to $4,000 within the next twelve months. At
July 31, 2015, the Companywas subject to income tax exami-
nations for its U.S. federal income taxes aer 2011 and for
state andlocal income taxes generally aer 2011.
14 NETINCOME PER SHARE AND
WEIGHTED AVEGE SHARES
e following table reconciles the components of diluted
earnings per sharecomputations:
2015 2014 2013
Netincome per share
numerator $ 163,903 $132,128 $117,265
Netincome per share
denominator:
Basic weighted average
sharesoutstanding23,918,368 23,817,768 23,708,875
Add potential dilution:
Stock options,
nonvestedstock
awardsand
MSU Grants130,556 148,247 239,446
Diluted weighted average
sharesoutstanding24,048,924 23,966,015 23,948,321
15 COMMITMENTS ANDCONTINGENCIES
During 2014 and through September 25, 2014, the Company
wasserved with severalclaimsled as a putative collective
action alleging violations of the Fair Labor Standards Act
(“FLSA”). e Companyhas recorded a total provision of
approximately$3,500 at July 31, 2015 to reectthe liability
related to these lawsuits. Although we continue to believe
that the Company’s associate managers are and havebeen
properly classied as exempt employees under FLSA and
have therefore aggressively challengedthe plaintis’ claims in
these lawsuits, in light of the potential cost and uncertainty
involved in these lawsuits, in March2015, we entered into
a memorandum of understanding (the “MOU”) with respect
to a selement with plaintis’ counsel to resolve the series
of lawsuits. Per the MOU, all three of these federallawsuits
were dismissedand a consolidated lawsuit was led in
Broward County,Florida Circuit Court with respectto the
underlying claims. In May 2015, the parties executed the
selement agreement based on the MOU, and the selement
agreement was approved by the Florida court on July 31,
2015. Consistent with the terms of the MOU and the court-
approved agreement, the parties will distribute notice to
potential claimants and process submied claims through a
selement administrator. See“Item 3. LegalProceedings”
of PartI of this Annual Report on Form10-Kfor further
information related to these claims.
In addition to the maers described above, the Company
andits subsidiaries arepartyto various legal and regulatory
proceedingsand claims incidentalto their business in the
ordinary course. In the opinion of management, based upon
information currently available, the ultimate liability with
respect to these proceedingsand claimswill not materially
aectthe Company’s consolidated results of operations or
nancial position.
e Companymaintains insurance coveragefor various
aspects of its business and operations. e Companyhas
elected, however, to retain allor a portion of losses that occur
through the use of various deductibles,limits and retentions
under its insurance programs.is situation may subjectthe
Company to some future liability for which it is only partially
insured, or completelyuninsured.e Companyintends
to mitigate any such future liability by continuing to exercise
prudent business judgment in negotiating the terms and
conditions of its contracts. SeeNote 2 for a further discussion
of insurance and insurance reserves.
Related to its insurance coverage, the Companyis contin-
gently liable pursuant to standby leers of creditas credit
guarantees to certain insurers. As of July 31, 2015, the
Company had $11,530 of standby leers of creditrelated to
securing reserved claims under workers’compensation
insurance. All standby leers of creditare renewable annually
andreduce the Company’s borrowing availability under its
Revolving Credit facility (see Note 5).
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