x
|
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended January 27, 2012
|
o
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
Tennessee
|
62-0812904
|
|
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |
305 Hartmann Drive, P.O. Box 787
|
37088-0787
|
|
Lebanon, Tennessee (Address of principal executive offices) | (Zip code) |
Large accelerated filer x
|
Accelerated filer ¨
|
|
Non-accelerated filer ¨
|
Smaller reporting company ¨
|
PART I. FINANCIAL INFORMATION |
Page
|
|||
Item 1 | ||||
● | Condensed Consolidated Financial Statements (Unaudited) | |||
a) | Condensed Consolidated Balance Sheets as of January 27, 2012 and July 29, 2011 |
3
|
||
b) | Condensed Consolidated Statements of Income for the Quarters and Six Months Ended January 27, 2012 and January 28, 2011 |
4
|
||
c) | Condensed Consolidated Statements of Cash Flows for the Quarters and Six Months Ended January 27, 2012 and January 28, 2011 |
5
|
||
d) | Notes to Condensed Consolidated Financial Statements |
6
|
||
Item 2 | ||||
● | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
15
|
||
Item 3 | ||||
● | Quantitative and Qualitative Disclosures About Market Risk |
30
|
||
Item 4 | ||||
● | Controls and Procedures |
30
|
||
PART II. OTHER INFORMATION | ||||
Item 1A | ||||
● | Risk Factors |
31
|
||
Item 6 | ||||
● | Exhibits |
31
|
||
SIGNATURES |
32
|
ASSETS
|
January 27,
2012
|
July 29,
2011*
|
||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$ | 119,385 | $ | 52,274 | ||||
Property held for sale
|
884 | 950 | ||||||
Accounts receivable
|
16,991 | 12,279 | ||||||
Income taxes receivable
|
-- | 7,898 | ||||||
Inventories
|
127,176 | 141,547 | ||||||
Prepaid expenses and other current assets
|
14,707 | 9,000 | ||||||
Deferred income taxes
|
21,494 | 21,967 | ||||||
Total current assets
|
300,637 | 245,915 | ||||||
Property and equipment
|
1,707,752 | 1,673,873 | ||||||
Less: Accumulated depreciation and amortization of capital leases
|
692,518 | 664,709 | ||||||
Property and equipment – net
|
1,015,234 | 1,009,164 | ||||||
Other assets
|
54,458 | 55,805 | ||||||
Total assets
|
$ | 1,370,329 | $ | 1,310,884 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$ | 93,592 | $ | 99,679 | ||||
Current maturities of long-term debt and other long-term obligations
|
9,490 | 123 | ||||||
Income taxes payable
|
5,173 | -- | ||||||
Accrued interest expense
|
10,059 | 7,857 | ||||||
Deferred revenue
|
54,895 | 32,630 | ||||||
Other current liabilities
|
122,475 | 126,814 | ||||||
Total current liabilities
|
295,684 | 267,103 | ||||||
Long-term debt
|
540,715 | 550,143 | ||||||
Interest rate swap liability
|
45,050 | 51,604 | ||||||
Other long-term obligations
|
101,401 | 105,661 | ||||||
Deferred income taxes
|
67,084 | 68,339 | ||||||
Commitments and Contingencies (Note 13)
|
||||||||
Shareholders’ Equity:
|
||||||||
Preferred stock – 100,000,000 shares of $.01 par value authorized; no shares issued
|
-- | -- | ||||||
Common stock – 400,000,000 shares of $.01 par value authorized; 22,992,183 shares issued and outstanding at January 27, 2012, and 22,840,974 shares issued and outstanding at July 29, 2011
|
230 | 228 | ||||||
Additional paid-in capital
|
15,317 | 7,081 | ||||||
Accumulated other comprehensive loss
|
(31,670 | ) | (38,032 | ) | ||||
Retained earnings
|
336,518 | 298,757 | ||||||
Total shareholders’ equity
|
320,395 | 268,034 | ||||||
Total liabilities and shareholders’ equity
|
$ | 1,370,329 | $ | 1,310,884 |
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
|
January 28,
|
January 27,
|
January 28,
|
|||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Total revenue
|
$ | 673,234 | $ | 640,277 | $ | 1,271,671 | $ | 1,238,968 | ||||||||
Cost of goods sold
|
235,391 | 219,390 | 421,698 | 399,143 | ||||||||||||
Gross profit
|
437,843 | 420,887 | 849,973 | 839,825 | ||||||||||||
Labor and other related expenses
|
234,933 | 223,182 | 455,901 | 447,786 | ||||||||||||
Other store operating expenses
|
119,136 | 112,164 | 228,180 | 224,123 | ||||||||||||
Store operating income
|
83,774 | 85,541 | 165,892 | 167,916 | ||||||||||||
General and administrative expenses
|
36,437 | 33,068 | 73,931 | 69,944 | ||||||||||||
Impairment and store dispositions, net
|
-- | 1 | -- | 84 | ||||||||||||
Operating income
|
47,337 | 52,472 | 91,961 | 97,888 | ||||||||||||
Interest expense
|
11,025 | 11,830 | 22,160 | 23,544 | ||||||||||||
Income before income taxes
|
36,312 | 40,642 | 69,801 | 74,344 | ||||||||||||
