<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
FORM 10-K
(Mark One)
[x] Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934 (Fee Required)
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (No Fee Required)
For the transition period from _______ to _______
For fiscal year ended Commission file number
July 29, 1994 0-7536
__________
CRACKER BARREL OLD COUNTRY STORE, INC.
(Exact name of registrant as specified in its charter)
Tennessee 62-0812904
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Hartmann Drive, P.O. Box 787 37088-0787
Lebanon, Tennessee (Zip code)
(Address of principal
executive offices)
__________
Registrant's telephone number, including area code:
(615)444-5533
__________
Securities registered pursuant to Section 12(b) of the Act:
None
__________
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
(Par Value $.50)
__________
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
--- ---
The aggregate market value of voting stock held by nonaffiliates of the
registrant is $1,337,481,709 as of September 26, 1994.
59,911,166
- - --------------------------------------------------------------------------------
(Number of shares of common stock outstanding as of September 26, 1994.)
1
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Documents Incorporated by Reference
<TABLE>
<CAPTION>
Document from which Portions Part of Form 10-K
are Incorporated by Reference to which incorporated
- - ----------------------------- ---------------------
<S> <C>
1. Annual Report to Shareholders Items 6, 7 and 8
for the fiscal year ended
July 29, 1994
2. Proxy Statement for Annual Part III
Meeting of Shareholders
to be held November 22, 1994
</TABLE>
2
<PAGE> 3
PART I
ITEM 1. BUSINESS
Cracker Barrel Old Country Store, Inc. (the "Company" or "Cracker
Barrel") was incorporated in October 1969 under the laws of the State of
Tennessee. The Company owns and operates 191 full service "country store"
restaurants which are located in the southeast, midwest, mid- atlantic and
southwest United States along interstate highways, including 5 stores located
at "tourist destinations". These family restaurants serve breakfast, lunch and
dinner between the hours of 6:00 a.m. and 10:00 p.m. and feature home style
country cooking prepared on the premises from the Company's own recipes using
quality ingredients and emphasizing authenticity. Menu items are moderately
priced and include country ham, chicken, fish, barbecue pork ribs, roast beef,
beans, turnip greens, vegetable plates, sandwiches, pancakes, eggs, bacon,
sausage and grits. The restaurants do not serve alcoholic beverages. The
stores are constructed in a rustic, country store design and feature a separate
gift shop area offering a wide variety of items specializing in hand-blown
glassware, cast iron cookware, toys and wood crafts as well as various old
fashioned candies, jellies and other foods. The Company considers its store
operations to constitute an integrated, single line of business.
Operations
Store Format: The format of each of Cracker Barrel's stores consists of
a rustic, country store style building. All stores are free standing buildings
with adequate parking facilities and standard landscaping. Store interiors are
subdivided into a dining area consisting of approximately 25% of the total
interior store space, a gift shop area consisting of approximately 22% of such
space, with the balance primarily consisting of kitchen and storage areas. All
stores have wood-burning fireplaces and are decorated with antique-style
furnishings and other authentic items of the past similar to those used and
sold in original old country stores. The kitchen areas contain modern food
preparation and storage equipment allowing for extensive flexibility in menu
variation and development.
Products: Cracker Barrel's restaurants offer rural Southern cooking
featuring the Company's own recipes. In keeping with the Company's emphasis on
authenticity and quality, Cracker Barrel's restaurants prepare menu selections
on the premises. The Company's restaurants offer breakfast, lunch and dinner
from a moderately-priced menu. Most items may be ordered at any time
throughout the day. Breakfast items include juices, eggs, pancakes, bacon,
country ham, sausage, grits, and a variety of biscuit specialties, with prices
for a breakfast meal ranging from $1.29 to $6.99. Lunch and dinner items
include country ham, catfish, steak, barbecue pork ribs, chicken, vegetable
plates, baked potatoes, salads, sandwiches, homemade soups and specialty items
such as beef stew with muffins. Lunches and dinners range in price from $2.99
to $10.95. The Company from time to time increases its prices and increased
its menu prices approximately 3% in February 1994.
The gift shops, which are decorated with antique signs, primitive tools
and other memorabilia in a turn-of-the-century atmosphere, offer a wide variety
of items consisting primarily of hand-blown glassware, cast iron cookware,
old-fashioned crockery, handcrafted figurines, classic children's toys and
various other gift items, as well as various candies, preserves, smoked
sausage, syrups and other foodstuffs. Many of the candy items, smoked bacon,
jellies and jams along with other high quality products are sold under the
Cracker Barrel Old Country Store brand name.
3
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Product Merchandising: Cracker Barrel maintains a quality control
department which also develops new and improved menu items in response to
shifts in customer preferences and changes in supply of ingredients used in the
Company's menu items. Company merchandising specialists are involved on a
continuing basis in selecting and positioning of merchandise in the gift shop
areas. Management believes that the Company has adequate flexibility to meet
future shifts in consumer preference on a timely basis.
Store Management: Store management typically consists of a general
manager, four associate managers and a gift shop manager who are responsible
for approximately 93 employees on two shifts. The relative complexity of
operating a Cracker Barrel Old Country Store requires an effective management
team at the individual store level. As a motivation to store managers to
improve sales and operational efficiency, Cracker Barrel has a bonus plan
designed to provide store management with an opportunity to share in the
pre-tax profits of their store. To assure that individual stores are operated
at a high level of quality, the Company emphasizes the selection and training
of store managers and has a level of District Management to assist individual
store managers.
The store management recruiting and training program begins with an
evaluation and screening program. In addition to multiple interviews and
background and experience verification, the Company conducts testing which it
believes is important in selecting those applicants best suited to manage store
operations. Those candidates who successfully pass this screening process are
then required to complete a 10-week training program conducted at the Company's
Lebanon, Tennessee facility. This program allows new managers the opportunity
to become familiar with the Company's operations, management objectives,
controls and evaluation criteria before assuming management responsibility.
Purchasing and Distribution: Cracker Barrel negotiates directly with
food vendors as to price and other material terms of most food purchases. The
Company purchases the majority of its food products and restaurant supplies on
a cost-plus basis through a distributor in Lebanon, Tennessee. The distributor
is responsible for placing food orders and warehousing and delivering food
products to the Company's stores. Certain perishable food items are purchased
locally by the Company's stores.
The majority of gift shop items are purchased directly by Cracker Barrel,
warehoused at its Lebanon warehouse and shipped to the stores.
The single food category accounting for the largest share (approximately
21%) of the Company's food purchasing expense is pork. The single food item
within the pork category accounting for the largest share (approximately 5%) of
the Company's food purchasing expense is country ham. The Company presently
purchases its pork food items through twelve vendors and its country ham
through three vendors. Should any pork items from these vendors become
unavailable for any reason, management is of the opinion that these food items
could be obtained in sufficient quantities from other sources at competitive
prices.
Quality, Cost and Inventory Controls: Costs are monitored by management
to determine if any material variances in food cost or operating expenses have
occurred. The Company's computer system is used to analyze store operating
information by providing management reports for continual monitoring of sales
mix and detailed operational cost data. This system is also used in the
development of budget analyses and planning.
4
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Marketing: New store locations generally are not advertised in the media
until several weeks after they have been opened in order to give the staff time
to adjust to local customer habits and traffic volume. To effectively reach
consumers in the primary trade area for each Cracker Barrel store and also
interstate travelers and tourists, outdoor advertising is the primary
advertising media utilized, accounting for approximately 54% of advertising
expenditures. Advertising costs are approximately 2% of annual sales.
Seasonal Aspects: The profits of the Company historically have been
lower in the Company's second fiscal quarter than its first and third, while
profits of the Company historically have been highest in the Company's fourth
fiscal quarter. Management attributes these variations primarily to the
decrease in interstate tourist traffic during the winter months and the
increase in interstate tourist traffic during the summer months.
Working Capital: Since substantially all sales in the restaurant
industry are for cash, the Company, like most other restaurant companies, is
able and may from time to time operate with a negative working capital.
Inventories are generally financed from normal trade credit aided by rapid
turnover of the restaurant inventory.
Expansion
The Company's primary customer is the interstate traveler. Therefore,
the Company's major emphasis in the opening of new stores will continue to be
locating stores at interstate highway locations. In addition, specific major
tourist destinations will be targeted as potential locations for new units.
The Company opened thirty new stores in fiscal 1994. Five of the stores
are located on Interstate 35 in Round Rock, Texas, Norman, Oklahoma, Liberty,
Missouri, Lakeville, Minnesota, and Lacy Lakeview, Texas; three are on
Interstate 75 in Flint, Michigan, Gainesville, Florida, and Middletown, Ohio;
three are located on Interstate 80 in Austintown, Ohio, Davenport, Iowa, and
Tinley Park, Illinois; two are located on Interstate 10 in Baytown, Texas and
Lafayette, Louisiana; two are on Interstate 40 in Knoxville, Tennessee and
Oklahoma City, Oklahoma; there is one store each on Interstate 4 in Sanford,
Florida, U.S. Highway 17 in North Myrtle Beach, South Carolina, Interstate 20
in Augusta, Georgia, U.S. Highway 41 in Germantown, Wisconsin, Interstate 44 in
Joplin, Missouri, Interstate 55 in Horn Lake, Mississippi, Interstate 64 in
Newport News, Virginia, Interstate 70 in Columbus, Ohio, Interstate 77 in
Akron, Ohio, Interstate 81 in Winchester, Virginia, Interstate 94 in Battle
Creek, Michigan, Interstate 96 in Walker, Michigan, Interstate 470 in Topeka,
Kansas, Interstate 635 in Mesquite, Texas and Interstate 694 in Brooklyn
Center, Minnesota.
The Company plans to open thirty-six new stores by the end of fiscal
1995. Nine of the stores are already open; there is one each on Interstate 70
in Independence, Missouri, Interstate 35 in Lewisville, Texas, Interstate 45 in
League City, Texas, Interstate 83 in York, Pennsyvania, Interstate 24 in
Chattanooga, Tennessee, Interstate 4 in Lakeland, Florida, Interstate 494 in
Woodbury, Minnesota, Interstate 88 in Napierville, Illinois and Interstate 10
in Pensacola, Florida.
Prior to committing to a new location, the Company performs extensive
reviews of various available sites, gathering approximate cost, demographic and
traffic data. The Company utilizes in-house engineers to consult on
architectural plans, to develop engineering plans and to oversee new
construction. The Company is currently engaged in the process of seeking and
selecting new sites, negotiating purchase or lease terms and developing chosen
sites.
5
<PAGE> 6
It is the Company's preference to own its restaurants. The Company
presently owns 174 of its 191 stores. Currently, average cost for a new store
is approximately $600,000 for land and $1,800,000 for site work, building and
equipment. The current store size is approximately 9,700 square feet with 176
seats in the restaurant.
Employees
As of July 29, 1994, Cracker Barrel employed 21,796 people, of whom 127
were in advisory and supervisory capacities, 1,121 were in store management
positions and 12 were officers of the Company. Most of the restaurant
personnel are employed on a full-time basis. The Company has an incentive plan
for its hourly employees which is intended to lower turnover and to increase
productivity by providing a defined career path through testing and ranking of
employees. The Company's employees are not represented by any union, and
management considers its employee relations to be good.
Competition
The restaurant business is highly competitive and 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. The principal basis of competition in the industry is the quality
and price of the food products offered. Site selection, quality and speed of
service, advertising and the attractiveness of facilities are also important.
There are a large number of restaurants catering to the public, including
several franchised operations in the family segment of the restaurant industry,
which are substantially larger and have greater financial and marketing
resources than those of the Company and which compete directly and indirectly
in all areas in which the Company operates.
Trademarks
The Company owns certain registered copyrights, patents and trademarks
relating to the name "Cracker Barrel Old Country Store," its logo, menu, design
of building, and other aspects of its operations. The Company believes that
the use of this name has some value in maintaining the atmosphere and public
acceptance of its mode of operations.
Research and Development
While research and development are important to the Company, these
expenditures have not been material.
Compliance With Environmental Protection Requirements
Compliance with federal, state and local provisions which have been
enacted or adopted regulating the discharge of materials into the environment
should have no material effect upon capital expenditures, earnings, or the
competitive position of the Company.
6
<PAGE> 7
ITEM 2. PROPERTIES
The Company's present corporate headquarters and warehouse facilities are
situated on approximately 120 acres of land owned by the Company in Lebanon,
Tennessee.
In addition to the corporate facilities, the Company owns or leases the
following properties:
<TABLE>
<CAPTION>
State Owned Leased
- - ----- ----------------- ----------------
Land Buildings Land Buildings
---- --------- ---- ---------
<S> <C> <C> <C> <C>
Tennessee 25 27 8 5
Georgia 17 17 2 2
Florida 17 17 - -
Indiana 14 13 - -
Ohio 12 12 1 -
Illinois 12 12 1 -
Texas 12 8 - -
Kentucky 9 9 2 2
North Carolina 9 9 1 -
South Carolina 7 8 2 1
Missouri 9 9 - -
Virginia 8 7 - -
Michigan 8 5 - -
Alabama 5 5 1 1
Wisconsin 6 5 - -
Minnesota 4 3 - -
Louisiana 3 3 - -
Mississippi 3 3 - -
Oklahoma 2 2 - -
West Virginia 2 2 - -
Iowa 2 2 - -
Pennsylvania 1 1 - -
Kansas 1 1 - -
</TABLE>
See "Business-Operations" and "Business-Expansion" for additional
information on the Company's stores.
ITEM 3. LEGAL PROCEEDINGS
The Company is not involved in any material pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
7
<PAGE> 8
Pursuant to Instruction 3 to Item 401(b) of Regulation S-K and General
Instruction G(3) to Form 10-K, the following information is included in Part I
of this Form 10-K.
Executive Officers of the Registrant
The following table sets forth certain information concerning the
executive officers of the Company as of September 26, 1994:
<TABLE>
<CAPTION>
Name Age Position with Registrant
- - ---- --- ------------------------
<S> <C> <C>
Dan W. Evins 59 Chairman of the Board,
President & Chief Executive Officer
Jimmie D. White 53 Senior Vice President,
Finance & Chief Financial Officer
Reginald M. Mudd 41 Senior Vice President
Operations & Chief Operations Officer
Michael D. Adkins 39 Vice President, Restaurant Operations
Richard G. Parsons 42 Vice President, Merchandising
Donald G. Kravitz 58 Vice President, Development
Mark W. Tanzer 37 Vice President, Product Development
Frank J. McAvoy, Jr. 46 Vice President, Operations Services
O. E. Philpot 60 Vice President, Marketing
Mattie H. Hankins 54 Vice President & Comptroller
</TABLE>
As of the end of fiscal 1994, no executive officer had been employed less
than five years.
