SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended October 27, 2000
Commission file number 000-25225
CBRL GROUP, INC.
A Tennessee Corporation I.R.S. EIN: 62-1749513
Hartmann Drive, P. O. Box 787
Lebanon, Tennessee 37088-0787
615-444-5533
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
56,789,087 Shares of Common Stock
Outstanding as of November 24, 2000
<PAGE>
PART I
Item 1. Financial Statements
CBRL GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except share data)
(Unaudited)
<TABLE>
<CAPTION>
October 27, July 28,
2000 2000*
---- ----
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 9,720 $ 13,865
Receivables 10,229 11,570
Inventories 125,518 107,377
Prepaid expenses 7,607 6,916
Deferred income taxes 4,307 4,307
---------- ----------
Total current assets 157,381 144,035
Property and equipment - net 949,895 1,075,134
Goodwill - net 106,254 107,253
Other assets 10,223 8,601
---------- ----------
Total assets $1,223,753 $1,335,023
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 58,327 $ 62,377
Accrued expenses 106,890 111,001
Current maturities of long-term debt
and other long-term obligations 200 200
---------- ----------
Total current liabilities 165,417 173,578
---------- ----------
Long-term debt 165,300 292,000
---------- ----------
Other long-term obligations 46,864 40,475
---------- ----------
Shareholders' equity:
Preferred stock - 100,000,000 shares
of $.01 par value authorized, no
shares issued -- --
Common stock - 400,000,000 shares of
$.01 par value authorized, at October 27,
2000, 62,701,849 shares issued and
56,701,849 shares outstanding and at
July 28, 2000, 62,668,349 shares issued
and 56,668,349 shares outstanding 627 627
Additional paid-in capital 284,697 284,429
Retained earnings 665,423 648,489
---------- ----------
950,747 933,545
Less treasury stock, at cost, 6,000,000 shares (104,575) (104,575)
---------- ----------
Total shareholders' equity 846,172 828,970
---------- ----------
Total liabilities and shareholders' equity $1,223,753 $1,335,023
========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
(*) This condensed consolidated balance sheet has been derived from the
audited consolidated balance sheet as of July 28, 2000.
<PAGE>
CBRL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended
October 27, October 29,
2000 1999
---- ----
<S> <C> <C>
Net sales $467,064 $422,421
Franchise fees and royalties 191 186
-------- --------
Total revenue 467,255 422,607
Cost of goods sold 156,072 145,759
-------- --------
Gross profit 311,183 276,848
Labor & other related expenses 173,290 153,220
Other store operating expenses 79,798 70,358
-------- --------
Store operating income 58,095 53,270
General and administrative 26,630 23,369
Amortization of goodwill 998 998
-------- --------
Operating income 30,467 28,903
Interest expense 3,478 5,329
Interest income 19 31
-------- --------
Income before income taxes 27,008 23,605
Provision for income taxes 10,074 9,133
-------- --------
Net income $ 16,934 $ 14,472
======== ========
Net earnings per share:
Basic $ .30 $ .25
======== ========
Diluted $ .30 $ .25
======== ========
Weighted average shares:
Basic 56,699 58,629
======== ========
Diluted 56,815 58,721
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
CBRL GROUP, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
---------------------------------
October 27, October 29,
2000 1999
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net income $ 16,934 $ 14,472
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 15,624 15,390
Loss (gain) on disposition of property and equipment 533 (269)
Changes in assets and liabilities:
Inventories (18,141) (14,977)
Accounts payable (4,050) (10,618)
Other current assets and other current liabilities (3,461) 8,432
Other assets and other long-term liabilities 4,754 (2,155)
--------- --------
Net cash provided by operating activities 12,193 10,275
--------- --------
Cash flows from investing activities:
Purchase of property and equipment (30,346) (40,758)
Proceeds from sale of property and equipment 140,499 716
-------- -------
Net cash provided by (used in) investing activities 110,153 (40,042)
-------- -------
Cash flows from financing activities:
Proceeds from issuance of long-term debt 85,000 76,500
Principal payments under long-term debt and other
long-term obligations (211,759) (46,559)
Proceeds from exercise of stock options 268 42
Dividends on common stock -- (293)
-------- -------
Net cash (used in) provided by financing activities (126,491) 29,690
-------- -------
Net decrease in cash and cash equivalents (4,145) (77)
Cash and cash equivalents, beginning of period 13,865 18,262
-------- -------
Cash and cash equivalents, end of period $ 9,720 $18,185
======== =======
Supplemental disclosures of cash flow information:
Cash paid during the three months for:
Interest $ 3,126 $ 5,311
Income taxes 9,151 1,221
</TABLE>
See notes to condensed consolidated financial statements.