Provision for income taxes
|
10,703 | 11,865 | 20,390 | 21,833 | ||||||||||||
Net income
|
$ | 25,609 | $ | 28,777 | $ | 49,411 | $ | 52,511 | ||||||||
Net income per share:
|
||||||||||||||||
Basic
|
$ | 1.11 | $ | 1.24 | $ | 2.16 | $ | 2.28 | ||||||||
Diluted
|
$ | 1.10 | $ | 1.20 | $ | 2.13 | $ | 2.21 | ||||||||
Weighted average shares:
|
||||||||||||||||
Basic
|
22,968,002 | 23,237,493 | 22,919,451 | 23,034,943 | ||||||||||||
Diluted
|
23,306,177 | 23,919,251 | 23,225,963 | 23,756,567 | ||||||||||||
Dividends declared per share
|
$ | 0.25 | $ | 0.22 | $ | 0.50 | $ | 0.44 |
Six Months Ended
|
||||||||
January 27,
|
January 28,
|
|||||||
2012
|
2011
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 49,411 | $ | 52,511 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
31,339 | 30,454 | ||||||
Loss on disposition of property and equipment
|
1,258 | 1,693 | ||||||
Share-based compensation
|
5,946 | 4,919 | ||||||
Excess tax benefit from share-based compensation
|
(155 | ) | (2,294 | ) | ||||
Changes in assets and liabilities:
|
||||||||
Inventories
|
14,371 | 13,555 | ||||||
Other current assets
|
(2,521 | ) | (11,627 | ) | ||||
Accounts payable
|
(6,087 | ) | (27,794 | ) | ||||
Accrued employee compensation
|
3,060 | (17,515 | ) | |||||
Deferred revenue
|
22,265 | 20,929 | ||||||
Other current liabilities
|
(697 | ) | (12,539 | ) | ||||
Other long-term assets and liabilities
|
(4,231 | ) | 5,013 | |||||
Net cash provided by operating activities
|
113,959 | 57,305 | ||||||
Cash flows from investing activities:
|
||||||||
Purchase of property and equipment
|
(38,835 | ) | (40,567 | ) | ||||
Proceeds from sale of property and equipment
|
477 | 265 | ||||||
Proceeds from insurance recoveries of property and equipment
|
116 | 92 | ||||||
Net cash used in investing activities
|
(38,242 | ) | (40,210 | ) | ||||
Cash flows from financing activities:
|
||||||||
Proceeds from issuance of long-term debt
|
92,600 | 110,700 | ||||||
Principal payments under long-term debt and other long-term obligations
|
(92,676 | ) | (114,188 | ) | ||||
Proceeds from exercise of share-based compensation awards
|
2,137 | 20,343 | ||||||
Excess tax benefit from share-based compensation
|
155 | 2,294 | ||||||
Purchases and retirement of common stock
|
-- | (10,997 | ) | |||||
Dividends on common stock
|
(10,822 | ) | (9,698 | ) | ||||
Net cash used in financing activities
|
(8,606 | ) | (1,546 | ) | ||||
Net increase in cash and cash equivalents
|
67,111 | 15,549 | ||||||
Cash and cash equivalents, beginning of period
|
52,274 | 47,700 | ||||||
Cash and cash equivalents, end of period
|
$ | 119,385 | $ | 63,249 | ||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest, net of amounts capitalized
|
$ | 18,916 | $ | 22,195 | ||||
Income taxes
|
$ | 6,412 | $ | 21,639 | ||||
Supplemental schedule of non-cash financing activity:
|
||||||||
Change in fair value of interest rate swaps
|
$ | 6,554 | $ | 10,654 | ||||
Change in deferred tax asset for interest rate swaps
|
$ | (192 | ) | $ | (1,078 | ) |
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Fair Value as
of January 27,
2012
|
|||||||||||||
Cash equivalents*
|
$ | 72,926 | $ | -- | $ | -- | $ | 72,926 | ||||||||
Deferred compensation plan assets**
|
28,748 | -- | -- | 28,748 | ||||||||||||
Total assets at fair value
|
$ | 101,674 | $ | -- | $ | -- | $ | 101,674 | ||||||||
Interest rate swap liability (see Note 5)
|
$ | -- | $ | 45,050 | $ | -- | $ | 45,050 | ||||||||
Total liabilities at fair value
|
$ | -- | $ | 45,050 | $ | -- | $ | 45,050 |
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
Fair Value as
of July 29,
2011
|
|||||||||||||
Cash equivalents*
|
$ | 29,548 | $ | -- | $ | -- | $ | 29,548 | ||||||||
Deferred compensation plan assets**
|
29,665 | -- | -- | 29,665 | ||||||||||||
Total assets at fair value
|
$ | 59,213 | $ | -- | $ | -- | $ | 59,213 | ||||||||
Interest rate swap liability (see Note 5)
|
$ | -- | $ | 51,604 | $ | -- | $ | 51,604 | ||||||||
Total liabilities at fair value
|
$ | -- | $ | 51,604 | $ | -- | $ | 51,604 |
January 27,
2012
|
July 29,
2011
|
|||||||
Retail
|
$ | 92,311 | $ | 108,829 | ||||
Restaurant
|
20,435 | 19,200 | ||||||
Supplies
|
14,430 | 13,518 | ||||||
Total
|
$ | 127,176 | $ | 141,547 |
January 27,
2012
|
July 29,
2011
|
|||||||
Revolving credit facility expiring on July 8, 2016
|
$ | 318,750 | $ | 318,750 | ||||
Term loan payable on or before July 8, 2016
|
231,250 | 231,250 | ||||||