8
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Since the initial public offering of the Company's common stock in
November 1981, the Company's common stock has been traded on The Nasdaq Stock
Market (National Market) with the symbol CBRL. There were 15,667
shareholders of record as of September 26, 1994.
The following table indicates the high and low sales prices of the
Company's common stock as reported on The Nasdaq Stock Market (National Market)
during the periods indicated.
<TABLE>
<CAPTION>
Fiscal Year 1994 Prices Fiscal Year 1993 Prices
----------------------- -----------------------
Quarter High Low High Low
- - ------- ---- --- ---- ---
<S> <C> <C> <C> <C>
First $29.25 $22.50 $27.33 $20.83
Second 29.75 24.50 30.67 26.67
Third 29.13 25.00 31.00 24.75
Fourth 28.00 21.25 34.25 24.50
</TABLE>
In September 1983 the Board of Directors of the Company initiated a policy
of declaring dividends on a quarterly basis. Prior to such date the Board
followed a policy of declaring annual dividends during the first fiscal
quarter. Quarterly dividends of $.00417 per share were paid for the first two
quarters of fiscal 1993. Dividends of $.00500 per share were paid for the last
two quarters of fiscal 1993 and all four quarters of fiscal 1994. The Company
forsees paying comparable cash dividends per share in the future.
The stock prices and dividends per share have been adjusted to reflect the
three-for-two stock split in the form of 50% stock dividends distributed to
stockholders on March 19, 1993.
The covenants relating to the $30,000,000 of 9.53% Senior Notes restrict
the payment of cash dividends and the purchase of treasury stock. Retained
earnings not restricted under the covenants were approximately $260,000,000 at
July 29, 1994.
ITEM 6. SELECTED FINANCIAL DATA
The table "Selected Financial Data" on page 17 of the Company's Annual
Report to Shareholders for the year ended July 29, 1994 (the "1994 Annual
Report") is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following portions of the 1994 Annual Report are incorporated herein
by reference:
Management's Discussion and Analysis of Financial Condition and Results of
Operations on pages 18 and 19.
9
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following portions of the 1994 Annual Report are incorporated herein
by reference:
Financial Statements and Independent Auditors' Report on pages 20
through 30.
Quarterly Financial Data (Unaudited) on page 29.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item with respect to directors of the
Company is incorporated herein by reference to the section entitled "Election
of Directors" in the Company's definitive proxy statement for its 1994 Annual
Meeting of Shareholders (the "1994 Proxy Statement"). The information required
by this item with respect to executive officers of the Company is set forth in
Part I of this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated herein by reference
to the section entitled "Executive Compensation" in the Company's 1994 Proxy
Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is incorporated herein by reference
to the section entitled "Security Ownership of Management" in the Company's
1994 Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated herein by reference
to the section entitled "Transactions with Management" in the Company's 1994
Proxy Statement.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
A. List of documents filed as part of this report:
1. The following Financial Statements and the Report of Deloitte &
Touche LLP on pages 20 through 30 of the 1994 Annual Report are
incorporated herein by reference:
Independent Auditor's Report dated September 7, 1994
Balance Sheets as of July 29, 1994 and July 30, 1993
Statements of Income for each of the three fiscal years ended
July 29, 1994, July 30, 1993 and July 31, 1992
Statements of Changes in Stockholders' Equity for each of the
three fiscal years ended July 29, 1994, July 30, 1993 and July 31, 1992
Statements of Cash Flows for each of the three fiscal years
ended July 29, 1994, July 30, 1993 and July 31, 1992
Notes to Financial Statements
2. The following supplemental schedules as of July 29, 1994, July
30, 1993 and July 31, 1992 and for each of the three fiscal years ended
July 29, 1994, July 30, 1993 and July 31, 1992 are included as required
by Item 8 of Form 10-K.
Schedule I Short-term and Long-term Investments
Schedule V Property and Equipment
Schedule VI Accumulated Depreciation and Amortization of
Property and Equipment
Schedule X Supplementary Income Statement Information
All other schedules for which provision is made in the
applicable accounting regulations of the Securities and Exchange
Commission are not required under the related instructions or are not
applicable and therefore have been omitted.
3. The exhibits listed in the accompanying Index to Exhibits on
page 18 are filed as part of this annual report
B. Reports on Form 8-K:
There were no reports filed on Form 8-K during the fourth quarter of the
fiscal year ended July 29, 1994.
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INDEPENDENT AUDITORS' REPORT
Cracker Barrel Old Country Store, Inc.:
We have audited the financial statements of Cracker Barrel Old Country
Store, Inc. (the "Company") as of July 29, 1994 and July 30, 1993, and for each
of the three fiscal years in the period ended July 29, 1994, and have issued
our report thereon dated September 7, 1994; such financial statements and
report are included in your 1994 Annual Report to shareholders and are
incorporated herein by reference. Our audits also included the financial
statement schedules of Cracker Barrel Old Country Store, Inc., listed in Item
14. These financial statement schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits. In our opinion, such financial statement schedules, when considered in
relation to the basic financial statements taken as a whole, present fairly in
all material respects the information set forth therein.
Deloitte & Touche LLP
Nashville, Tennessee
September 7, 1994
12
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CRACKER BARREL OLD COUNTRY STORE, INC. SUPPLEMENTAL SCHEDULE I
SHORT-TERM AND LONG-TERM INVESTMENTS
<TABLE>
<CAPTION>
JULY 29, 1994
--------------------------------------------------------
Market Carrying
Name of Issuer Principal Cost Value Value
- - -------------- --------- ---- ------ -----
<S> <C> <C> <C> <C>
US Government & Agencies $ 6,000,000 $ 6,496,261 $ 6,168,750 $ 6,219,429
State Governments & Agencies 3,930,000 3,939,618 3,931,604 3,932,644
City & County Governments & Agencies:
Tennessee:
Clarksville, TN Pub Bldg Auth
Ser 1994 5,000,000 5,000,000 5,000,000 5,000,000
Nashville, TN David Lipscomb Univ IDB 2,455,000 2,455,000 2,455,000 2,455,000
Nashville, TN Water & Sewer Rev Ref 2,775,000 3,019,486 2,897,037 2,900,929
Nashville, TN Health & Educ Rev Ref 1,500,000 1,500,000 1,493,295 1,500,000
Memphis, TN Sanit & Sewer System
Rev Ref 1,000,000 1,000,670 999,190 1,000,082
Memphis/Shelby Co, TN Airport Rev Ref 660,000 660,000 659,525 660,000
Nashville, TN Pre-ref Convention Ctr 575,000 611,754 603,992 608,046
Kingsport, TN Ref Rev & Tax Water 500,000 500,000 500,000 500,000
Knox Co, TN G/O Scheduled Bonds 365,000 378,096 373,935 375,702
Murfreesboro, TN G/O Refunding 200,000 199,482 199,674 199,828
Maury Co, TN Health & Educ Fac Board 100,000 100,000 100,000 100,000
California 9,000,000 9,000,000 9,000,000 9,000,000
Ohio 2,500,000 2,500,000 2,500,000 2,500,000
Texas 1,445,000 1,519,188 1,488,244 1,495,589
Minnesota 600,000 657,279 622,530 623,173
Washington, D.C. 300,000 324,483 312,084 311,945
Auction Preferred Stock:
Muni Partners Fund II Inc ARP Ser M 4,800,000 4,800,000 4,800,000 4,800,000
Muni Partners Fund AP Ser M 3,500,000 3,500,000 3,500,000 3,500,000
Van Kampen Merritt Tr Inv Grade PA 3,000,000 3,000,000 3,000,000 3,000,000
Municipal Premium Income Tr Ser C 2,000,000 2,000,000 2,000,000 2,000,000
Van Kampen Merritt Municipal Tr Ser C 2,000,000 2,000,000 2,000,000 2,000,000
Intercapital Insured Muni Tr II Ser 22,000,000 2,000,000 2,000,000 2,000,000
Van Kampen Mer Tr Inv Grade Muni Pfd B 750,000 750,000 750,000 750,000
Muniyield Pennsylvania Insured Fund 400,000 400,000 400,000 400,000
Nuveen Premier Insured Muni Inc Fd
Ser Th 50,000 50,000 50,000 50,000
Commercial Paper 7,592,500 7,781,762 7,626,879 7,648,452
----------- ----------- ----------- -----------
Total Short-Term Investments $64,997,500 $66,143,079 $65,431,739 $65,530,819
=========== =========== =========== ===========
US Government & Agencies $11,757,000 $12,670,270 $12,017,701 $12,289,434
City & County Governments & Agencies 305,000 325,578 313,702 316,713
Commercial Paper 2,961,000 3,161,705 3,023,645 3,084,652
----------- ----------- ----------- -----------
Total Long-Term Investments $15,023,000 $16,157,553 $15,355,048 $15,690,799
=========== =========== =========== ===========
</TABLE>
13
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CRACKER BARREL OLD COUNTRY STORE, INC. SUPPLEMENTAL SCHEDULE V
PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
Balance at Balance
Beginning Additions at end
of Year at Cost Retirements Changes of Year
<S> <C> <C> <C> <C> <C>
YEAR ENDED JULY 29, 1994:
Land $ 83,971,175 $ 23,491,342 $ 484,982 $ 23,129 $107,000,664
Buildings & improvements 153,237,487 28,787,737 655,264 20,456,432 201,826,392
Buildings under capital leases 3,289,285 -- -- -- 3,289,285
Restaurant & other equipment 89,272,873 23,891,360 3,065,708 4,535,471 114,633,996
Leasehold improvements 7,572,204 2,059,480 167,177 -- 9,464,507
Construction in progress 25,244,569 23,715,004 24,904 (25,015,032) 23,919,637
------------ ------------ ---------- ------------ ------------
TOTAL $362,587,593 $101,944,923 $4,398,035 $ 0 $460,134,481
============ ============ ========== ============ ============
YEAR ENDED JULY 30, 1993:
Land $ 66,793,234 $ 17,178,949 $ 1,008 $ -- $ 83,971,175
Buildings & improvements 119,213,360 25,350,582 63,653 8,737,198 153,237,487
Buildings under capital leases 3,289,285 -- -- -- 3,289,285
Restaurant & other equipment 71,662,633 16,229,384 3,053,587 4,434,443 89,272,873
Leasehold improvements 6,394,972 1,366,561 209,229 19,900 7,572,204
Construction in progress 13,573,083 24,868,039 5,012 (13,191,541) 25,244,569
------------ ------------ ---------- ------------ ------------
TOTAL $280,926,567 $ 84,993,515 $3,332,489 $ 0 $362,587,593
============ ============ ========== ============ ============
YEAR ENDED JULY 31, 1992:
Land $ 48,310,450 $ 18,662,379 $ 183,556 $ 3,961 $ 66,793,234
Buildings & improvements 88,123,466 21,425,477 212,796 9,877,213 119,213,360
Buildings under capital leases 3,503,390 -- 214,105 -- 3,289,285
Restaurant & other equipment 56,163,710 16,561,606 3,486,511 2,423,828 71,662,633
Leasehold improvements 4,841,856 1,375,061 145,624 323,679 6,394,972
Construction in progress 12,799,657 13,484,483 82,376 (12,628,681) 13,573,083
------------ ------------- ---------- ------------ ------------
TOTAL $213,742,529 $ 71,509,006 $4,324,968 $ 0 $280,926,567
============ ============ ========== ============ ============
</TABLE>
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CRACKER BARREL OLD COUNTRY STORE, INC. SUPPLEMENTAL SCHEDULE VI
ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
Additions
Balance at Charged To Balance
Beginning Costs And at end
of Year Expenses Retirements Changes of Year
<S> <C> <C> <C> <C> <C>
YEAR ENDED JULY 29, 1994:
Buildings & improvements $15,870,111 $ 5,211,501 $ 212,873 -- $20,868,739
Buildings under capital leases 2,162,579 125,650 -- -- 2,288,229
Restaurant & other equipment 37,724,426 14,732,326 2,838,502 -- 49,618,250
Leasehold improvements ,234,611 331,924 67,077 -- 1,399,458
----------- ----------- ---------- --------- -----------
TOTAL $56,991,727 $20,401,401 $3,218,452 - $74,174,676
=========== =========== ========== ========= ===========
YEAR ENDED JULY 30, 1993:
Buildings & improvements $11,885,571 $ 3,985,188 $ 648 -- $15,870,111
Buildings under capital leases 2,011,981 150,598 -- -- 2,162,579
Restaurant & other equipment 29,230,610 11,369,973 2,876,157 -- 37,724,426
Leasehold improvements 1,104,482 296,722 166,593 -- 1,234,611
----------- ----------- ---------- --------- -----------
TOTAL $44,232,644 $15,802,481 $3,043,398 -- $56,991,727
=========== =========== ========== ========= ===========
YEAR ENDED JULY 31, 1992:
Buildings & improvements $ 9,002,036 $ 3,049,089 $ 165,554 -- $11,885,571
Buildings under capital leases 2,050,898 175,188 214,105 -- 2,011,981
Restaurant & other equipment 23,031,167 9,015,377 2,815,934 -- 29,230,610
Leasehold improvements 989,399 257,392 142,309 -- 1,104,482
----------- ----------- ---------- --------- -----------
TOTAL $35,073,500 $12,497,046 $3,337,902 -- $44,232,644
=========== =========== ========== ========= ===========
</TABLE>
15
<PAGE> 16
CRACKER BARREL OLD COUNTRY STORE, INC. SUPPLEMENTAL SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
<TABLE>
<CAPTION>
Charged to Cost and Expenses
For Fiscal Year
-----------------------------------------
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Maintenance and repairs $ 8,644,741 $6,726,884 $5,090,681
Advertising costs (A) $12,212,528 $9,955,902 $7,873,082
</TABLE>
All other supplemental income statement information is not required under the
related instructions or is not applicable and therefore has been omitted.
(A) Advertising costs include sign rentals for outdoor advertising.
16
<PAGE> 17
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Cracker Barrel Old Country Store, Inc. has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CRACKER BARREL OLD COUNTRY STORE, INC.