<PAGE>
CBRL GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(In thousands)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated balance sheet as of October 27, 2000 and the
related condensed consolidated statements of income and cash flows for the
quarters ended October 27, 2000 and October 29, 1999, have been prepared by CBRL
Group, Inc., (the "Company") without audit; in the opinion of management, all
adjustments for a fair presentation of such condensed consolidated financial
statements have been made.
These condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and notes thereto
contained in the Company's Annual Report on Form 10-K for the year ended July
28, 2000.
Deloitte & Touche LLP, the Company's independent accountants, have
performed a limited review of the financial information included herein. Their
report on such review accompanies this filing.
2. INCOME TAXES
The provision for income taxes for the quarter ended October 27, 2000
has been computed based on management's estimate of the tax rate for the entire
fiscal year of 37.3%. The variation between the statutory tax rate and the
effective tax rate is due primarily to employer tax credits for FICA taxes paid
on employee tip income. The Company's effective tax rates for the quarter ended
October 29, 1999 and for the entire fiscal year of 2000 were 38.7% and 37.7%,
respectively.
3. SEASONALITY
The sales and profits of the Company are affected significantly by
seasonal travel and vacation patterns because of its interstate highway
locations. Historically, the Company's greatest sales and profits have occurred
during the period of June through August. Early December through the last part
of February, excluding the Christmas holidays, has historically been the period
of lowest sales and profits. Therefore, the results of operations for the
quarter ended October 27, 2000 cannot be considered indicative of the operating
results for the full fiscal year.
4. INVENTORIES
Inventories were comprised of the following at:
<TABLE>
<CAPTION>
October 27, July 28,
2000 2000
---- ----
<S> <C> <C>
Retail $ 99,636 $ 81,200
Restaurant 15,202 16,083
Supplies 10,680 10,094
--------- --------
Total $125,518 $107,377
========= ========
</TABLE>
5. EARNINGS PER SHARE AND WEIGHTED AVERAGE SHARES
Basic earnings per share are computed by dividing income available to
common shareholders by the weighted average number of common shares outstanding
for the reporting period. Diluted earnings per share reflects the potential
dilution that could occur if securities, options or other contracts to issue
common stock were exercised or converted into common stock. Outstanding stock
options issued by the Company represent the only dilutive effect reflected in
diluted weighted average shares.
<PAGE>
6. COMPREHENSIVE INCOME
Comprehensive income is defined as the change in equity of a business
enterprise during a period from transactions and other events and circumstances
from non-owner sources. There is no difference between comprehensive income and
net income as reported by the Company for all periods shown.
7. SEGMENT REPORTING
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. The following data are presented in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 131 for all periods presented.
<TABLE>
<CAPTION>
Quarter Ended
-------------------------------
October 27, October 29,
2000 1999
---- ----
<S> <C> <C>
Net sales:
Restaurant $370,042 $332,454
Retail 97,022 89,967
-------- --------
Total net sales $467,064 $422,421
======== ========
</TABLE>
8. RECENT ACCOUNTING PRONOUNCEMENTS ADOPTED
In June 1998, SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities," was issued, but was subsequently amended by SFAS Nos. 137
and 138. These statements specify how to report and display derivative
instruments and hedging activities and are effective for fiscal years beginning
after June 15, 2000. The Company adopted these statements on July 29, 2000. See
Note 11. The adoption of these statements did not have a material effect on the
Company's consolidated financial statements. On December 3, 1999, the Securities
and Exchange Commission ("SEC") released Staff Accounting Bulletin ("SAB") No.
101, "Revenue Recognition in Financial Statements". Its effective date was
subsequently amended by the SEC through the issuance of SAB Nos. 101A and 101B.
SAB No. 101 must now be adopted by the fourth quarter of fiscal years beginning
after December 15, 1999. SAB No. 101 summarizes certain of the SEC's views in
applying generally accepted accounting principles to revenue recognition in
financial statements. The Company early adopted SAB No. 101 on July 29, 2000.
The adoption of SAB No. 101 did not have a material effect on its consolidated
financial statements.