Note payable
|
195 | 246 | ||||||
550,195 | 550,246 | |||||||
Current maturities
|
(9,480 | ) | (103 | ) | ||||
Long-term debt
|
$ | 540,715 | $ | 550,143 |
Trade Date
|
Effective Date
|
Term
(in Years)
|
Notional Amount
|
Fixed
Rate
|
||||||||||
May 4, 2006
|
August 3, 2006
|
7 | $ | 550,000 | 5.57 | % | ||||||||
August 10, 2010
|
May 3, 2013
|
2 | 200,000 | 2.73 | % | |||||||||
July 25, 2011
|
May 3, 2013
|
2 | 50,000 | 2.00 | % | |||||||||
July 25, 2011
|
May 3, 2013
|
3 | 50,000 | 2.45 | % | |||||||||
September 19, 2011
|
May 3, 2013
|
2 | 25,000 | 1.05 | % | |||||||||
September 19, 2011
|
May 3, 2013
|
2 | 25,000 | 1.05 | % | |||||||||
December 7, 2011
|
May 3, 2013
|
3 | 50,000 | 1.40 | % |
Balance Sheet Location
|
January 27, 2012
|
July 29, 2011
|
|||||||
Interest rate swaps (See Note 2)
|
Interest rate swap liability
|
$ | 45,050 | $ | 51,604 |
Amount of Income Recognized in AOCL on
Derivatives (Effective Portion)
|
||||||||
Six Months Ended
|
Year Ended
|
|||||||
January 27, 2012
|
July 29, 2011
|
|||||||
Cash flow hedges:
|
||||||||
Interest rate swaps
|
$ | 6,554 | $ | 14,677 |
Location of Loss
Reclassified from
AOCL into Income
(Effective Portion)
|
Amount of Loss Reclassified from AOCL into Income
(Effective Portion)
|
||||||||||||||||
Quarter Ended
|
Six Months Ended
|
||||||||||||||||
January 27,
2012
|
January 28
2011
|
January 27,
2012
|
January 28,
2011
|
||||||||||||||
Cash flow hedges:
|
|||||||||||||||||
Interest rate swaps
|
Interest expense
|
$ | 7,467 | $ | 7,518 | $ | 14,912 | $ | 15,113 |
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
2012
|
January 28,
2011
|
January 27,
2012
|
January 28,
2011
|
|||||||||||||
Net income
|
$ | 25,609 | $ | 28,777 | $ | 49,411 | $ | 52,511 | ||||||||
Other comprehensive income:
|
||||||||||||||||
Changes in fair value of interest rate swaps, net of tax
|
2,412 | 9,393 | 6,362 | 9,576 | ||||||||||||
Total comprehensive income
|
$ | 28,021 | $ | 38,170 | $ | 55,773 | $ | 62,087 |
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
2012
|
January 28,
2011
|
January 27,
2012
|
January 28,
2011
|
|||||||||||||
Revenue:
|
||||||||||||||||
Restaurant
|
$ | 503,531 | $ | 478,614 | $ | 985,040 | $ | 960,429 | ||||||||
Retail
|
169,703 | 161,663 | 286,631 | 278,539 | ||||||||||||
Total revenue
|
$ | 673,234 | $ | 640,277 | $ | 1,271,671 | $ | 1,238,968 |
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
2012
|
January 28,
2011
|
January 27,
2012
|
January 28,
2011
|
|||||||||||||
Stock options
|
$ | 437 | $ | 474 | $ | 846 | $ | 1,187 | ||||||||
Nonvested stock
|
2,526 | 1,622 | 4,065 | 3,371 | ||||||||||||
Performance-based stock units
|
436 | 361 | 1,035 | 361 | ||||||||||||
$ | 3,399 | $ | 2,457 | $ | 5,946 | $ | 4,919 |
Liability at July 29, 2011
|
$ | 1,579 | ||
Payments
|
(1,030 | ) | ||
Adjustments
|
(127 | ) | ||
Liability at January 27, 2012
|
$ | 422 |
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
2012
|
January 28,
2011
|
January 27,
2012
|
January 28,
2011
|
|||||||||||||
Net income per share numerator
|
$ | 25,609 | $ | 28,777 | $ | 49,411 | $ | 52,511 | ||||||||
Net income per share denominator:
|
||||||||||||||||
Weighted average shares
|
22,968,002 | 23,237,493 | 22,919,451 | 23,034,943 | ||||||||||||
Add potential dilution:
|
||||||||||||||||
Stock options and nonvested stock and stock awards
|
338,175 | 681,758 | 306,512 | 721,624 | ||||||||||||
Diluted weighted average shares
|
23,306,177 | 23,919,251 | 23,225,963 | 23,756,567 |
|
●
|
A New Marketing Messaging to better connect with our current and potential guests and reinforce the authentic value of the Cracker Barrel experience that has created such a powerful attraction to our brand.
|
|
●
|
Implementing refined menu and pricing strategies to increase the variety and everyday affordability of our menu in the face of ongoing challenges to our guests’ household budgets.
|
|
●
|
Enhancing our restaurant operating platform to generate sustained improvements in the guest experience.
|
|
●
|
Driving retail sales growth by continuing to review and modify as needed our retail assortment to deliver value and further enhance the role of the retail store in our guests overall experience.
|
|
●
|
Implementing initiatives to reduce costs to offset at least a portion of the impact of higher food commodity costs.
|
|
●
|
Leveraging our strong cash flow generation to both reinvest in the business as well as increase our return of capital to our shareholders.