<TABLE>
<S> <C> <C>
By: /s/D.W. Evins By: /s/Mattie H. Hankins
------------------------------ ------------------------------
D. W. Evins Mattie H. Hankins
President, CEO Vice President & Comptroller
(Principal Executive Officer)
By: /s/Jimmie D. White
------------------------------
Jimmie D. White
Senior Vice President, Finance
(Principal Financial Officer)
</TABLE>
Date: October 24, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person on behalf of the
Company and in the capacities and on the dates indicated.
<TABLE>
<S> <C>
/s/James C. Bradshaw, M.D.
- - --------------------------------- ----------------------------------
James C. Bradshaw, M.D., Director Charles T. Lowe, Jr., Director
/s/B.F. Lowery
- - --------------------------------- ----------------------------------
Robert V. Dale, Director B. F. Lowery, Director
/s/Dan W. Evins /s/Gordon L. Miller
- - --------------------------------- ----------------------------------
Dan W. Evins, Director Gordon L. Miller, Director
- - --------------------------------- ----------------------------------
Edgar W. Evins, Director Martha M. Mitchell, Director
- - --------------------------------- ----------------------------------
William D. Heydel, Director James H. Stewart, Director
/s/Robert C. Hilton /s/Jimmie D. White
- - --------------------------------- ----------------------------------
Robert C. Hilton, Director Jimmie D. White, Director
/s/Charles E. Jones, Jr.
- - ---------------------------------
Charles E. Jones, Jr., Director
</TABLE>
17
<PAGE> 18
INDEX TO EXHIBITS
Exhibit
<TABLE>
<S> <C>
3(a) Charter (6)
3(b) Bylaws(1)
4(a) Note Agreement dated as of January 1, 1991,
relating to $30,000,000 of 9.53% Senior Notes (4)
10(a) Credit Agreement dated January 28, 1991,
between the Company and Wachovia Bank and
Trust Company, N.A. (4)
10(b) Lease dated August 27, 1981 for lease of
Clarksville, Tennessee, and Macon, Georgia,
stores between B. F. Lowery, general counsel
and a director, and the Company (2)
10(c) The Company's Incentive Stock Option Plan of
1982, as amended (3)
10(d) The Company's 1987 Stock Option Plan, as
amended (6)
10(e) The Company's Non-Employee Director's Stock
Option Plan, as amended (5)
10(f) The Company's Executive Employment Agreement
(3)
13 Pertinent portions, incorporated by reference herein, of the Company's
1994 Annual Report to Shareholders
22 Definitive Proxy Materials
23 Consent of Deloitte & Touche LLP
27 Financial Data Schedule (For SEC use only)
</TABLE>
18
<PAGE> 19
<TABLE>
<S> <C>
(1) Incorporated by reference to the Company's
Registration Statement on Form S-2 under the
Securities Act of 1933 (File No. 2-82257).
(2) Incorporated by reference to the Company's
Registration Statement on Form S-7 under the
Securitites Act of 1933 (File No. 2-74266).
(3) Incorporated by reference to the Company's Annual
Report on Form 10-K under the Securities Exchange
Act of 1934 for the fiscal year ended July 28, 1989
(File No. 0-7536).
(4) Incorporated by reference to the Company's
Registration Statement on Form S-3 under the
Securities Act of 1933 (File No. 33-38989).
(5) Incorporated by reference to the Company's Annual
Report on Form 10-K under the Securities Exchange
Act of 1934 for the fiscal year ended August 2, 1991
(File No. 0-7536).
(6) Incorporated by reference to the Company's
Registration Statement on Form S-8 under the
Securities Act of 1933 (File No. 33-45482).
</TABLE>
19
<PAGE> 1
EXHIBIT 13
<PAGE> 2
Selected Financial Data
<TABLE>
<CAPTION>
For each of the fiscal years ended
(In thousands except per share data)
July 29, July 30, July 31, August 2, August 3,
1994 1993 1992 1991 1990
- - --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATING RESULTS
Net sales $640,899 $517,616 $400,577 $300,209 $225,518
Cost of goods sold 215,071 171,709 130,885 100,720 79,043
Expenses:
Store operations 299,921 242,582 189,275 141,668 106,687
General and
administrative 36,807 30,096 25,186 20,131 15,309
Total expenses 336,728 272,678 214,461 161,799 121,996
Operating income 89,100 73,229 55,231 37,691 24,479
Interest expense 2,136 2,885 3,374 2,839 1,338
Interest income 3,604 2,600 2,365 1,700 922
Income before income
taxes 90,568 72,944 54,222 36,551 24,063
Provision for income
taxes 33,609 27,292 20,279 13,679 8,796
Income before change in
accounting principle 56,959 45,652 33,943 22,872 15,267
Cumulative effect of
change in accounting
principle** 988 -- -- -- --
Net income 57,947 45,652 33,943 22,872 15,267
SHARE DATA*
Earnings before change
in accounting principle
per share $ .94 $ .78 $ .60 $ .44 $ .32
Cumulative effect of
change in accounting
principle per share** .02 -- -- -- --
Net earnings per share $ .96 $ .78 $ .60 $ .44 $ .32
Dividends per share $ .02 $ .02 $ .02 $ .02 $ .01
Weighted average
shares outstanding 60,607 58,789 56,204 51,497 48,360
FINANCIAL POSITION
Working capital $ 60,721 $ 76,115 $ 32,565 $ 50,280 $ (5,808)
Total assets 530,064 469,073 313,460 264,666 145,156
Property and equipment
additions-net 100,736 84,837 71,115 63,149 37,986
Property and equipment
-net 385,960 305,596 236,694 178,669 125,485
Long-term debt 23,500 36,576 41,449 42,516 13,762
Capital lease
obligations 1,709 1,802 1,876 2,032 2,188
Stockholders' equity 429,846 366,785 222,110 180,443 99,941
==============================================================================================================
</TABLE>
* Adjusted to give effect for the three-for-two stock splits in the form of
50% stock dividends distributed to stockholders on March 19, 1993, March 20,
1992 and March 22, 1991.
** The Company adopted Statement of Financial Accounting Standards (SFAS) No.
109, "Accounting for Income Taxes", effective July 31, 1993. (See Note 7).
<PAGE> 3
Market Price and Dividend Information
The following table indicates the high and low sale prices of the Company's
common stock as reported by The Nasdaq Stock Market (National Market) and
dividends paid. These prices and dividends have been adjusted to give effect
for the three-for-two stock split in the form of a 50% stock dividend
distributed to stockholders on March 19, 1993.
<TABLE>
<CAPTION>
Fiscal Year 1994 Fiscal Year 1993
---------------- ----------------
Prices Prices
----------------------- Dividends ---------------------- Dividends
Quarter High Low Paid High Low Paid
- - ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
First $29.25 $22.50 $ .00500 $27.33 $20.83 $ .00417
Second 29.75 24.50 .00500 30.67 26.67 .00417
Third 29.13 25.00 .00500 31.00 24.75 .00500
Fourth 28.00 21.25 .00500 34.25 24.50 .00500
- - ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
The following table highlights operating results over the past three
fiscal years:
<TABLE>
<CAPTION>
Period to Period
Relationship to Net Sales Increase(Decrease)
------------------------- ------------------
1994 1993 1992 1994 vs 1993 1993 vs 1992
- - -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Sales
Restaurant 78.2% 78.8% 79.8% 23% 28%
Gift shop 21.8 21.2 20.2 28 35
---- ---- ----
100.0 100.0 100.0 24 29
Cost of goods sold 33.6 33.2 32.7 25 31
Expenses
Store operations 46.8 46.9 47.3 24 28
General &
administrative 5.7 5.8 6.3 22 19
Operating income 13.9 14.1 13.8 22 33
Interest expense .3 .6 .8 (26) (15)
Interest income .6 .5 .6 39 10
Income before
income taxes 14.1 14.1 13.5 24 35
Provision for
income taxes 5.2 5.3 5.1 23 35
Income before change in
accounting principle 8.9 8.8 8.5 25 34
Cumulative effect of change
in accounting principle* .2 -- -- -- --
Net income 9.0 8.8 8.5 27 34
==============================================================================
</TABLE>
*The Company adopted Statement of Financial Accounting Standards (SFAS) No.
109, "Accounting for Income Taxes", effective July 31, 1993. (See Note 7).
Same Store Sales Analysis
<TABLE>
<CAPTION>
Period to Period
Increase
--------------------------------
1994 vs 1993 1993 vs 1992
(127 Stores) (106 Stores)
- - -----------------------------------------------------------------------------------
<S> <C> <C>
Restaurant 4% 7%
Gift shop 7 12
Restaurant & gift shop 4 8
======================================================================================
</TABLE>
Same store restaurant sales (which compares sales of stores open
throughout the periods under comparison) increased 4% in fiscal 1994 including
menu price increases averaging 3% and a real sales increase of 1%. In fiscal
1993 same store restaurant sales increased 7% consisting of 3% in average menu
price increases and 4% in real terms.
Same store gift shop sales increased 7% in fiscal 1994 over 1993 while
sales increased 12% in fiscal 1993 over 1992.
In fiscal 1994 total sales (restaurant and gift shop) in the 127 same
stores averaged $3.81 million. Restaurant sales were 78.3% of total sales in
the 127 same stores in fiscal 1994 and 78.8% in fiscal 1993.
<PAGE> 5
Total net sales, which increased 24% and 29% in fiscal 1994 and 1993,
respectively, benefited from comparable store sales growth and the opening of
30, 25 and 21 new stores in fiscal 1994, 1993 and 1992, respectively.
Cost of goods sold as a percentage of net sales increased in 1994 to
33.6% from 33.2% in 1993. This increase was primarily due to an increasing mix
of gift shop sales which have a higher cost than restaurant sales. Cost of
goods sold as a percentage of net sales increased in 1993 to 33.2% from 32.7%
in 1992. This increase was primarily due to an increasing mix of gift shop
sales which have a higher cost than restaurant sales.
Store operations expenses (which includes all store labor costs) as a
percentage of net sales decreased to 46.8% in fiscal 1994 from 46.9% in fiscal
1993. The primary reasons for this decrease were improved volume and lower
workers' compensation insurance expenses as a result of various safety programs
instituted in the stores. Store operations expenses decreased from 47.3% in
fiscal 1992 to 46.9% in fiscal 1993. The decrease was primarily due to
improved volume.
General and administrative expenses as a percentage of net sales have
declined over the past three fiscal years from 6.3% in 1992 to 5.8% in 1993 and
to 5.7% in 1994. This reduction was accomplished largely due to improved
volume. The largest area of increased spending in absolute dollars has been in
the operations area relating to the new gift shop warehouse required to support
the store expansion program that resulted in a 72% increase in the number of
stores from 106 to 182 over the past three fiscal years.
Interest expense decreased to $2.1 million in fiscal 1994 from $2.9
million in fiscal 1993 primarily due to the prepayment of approximately $6.8
million in unsecured notes payable and $3.5 million of Industrial Development
Revenue Bonds in the second quarter of fiscal 1994 (see Note 4) and an increase
in capitalized interest related to the increase in additional stores opened
from 25 in 1993 to 30 in 1994. Interest expense decreased to $2.9 million in
fiscal 1993 from $3.4 million in fiscal 1992 primarily due to the prepayment of
approximately $1.5 million in mortgage notes in the first quarter of fiscal
1993 and an increase in capitalized interest related to the new gift shop
warehouse.
Interest income has increased in the past three fiscal years from $2.4
million in fiscal 1992 to $2.6 million in fiscal 1993 to $3.6 million in fiscal
1994. The increase from fiscal 1992 to fiscal 1993 was primarily due to income
received on the remaining proceeds from the sale (after giving effect to the
stock split - see Note 5) of 2,587,500 new common shares in January 1993 and
the exercise of stock options (see Note 6) in fiscal 1993. The increase from
fiscal 1993 to fiscal 1994 was primarily due to income received for a full
fiscal year on the remaining proceeds from the sale (after giving effect to the
stock split - see Note 5) of 2,587,500 new common shares in January 1993 and the
exercise of stock options (see Note 6) in fiscal 1993.
Provision for income taxes as a percent of pretax income was 37.1% for
fiscal 1994 and 37.4% for fiscal 1993 and 1992. The Company adopted Statement
of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income
Taxes", effective July 31, 1993. (See Note 7).
Liquidity and Capital Resources
The Company's cash generated from operating activities was $72.3 million
in fiscal 1994. Most of this cash was provided by net income adjusted by
depreciation. Increases in inventories were partially offset by increases in
accounts payable, taxes withheld and accrued, income taxes payable and accrued
employee compensation.
Capital expenditures were $101.9 million in fiscal 1994. Land purchases
and cost of new stores accounted for substantially all of these expenditures,
except for $3.8 million for the new gift shop warehouse.
<PAGE> 6
The Company has received approximately $4.8 million in fiscal 1994 from
the exercise of stock options representing approximately 300,000 shares of
common stock. The Company has also received as a result of the stock option
exercises approximately $1.5 million in federal income tax benefit in fiscal
1994, which was credited directly to Additional Paid-In Capital (see Note 6).
The Company's internally generated cash and short-term and long-term
investments were sufficient to finance all of its growth in fiscal 1994.
The Company estimates that its capital expenditures for fiscal 1995 will
be approximately $120 million, substantially all of which will be land
purchases and cost of new stores except for $6 million relating to the
renovation of the old gift shop warehouse into office space. The Company's
cash, short-term and long-term investments, along with internally generated
cash from operating activities should be sufficient to finance its continued
expansion in fiscal 1995 and its expansion plans through fiscal 1997.
Presently the Company has an unused revolving credit line of $15 million.
<PAGE> 7
Balance Sheets
<TABLE>
<CAPTION>
July 29, July 30,
Assets 1994 1993
- - --------------------------------------------------------------------------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents (Note 1) $ 13,050,523 $ 38,552,111
Short-term investments (Notes 1 and 3) 65,530,819 65,094,791
Receivables 2,993,735 2,436,918
Inventories (Notes 1 and 2) 41,989,546 28,426,408
Prepaid expenses 1,094,862 832,262
Deferred income taxes (Notes 1 and 7) 3,220,016 --
------------ ------------
Total current assets 127,879,501 135,342,490
------------ ------------
Property and Equipment (Notes 1 and 9):
Land 107,000,664 83,971,175
Buildings and improvements 201,826,392 153,237,487
Buildings under capital leases 3,289,285 3,289,285
Restaurant and other equipment 114,633,996 89,272,873
Leasehold improvements 9,464,507 7,572,204
Construction in progress 23,919,637 25,244,569
------------ ------------
Total 460,134,481 362,587,593
Less: Accumulated depreciation 71,886,447 54,829,148
Accumulated amortization of
capital leases 2,288,229 2,162,579
------------ ------------
Property and equipment-net 385,959,805 305,595,866
------------ ------------
Long-term investments (Notes 1 and 3) 15,690,799 27,421,378
------------ ------------
Other assets 533,622 712,783
------------ ------------
Total $530,063,727 $469,072,517
============ ============
</TABLE>
See notes to financial statements.