9. IMPAIRMENT OF LONG-LIVED ASSETS
The Company evaluates long-lived assets and certain identifiable
intangibles to be held and used in the business for impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. An impairment is determined by comparing estimated
undiscounted future operating cash flows to the carrying amounts of assets on a
store by store basis. If an impairment exists, the amount of impairment is
measured as the sum of the estimated discounted future operating cash flows of
such asset and the expected proceeds upon sale of the asset less its carrying
amount. Assets held for sale are reported at the lower of carrying amount or
fair value less costs to sell. The Company had no impairment loss recorded for
the quarters ending October 27, 2000 and October 29, 1999.
10. LITIGATION
As more fully discussed in Note 10 to the Consolidated Financial
Statements for the fiscal year ended July 28, 2000 contained in the Company's
Annual Report on Form 10-K filed on October 25, 2000, the Company is defendant
in two lawsuits, one of which has been provisionally certified as a class
action. The Company believes it has substantial defenses in these actions and
intends to defend each of them vigorously. There currently is no provision for
any potential liability with respect to this litigation in the Consolidated
Financial Statements. There has been no significant change in the status of
either of these two lawsuits during the quarter ended October 27, 2000. If there
were to be an unfavorable outcome in either of these cases, the Company's
results of operations, financial position and liquidity could be materially and
adversely affected.
<PAGE>
11. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
The Company is exposed to market risk, such as changes in interest rates
and commodity prices. To manage the volatility relating to these exposures, the
Company nets the exposures on a consolidated basis to take advantage of natural
offsets. For the residual portion, the Company may enter into various derivative
financial instruments pursuant to the Company's policies in areas such as
counterparty exposure and hedging practices. The Company would review these
derivative financial instruments on a specific exposure basis to support hedge
accounting. The changes in fair value of these hedging instruments would be
offset in part or in whole by the corresponding changes in the fair value or
cash flows of the underlying exposures being hedged. The Company does not hold
or use derivative financial instruments for trading purposes. The Company's
historical practice has been not to enter into derivative financial instruments.
The Company's policy has been to manage interest cost using a mix of
fixed and variable rate debt. The Company has accomplished this objective
through the use of interest rate swaps and/or sale-leaseback transactions. In an
interest rate swap, the Company agrees to exchange, at specified intervals, the
difference between fixed and variable interest amounts calculated by reference
to an agreed-upon notional amount. In a sale-leaseback transaction, the Company
finances its operating facilities by selling them to a third party and then
leasing them back under a long-term operating lease at fixed terms. See Note 12.
Many of the food products purchased by the Company are affected by
commodity pricing and are, therefore, subject to price volatility caused by
weather, production problems, delivery difficulties and other factors which are
outside the control of the Company and which are generally unpredictable.
Changes in commodity prices would affect the Company and its competitors
generally and often simultaneously. In many cases, the Company believes it will
be able to pass through any increased commodity costs by adjusting its menu
pricing. From time to time, competitive circumstances may limit menu price
flexibility, and in those circumstances increases in commodity prices can result
in lower margins for the Company. Some of the Company's purchase contracts are
used to hedge commodity prices and may contain features that could be classified
as derivative financial instruments under SFAS Nos. 133, 137 and 138. However,
these features that could be classified as derivative financial instruments are
exempt from hedge accounting based on the normal purchases exemption. The
Company presently believes that any changes in commodity pricing which cannot be
adjusted for by changes in menu pricing or other product delivery strategies
would not be material.
Upon adoption of SFAS Nos. 133, 137 and 138 on July 29, 2000 and at
October 27, 2000, the Company had no derivative financial instruments that
required hedge accounting.
12. SALE-LEASEBACK TRANSACTION
On July 31, 2000, the Company, through its Cracker Barrel Old Country
Store, Inc. subsidiary, completed a sale-leaseback transaction involving 65 of
its owned Cracker Barrel Old Country Store units. Under the transaction, the
land, buildings and building improvements at the locations were sold for net
consideration of $138,325 and have been leased back for an initial term of 21
years. Equipment was not included. The leases include specified renewal options
for up to 20 additional years and have certain financial covenants related to
fixed charge coverage for the leased units. Net rent expense during the initial
term will be $14,965 annually, and the assets sold and leased back previously
had depreciation expense of $2,707 annually. The $5,069 gain on the sale and the
$1,295 deferred financing costs will be amortized over the initial lease term of
21 years and are included in the net rent expense. Net proceeds from the sale
were used to reduce outstanding borrowings under the Company's revolving credit
facility.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
All dollar amounts reported or discussed in Part I, Item 2 of this
Quarterly Report on Form 10-Q are shown in thousands. 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
condensed consolidated financial statement and notes thereto. Except for
specific historical information, many of the matters discussed in this Form 10-Q
may express or imply projections of revenues or expenditures, statements of
plans and objectives or future operations or statements of future economic
performance. These, and similar statements are forward-looking statements
concerning matters that involve risks, uncertainties and other factors which may
cause the actual performance of CBRL Group, Inc. 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 and Litigation Reform Act of 1995 and should be evaluated in
the context of these factors. Factors which will affect actual results include,
but are not limited to: 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; the ability of the Company to identify
successful new lines of retail merchandise, especially during seasonal sales
periods such as the Christmas holiday season; the results of pending or
threatened litigation; the availability and costs of acceptable sites for
development; the acceptance of the Company's concepts as the Company expands
into new markets and geographic regions; commodity price increases; adverse
general economic conditions; adverse weather conditions; changes in interest
rates affecting the Company's financing costs; changes in or implementation of
additional governmental rules and regulations affecting wage and hour matters,
health and safety, taxes, pensions and insurance; other undeterminable areas of
government actions or regulations; and other factors described from time to time
in the Company's filings with the Securities and Exchange Commission, press
releases and other communications.