|
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
|
January 28,
|
January 27,
|
January 28,
|
|||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Total revenue
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Cost of goods sold
|
35.0 | 34.3 | 33.2 | 32.2 | ||||||||||||
Gross profit
|
65.0 | 65.7 | 66.8 | 67.8 | ||||||||||||
Labor and other related expenses
|
34.9 | 34.8 | 35.9 | 36.2 | ||||||||||||
Other store operating expenses
|
17.7 | 17.5 | 17.9 | 18.1 | ||||||||||||
Store operating income
|
12.4 | 13.4 | 13.0 | 13.5 | ||||||||||||
General and administrative expenses
|
5.4 | 5.2 | 5.8 | 5.6 | ||||||||||||
Impairment and store dispositions, net
|
-- | -- | -- | -- | ||||||||||||
Operating income
|
7.0 | 8.2 | 7.2 | 7.9 | ||||||||||||
Interest expense
|
1.6 | 1.9 | 1.7 | 1.9 | ||||||||||||
Income before income taxes
|
5.4 | 6.3 | 5.5 | 6.0 | ||||||||||||
Provision for income taxes
|
1.6 | 1.8 | 1.6 | 1.8 | ||||||||||||
Net income
|
3.8 | % | 4.5 | % | 3.9 | % | 4.2 | % |
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
2012
|
January 28,
2011
|
January 27,
2012
|
January 28,
2011
|
|||||||||||||
Revenue in dollars:
|
||||||||||||||||
Total Revenue:
|
||||||||||||||||
Restaurant
|
$ | 503,531 | $ | 478,614 | $ | 985,040 | $ | 960,429 | ||||||||
Retail
|
169,703 | 161,663 | 286,631 | 278,539 | ||||||||||||
Total revenue
|
$ | 673,234 | $ | 640,277 | $ | 1,271,671 | $ | 1,238,968 |
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
|
January 28,
|
January 27,
|
January 28,
|
|||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Revenue by percentage relationships:
|
||||||||||||||||
Total Revenue:
|
||||||||||||||||
Restaurant
|
74.8 | % | 74.8 | % | 77.5 | % | 77.5 | % | ||||||||
Retail
|
25.2 | 25.2 | 22.5 | 22.5 | ||||||||||||
Total revenue
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
|
January 28,
|
January 27,
|
January 28,
|
|||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Open at beginning of period
|
606 | 596 | 603 | 593 | ||||||||||||
Open during period
|
2 | 1 | 5 | 4 | ||||||||||||
Open at the end of period
|
608 | 597 | 608 | 597 |
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
|
January 28,
|
January 27,
|
January 28,
|
|||||||||||||
2012
|
2011
|
2012
|
2011
|
|||||||||||||
Revenue:
|
||||||||||||||||
Restaurant
|
$ | 828.3 | $ | 801.7 | $ | 1,625.5 | $ | 1,612.2 | ||||||||
Retail
|
279.1 | 270.8 | 473.0 | 467.5 | ||||||||||||
Total revenue
|
$ | 1,107.4 | $ | 1,072.5 | $ | 2,098.5 | $ | 2,079.7 |
Second Quarter
Increase
|
Six Month
Period Increase
|
|||||||
Comparable store sales:
|
|
|||||||
Restaurant
|
3.5 | % | 1.0 | % | ||||
Retail
|
3.4 | 1.4 | ||||||
Restaurant and retail
|
3.5 | 1.1 |
Quarter Ended
|
Six Months Ended
|
|||||||||||||||
January 27,
2012
|
January 28,
2011
|
January 27,
2012
|
January 28,
2011
|
|||||||||||||
Cost of Goods Sold:
|
||||||||||||||||
Restaurant
|
$ | 138,456 | $ | 127,201 | $ | 266,152 | $ | 249,582 | ||||||||
Retail
|
96,935 | 92,189 | 155,546 | 149,561 | ||||||||||||
Total Cost of Goods Sold
|
$ | 235,391 | $ | 219,390 | $ | 421,698 | $ | 399,143 |
Second Quarter
Increase (Decrease) as a
Percentage of Total Revenue
|
||||
Prior year workers’ compensation actuarial adjustment
|
0.3 | % | ||
Store bonus expense
|
0.3 | % | ||
Store hourly labor
|
(0.3 | %) | ||
Health care costs
|
(0.2 | %) |
Six Month Period
Increase (Decrease) as a
Percentage of Total Revenue
|
||||
Store hourly labor
|
(0.3 | %) | ||
Health care costs
|
(0.2 | %) | ||
Store management compensation
|
0.2 | % |
Second Quarter
Increase (Decrease) as a
Percentage of Total Revenue
|
||||
Advertising expense
|
0.8 | % | ||
Maintenance expense
|
(0.2 | %) | ||
Credit card fees
|
(0.1 | %) | ||
Utilities expense
|
(0.1 | %) | ||
Supplies expense
|
(0.1 | %) |
Six Month Period
Increase (Decrease) as a
Percentage of Total Revenue
|
||||
Advertising expense
|
0.5 | % | ||
Litigation settlement
|
(0.2 | %) | ||
Maintenance expense
|
(0.2 | %) | ||
Credit card fees
|
(0.1 | %) | ||
Utilities expense
|
(0.1 | %) | ||
Supplies expense
|
(0.1 | %) |
Second Quarter
Increase (Decrease) as a
Percentage of Total Revenue
|
||||
Expenses related to the proxy contest initiated by Biglari Holdings Inc.
|
0.5 | % | ||
Incentive compensation
|
0.3 | % | ||
Payroll and related expenses
|
(0.4 | %) | ||
Travel
|
(0.1 | %) |
Six Month Period
Increase (Decrease) as a
Percentage of Total Revenue
|
||||
Expenses related to the proxy contest initiated by Biglari Holdings Inc.
|
0.4 | % | ||
Manager meeting conference expense
|
0.2 | % | ||
Payroll and related expenses
|
(0.4 | %) |
|
●
|
management believes are most important to the accurate portrayal of both our financial condition and operating results and
|
|
●
|
require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
|
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●
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Impairment of Long-Lived Assets and Provision for Asset Dispositions
|
|
●
|
Insurance Reserves
|
|
●
|
Retail Inventory Valuation
|
|
●
|
Tax Provision
|
|
●
|
Share-Based Compensation
|
|
●
|
Unredeemed Gift Cards
|
|
●
|
Legal Proceedings
|
|
●
|
The expected volatility is a blend of implied volatility based on market-traded options on our stock and historical volatility of our stock over the period commensurate with the three-year performance period.