<PAGE> 8
<TABLE>
<CAPTION>
July 29, July 30,
Liabilities and Stockholders' Equity 1994 1993
- - --------------------------------------------------------------------------------
<S> <C> <C>
Current Liabilities:
Accounts payable $ 25,766,024 $ 23,137,298
Current maturities of
long-term debt (Note 4) 3,500,000 3,822,156
Current portion of capital lease
obligations (Note 9) 93,781 79,597
Taxes withheld and accrued 7,407,263 6,212,278
Income taxes payable 5,039,688 1,926,374
Accrued employee compensation 13,187,656 10,973,979
Accrued employee benefits 7,882,069 8,872,100
Other accrued expenses 4,281,525 4,203,432
------------ ------------
Total current liabilities 67,158,006 59,227,214
------------ ------------
Long-Term Debt (Note 4) 23,500,000 36,575,799
------------ ------------
Capital Lease Obligations (Note 9) 1,708,619 1,801,900
------------ ------------
Deferred Income Taxes (Notes 1 and 7) 7,851,185 4,682,931
------------ ------------
Commitments and Contingencies (Note 9)
Stockholders' Equity (Notes 4, 5 and 6):
Common stock - 150,000,000 shares of $.50
par value authorized; shares issued and
outstanding: 1994, 59,901,316; 1993,
59,570,468 29,950,658 29,785,234
Additional paid-in capital 194,073,393 187,929,934
Retained earnings 205,821,866 149,069,505
------------ ------------
Total stockholders' equity 429,845,917 366,784,673
------------ ------------
Total $530,063,727 $469,072,517
============ ============
</TABLE>
See notes to financial statements.
<PAGE> 9
Statements of Income
<TABLE>
<CAPTION>
Fiscal years ended
July 29, July 30, July 31,
1994 1993 1992
- - ------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $640,898,529 $517,616,132 $400,577,451
Cost of goods sold 215,071,169 171,708,439 130,885,297
------------ ------------ ------------
Gross profit on sales 425,827,360 345,907,693 269,692,154
------------ ------------ ------------
Expenses:
Store operations 299,920,659 242,582,314 189,275,090
General and administrative 36,806,415 30,096,037 25,185,724
------------ ------------ ------------
Total expenses 336,727,074 272,678,351 214,460,814
------------ ------------ ------------
Operating income 89,100,286 73,229,342 55,231,340
Interest expense 2,136,393 2,884,857 3,374,638
Interest income 3,603,983 2,600,000 2,365,146
------------ ------------ ------------
Income before income taxes 90,567,876 72,944,485 54,221,848
Provision for income taxes
(Notes 1 and 7) 33,608,692 27,292,000 20,279,000
------------ ------------ ------------
Income before change in
accounting principle 56,959,184 45,652,485 33,942,848
Cumulative effect of change
in accounting principle
(Note 7) 988,262 -- --
------------ ------------ ------------
Net income $ 57,947,446 $ 45,652,485 $ 33,942,848
============ ============ ============
Earnings before change in
accounting principle per
share (Notes 1 and 5) $ .94 $ .78 $ .60
Cumulative effect of change
in accounting principle
per share (Note 7) .02 -- --
----- ----- -----
Net earnings per share
(Notes 1 and 5) $ .96 $ .78 $ .60
===== ===== =====
</TABLE>
See notes to financial statements.
<PAGE> 10
Statements of Changes in Stockholders' Equity
<TABLE>
<CAPTION>
Additional Total
Common Paid-In Retained Stockholders'
Stock Capital Earnings Equity
- - ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balances at August 2, 1991 $11,981,205 $ 97,052,475 $ 71,408,939 $180,442,619
Cash dividends - $.02 a
share (876,205) (876,205)
Exercise of stock
options (Note 6) 225,179 3,796,281 4,021,460
Tax benefit realized upon
exercise of stock
options (Note 6) 4,579,000 4,579,000
Three-for-two stock split
(Note 5) 6,052,917 (6,052,917)
Net income 33,942,848 33,942,848
---------- ----------- ----------- -----------
Balances at July 31,1992 18,259,301 99,374,839 104,475,582 222,109,722
Cash dividends - $.02 a
share (1,058,562) (1,058,562)
Exercise of stock
options (Note 6) 785,674 12,354,441 13,140,115
Tax benefit realized upon
exercise of stock
options (Note 6) 17,610,000 17,610,000
Proceeds from issuance of
common stock, less
related expenses of
$221,087 862,500 68,468,413 69,330,913
Three-for-two stock split
(Note 5) 9,877,759 (9,877,759)
Net income 45,652,485 45,652,485
---------- ----------- ----------- -----------
Balances at July 30, 1993 29,785,234 187,929,934 149,069,505 366,784,673
Cash dividends - $.02 a
share (1,195,085) (1,195,085)
Exercise of stock
options (Note 6) 165,424 4,616,561 4,781,985
Tax benefit realized upon
exercise of stock
options (Note 6) 1,526,898 1,526,898
Net income 57,947,446 57,947,446
---------- ----------- ----------- -----------
Balances at July 29, 1994 $29,950,658 $194,073,393 $205,821,866 $429,845,917
========== =========== =========== ===========
</TABLE>
See notes to financial statements.
<PAGE> 11
Statements of Cash Flows
<TABLE>
<CAPTION>
Fiscal years ended
July 29, July 30, July 31,
1994 1993 1992
- - -------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 57,947,446 $ 45,652,485 $33,942,848
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization
of property and equipment 20,401,401 15,802,481 12,497,046
(Gain) loss on disposition of
property and equipment (29,697) 132,828 593,015
(Increase) decrease in
receivables (556,817) (728,490) 65,818
Increase in inventories (13,563,138) (5,234,298) (7,445,662)
Increase in prepaid expenses (262,600) (197,909) (226,838)
Decrease (increase) in
other assets 179,161 (11,141) 23,876
Increase in accounts payable 2,628,726 7,149,398 805,244
Increase in taxes withheld
and accrued 1,194,985 1,093,380 1,300,615
Increase in income taxes payable 3,113,314 243,332 182,973
Increase in accrued employee
compensation 2,213,677 427,509 2,659,049
(Decrease) increase in accrued
employee benefits (990,031) 2,586,738 2,903,056
Increase in other accrued
expenses 78,093 1,516,571 821,298
(Decrease) increase in
deferred income taxes (51,762) 189,000 (158,000)
----------- ----------- -----------
Net cash provided by
operating activities 72,302,758 68,621,884 47,964,338
----------- ----------- -----------
Cash flows from investing activities:
Decrease (increase) in short-term
and long-term investments 11,294,551 (54,938,192) 16,843,408
Purchase of property and equipment (101,944,923) (84,993,515) (71,509,006)
Proceeds from sale of property and
equipment 1,209,280 156,263 394,051
----------- ----------- -----------
Net cash used in investing
activities (89,441,092) (139,775,444) (54,271,547)
----------- ----------- -----------
</TABLE>
<PAGE> 12
<TABLE>
<S> <C> <C> <C>
Cash flows from financing activities:
Proceeds from issuance of
capital stock -- 69,330,913 --
Proceeds from exercise of
stock options 4,781,985 13,140,115 4,021,460
Tax benefit realized upon
exercise of stock options 1,526,898 17,610,000 4,579,000
Principal payments under
long-term debt and capital
lease obligations (13,477,052) (2,268,456) (1,387,659)
Dividends on common stock (1,195,085) (1,058,562) (876,205)
------------ ------------ -----------
Net cash (used in) provided by
financing activities (8,363,254) 96,754,010 6,336,596
------------ ------------ -----------
Net (decrease) increase in cash
and cash equivalents (25,501,588) 25,600,450 29,387
Cash and cash equivalents,
beginning of year 38,552,111 12,951,661 12,922,274
------------ ------------ -----------
Cash and cash equivalents,
end of year $ 13,050,523 $ 38,552,111 $12,951,661
============ ============ ===========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 3,557,507 $ 3,325,044 $ 3,804,309
Income taxes 28,126,949 9,249,668 19,938,027
</TABLE>
See notes to financial statements.
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Fiscal year - The Company's fiscal year ends on the Friday nearest July
31st and each quarter consists of thirteen weeks.
Start-up Costs - Start-up costs of a new store are expensed in the period
in which the store opens.
Cash and cash equivalents - Cash consists of cash on hand, cash on deposit
and money market funds subject to withdrawal by check or wire.
Short-term Investments - Short-term investments, primarily consisting
of auction preferred stock, municipal bonds, commercial paper and federal
government agency securities, which the Company intends to hold to maturity,
are stated at amortized cost in accordance with Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in
Debt and Equity Securities". The Company adopted SFAS No. 115 as of July 30,
1993. (See Note 3).
Inventories - Inventories are stated at the lower of cost or market. Cost
is determined by the first-in, first-out (FIFO) method.
Property and Equipment - Property and equipment are stated at cost. For
financial reporting purposes depreciation and amortization on these assets are
computed by use of the straight-line and double-declining balance methods over
the estimated useful lives of the respective assets, as follows:
<TABLE>
<CAPTION>
Years
- - ----------------------------------------------------------------------
<S> <C>
Buildings and improvements 20-45
Buildings under capital leases 10-25
Restaurant and other equipment 5-10
Leasehold improvements 3-35
- - ----------------------------------------------------------------------
</TABLE>
Accelerated depreciation methods are generally used for income tax
purposes.
Interest is capitalized in accordance with Statement of Financial
Accounting Standards No. 34, "Capitalization of Interest Costs". Capitalized
interest was $1,533,904, $1,362,460 and $1,055,033 for fiscal years 1994, 1993
and 1992, respectively.
Gain or loss is recognized upon disposal of property and equipment, and the
asset and related accumulated depreciation and amortization amounts are removed
from the accounts.
Maintenance and repairs, including the replacement of minor items, are
charged to expense, and major additions to property and equipment are
capitalized.
Income Taxes - The Company adopted Statement of Financial Accounting
Standards (SFAS) No. 109, "Accounting for Income Taxes", effective July 31,
1993. This Statement supersedes Accounting Principles Board Opinion No. 11,
"Accounting for Income Taxes", which was the Company's prior method of
accounting for income taxes. Targeted jobs tax credits and employer tax
credits for FICA taxes paid on tip income are accounted for by the flow-through
method. Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes (see
Note 7).
Earnings per common share - The computation of earnings per common share is
based on the weighted average number of outstanding common shares and
equivalents (stock options) adjusted for stock splits. The weighted average
number of outstanding common shares and equivalents were 60,607,372, 58,788,612
and 56,203,512 for 1994, 1993 and 1992, respectively.
Long-term Investments - Long-term investments, primarily consisting of
federal government agency securities and commercial paper which the Company
intends to hold to maturity, are stated at amortized cost in accordance with
SFAS No. 115. (See Note 3).
<PAGE> 14
Reclassifications - Certain reclassifications have been made in the fiscal
1993 and 1992 financial statements to conform to the classifications used in
fiscal 1994.
2. Inventories
Inventories were composed of the following at:
<TABLE>
<CAPTION>
July 29, July 30,
1994 1993
- - ---------------------------------------------------------------------------
<S> <C> <C>
Gift shop $34,379,398 $22,446,477
Restaurant 6,156,479 5,001,681
Supplies 1,435,841 978,250
- - ---------------------------------------------------------------------------
Total $41,989,546 $28,426,408
===========================================================================
</TABLE>
3. Short-term and Long-term Investments
Effective July 30, 1993, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in
Debt and Equity Securities". The Company's investment securities are
classified as held-to-maturity under SFAS No. 115 and, as a result, are carried
at amortized cost. Unrealized holding gains and losses are not reported in the
Company's financial statements, since the investments are classified as
held-to-maturity under SFAS No. 115. The adoption of SFAS No. 115 had no
effect on the Company's financial statements.
The amortized cost and market values of securities held-to-maturity at July 29,
1994 were as follows:
<TABLE>
<CAPTION>
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
- - ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury and U.S.
Government Agencies $18,508,863 $ -- $322,412 $18,186,451
Obligations of states
and political
subdivisions 33,479,651 139 29,978 33,449,812
Corporate debt
securities 10,733,104 540 83,120 10,650,524
Other securities 18,500,000 -- -- 18,500,000
- - ---------------------------------------------------------------------------
Short-term and long-term
investment securities $81,221,618 $679 $435,510 $80,786,787
===========================================================================
</TABLE>
The amortized cost and market values of securities held-to-maturity at July 30,
1993 were as follows:
<TABLE>
<CAPTION>
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
- - ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Treasury and U.S.
Government Agencies $15,121,810 $12,613 $ 5,440 $15,128,983
Obligations of states
and political
subdivisions 26,897,314 -- -- 26,897,314
Corporate debt
securities 16,451,317 7,538 8,960 16,449,895
Other securities 34,045,728 -- -- 34,045,728
- - ---------------------------------------------------------------------------
Short-term and long-term
investment securities $92,516,169 $20,151 $14,400 $92,521,920
===========================================================================
</TABLE>
<PAGE> 15
The following table shows the maturity distribution of the Company's investment
securities at July 29, 1994:
<TABLE>
<CAPTION>
Amortized Market
Maturity (Fiscal Years) Cost Value
- - ---------------------------------------------------------------------------
<S> <C> <C>
1995 $65,530,819 $65,431,739
1996-1999 15,577,676 15,242,727
2000-2004 113,123 112,321
- - ---------------------------------------------------------------------------
Short-term and long-term investments $81,221,618 $80,786,787
===========================================================================
</TABLE>
4. Debt
Long-term debt consisted of the following at:
<TABLE>
<CAPTION>
July 29, July 30,
1994 1993
- - ---------------------------------------------------------------------------
<S> <C> <C>
9.53% Senior Notes Payable in annual
installments of varying amounts from
January 15, 1994 to January 15, 2002,
with a final installment of $2,000,000
due January 15, 2003 $27,000,000 $30,000,000
Unsecured Notes Payable in annual
installments of $800,000 through 1999,
with a final installment of $2,000,000
due August 5, 2000. The note bears
interest at an annual rate of 9.5%
through 1997 and thereafter at a rate
equal to the U. S. Treasury Note rate
plus 1.2% -- 6,800,000
Industrial Development Revenue Bonds
redeemable in annual installments of
$700,000 from December 1, 2009 through
December 1, 2012, with a final
installment of $665,000 on December 1,
2013, bearing interest at an annual
rate of 8.5% -- 3,465,000
Other note payable -- 132,955
- - ---------------------------------------------------------------------------
Total 27,000,000 40,397,955
Less current maturities 3,500,000 3,822,156
- - ---------------------------------------------------------------------------
Long-term debt $23,500,000 $36,575,799
===========================================================================
</TABLE>
The note agreements relating to the $30,000,000 of 9.53% Senior Notes
placed in January 1991 include, among other provisions, requirements that the
Company maintain minimum tangible net worth of $70,000,000. The agreements
also contain certain other restrictions related to the payment of cash
dividends and the purchase of treasury stock. Retained earnings not restricted
under the provisions of the agreements were approximately $260,000,000 at July
29, 1994.