RESULTS OF OPERATIONS
The Company's higher net income for the quarter ended October 27, 2000
compared with the year earlier period primarily reflects higher operating income
at Cracker Barrel Old Country Store ("Cracker Barrel") and lower interest
expense. The following table highlights operating results by percentage
relationships to total revenue for the quarter ended October 27, 2000 as
compared to the same period a year ago:
<TABLE>
<CAPTION>
Quarter Ended
-------------
October 27, October 29,
2000 1999
---- ----
<S> <C> <C>
Net sales 100.0% 100.0%
Franchise fees and royalties -- --
----- -----
Total revenue 100.0 100.0
Cost of goods sold 33.4 34.5
----- -----
Gross profit 66.6 65.5
Labor & other related expenses 37.1 36.3
Other store operating expenses 17.1 16.6
----- -----
Store operating income 12.4 12.6
General and administrative 5.7 5.5
Amortization of goodwill 0.2 0.2
----- -----
Operating income 6.5 6.9
Interest expense 0.7 1.3
Interest income -- --
----- -----
Income before income taxes 5.8 5.6
Provision for income taxes 2.2 2.2
----- -----
Net income 3.6% 3.4%
===== =====
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Comparable Store Sales Analysis
Quarter Ended
-------------
October 27, October 29,
2000 1999
---- ----
<S> <C> <C>
Cracker Barrel (380 stores)
Net sales:
Restaurant $750.2 $712.2
Retail 221.2 215.8
------ ------
Total net sales $971.4 $928.0
====== ======
Logan's (41 restaurants) $722.1 $717.6
====== ======
</TABLE>
TOTAL REVENUE
Total revenue for the first quarter of fiscal 2001 increased 11%
compared to last year's first quarter. At the Cracker Barrel concept, comparable
store restaurant sales increased 5.3% and comparable store retail sales
increased 2.5%, for a combined comparable store sales (total net sales) increase
of 4.7%. The comparable store restaurant sale increase consisted of a 3.2% menu
price increase for the quarter and a 2.1% increase in customer traffic.
Comparable store retail sales increased primarily due to the assortment of
retail items in the stores versus the prior year. At the Logan's concept,
comparable store sales increased 0.6%, which consisted of 2.6% menu price
increase and a 2.0% customer traffic decrease. The customer traffic decrease was
partly caused by the opening of directly competitive restaurants in 11 of 41 of
the Company's comparable store direct trade areas. Sales from new Cracker Barrel
and Logan's stores accounted for the balance of the total revenue increase in
the first quarter.
COST OF GOODS SOLD
Cost of goods sold as a percentage of total revenue for the quarter
ended October 27, 2000 decreased to 33.4% from 34.5% in the first quarter of
last year. This decrease was primarily due to higher menu pricing, improvements
in Cracker Barrel store level execution, lower chicken and dairy prices and
lower retail shrinkage versus the prior year, partially offset by higher pork
and shrimp costs.
LABOR AND OTHER RELATED EXPENSES
Labor and other related expenses include all direct and indirect labor
and related costs incurred in store operations. Labor and other related expenses
as a percentage of total revenue increased to 37.1% in the first quarter this
year from 36.3% last year. This increase was primarily due to hourly employee
wage inflation at Cracker Barrel and Logan's stores of approximately 5%,
increases in Cracker Barrel's store manager staffing and wages, increased bonus
payouts under the Cracker Barrel store-level bonus program and increased group
health costs. These increases were partially offset by higher menu pricing at
Cracker Barrel and Logan's and improvements in Cracker Barrel store level
execution.