|
|
●
|
The risk-free interest rate is based on the U.S. Treasury rate assumption commensurate with the three-year performance period.
|
|
●
|
The expected dividend yield is based on our current dividend yield as the best estimate of projected dividend yield for periods within the three-year performance period.
|
ITEM 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
ITEM 4.
|
Controls and Procedures
|
ITEM 1A.
|
Risk Factors
|
ITEM 6.
|
Exhibits
|
CRACKER BARREL OLD COUNTRY STORE, INC.
|
|||
Date: 2/21/12
|
By:
|
/s/Lawrence E. Hyatt | |
Lawrence E. Hyatt, Senior Vice President and | |||
Chief Financial Officer | |||
Date: 2/21/12 | By: | /s/P. Douglas Couvillion | |
P. Douglas Couvillion, Vice President, Corporate Controller and | |||
Principal Accounting Officer |
INDEX TO EXHIBITS
|
|
Exhibit
|
|
3.1
|
Amended and Restated Charter of Cracker Barrel Old Country Store, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on December 23, 2011)
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3.2
|
Amended and Restated Bylaws of Cracker Barrel Old Country Store, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed on December 23, 2011)
|
Consulting Agreement with Forrest Shoaf, dated as of December 20, 2011 (filed herewith) †
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10.2
|
Cracker Barrel Old Country Store, Inc. 1989 Stock Option Plan for Non-Employee Directors (incorporated by reference to Exhibit 10.4 to the Company’s Post Effective Amendment No. 1 to Form S-8 filed on January 17, 2012) †
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
|
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
|
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
|
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
|
101.INS
|
XBRL Instance Document (filed herewith)
|
101.SCH
|
XBRL Taxonomy Extension Schema (filed herewith)
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase (filed herewith)
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase (filed herewith)
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase (filed herewith)
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase (filed herewith)
|
|
(a)
|
Subject to early termination or acceleration pursuant to Section 10, CBRL will pay Executive at the rate of $18,133.50, semi-monthly, for fifteen (15) consecutive months, in accordance with CBRL’s regular payroll policies with such payments commencing on the first regularly scheduled pay period which occurs after the expiration of the Revocation Period. In the event of the death or disability of Executive, the foregoing payments will continue to be made to Executive’s estate, heirs, or conservator, as applicable. CBRL will have the right to deduct from compensation payable to Executive under this Agreement, social security taxes, and all federal, state, and municipal taxes and charges as may now be in effect and that may be enacted or required after the effective date of this Agreement as charges on the compensation of Executive. CBRL will be responsible for the payment of any employer matching amounts of such taxes.
|
|
(b)
|
Throughout the course of his employment, Executive has received awards under various equity plans (collectively, the “Equity Awards”). Executive and CBRL agree that to the extent there are such Equity Awards which are currently scheduled to vest in 2012 (during the Consulting Term), such Equity Awards shall continue to vest as set forth in Attachment B and shall become payable or exercisable in accordance with the terms of the applicable plans, provided Executive continues to provide the services described in Section 2 throughout the Consulting Term.
|
|
(c)
|
Until the earlier of: (i) the end of the Consulting Term or (ii) Executive’s obtaining other employment at which he receives health insurance benefits irrespective of their scope and coverage, CBRL, subject to Executive’s payment of contributions applicable to plan participants, shall continue to provide all group health and life insurance benefits for Executive and his dependents at the same level as for other CBRL senior level executives. Afterwards, CBRL will have no obligation to provide further life insurance benefits, but upon payment of the appropriate premiums, Executive will have the right to continue his participation in CBRL’s group health coverage plan under the applicable COBRA regulations. Executive shall not be entitled to any other benefits as a consultant to CBRL.
|
|
(d)
|
Executive will be paid any bonus earned under the CBRL FY2012 Annual Bonus Plan (“ABP”), in accordance with the terms of, and at the time specified in, the ABP, prorating, for purposes of service under the ABP, Executive’s Employment through the Employment Termination Date. Executive’s services as a Consultant pursuant to Section 2 of this Agreement shall not count in the determination of any employment or service requirement for an award under the ABP.
|
|
(e)
|
CBRL shall reimburse Executive for his reasonable out-of-pocket expenses in connection with his activities and the services that he is requested to perform under Section 2; provided that the request for reimbursement of such expenses is accompanied by documentation satisfactory to CBRL and, provided further, that any expense in excess of $500.00 must be approved in advance in writing by CBRL.
|
|
(f)
|
CBRL shall deduct from the amounts payable to the Executive pursuant to this Agreement the amount of all required federal, state and local withholding taxes in accordance with the Executive’s Form W-4 on file with CBRL, and all applicable federal employment taxes.
|
|
(a)
|
CBRL shall report all payments and other benefits paid or provided pursuant to Section 2 and Section 3 of this Agreement to the extent required by, and in accordance with, Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”). In the event that CBRL or the Executive reasonably and in good faith determines that any payment to be made or benefit to be provided to the Executive hereunder would result in the application of Section 409A, CBRL shall, in consultation with the Executive, modify the Agreement to the extent possible and in the least restrictive manner reasonably available in order to exclude such compensation from the definition of “deferred compensation” within the meaning of such Section 409A or in order to comply with the provisions of Section 409A and/or any rules, regulations or other regulatory guidance issued under such statutory provision and without any diminution in the value of the payments to the Executive. Notwithstanding the foregoing, under no circumstance shall CBRL be responsible for any taxes, penalties, interest or other losses or expenses incurred by the Executive due to any failure to comply with Section 409A, or for any interest on account of any delay in payment deemed necessary to comply with Section 409A.