The Company has a revolving credit agreement with a maximum principal
amount of $15,000,000. No amounts were outstanding under the agreement at
July 29, 1994 or July 30, 1993.
<PAGE> 16
The Company elected to prepay the following two outstanding debt issues
during the second quarter of fiscal year 1994, unsecured notes payable of
$6,800,000 and Industrial Development Revenue Bonds of $3,465,000.
The aggregate maturities of long-term debt subsequent to July 29, 1994 are
as follows:
<TABLE>
<S> <C>
Fiscal year
- - ----------------------------------------------------------------------------
1995 $ 3,500,000
1996 4,000,000
1997 4,000,000
1998 3,500,000
1999 2,500,000
Later years 9,500,000
- - ----------------------------------------------------------------------------
Total $27,000,000
============================================================================
</TABLE>
5. Common Stock
On January 29, 1993 and January 30, 1992, the Board of Directors declared
three-for-two stock splits in the form of 50% stock dividends distributed to
stockholders on March 19, 1993 and March 20, 1992, respectively. The earnings
and dividends per common share for the first two quarters of 1993 and for 1992
have been restated to give effect to the stock splits.
The Board of Directors granted on August 30, 1993, an option for
1,000,000 shares at $25.00 per share to the Cracker Barrel Old Country Store
Foundation. The option is exercisable each year, starting at the date of the
grant, on a cumulative basis at the rate of 20% of the total number of shares
covered by the option. 1,000,000 shares of the option remain unexercised (of
which 200,000 shares are exercisable).
6. Stock Option Plans
The Company has two incentive stock option plans for key employees
(which includes store-level management and the highest level of hourly
employees in the stores) and one for non-employee directors. After giving
effect to the stock splits (see Note 5), a total of 11,025,702 shares have been
reserved for the key employees plans. The Company has granted options for
8,589,180 shares at purchase prices ranging from $.58 to $27.67 per share.
The options expire ten years from the date of the grant and are exercisable
each year, starting at the date of grant, on a cumulative basis at the rate of
33% of the total number of shares covered by the option.
The following is a schedule by years of the activity of the key
employees plans adjusted for stock splits (see Note 5):
<TABLE>
<CAPTION>
Exercise Price
Shares (Range) per Share
- - ----------------------------------------------------------------------------
<S> <C> <C> <C>
Outstanding at August 2, 1991
(2,337,613 shares exercisable) 3,334,194 $ 1.10 - $ 7.04
Granted 1,210,142 $16.61
Exercised 684,970 $ 1.10 - $16.61
Expired 41,491 $ 5.38 - $ 7.04
- - ----------------------------------------------------------------------------
Outstanding at July 31, 1992
(2,750,041 shares exercisable) 3,817,875 $ 1.19 - $16.61
Granted 1,030,273 $27.67
Exercised 1,972,490 $ 1.19 - $27.67
Expired 46,485 $16.61 - $27.67
- - ----------------------------------------------------------------------------
Outstanding at July 30, 1993
(1,845,387 shares exercisable) 2,829,173 $ 1.51 - $27.67
Granted 825,825 $25.75
Exercised 330,848 $ 5.38 - $27.67
Expired 168,813 $16.61 - $27.67
- - ----------------------------------------------------------------------------
Outstanding at July 29, 1994
(2,342,912 shares exercisable) 3,155,337 $ 1.51 - $27.67
============================================================================
</TABLE>
<PAGE> 17
After giving effect to the stock splits (see Note 5), a total of
1,518,750 shares have been reserved for the Non-employee Directors Plan. The
Company has granted options for 1,341,536 shares at purchase prices ranging
from $5.09 to $29.50 per share. The options are exercisable six months from
the date of grant.
The following is a schedule by years of the activity of the
Non-employee Directors Plan adjusted for stock splits (see Note 5):
<TABLE>
<CAPTION>
Exercise Price
Shares (Range) per Share
- - ----------------------------------------------------------------------------
<S> <C> <C> <C>
Outstanding at August 2, 1991
(514,677 shares exercisable) 514,677 $ 5.09 - $ 7.48
Granted 253,120 $16.56
Exercised 179,059 $ 5.09 - $ 7.48
- - ----------------------------------------------------------------------------
Outstanding at July 31, 1992
(588,738 shares exercisable) 588,738 $ 5.09 - $16.56
Granted 253,120 $29.50
Exercised 234,370 $ 5.09 - $16.56
- - ----------------------------------------------------------------------------
Outstanding at July 30, 1993
(607,488 shares exercisable) 607,488 $ 5.09 - $29.50
Granted 278,432 $25.38
Exercised 0 -
- - ----------------------------------------------------------------------------
Outstanding at July 29, 1994
(885,920 shares exercisable) 885,920 $ 5.09 - $29.50
============================================================================
</TABLE>
The Company recognizes a tax benefit upon exercise of non-qualified stock
options in an amount equal to the difference between the option price and the
fair market value of the common stock. These tax benefits are credited to
Additional Paid-In Capital.
7. Income Taxes
The Company adopted Statement of Financial Accounting Standards (SFAS)
No. 109, "Accounting for Income Taxes", effective July 31, 1993. This
Statement supersedes Accounting Principles Board Opinion No. 11, "Accounting
for Income Taxes", which was the Company's prior method of accounting for
income taxes. The cumulative effect of adopting SFAS No. 109 in the Company's
financial statements increased income by $988,262 ($.02 per share) for fiscal
1994. The adjustment primarily represents the impact of adjusting deferred
taxes to new rates as opposed to the higher tax rates in effect when the
deferred taxes originated. The adoption of SFAS No. 109 had no impact on the
Company's effective tax rate for fiscal years 1993 or 1994.
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes.
<PAGE> 18
Significant components of the Company's net deferred tax liability
consisted of the following at:
<TABLE>
<CAPTION>
July 29, July 31,
1994 1993
- - ----------------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets:
Financial accruals without
economic performance $ 4,527,953 $ 3,778,730
Other 1,751,543 797,357
--------------------------
Deferred tax assets 6,279,496 4,576,087
--------------------------
Deferred tax liabilities:
Excess tax depreciation over book 9,710,701 8,235,680
Other 1,199,964 35,076
--------------------------
Deferred tax liabilities 10,910,665 8,270,756
--------------------------
Net deferred tax liability $(4,631,169) $(3,694,669)
==========================
</TABLE>
The Company provided no valuation allowance against deferred tax assets
recorded as of July 31, 1993 and July 29, 1994, as the "more-likely-than-not"
valuation method determined all deferred assets to be fully realizable in
future taxable periods.
The components of the provision for income taxes for each of the three
fiscal years was as follows:
<TABLE>
<CAPTION>
1994 1993 1992
- - ----------------------------------------------------------------------------
<S> <C> <C> <C>
Current:
Federal $29,253,272 $23,088,000 $17,184,000
State 5,141,920 4,015,000 3,253,000
Deferred (786,500) 189,000 (158,000)
- - ----------------------------------------------------------------------------
Total income tax provision $33,608,692 $27,292,000 $20,279,000
============================================================================
</TABLE>
A reconciliation of the provision for income taxes as reported and the
amount computed by multiplying the income before the provision for income taxes
by the U.S. federal statutory rate of 35% for fiscal 1994 and 34% for fiscal
years 1993 and 1992 follows:
<TABLE>
<CAPTION>
1994 1993 1992
- - ----------------------------------------------------------------------------
<S> <C> <C> <C>
Provision computed at federal
statutory income tax rate $31,698,757 $24,801,125 $18,435,480
State and local income taxes 3,255,457 2,647,885 2,147,185
Jobs credit (487,500) (462,000) (511,500)
Employer tax credits for
FICA taxes paid on tip income (571,002) -- --
Retroactive change in income tax
rate to 35% from January 1, 1993 -- 422,838 --
Other-net (287,020) (117,848) 207,835
- - ----------------------------------------------------------------------------
Total income tax provision $33,608,692 $27,292,000 $20,279,000
============================================================================
</TABLE>
8. Segment Information
The Company operates stores which provide a combination of restaurant and
gift shop services to the motoring public. This combination of services is
considered to be one industry segment.
<PAGE> 19
9. Leases
The Company operates seventeen stores from leased facilities and also
leases certain land and advertising billboards. These leases have been
classified as either capital or operating leases in accordance with the
criteria contained in Statement of Financial Accounting Standards No. 13,
"Accounting for Leases". The interest rates for capital leases vary from 10%
to 17%. Amortization of capital leases is included with depreciation expense.
A majority of the Company's lease agreements provide for renewal options and
some of these options contain escalation clauses. Certain store leases provide
for contingent lease payments based upon sales volume in excess of specified
minimum levels.
The following is a schedule by years of future minimum lease payments
under capital leases together with the present value of the minimum lease
payments as of July 29, 1994:
<TABLE>
<S> <C>
Fiscal year
- - ----------------------------------------------------------------------------
1995 $ 360,135
1996 360,135
1997 360,135
1998 368,122
1999 370,785
Later years 1,598,678
- - ----------------------------------------------------------------------------
Total minimum lease payments 3,417,990
Less amount representing interest 1,615,590
- - ----------------------------------------------------------------------------
Present value of minimum lease payments 1,802,400
Less current portion 93,781
- - ----------------------------------------------------------------------------
Long-term portion of capital lease obligations $1,708,619
============================================================================
</TABLE>
The following is a schedule by years of the future minimum rental payments
required under noncancelable operating leases as of July 29, 1994:
<TABLE>
<S> <C>
Fiscal year
- - ----------------------------------------------------------------------------
1995 $ 7,161,107
1996 3,743,977
1997 1,393,088
1998 791,366
1999 673,438
Later years 6,864,398
- - ----------------------------------------------------------------------------
Total $20,627,374
============================================================================
</TABLE>
Rent expense under operating leases for each of the three fiscal years was:
<TABLE>
<CAPTION>
Minimum Contingent Total
<S> <C> <C> <C>
- - ----------------------------------------------------------------------------
1994 $7,799,700 $634,200 $8,433,900
1993 6,313,800 539,800 6,853,600
1992 4,741,000 722,300 5,463,300
</TABLE>
10. Employee Savings Plan
The Company has an employee savings plan, which provides for retirement
benefits for eligible employees. The plan is funded by elective employee
contributions up to 16% of their compensation and the Company matches 25% of
employee contributions for each participant up to 6% of the employee's
compensation. The Company expensed contributions of $540,469, $482,446 and
$338,791 for fiscal 1994, 1993 and 1992, respectively.
<PAGE> 20
11. Quarterly Financial Data (Unaudited)
Quarterly financial data for fiscal 1994 and 1993 are summarized as
follows:
<TABLE>
<CAPTION>
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter
- - ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1994
Net sales $152,498,897 $150,831,678 $155,368,895 $182,199,059
Gross profit on
sales 102,105,597 96,775,494 104,610,016 122,336,253
Income before income
taxes 21,456,461 15,911,622 20,221,158 32,978,635
Income before change in
accounting principle 13,367,375 9,912,941 12,597,781 21,081,087
Cumulative effect of
change in accounting
principle** 988,262 -- -- --
Net income 14,355,637 9,912,941 12,597,781 21,081,087
Earnings before change
in accounting principle
per share .22 .16 .21 .35
Cumulative effect of
change in accounting
principle per share** .02 -- -- --
Net earnings per share .24 .16 .21 .35
- - ----------------------------------------------------------------------------
1993
Net sales $122,980,186 $119,575,294 $125,151,916 $149,908,736
Gross profit on
sales 82,631,627 77,709,552 84,633,732 100,932,782
Income before income
taxes 16,188,574 12,222,426 16,084,669 28,448,816
Net income 10,134,047 7,651,239 10,069,003 17,798,196
Net earnings per share* .18 .13 .17 .29
- - ----------------------------------------------------------------------------
</TABLE>
*(See Note 5).
**(See Note 7).
<PAGE> 21
INDEPENDENT AUDITORS' REPORT
Cracker Barrel Old Country Store, Inc.:
We have audited the accompanying balance sheets of Cracker Barrel Old Country
Store, Inc. (the "Company") as of July 29, 1994 and July 30, 1993, and the
related statements of income, changes in stockholders' equity, and cash flows
for each of the three fiscal years in the period ended July 29, 1994. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company at July 29, 1994 and July 30,
1993, and the results of its operation and its cash flows for each of the three
fiscal years in the period ended July 29, 1994 in conformity with generally
accepted accounting principles.
Deloitte & Touche LLP
Nashville, Tennessee
September 7, 1994
<PAGE> 1
EXHIBIT 22
<PAGE> 2
CRACKER BARREL OLD COUNTRY STORE, INC.
Hartmann Drive
Lebanon, Tennessee 37088-0787
______________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON TUESDAY, NOVEMBER 22, 1994
______________________________
Notice is hereby given that the Annual Meeting of Shareholders of
Cracker Barrel Old Country Store, Inc. (hereinafter called the "Company"), will
be held at the offices of the Company located on Hartmann Drive, Lebanon,
Tennessee, on Tuesday, November 22, 1994 at 10:00 a.m., local time, for the
following purposes:
(1) To elect 13 directors to serve until the next Annual Meeting
and until their successors are duly elected and qualified;
(2) To approve the selection of Deloitte & Touche as the Company's
independent auditors for the 1995 fiscal year.