OTHER STORE OPERATING EXPENSES
Other store operating expenses include all unit-level operating costs,
the major components of which are operating supplies, repairs and maintenance,
advertising expenses, utilities and depreciation. Other store operating expenses
as a percentage of total revenue increased to 17.1% in the first quarter of
fiscal 2001 from 16.6% in the first quarter of last year. This increase was
primarily due to the net effect of the Company's sale-leaseback transaction,
which increased net rent expense by $3,741 during the first quarter and
decreased depreciation by $677 for a net increase to other store operating
expenses as a percentage of total revenue of 0.7%.
<PAGE>
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses as a percentage of total revenue
increased to 5.7% in the first quarter of fiscal 2001 from 5.5% in the first
quarter of last year. The primary reason for the increase was the increased
costs for recruiting and training to complete the Company's goal to be fully
staffed in the store management ranks in the Cracker Barrel stores by the end of
the first quarter of fiscal 2001.
INTEREST EXPENSE
Interest expense decreased to $3,478 in the first quarter of fiscal
2001 from $5,329 in the first quarter of last year. The decrease primarily
resulted from lower average debt outstanding during the quarter as compared to
last year, reflecting net revolving debt principal payments from the proceeds of
the Company's sale-leaseback transaction.
INTEREST INCOME
Interest income decreased to $19 in the first quarter of fiscal 2001
from $31 in the first quarter of last year. The decrease was primarily due to
lower average funds available for investment.
PROVISION FOR INCOME TAXES
The provision for income taxes as a percent of pretax income decreased
to 37.3% in the first quarter of fiscal 2001 from 38.7% during the same period a
year ago. The decrease in tax rate was primarily due to decreases in effective
state tax rates.
LIQUIDITY AND CAPITAL RESOURCES
The Company's operating activities provided net cash of $12,193 for the
three-month period ended October 27, 2000. Most of this cash was provided by net
income adjusted for depreciation and amortization. Increases in inventories and
other assets and decreases in accounts payable and other current liabilities
were partially offset by decreases in other current assets and increases in
other long-term obligations.
Capital expenditures were $30,346 for the three-month period ended
October 27, 2000. Land purchases and the construction of new stores accounted
for substantially all of these expenditures. Capitalized interest was $322 for
the quarter ended October 27, 2000 as compared to $460 for the quarter ended
October 29, 1999. This difference was primarily due to the reduction in Cracker
Barrel new store construction in fiscal 2001 as compared to the same period a
year ago.
The Company's internally generated cash along with cash at July 28,
2000 and the Company's available revolver, were sufficient to finance all of its
growth in the first quarter of fiscal 2001.
The Company estimates that its capital expenditures for fiscal 2001
will be approximately $93,000 substantially all of which will be land purchases
and the construction of 15 new Cracker Barrel stores and 13 new Logan's
restaurants, including one replacement for a unit destroyed by fire in fiscal
2000. On July 31, 2000, the Company completed a sale-leaseback transaction
involving 65 of its owned Cracker Barrel Old Country Store units. Under the
transaction, the land, buildings and improvements at the locations were sold for
net consideration of $138,280 and have been leased back for an initial term of
21 years. Net proceeds from the sale were used to reduce outstanding borrowings
under the Company's revolving credit facility, and the commitment under that
facility was reduced by $70,000 to $270,000.
<PAGE>
Management believes that cash at October 27, 2000, along with cash
generated from the Company's operating activities, will be sufficient to finance
its continued operations and its continued expansion plans through fiscal 2001.
At October 27, 2000, the Company had $154,700 available under its revolving
credit facility following the completion of the sale-leaseback transaction. The
Company estimates that it will generate excess cash of approximately $70,000
which it intends to use for additional share repurchases upon Board of Directors
approval and/or to reduce borrowings under the revolving credit facility in
fiscal 2001. The Company's principal criteria for share repurchases are that
they be accretive to earnings per share and that they do not unfavorably affect
the Company's investment grade debt rating.
On November 22, 2000, the Company announced that the Board of Directors
had authorized the repurchase of up to an additional 2 million shares of the
Company's common stock. The purchases are to be made from time to time in the
open market at prevailing market prices. The Company expects to complete this
third share repurchase authorization by the end of fiscal 2001.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A of the Company's Annual Report on Form 10-K for the fiscal year
ended July 28, 2000, and filed with the Commission on October 25, 2000, is
incorporated in this item of this report by this reference.