|
|
(b)
|
It is intended that (i) each payment or installment of payments provided under this Agreement is a separate “payment” for purposes of Section 409A of the Code, and (ii) that the payments satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code, including those provided under Treasury Regulations 1.409A-1(b)(4) (regarding short-term deferrals), 1.409A-1(b)(9)(iii) (regarding the two-times, two (2) year exception) and 1.409A-1(b)(9)(v) (regarding reimbursements and other separation pay). Notwithstanding anything to the contrary herein, if it is determined (i) that on the date of Executive’s “separation from service” (as such term is defined under Treasury Regulation 1.409A-1(h)) or at such other time that CBRL determines to be relevant, Executive is a “specified employee” (as such term is defined under Treasury Regulation 1.409A-1(i)(1)) of CBRL, and (ii) that any payments to be provided to Executive pursuant to this Agreement are or may become subject to the additional tax under Section 409A(a)(1)(B) of the Code or any other taxes or penalties imposed under Section 409A of the Code if provided at the time otherwise required under this Agreement, then such payments shall be delayed until the date that is six (6) months after the date of Executive’s “separation from service” (as such term is defined under Treasury Regulation 1.409A-1(h)) or, if sooner, the date of Executive’s death. Any payments delayed pursuant to this Section 4(b) shall be made in a lump sum on the first day of the seventh month following Executive’s “separation from service” (as such term is defined under Treasury Regulation 1.409A-1(h)) or, if sooner, the date of Executive’s death. It is intended that this Agreement shall comply with the provisions of Section 409A of the Code and the Treasury Regulations relating thereto so as not to subject Executive to the payment of additional taxes and interest under Section 409A of the Code. In furtherance of this intent, this Agreement shall be interpreted, operated, and administered in a manner consistent with these intentions.
|
|
(c)
|
To the extent that any reimbursement, fringe benefit or other, similar plan or arrangement in which Executive participates during the term of Executive’s employment under this Agreement (including any reimbursements under Section 3(e) hereof) or thereafter provides for a “deferral of compensation” within the meaning of Section 409A of the Code, such payments shall be made in accordance with Section 1.409A-3(i)(1)(iv) of the Treasury Regulations, including (i) the amount eligible for reimbursement or payment under such plan or arrangement in one calendar year may not affect the amount eligible for reimbursement or payment in any other calendar year (except that a plan providing medical or health benefits may impose a generally applicable limit on the amount that may be reimbursed or paid), (ii) subject to any shorter time periods provided herein or the applicable plans or arrangements, any reimbursement or payment of an expense under such plan or arrangement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred, and (iii) the right to any reimbursement or in-kind benefit is not subject to liquidation or exchange for another benefit.
|
|
(d)
|
Except for any disgorgement or forfeiture of benefits provided for under this Agreement, including Section 10(a) herein, in no event shall any payment under this Agreement that constitutes “deferred compensation” for purposes of Section 409A of the Code and the Treasury Regulations promulgated thereunder be subject to offset by any other amount unless otherwise permitted by Section 409A of the Code.
|
|
(e)
|
For the avoidance of doubt, any payment due under this Agreement within a period following Executive’s termination of employment or other event, shall be made on a date during such period as determined by CBRL in its sole discretion.
|
|
(f)
|
By accepting this Agreement, Executive hereby agrees and acknowledges that CBRL does not make any representations with respect to the application of Section 409A of the Code to any tax, economic or legal consequences of any payments payable to Executive hereunder. Further, by the acceptance of this Agreement, Executive acknowledges that (i) Executive has obtained independent tax advice regarding the application of Section 409A of the Code to the payments due to Executive hereunder, (ii) Executive retains full responsibility for the potential application of Section 409A of the Code to the tax and legal consequences of payments payable to Executive hereunder and (iii) CBRL shall not indemnify or otherwise compensate Executive for any violation of Section 409A of the Code that my occur in connection with this Agreement.
|
|
(a)
|
“Competitive Position” shall mean any employment, consulting, advisory, directorship, agency, promotional or independent contractor arrangement between Executive and any person or Entity engaged, wholly or in material part, or that is an investor or prospective investor in an Entity that is engaged wholly or in material part in the restaurant business that is the same or similar to that in which CBRL or any of CBRL’s subsidiaries or affiliates (collectively the “CBRL Entities”) is engaged, at the Employment Termination Date, whereby Executive is required to or does perform services on behalf of or for the benefit of such person or Entity which are substantially similar to the services in which Executive participated or that he directed or oversaw while employed by CBRL.
|
|
(b)
|
“Confidential Information” shall mean the proprietary or confidential data, information, documents or materials (whether oral, written, electronic or otherwise) belonging to or pertaining to the CBRL Entities, other than “Trade Secrets” (as defined below), which is of tangible or intangible value to any of the CBRL Entities and the details of which are not generally known to the competitors of the CBRL Entities. Confidential Information shall also include: any items that any of the CBRL Entities have marked “CONFIDENTIAL” or some similar designation or are otherwise identified as being confidential, at the time disclosed to executive.
|
|
(c)
|
“Entity” or “Entities” shall mean any business, individual, partnership, joint venture, agency, governmental agency, body or subdivision, association, firm, corporation, limited liability company or other entity of any kind.
|
|
(d)
|
“Restricted Period” shall mean the twenty-four (24) month period following the Employment Termination Date; provided, however that the Restricted Period shall be extended for a period of time equal to any period(s) of time within the twenty-four (24) month period following the Employment Termination Date that Executive is determined by a final non-appealable judgment from a court of competent jurisdiction to have engaged in any conduct that violates this Section 8 or any sub-sections thereof, the purpose of this provision being to secure for the benefit of CBRL the entire Restricted Period being bargained for by CBRL for the restrictions upon Executive’s activities.