(3) To consider and take action on a proposal of the New York City
Employees' Retirement System to amend the Company's employment
policies to include language relating to gay and lesbian
sexual preferences, if such proposal should be presented at
the meeting.
(4) To consider and take action on a proposal of a certain
shareholder, relating to the expansion of the Board of
Directors to reflect the varied races, genders and sexual
orientations of shareholders, if such proposal should be
presented at the meeting.
(5) To transact such other business as may properly be brought
before the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on September
26, 1994, as the record date for the determination of shareholders entitled to
notice of and to vote at the meeting.
Your attention is directed to the Proxy Statement accompanying this
notice for a more complete statement regarding matters to be acted upon at the
meeting.
By Order of the Board of Directors
Evalena C. Bennett, Secretary
Lebanon, Tennessee
October 21, 1994
YOUR REPRESENTATION AT THE MEETING IS IMPORTANT. TO ENSURE
YOUR REPRESENTATION, WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED
PROXY CARD. SHOULD YOU DESIRE TO REVOKE YOUR PROXY, YOU MAY DO
SO AS PROVIDED IN THE ACCOMPANYING PROXY STATEMENT, AT ANY
TIME BEFORE IT IS VOTED.
<PAGE> 3
CRACKER BARREL OLD COUNTRY STORE, INC.
Hartmann Drive
Lebanon, Tennessee 37088-0787
________________________________
PROXY STATEMENT
________________________________
The accompanying proxy is solicited by the Board of Directors of
Cracker Barrel Old Country Store, Inc. (the "Company"), for use at the Annual
Meeting of Shareholders to be held on November 22, 1994, and any adjournments
thereof, notice of which is attached hereto.
This Proxy Statement and the Annual Report of the Company for the
fiscal year ended July 29, 1994, have been mailed on or about October 21, 1994,
to all shareholders of record on September 26, 1994.
The purpose of the Annual Meeting is to elect thirteen directors; to
approve the selection of Deloitte & Touche as the Company's independent
auditors for the next fiscal year; to vote on a shareholder proposal for the
amendment of the Company's employment policies as they relate to gay and
lesbian sexual preferences; and to vote on a shareholder proposal for the
expansion of the Board of Directors by the number of persons necessary to
reflect the varied races, genders, and sexual orientations of the Company's
shareholders.
A shareholder of record who signs and returns a proxy in the
accompanying form may revoke the same at any time before the authority granted
thereby is exercised by attending the Annual Meeting and electing to vote in
person by filing with the Secretary of the Company a written revocation or by
duly executing a proxy bearing a later date. Unless so revoked, the shares
represented by the proxy will be voted at the Annual Meeting. Where a choice
is specified on the proxy, the shares represented thereby will be voted in
accordance with such specifications. If no specification is made, such shares
will be voted for: the election of all director nominees and the approval of
Deloitte & Touche as the Company's independent auditors for the next fiscal
year. If no specification is made, such shares will be voted against: the two
proposals by shareholders.
Directors shall be elected by a plurality of the votes cast in the
election by the holders of Common Stock represented and entitled to vote at the
Annual Meeting, at which a quorum is present. Assuming the existence of a
quorum, all other proposals submitted to the shareholders shall be approved if
the votes cast favoring the proposal exceed the votes cast opposing it.
Abstentions will be counted as present for purposes of determining the
existence of a quorum and for determining the total number of votes cast.
Abstentions are disregarded in determining if a director receives a plurality
of the votes cast or whether votes cast for a proposal exceed votes cast
against it. Broker non-votes are disregarded for the purpose of determining
the total number of votes cast with respect to a proposal.
The Board of Directors knows of no other matters which are to be
brought to a vote at the Annual Meeting. However if any other matter does come
before the meeting, the persons appointed in the proxy or their substitutes
will vote in accordance with their best judgment on such matters.
<PAGE> 4
The Board of Directors has fixed the close of business on September
26, 1994, as the record date for the Annual Meeting. The Company's only class
of securities is its Common Stock, $.50 par value per share. On September 26,
1994, the Company had outstanding 59,911,166 shares of Common Stock. Only
shareholders of record at the close of business on that date will be entitled
to vote at the Annual Meeting. Shareholders will be entitled to one vote for
each share so held, which may be given in person or by proxy authorized in
writing.
The cost of solicitation of proxies will be borne by the Company,
including expenses in connection with preparing, assembling and mailing this
Proxy Statement. Such solicitation will be made by mail, and may also be made
by the Company's regular officers or employees personally or by telephone or
telegram. The Company may reimburse brokers, custodians and nominees for their
expenses in sending proxies and proxy material to beneficial owners. The
Company retains Corporate Communications, Inc., 523 Third Avenue South,
Nashville, Tennessee to assist in the management of the Company's investor
relations and other shareholder communications issues, for a fee of
approximately $2,000 per month, plus reimbursement of out-of-pocket expenses.
As part of its duties, Corporate Communications, Inc. may assist in the
solicitation of proxies.
The Company will continue its practice of holding the votes of all
share owners in confidence from the Company, its directors, officers and
employees except (1) to allow the independent inspectors of election to certify
the results of the vote; (ii) as necessary to meet applicable legal
requirements and to assert or defend claims for or against the Company; (iii)
in case of a contested proxy solicitation; or (iv) in the event that a share
owner makes a written comment on the proxy card or otherwise communicates
his/her vote to management. The Company will also continue, as it has in the
past, to employ an independent tabulator to receive and tabulate the proxies,
and independent inspectors of election to certify the results.
PROPOSAL 1. ELECTION OF DIRECTORS
The terms of all present directors will expire upon the election of
new directors at the Annual Meeting. The Board of Directors proposes the
election of the nominees listed below to serve until the next Annual Meeting
and until their successors are duly elected and qualified. Unless contrary
instructions are received, it is intended that the shares represented by
proxies solicited by the Board of Directors will be voted in favor of the
election as directors of all the nominees named below. If for any reason any
of such nominees is not available for election, the persons named in the proxy
have advised that they will vote for such substitute nominees as the Board of
Directors of the Company may propose. The Board of Directors has no reason to
expect that any of these nominees will fail to be candidates at the meeting,
and therefore, does not at this time have any substitute nominee under
consideration. The information relating to the thirteen nominees set forth
below has been furnished to the Company by the individuals named. All of the
nominees are presently directors of the Company and were elected at the annual
meeting held on November 23, 1993.
The Directors shall be elected by a plurality of the votes cast by the
shares entitled to vote in the election at the Annual Meeting. THE BOARD OF
DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE NOMINEES LISTED BELOW.
PROXIES, UNLESS INDICATED TO THE CONTRARY, WILL BE VOTED "FOR" THE LISTED
NOMINEES.
2
<PAGE> 5
<TABLE>
<CAPTION>
NAME, AGE, POSITION FIRST BECAME BUSINESS EXPERIENCE
WITH THE COMPANY A DIRECTOR DURING PAST FIVE YEARS
---------------- ----------- ----------------------
<S> <C> <C>
James C. Bradshaw, 63 1970 Practicing physician, Lebanon,
Director Tennessee
Robert V. Dale, 58 1986 President of Martha White Foods, Inc.,
Director Nashville, Tennessee
Dan W. Evins, 59 1970 Chairman, President and Chief
Chairman, President and Executive Officer of the Company;
Chief Executive Officer(1) Member of Board of Directors of
Clayton Homes, Inc.
Edgar W. Evins, 62 1970 Retired in June 1987; President,
Director(1) DeKalb County Bank and Trust
Company, Alexandria, Tennessee,
from 1958 until June 1987
William D. Heydel, 65 1970 Retired in 1984; for the previous
Director five years, Tennessee manager of
American Family Life Assurance
Company, Nashville, Tennessee
Robert C. Hilton, 57 1981 Chairman, President and CEO of
Director Home Technology Healthcare, Inc.
Nashville, Tennessee, since October
1991; Private investor, August 1988
to October 1991; Chairman and CEO,
American Healthcorp, Inc. September
1981 to August 1988
Charles E. Jones, Jr., 49 1981 President, Corporate Communications,
Director Incorporated, a financial public
relations firm, Nashville, Tennessee
Charles T. Lowe, Jr., 62 1970 Retired in 1993; previously
Director President of Travel World, Inc., a
travel agency, Lebanon, Tennessee
B.F. Lowery, 57 1971 Attorney; President and Chairman,
Director LoJac Companies, asphalt paving,
highway construction, highway safety
equipment and building materials
supplier and contractor, Lebanon,
Tennessee
Gordon L. Miller, 60 1974 Dentist, Lebanon, Tennessee
Director
Martha M. Mitchell, 54 1993 Senior Vice President (since
Director January 1987) and Partner (since
January 1993) of Fleishman-Hillard,
Inc., a public relations firm, St.
Louis, Missouri
</TABLE>
3
<PAGE> 6
<TABLE>
<S> <C> <C>
James H. Stewart, 69 1985 Retired in October 1987; President
Director and Chief Operating Officer,
Prepared Foods, Inc., August
1986 to September 1987; Vice President
and Chief Financial Officer,
Prepared Foods, Inc. from
September 1985 to July 1986
Jimmie D. White, 53 1993 Senior Vice President - Finance and
Chief Financial Officer of the
Company
____________________________________
</TABLE>
(1) Dan W. Evins and Edgar W. Evins are brothers.
The Company's Stock Option Committee is currently composed of Robert
C. Hilton, Edgar W. Evins and Charles E. Jones, Jr. This committee, which met
once during the fiscal year ended July 29, 1994, is responsible for the
administration of the Company's Incentive Stock Option Plan of 1982 and its
1987 Stock Option Plan.
The Company's Audit Committee is currently composed of James H.
Stewart, Edgar W. Evins, William D. Heydel and Charles T. Lowe, Jr. This
committee, which met three times during the fiscal year ended July 29, 1994,
reviews the Company's internal accounting controls and systems, the results of
the Company's annual audit and the Company's accounting policies and any change
therein.
The Company's Compensation Committee is composed of Robert V. Dale,
James C. Bradshaw, Robert C. Hilton, Charles E. Jones, Jr., B.F. Lowery and
Gordon L. Miller. This committee, which met once during the fiscal year ended
July 29, 1994, reviews and recommends to the Board of Directors the salaries,
bonuses and other cash compensation of the executive officers of the Company.
During the fiscal year ended July 29, 1994, the Board of Directors
held four meetings and the Executive Committee held ten meetings. No incumbent
director attended fewer than 75 percent of the Board meetings in 1994. The
Company's Executive Committee has all the duties and powers of the Board of
Directors, subject to the general direction, approval and control of the Board.
The Executive Committee is currently composed of James C. Bradshaw, Robert V.
Dale, Dan W. Evins, Robert C. Hilton, Charles E. Jones, Jr., B.F. Lowery and
Gordon L. Miller. The Executive Committee also reviews director nominees and
makes recommendations to the Board of Directors prior to each annual meeting of
shareholders. The Executive Committee will consider nominees recommended in
writing by shareholders who submit such nominations to the Company prior to the
deadline for shareholder proposals as further described under "Proposals of
Shareholders" herein.
The Company pays to each of its outside directors an annual retainer
of $14,000 and $900 as a director's fee for each board meeting attended.
Outside directors who are members of the Company's Executive Committee receive
a fee of $900 for each such committee meeting attended. Fees of $800 for the
Company's Audit Committee, Compensation Committee and Stock Option Committee
are paid to committee members for each such committee meeting attended. The
chairmen of the Audit Committee, Compensation Committee and the Stock Option
Committee receive an additional fee of $400 for each committee meeting
attended. No fees are paid to directors who are also employees of the Company.
4
<PAGE> 7
SECURITY OWNERSHIP OF MANAGEMENT
The following information pertains to the Common Stock of the Company
beneficially owned, directly or indirectly, by all directors and nominees and
by all directors and officers as a group, as of September 26, 1994. Unless
otherwise noted, the named persons have sole voting and investment power with
respect to the shares indicated.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNERS BENEFICIAL OWNERSHIP(1) OF CLASS
- - ----------------- ----------------------- --------
<S> <C> <C>
James C. Bradshaw 529,609 (2) *
Robert V. Dale 139,242 *
Dan W. Evins 570,000 *
Edgar W. Evins 52,824 *
William D. Heydel 534,842 (2) *
Robert C. Hilton 83,189 *
Charles E. Jones, Jr. 86,651 *
Charles T. Lowe, Jr. 985,867 (3) 1.6%
B.F. Lowery 224,015 *
Gordon L. Miller 252,124 *
Martha M. Mitchell 25,762 *
James H. Stewart 50,624 *
Jimmie D. White 350,060 *
All Officers and
Directors as a group
(23 persons) 4,760,329 7.7%
*Less than one percent
____________________________________
</TABLE>
(1) Includes the following shares which are not currently outstanding but
which the named holders are entitled to receive within 60 days upon
exercise of options:
<TABLE>
<S> <C>
James C. Bradshaw 126,560
Robert V. Dale 126,560
Dan W. Evins 170,000
Edgar W. Evins 50,624
William D. Heydel 126,560
Robert C. Hilton 75,936
Charles E. Jones, Jr. 75,936
Charles T. Lowe, Jr. 50,624
B. F. Lowery 126,560
Gordon L. Miller 50,624
Martha M. Mitchell 25,312
James H. Stewart 50,624
Jimmie D. White 284,375
All Officers and Directors as a group 1,340,295
</TABLE>
The shares described in this note are deemed to be outstanding for the
purpose of computing the percentage of outstanding Common Stock owned
by each named individual and by the group, but are not deemed to be
outstanding for the purpose of computing the percentage ownership of
any other person.
5
<PAGE> 8
(2) Includes shares owned jointly with wife with whom voting and
investment power is shared: Mr. Bradshaw 403,049 and Mr. Heydel
408,282.
(3) Voting and investment power with respect to 43,489 shares is shared by
Mr. Lowe and his wife, the owner of those shares.
REPORT OF THE COMPENSATION COMMITTEE AND THE STOCK OPTION
COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Company's compensation policies for its executive officers are
administered by two committees of the Board of Directors - the Compensation
Committee and the Stock Option Committee. All members of each committee are
non-employee directors.
The primary components of executive compensation are base salary,
bonus and longer-term incentives such as stock options. The Compensation
Committee recommends to the Board of Directors the salaries and bonus plan for
the executive officers. The Stock Option Committee administers the stock
option plan pursuant to which employee stock options are granted. In addition,
a study prepared by independent consultants which specialize in executive
compensation is used to review the salary and bonus for competitiveness in
relation to other selected companies in the restaurant and food service
industry.