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Shareholders of
CBRL Group, Inc.
Lebanon, Tennessee
We have reviewed the accompanying condensed consolidated balance sheet of CBRL
Group, Inc. and subsidiaries as of October 27, 2000, and the related condensed
consolidated statements of income and cash flows for the quarters ended October
27, 2000 and October 29, 1999. These financial statements are the responsibility
of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to such condensed consolidated financial statements for them to be in
conformity with generally accepted accounting principles in the United States of
America.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of CBRL Group, Inc. and subsidiaries
as of July 28, 2000, and the related consolidated statements of income,
shareholders' equity, and cash flows for the year then ended (not presented
herein); and in our report dated September 7, 2000, we expressed an unqualified
opinion on those financial statements. In our opinion, the information set forth
in the accompanying condensed consolidated balance sheet as of July 28, 2000 is
fairly stated, in all material respects, in relation to the consolidated balance
sheet from which it has been derived.
DELOITTE & TOUCHE LLP
Nashville, Tennessee
December 7, 2000
<PAGE>
PART II
ITEM 1. LEGAL PROCEEDINGS
Part I, Item 3 of the Company's Annual Report on Form
10-K filed October 25, 2000, is incorporated in this
Form 10-Q by this reference. See also Note 10 to the
Company's Condensed Consolidated Financial Statements
filed in Part I, Item I of this Quarterly Report on
Form 10-Q, which also is incorporated in this item of
this report by this reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Meeting of shareholders was held November 21, 2000.
(b)(c) Proxies for the meeting were solicited in accordance
with Regulation 14 of the Securities Exchange Act of
1934; there was no solicitation in opposition to
management's nominees and all of management's nominees
were elected.
The following sets forth the results of voting on
each matter at the annual meeting:
Proposal 1 - Election of Directors.
WITHHOLD
FOR AUTHORITY
--- ---------
James C. Bradshaw 48,903,221 710,748
Robert V. Dale 48,939,293 674,676
Dan W. Evins 43,384,979 6,228,990
Edgar W. Evins 48,530,709 1,083,260
Robert C. Hilton 48,933,500 680,469
Charles E. Jones, Jr. 48,294,930 1,319,039
Charles T. Lowe, Jr. 48,912,518 701,451
B.F. Lowery 48,542,616 1,071,353
Gordon L. Miller 48,908,408 705,561
Martha M. Mitchell 48,297,632 1,316,337
Jimmie D. White 48,291,686 1,322,283
Michael A. Woodhouse 48,938,442 675,527
Proposal 2 - To approve the selection of Deloitte and Touche
LLP as the Company's independent auditors for the 2001 fiscal
year.
Votes cast for 49,376,172
Votes cast against 111,140
Votes cast to abstain 126,657
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed pursuant to Item 601 of
Regulation S-K
(15)Letter regarding unaudited financial information
(27)Financial Data Schedule.
(b) On August 8, 2000, the Company filed a Current Report
on Form 8-K, Item 5 to report a sale-leaseback
transaction involving 65 of its owned Cracker Barrel
Old Country Store units and the completion of its
remaining share repurchase authorization.
On September 7, 2000, the Company filed a Current
Report on Form 8-K, Item 5 the Company's quarterly
and fiscal year end results and the Company's
comments on current trends and earnings targets for
fiscal 2001, all as had been announced concurrently
by a press release.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CBRL GROUP, INC.
Date: 12/7/00 By /s/Lawrence E. White
------- ------------------------------------------------
Lawrence E. White, Senior Vice President/Finance
and Chief Financial Officer
Date: 12/7/00 By /s/Patrick A. Scruggs
------- ------------------------------------------------
Patrick A. Scruggs, Assistant Treasurer
<PAGE>
December 7, 2000
CBRL Group, Inc.
Lebanon, Tennessee 37088-0787
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited interim financial
information of CBRL Group, Inc. for the quarters ended October 27, 2000 and
October 29, 1999, as indicated in our report dated December 7, 2000; because we
did not perform an audit, we expressed no opinion on that information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended October 27, 2000, is
incorporated by reference in Registration Statement Nos. 2-86602, 33-15775,
33-37567, 33-45482, 333-01465 and 333-81063 on Form S-8 and Registration
Statement No. 33-59582 on Form S-3.
We also are aware that the aforementioned report, pursuant to Rule 436(c) under
the Securities Act of 1933, is not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
DELOITTE & TOUCHE LLP
Nashville, Tennessee