|
|
(e)
|
“Territory” shall mean each of the United States of America.
|
|
(f)
|
“Trade Secrets” shall mean information or data of or about any of the CBRL Entities, including, but not limited to, the store operating model known as Seat 2 Eat, technical or non-technical data, recipes, formulas, patterns, compilations, programs (e.g., advertising or promotional schedules), devices, methods, techniques, drawings, processes, financial data, financial plans, product plans or lists of actual or potential suppliers that: (1) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; and (3) any other information which is defined as a “trade secret” under applicable law.
|
|
(g)
|
“Work Product” shall mean all tangible work product (e.g., menus, advertising materials), property, data, documentation, “know-how,” concepts or plans, inventions, improvements, techniques and processes relating to the CBRL Entities that were conceived, discovered, created, written, revised or developed by Executive during the term of his employment with CBRL.
|
|
(a)
|
In recognition of the need of the CBRL Entities to protect their legitimate business interests, Confidential Information and Trade Secrets, Executive hereby covenants and agrees that Executive shall regard and treat Trade Secrets and all Confidential Information as strictly confidential and wholly-owned by the CBRL Entities and shall never, for any reason, in any fashion, either directly or indirectly, use, sell, lend, lease, distribute, license, give, transfer, assign, show, disclose, disseminate, reproduce, copy, misappropriate or otherwise communicate any such item or information to any third party or Entity for any purpose other than in accordance with this Agreement or as required by applicable law, court order or other legal process.
|
|
(b)
|
Executive shall exercise best efforts to ensure the continued confidentiality of all Trade Secrets and Confidential Information, and he shall immediately notify CBRL of any unauthorized disclosure or use of any Trade Secrets or Confidential Information of which Executive becomes aware. Executive shall assist the CBRL Entities, to the extent reasonably necessary and at the sole expense of the CBRL Entities, in the protection of or procurement of any intellectual property protection or other rights in any of the Trade Secrets or Confidential Information.
|
|
(c)
|
All Work Product shall be owned exclusively by the CBRL Entities. To the greatest extent possible, any Work Product shall be deemed to be “work made for hire” (as defined in the Copyright Act, 17 U.S.C. §§ 101 et seq., as amended), and Executive hereby unconditionally and irrevocably transfers and assigns to the applicable CBRL Entity all right, title and interest Executive currently has or may have by operation of law or otherwise in or to any Work Product, including, without limitation, all patents, copyrights, trademarks (and the goodwill associated therewith), trade secrets, service marks (and the goodwill associated therewith) and other intellectual property rights. Executive agrees to execute and deliver to the applicable CBRL Entity any transfers, assignments, documents or other instruments which CBRL may deem necessary or appropriate, from time to time, to protect the rights granted herein or to vest complete title and ownership of any and all Work Product, and all associated intellectual property and other rights therein, exclusively in the applicable CBRL Entity.
|
|
(d)
|
Executive also recognizes that all writings, illustrations, drawings and other similar materials which embody or otherwise contain Trade Secrets, Confidential Information or Work Product that any CBRL Entity may have produced during his employment or which may have been given to Executive in connection with his employment are the property of CBRL, and it is Executive’s obligation to immediately return any such materials to CBRL.
|
|
(a)
|
Executive understands and acknowledges that his violation of Section 7.1 or Section 8 or any sub-section thereof would cause irreparable harm to CBRL and CBRL would be entitled to an injunction by any court of competent jurisdiction enjoining and restraining Executive from any employment, service, or other act prohibited by this Agreement. The parties agree that nothing in this Agreement shall be construed as prohibiting CBRL from pursuing any remedies available to it for any breach or threatened breach of Section 7.1 or Section 8 or any sub-section thereof, including, without limitation, the recovery of actual damages from Executive or any person or entity acting in concert with Executive. CBRL shall receive injunctive relief without the necessity of posting bond or other security, such bond or other security being hereby waived by Executive. If any part of Section 7.1 or Section 8 or any sub-section thereof is found to be unreasonable, then it may be amended by appropriate order of a court of competent jurisdiction to the extent deemed reasonable. Furthermore and in recognition that certain provisions in this Agreement are being agreed to by CBRL in reliance upon Executive’s compliance with Sections 7.1 and 8, in the event of a breach by Executive of any of the provisions of Section 7.1 or Section 8 or any sub-sections thereof, damages to CBRL would be difficult to determine and, in the event of such breach by Executive, the Consulting Term shall immediately terminate without any action on the part of CBRL and: (a) CBRL shall be released from its obligation to make any further payments or provide benefits to Executive under Section 3 hereof; (b) CBRL shall be released from its obligations under Section 7.2 hereof, and (c) any Equity Awards shall cease to vest as of the date of such breach, and the unvested portion thereof shall be immediately forfeited and thereafter not be distributed to Executive, or be exercisable by Executive, as applicable. If either CBRL or Executive brings suit to compel performance of, to interpret, or to recover damages for the breach of this Agreement, the prevailing party in such litigation shall be entitled to recover its reasonable attorneys’ fees in addition to costs and necessary disbursements otherwise recoverable. Additionally, if Executive breaches any of the provisions of Section 8, the value of any Equity Awards that vested during the Consulting Term that are received by Executive shall be disgorged to CBRL.