BASE SALARY
In setting the Fiscal 1994 base salary for each executive officer the
Compensation Committee reviewed the then current salary for each of the
officers in relation to average salaries within the industry for comparable
areas of responsibility from a report prepared for the Company by independent
executive compensation consultants. In addition, they considered the
contribution made by each executive officer during Fiscal 1993, as reported by
the Chief Executive Officer, as well as salary recommendations from management
for the executive officers other than the Chairman, President and Chief
Executive Officer, Dan W. Evins. During discussions out of his presence, the
Compensation Committee employed procedures similar to those used for each of
the other executive officers to determine the Fiscal 1994 salary for Dan W.
Evins.
BONUS
The Compensation Committee has established that the financial
performance of the Company should be a significant factor in rewarding its
executive officers. Therefore, in July of each year, the Compensation
Committee reviews the expected financial performance of the Company for the
then ending fiscal year and the internal budget established for the next fiscal
year in setting the criteria for executive officer bonuses.
The basic plan rewards executive officers of the Company, based on the
amount of increase in the Company's pretax income over the previous fiscal
year. If pretax income is equal to or less than that of the previous fiscal
year, there are no bonuses paid to any of the executive officers.
For Fiscal 1994, as in recent years, a bonus pool of 12% of the amount
by which the current fiscal year's pretax income exceeds that of the previous
fiscal year, plus an additional 2% of any amount in excess of the internally
budgeted pretax income, is distributed among the executive officers. The bonus
pool is distributed by determining each executive officer's pro rata share of
an aggregate bonus participation amount arrived
6
<PAGE> 9
at by multiplying each officer's salary by the bonus participation percent set
by the Compensation Committee (60% for Mr. Evins, 36% for senior officers and
24% for all other executive officers). Bonuses earned for Fiscal 1994, as a
percent of total salary and bonuses, were 71% for Mr. Evins, 60% for Senior
Officers and 49% for all other executive officers.
STOCK OPTIONS
In contrast to salary and bonus awards, which are generally for past
work performance, stock options are based on future performance of stock price
appreciation. They are granted at an exercise price which is equal to the
market price of the Company's Common Stock on the date of grant, and therefore
have no value until the stock price increases.
The Stock Option Committee has generally granted nonqualified stock
options annually. In recent years, the Committee has extended option grants
down into the organization as far as the top hourly level positions in the
operating units. See "Stock Option Plans" below.
STOCK PERFORMANCE GRAPH
The following graph sets forth the yearly percentage change in the
cumulative total shareholder return on the Company's Common Stock during the
preceding five fiscal years ended July 29, 1994 compared with the Standard &
Poor's 400 MidCap Index and a Total Return Index comprised of all NASDAQ
companies with the same two digit SIC (Standard Industrial Classification) code
as the Company.
<TABLE>
<CAPTION>
7/31/89 7/31/90 7/31/91 7/31/92 7/31/93 7/29/94
<S> <C> <C> <C> <C> <C> <C>
Cracker Barrel Old Country Store, Inc. 100 136 263 389 453 405
NASDAQ SIC-58 100 109 116 148 173 157
S&P 400 MIDCAP 100 106 130 153 178 185
</TABLE>
(1) Assumes that the value of the investment in the Company's Common Stock
and each Index was $100 on July 28, 1989, and that all dividends were
reinvested.
7
<PAGE> 10
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation
of the Chief Executive Officer and the four other most highly compensated
executive officers who served in such capacities as of July 29, 1994.
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation
------------------------------- ---------------------------
Principal Fiscal # Options All Other
Name Position Year Salary (1) Bonus Granted Compensation (2)
---- -------- ---- ---------- ----- ------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Dan W. Evins Chairman of the Board, 1994 $360,000 $879,900 40,000 $29,223
Chief Executive 1993 326,600 861,748 60,000 30,647
Officer and President 1992 295,800 805,152 90,000 29,745
Jimmie D. White Senior Vice President/ 1994 195,000 285,997 25,000 16,991
Finance and Chief 1993 163,000 276,324 37,500 17,111
Financial Officer 1992 145,000 254,721 56,250 16,550
Reginald M. Mudd (3) Senior Vice President/ 1994 165,083 222,014 25,000 8,962
Operations and Chief 1993 130,000 146,921 18,000 8,753
Operations Officer 1992 118,000 138,193 27,000 8,385
Richard G. Parsons Vice President/ 1994 134,000 131,021 12,000 8,506
Merchandising 1993 122,000 137,879 18,000 8,436
1992 111,000 129,995 27,000 7,326
Frank J. McAvoy Vice President/ 1994 145,000 141,776 12,000 12,197
Operations Services 1993 133,000 150,311 18,000 12,619
1992 101,000 118,870 27,000 8,503
</TABLE>
(1) Salary includes director's fees received by Mr. Evins in the amount of
$21,600 for 1993 and $20,800 for 1992. Effective August 1993, no
director's fees are paid to directors who are also employees of the
Company.
(2) Includes premiums paid on Life and Disability insurance for coverage
above that available to all salaried employees, the Company's
contributions to 401(k) Employee Savings Plan and interest earned on
salary deferred under the Company's Deferred Compensation Plan.
(3) Mr. Mudd assumed his current responsibilities effective November 15,
1993. Prior to that date he was Vice President, Restaurant Operations.
8
<PAGE> 11
OPTIONS GRANTED DURING FISCAL YEAR ENDED JULY 29, 1994
The following table sets forth all options to acquire shares of the
Company's Common Stock granted to the named executive officers during the
fiscal year ended July 29, 1994.
<TABLE>
<CAPTION>
Individual Grants (1)
--------------------------------------------------------------------
Percent of Potential Realizable Value
Total Options Assumed Annual Rates of Stock
Granted to Exercise or Appreciation for Option (2)
# Options Employees in Base Price Expiration -----------------------------
Name Granted Fiscal Year $/Share Date 5% 10%
---- ------- ----------- ------- -------- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Dan W. Evins 40,000 4.8% $25.75 08-26-03 $647,600 $1,641,600
Jimmie D. White 25,000 3.0% 25.75 08-26-03 404,750 1,026,000
Reginald M. Mudd 25,000 3.0% 25.75 08-26-03 404,750 1,026,000
Richard G. Parsons 12,000 1.5% 25.75 08-26-03 194,280 492,480
Frank J. McAvoy 12,000 1.5% 25.75 08-26-03 194,280 492,480
</TABLE>
(1) The exercise price of the options granted is equal to the market value
of the Company's Common Stock on the date of grant. Options are
exercisable as to not more than one-third of the total number of
shares under the option during each twelve-month period following the
grant. To the extent any optionee does not exercise an option as to
all shares for which the option was exercisable during any
twelve-month period, the balance of unexercised options shall
accumulate and the option will be exercisable with respect to such
shares. Options expire ten years after grant.
(2) The potential realizable value amounts shown illustrate the values
that might be realized upon exercise immediately prior to the
expiration of their term using 5 percent and 10 percent appreciation
rates set by the Securities and Exchange Commission, compounded
annually, and, therefore, are not intended to forecast possible future
appreciation, if any, of the Company's stock price. Additionally,
these values do not take into consideration the provisions of the
options providing for nontransferability, vesting over a period of
years or termination of the options following termination of
employment.
9
<PAGE> 12
OPTION EXERCISES AND FISCAL YEAR END VALUES
There were no options exercised during the fiscal year ended July 29,
1994 by the named executive officers. The following table sets forth the
number and value of unexercised options held by such executive officers at
fiscal year end.
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-the-Money-Options
Options at FY-End at FY-End
------------------------------ -----------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Dan W. Evins 143,333 46,667 $ 597,600 $0
Jimmie D. White 267,708 29,167 3,388,519 0
Reginald M. Mudd 128,333 22,667 1,542,713 0
Richard M. Parsons 158,780 14,000 2,254,610 0
Frank J. McAvoy 51,437 14,000 316,044 0
</TABLE>
(1) The last trade of the Company's Common Stock as reported by NASDAQ on
July 29, 1994 was $23.25 and was used in calculating the value of
unexercised options.
EXECUTIVE EMPLOYMENT AGREEMENT
Employment agreements have been granted to Dan W. Evins (Chairman of
the Board, Chief Executive Officer and President), and Jimmie D. White (Senior
Vice President, Finance and Chief Financial Officer) which, upon the occurrence
of certain events, authorize a severance payment approximately equal to three
times their annual salary rate in effect on the date of termination.
The Executive may terminate his employment and receive the three-year
severance payment if there is a "change in control of the company" (as defined
in the Agreement), accompanied by: (1) a decrease in the Executive's base
salary or bonus percentage; or (2) a reduction in the importance of the
Executive's job responsibilities; or (3) a geographical relocation of the
Executive without his consent. The three-year severance payment shall also be
made to the Executive if the Company breaches the terms of the Agreement.
Additionally, the Agreement describes the Executive's rights to compensation
should his employment be terminated or suspended due to death, disability, poor
performance or wrongful activities. Although not intended primarily as a
standard employment contract, the Agreement does provide for payment to the
Executive of a specified annual salary which shall not be decreased, and which
may be increased from time to time. These agreements do not preclude the
Executives from participating in any other Company benefit plans or
arrangements.
10
<PAGE> 13
STOCK OPTION PLANS
On February 25, 1982, the Company's Board of Directors adopted an
incentive stock option plan, which was subsequently approved by the
shareholders of the Company on November 23, 1982. The 1982 Plan authorized the
Stock Option Committee to issue options to certain key employees. In 1986,
Congress adopted the Tax Reform Act of 1986, and in response to the 1986 Code
amendments, the Company's Board of Directors voted to discontinue the 1982 Plan
and adopt in its place the 1987 Stock Option Plan (the "1987 Plan"). The
shareholders adopted the 1987 Plan at the 1987 annual meeting of shareholders.
The 1987 Plan, like the 1982 Plan is administered by the Stock Option
Committee (the "Committee"). Members of the Committee are appointed by the
Board and consist of members of the Board. The Committee is authorized to
determine, at time periods within its discretion and subject to the direction
of the Board, which key employees shall be granted options, the number of
shares covered by the options granted to each, and within applicable limits,
the terms and provisions relating to the exercise of such options.
The Committee is currently authorized to grant options to purchase an
aggregate of 8,550,607 shares of the Company's Common Stock under the 1987
Plan. Options may be granted only to key executive personnel and other
employees who hold responsible positions with the Company. The Committee may
impose on the option, or the exercise thereof, such restrictions as it deems
reasonable and which are within the restrictions authorized by the 1987 Plan.
An option granted pursuant to the 1987 Plan is exercisable as to not
more than one-third of the total number of shares under the option during each
twelve-month period following the date of the granting of the option. To the
extent, however, any optionee does not exercise an option as to all shares for
which the option was exercisable during any twelve-month period, the balance of
unexercised options shall accumulate and the option will be exercisable with
respect to such shares.
The option price per share under the 1987 Plan must be at least 100%
of the fair market value of a share of the Company's Common Stock on the day
next preceding the day the option is granted and options must be exercised not
later than ten years after the date on which granted.
During Fiscal 1994, the aggregate number of shares subject to options
granted was 825,825 including 166,000 shares granted to the Company's executive
officers as a group, including the individuals named in the summary
compensation table. These options were granted at $25.75 per share. The
aggregate number of shares exercised during Fiscal 1994 was 330,848. There
were no options exercised during Fiscal 1994 by the Company's executive
officers. The net value of shares (market value less option exercise price) or
cash realized upon exercise of options was $4,114,520 in the aggregate.
In 1989, the directors and shareholders of the Company adopted the
1989 Stock Option Plan for Non-Employee Directors. The total number of shares
of Common Stock issuable upon the exercise of all options granted under the
Plan will not exceed in the aggregate 1,518,750 shares. Under the Plan, all
non-employee directors of the Company automatically receive an annual stock
option grant for 25,312 shares of the Company's Common Stock. These Stock
Options become exercisable six (6) months after the date of
11
<PAGE> 14
grant. The Stock Options are granted at an exercise price equal to the fair
market value of the underlying stock on the date of grant and have no
expiration date. On August 26, 1993 each director listed on page 5, except Mr.
Dan W. Evins and Mr. Jimmie D. White, was granted an option to purchase 25,312
shares at $25.375 per share. There were no options exercised during Fiscal
1994.
EMPLOYEE SAVINGS PLANS
The Company has an Employee Savings Plan (the "Plan") which provides
for retirement benefits for employees. The Plan is qualified under Section
401(k) of the Internal Revenue Code. Generally, all employees of the Company
who have completed one year of service with the Company, who have worked in
excess of 1,000 hours with the Company and who have reached the age of
twenty-one (21) are eligible to participate in the Plan. Eligible employees
may elect to participate in the Plan as of the beginning of each calendar
quarter. Each eligible employee who chooses to participate in the Plan may
elect to have up to sixteen percent (16%) (not to exceed $9,240 in calendar
1994) of their compensation contributed to the Plan. The Company matches
twenty-five percent (25%) of employee contributions for each participant up to
6% of the employee's compensation.
Participants in the Plan have fully vested interest in their
contributions to the Plan. Participants' interest in Company contributions
begins to vest after one (1) year from the date of employment and continues to
vest at the rate of twenty percent (20%) per year until fully vested.
Generally participants may not withdraw either their contributions or
their vested interest in Company contributions prior to retirement or
termination of their employment with the Company. Limited hardship withdrawals
are tightly controlled by the provisions of the Plan and the Internal Revenue
Code.
Effective January 1, 1994, the Company's Board of Directors adopted a
Deferred Compensation Plan to provide retirement and incidental benefits for
certain executive employees and outside directors of the Company. At the
beginning of each calendar year, participants of the plan may make an election
to defer a portion of their compensation. Interest is credited to each
participant's account quarterly at a rate equal to the ten-year Treasury bill
rate in effect as of the beginning of the quarter, plus 1.5%. The total
interest credited to all participants' accounts during Fiscal 1994 was $1,739.
12
<PAGE> 15
TRANSACTIONS WITH MANAGEMENT
The Company leases its stores in Clarksville, Tennessee and Macon,
Georgia from B.F. Lowery, a director of the Company. Under the terms of an
August 1981 agreement, Mr. Lowery purchased the land, constructed the
restaurant buildings and facilities to the Company's specifications and leased
the stores to the Company for a fifteen-year term. The annual rental for the
Macon store is the greater of (i) 12% of the total cost of the land, buildings
and improvements or (ii) 5% of the total restaurant sales plus 3% of the gift
shop sales. The annual rental for the Clarksville store is 12% of the total
cost of the land, buildings and improvements or, in the alternative, 5% of the
total restaurant sales plus 3% of the gift shop sales, provided the total of
such percentages exceeds $65,000. Taxes, insurance and maintenance are paid by
the Company. The Company has options to extend the Clarksville and Macon
leases for up to 20 years. During the fiscal year ended July 29, 1994, the
Company paid a total of $298,832 in lease payments to Mr. Lowery.
The Company uses the services of Corporate Communications, Inc., a
financial public relations firm in Nashville, Tennessee, of which Charles E.
Jones, Jr., a director of the Company, is president and the major shareholder.
During the past fiscal year, the Company paid $24,000 to such company for
services and $435,515 for reimbursement of direct expenses including
preparation, distribution and design of the annual report, and other financial
reports.
All of the foregoing transactions were negotiated by the Company on an
arms-length basis, and Management believes that such transactions are fair and
reasonable and on terms no less favorable than those which could be obtained
from unaffiliated parties.
PROPOSAL 2. APPROVAL OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed Deloitte & Touche as independent
auditors of the Company for the 1995 fiscal year, subject to approval by the
shareholders. Deloitte & Touche have served as the Company's independent
auditors since the fiscal year ended July 31, 1973. A representative of
Deloitte & Touche is expected to be present at the Annual Meeting with the
opportunity to make a statement, if such representative so desires, and will be
available to respond to appropriate questions.
For adoption of this proposal, the votes cast favoring the proposal
must exceed the votes cast opposing it. THE BOARD OF DIRECTORS RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL. PROXIES, UNLESS INDICATED TO THE
CONTRARY, WILL BE VOTED "FOR" THE PROPOSAL.
PROPOSAL 3. SHAREHOLDER PROPOSAL
The New York City Employees' Retirement System, Office of Comptroller,
Municipal Building, New York, New York, states that it is the owner of at least
1,000 shares of the Common Stock of the Company, and has informed the Company
that it intends to present, through a representative, the following proposal at
the meeting:
WHEREAS, in February, 1991 the management of Cracker Barrel Old
Country Stores restaurants announced a policy of discrimination in employment
against gay men and lesbians; and
13
<PAGE> 16
WHEREAS, although Cracker Barrel management asserts that this
discrimination policy has been rescinded, the Company refused to rehire fired
workers and media reports have indicated that gay and lesbian workers were
subsequently dismissed on the basis of their sexual orientation; and
WHEREAS, employment discrimination on the basis of sexual preference
may deprive corporations of the services of productive employees, leading to
less efficient corporate operations which in turn can have a negative impact on
shareholder value; and,
RESOLVED, Shareholders request the Board of Directors to implement
non-discriminatory policies relating to sexual orientation and to add explicit
prohibitions against such discrimination to their corporate employment policy
statement.
For adoption of this proposal, the votes cast favoring it must exceed
the votes cast opposing it. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST"
THIS PROPOSAL FOR THE REASONS CITED BELOW. PROXIES, UNLESS INDICATED TO THE
CONTRARY, WILL BE VOTED "AGAINST" THE PROPOSAL.
The SEC (Securities and Exchange Commission) ruled that a New York
City Employees' Retirement System proposal identical to Proposal 3 did not have
to be included in the Company's 1992 proxy. The basis of the SEC's ruling was
that the proposal involved day-to-day issues concerning hiring and other
personnel matters, which are properly left to Company management.
Last year, the SEC's decision was overruled by the United States
District Court for the Southern District of New York, forcing the Company to
include the proposal in its 1993 proxy. Company shareholders defeated this
proposal by a wide margin.
A national civil rights bill referred to as the National Lesbian and
Gay Rights Law has been considered by Congress, but has never passed. Your
management is convinced that the proponents of Proposal 3 are attempting to
circumvent the legislative process by using corporate proxies as a forum to
promote a "social policy" concerning gay and lesbian sexual preferences,
thereby forcing your Company to do what Congress has declined to force
companies to do. Your management is also convinced that the proponents of this
proposal are more interested in gay and lesbian concerns as a social issue than
in any economic effect these concerns may have on your Company.
Proposal 3 references a possible negative impact on Company stock, due
to gay and lesbian issues. This suggestion ignores the fact that since
February 1991, the value of Cracker Barrel Common Stock has risen from $9.96
per share (adjusted for stock splits) to $23.25 per share on September 26,
1994.
As Cracker Barrel has publicly stated on many occasions, it is an
equal opportunity employer that adheres to the letter and spirit of the law
regarding non-discrimination in the work place.
THE BOARD OF DIRECTORS, FOR THESE REASONS, RECOMMENDS A VOTE "AGAINST"
THIS SHAREHOLDER PROPOSAL.
14
<PAGE> 17
PROPOSAL 4. SHAREHOLDER PROPOSAL
Mr. Carl R. Owens, P. O. Box 8233, Atlanta, Georgia, states that he is
the owner of at least 1,000 shares of the Common Stock of the Company, and has
informed the Company that he intends to present the following proposal at the
meeting:
WHEREAS, the Board of Directors controls who is nominated to sit on the
Board and can invite self-nominated persons who can make a self-identification
as to gender, ethnic background, and sexual orientation for positions on the
Board; and
WHEREAS, the Board has the ability to communicate with all stockholders
in the Company and can survey the stockholders to determine the percentages of
stockholders who wish to self-identify into either race or sexual orientation
categories; and
WHEREAS, the Board has not issued a policy protecting the employment
rights of gay and lesbian employees, thereby negatively affecting the value of
the stock; and
WHEREAS, the Board does not wish to acknowledge that the majority of
stockholders of the Company are gay and lesbian or support gay or lesbian
rights; and
WHEREAS, the Company has not always been racially sensitive in its
choice of merchandise in the Company's stores; and
WHEREAS, because diversity issues within a corporation are set through
policies of the Board of Directors, and the Board of this corporation has not
been responsive to issues of the various groups comprising the customer base
and stockholders, the Board needs to include representatives from the
stockholders to be certain the issues are addressed on a company-wide basis;
and
WHEREAS, discrimination against a particular group results in violence
being directed toward individuals in that group and the blatant discrimination
that our Company fosters is and has been a contributing factor to serious
injuries against gay and lesbian persons; and
WHEREAS, the lack of a company-wide policy protecting the employment
rights of gay and lesbian employees has been a decision of the Board of
Directors and such policy is detrimental to the Company and the communities in
which it is located;
RESOLVED, that the Board of Directors of Cracker Barrel Old Country
Store, Inc. shall include individuals knowledgeable about the business of
operating the Company, and that group shall reflect the races, genders and
sexual orientations of the Stockholders. The Board shall determine how to
implement this proposal; if necessary it shall be accompanied by increasing the
number of members of the Board by the necessary number of seats to assure
representation of stockholder diversity as described in this resolution.
15
<PAGE> 18
For adoption of this proposal, the votes cast favoring it must exceed
the votes cast opposing it. THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST"
THIS PROPOSAL FOR THE REASONS CITED BELOW. PROXIES, UNLESS INDICATED TO THE
CONTRARY, WILL BE VOTED "AGAINST" THE PROPOSAL.
Proposal 4 is essentially the same as the proposal submitted by Mr.
Owens for inclusion in the Company's 1993 proxy. This proposal was soundly
defeated. Management urges shareholders to similarly defeat Mr. Owens'
proposal this year.
A fundamental problem with the proposal is that it asks the Board of
Directors to do something which is beyond its power. Only the shareholders can
elect members to the Company's Board. The Board itself cannot insure that
particular directors will be elected. In short, Mr. Owens' proposal, even if
it were to receive the requisite votes, is not one the Company has the
authority to bring about.
Additionally, the proposal is so vague and indefinite that it cannot be
determined with reasonable certainty what action or measures would be required
if the proposal were adopted. The Company does not know the race, gender and
sexual preference of each of its shareholders. Such information could not be
requested without violating shareholders' rights to privacy. Further, the
Company does not know exactly what the proposal means when it refers to "races"
and "sexual orientations." Likewise, it is not clear what would constitute
"the necessary number of seats to assure representation of stockholder
diversity."
In short, Proposal 4 is beyond the Board's power to effect, and is so
vague and indefinite, the Company would not know how to implement it.
THE BOARD OF DIRECTORS, FOR THESE REASONS, RECOMMENDS A VOTE "AGAINST"
THIS SHAREHOLDER PROPOSAL.
PROPOSALS OF SHAREHOLDERS
Shareholders intending to submit proposals for presentation at the 1995
Annual Meeting of Shareholders of the Company and inclusion in the proxy
statement and form of proxy for such meeting should forward such proposals to
Dan W. Evins, President, Cracker Barrel Old Country Store, Inc., P.O. Box 787,
Hartmann Drive, Lebanon, Tennessee 37088-0787. Proposals must be in writing
and must be received by the Company prior to June 25, 1995. Proposals should
be sent to the Company by certified mail, return receipt requested.
ANNUAL REPORT AND FINANCIAL INFORMATION
A copy of the Company's Annual Report to Shareholders for Fiscal 1994 is
being mailed to each shareholder herewith. A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K AND A LIST OF ALL EXHIBITS THERETO WILL BE SUPPLIED WITHOUT
CHARGE TO ANY SHAREHOLDER UPON WRITTEN REQUEST TO: JIMMIE D. WHITE, SR. VICE
PRESIDENT - FINANCE, AT THE COMPANY'S PRINCIPAL EXECUTIVE OFFICES, HARTMANN
DRIVE, LEBANON, TENNESSEE 37088-0787. EXHIBITS TO THE FORM 10-K ARE AVAILABLE
FOR A REASONABLE FEE.
16
<PAGE> 19
CRACKER BARREL OLD COUNTRY STORE, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON TUESDAY, NOVEMBER 22, 1994.
The undersigned hereby appoints Dan W. Evins and Evalena C. Bennett
and each of them, as proxies, with full power of substitution, to vote all
shares of the undersigned as shown below on this proxy at the Annual Meeting of
Shareholders of Cracker Barrel Old Country Store, Inc. to be held at the
Company's offices located on Hartmann Drive, Lebanon, Tennessee, on Tuesday,
November 22, 1994, at 10:00 a.m., local time, and any adjournments thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS (1) AND (2).
(1) ELECTION OF DIRECTORS:
/ / FOR all the following nominees (except as indicated to the
contrary below): J. Bradshaw, R. Dale, D. W. Evins, E. W.
Evins, W. Heydel, R. Hilton, C. Jones, Jr., C. Lowe, Jr., B.
Lowery, G. Miller, M. Mitchell, J. Stewart, and J. White.
/ / AGAINST the following nominee(s) (please print name(s)):
--------------------------------------------------------------
/ / WITHHOLD AUTHORITY (ABSTAIN) to vote for the following
nominees (please print name):
---------------------------------
/ / AGAINST all nominees.
/ / WITHHOLD AUTHORITY (ABSTAIN) to vote for all nominees.
(2) To approve the selection of Deloitte & Touche as the Company's
independent auditors for the fiscal year 1995.
/ / FOR / / AGAINST / / WITHHOLD AUTHORITY (ABSTAIN)
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSALS (3) AND (4).
(3) To vote on a proposal of the New York City Employees' Retirement
System to amend employment policies to include language relating to
gay and lesbian sexual preferences.
/ / AGAINST / / FOR / / WITHHOLD AUTHORITY (ABSTAIN)
(Please date and sign this proxy on the reverse side.)
(4) To vote on a proposal of a shareholder to expand the Company's Board
of Directors to include persons who reflect the varied races, genders
and sexual orientations of the Company's shareholders.
/ / AGAINST / / FOR / / WITHHOLD AUTHORITY (ABSTAIN)
(5) In their discretion, to transact such other business as may properly
be brought before the meeting or any adjournment thereof.
Your shares will be voted in accordance with your instructions. If no
choice is specified, shares will be voted FOR the nominees in the election of
directors, FOR the selection of Deloitte & Touche, AGAINST the amendment of
employment policies and AGAINST the expansion of the Board of Directors.
Date ___________, 1994.
PLEASE SIGN HERE AND RETURN
PROMPTLY
--------------------------------------------
--------------------------------------------
Please sign exactly as your name appears at
left. If registered in the names of two or
more persons, each should sign. Executors,
administrators, trustees, guardians,
attorneys, and corporate officers should
show their full titles.
- - ------------------------------------------------------------------------------
IF you have changed your address, please PRINT your new address on this line.
<PAGE> 1
EXHIBIT 23
<PAGE> 2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement Nos.
2-86602, 33-15775, 33-37567 and 33-45482 of Cracker Barrel Old Country Store,
Inc. on Forms S-8 and Registration No. 33-59582 on Form S-3 of our report dated
September 7, 1994, incorporated by reference in the Annual Report on Form 10-K
of Cracker Barrel Old Country Store, Inc. for the year ended July 29, 1994.
Deloitte & Touche LLP
Nashville, Tennessee
October 24, 1994
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE FINANCIAL STATEMENT OF CRACKER BARREL FOR THE YEAR ENDED
JULY 29, 1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-29-1994
<PERIOD-START> JUL-31-1993
<PERIOD-END> JUL-29-1994
<CASH> 13,051
<SECURITIES> 65,531
<RECEIVABLES> 2,994
<ALLOWANCES> 0
<INVENTORY> 41,990
<CURRENT-ASSETS> 127,880
<PP&E> 460,134
<DEPRECIATION> 74,175
<TOTAL-ASSETS> 530,064
<CURRENT-LIABILITIES> 67,158
<BONDS> 23,500
<COMMON> 29,951
0
0
<OTHER-SE> 399,895
<TOTAL-LIABILITY-AND-EQUITY> 530,064
<SALES> 640,899
<TOTAL-REVENUES> 640,899
<CGS> 215,071
<TOTAL-COSTS> 299,921
<OTHER-EXPENSES> 36,806
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,136
<INCOME-PRETAX> 90,568
<INCOME-TAX> 33,609
<INCOME-CONTINUING> 56,959
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 988
<NET-INCOME> 57,947
<EPS-PRIMARY> .96
<EPS-DILUTED> .96
</TABLE>