|
|
(b)
|
In recognition that certain provisions in this Agreement are being agreed to by Executive in reliance upon CBRL’s compliance with Sections 3 and 7.2, in the event of a breach by CBRL of any of the provisions of Section 3 or any subsections thereof or Section 7.2, Executive will be entitled, at his option, to: (i) a release from his obligations to provide further consulting services under Section 2; (ii) a release from his obligations and restrictions provided for in Section 8; (iii) to the extent permitted by Section 409A of the Code, accelerate the payment of all amounts under Section 3(a); and (iv) to the extent provided for in the Omnibus Plan, accelerate the receipt of and immediately vest any then unvested Equity Awards that would have vested during the Consulting Term; provided, however, that notwithstanding the forgoing, Executive shall not be entitled to the releases set forth in subsections (i) and (ii) above or the acceleration of Equity Awards set forth in subsections (iii) and (iv) unless Executive shall first have given CBRL five (5) days prior notice (which notice shall describe the breach of CBRL) and CBRL shall not cure such breach during said five (5) day period. The foregoing remedies are in addition to and not in lieu of any other contractual, legal, or equitable remedies that may be available to Executive. If either Executive or CBRL brings suit to compel performance of, to interpret, or to recover damages for the breach of this Agreement, the prevailing party in such litigation shall be entitled to recover its reasonable attorneys’ fees in addition to costs and necessary disbursements otherwise recoverable.
|
|
(c)
|
CBRL shall defend, hold harmless and indemnify Executive in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a consultant of CBRL during all or any portion of the Consulting Term or provided services to CBRL against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of CBRL and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. Notwithstanding the preceding sentence, no indemnity shall be paid by CBRL: (i) in connection with any proceeding by or in the right of CBRL in which Executive is adjudged liable to CBRL; (ii) if a final judgment or other final adjudication by a court having jurisdiction in the matter shall determine that such indemnity is not lawful; or (iii) in connection with any proceeding charging improper personal benefit to Executive if a final judgment or other final adjudication by a court having jurisdiction in the matter shall determine that such personal benefit was improper.
|
|
(a)
|
That he has carefully read this Agreement, and understands its contents, meaning and intent; and
|
|
(b)
|
That, understanding this document, he has freely and voluntarily executed it with the advice of counsel aforesaid, without compulsion, coercion or duress.
|
|
/s/ N.B.F. Shoaf
|
|
Forrest Shoaf | ||
Date: | December 20, 2011 | |
CRACKER BARREL OLD COUNTRY STORE, INC. | ||
By: | Sandra B. Cochran | |
Title: | President and CEO | |
Date: | December 20, 2011 |
EXECUTIVE
|
|
|
/s/ N.B.F. Shoaf |
Forrest Shoaf
|
|
CRACKER BARREL OLD COUNTRY STORE, INC. | |
/s/ Sandra B. Cochran | |
Chief Executive Officer |
EXHIBIT 31.1
|
CERTIFICATION
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Cracker Barrel Old Country Store, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
EXHIBIT 31.2
|
CERTIFICATION
|
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Cracker Barrel Old Country Store, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.
|
Date: February 21, 2012
|
By:
|
/s/Sandra B. Cochran |
Sandra B. Cochra | ||
President and Chief Executive Officer |
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer.
|
Date: February 21, 2012
|
By:
|
/s/Lawrence E. Hyatt |
Lawrence E. Hyatt, | ||
Senior Vice President and Chief Financial Officer |
Commitments and Contingencies (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended |
---|---|
Jan. 27, 2012
|
|
Guarantor Obligations [Line Items] | |
Proceeds received from legal settlement | $ 3,000 |
Total guarantee of lease agreement | 928 |
Financial Standby Letter of Credit [Member]
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Guarantor Obligations [Line Items] | |
Standby letters of credit | 28,606 |
Third party lease guarantees [Member]
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Guarantor Obligations [Line Items] | |
Remaining life of lease with guaranteed payments (in years) | 1.7 |
Annual lease payments under operating lease agreement | 361 |
Total guarantee of lease agreement | 601 |
Indemnification agreement Logan's 2 [Member]
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Guarantor Obligations [Line Items] | |
Remaining life of lease with guaranteed payments (in years) | 8.2Y |
Annual lease payments under operating lease agreement | $ 108 |
Share-Based Compensation (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 27, 2012
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Share-Based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation | Share-based compensation is recorded in general and administrative expenses in the accompanying Condensed Consolidated Statements of Income. Total share-based compensation was comprised of the following at:
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Restructuring (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | 12 Months Ended |
---|---|---|
Jan. 27, 2012
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Jul. 29, 2011
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Restructuring [Abstract] | ||
Number of management and staff positions eliminated | 60 | |
Restructuring liability [Roll forward] | ||
Liability at beginning of period | $ 1,579 | |
Payments | (1,030) | |
Adjustments | (127) | |
Liability at end of period | $ 422 | $ 1,579 |
Debt
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jan. 27, 2012
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Debt [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | 4. Debt Long-term debt consisted of the following at:
The Company's $750,000 credit facility (the “Credit Facility”) consists of a term loan and a $500,000 revolving credit facility (“the Revolving Credit Facility”). At January 27, 2012, the Company had $318,750 of outstanding borrowings under the Revolving Credit Facility and $28,606 of standby letters of credit, which reduce the Company's availability under the Revolving Credit Facility (see Note 13). At January 27, 2012, the Company had $152,644 in borrowing availability under the Revolving Credit Facility. In accordance with the Credit Facility, outstanding borrowings bear interest, at the Company's election, either at LIBOR or prime plus a percentage point spread based on certain specified financial ratios. As of January 27, 2012, the Company's outstanding borrowings were swapped at a weighted average interest rate of 7.57% (see Note 5 for information on the Company's interest rate swaps). The Credit Facility contains customary financial covenants, which include maintenance of a maximum consolidated total leverage ratio and a minimum consolidated interest coverage ratio. At January 27, 2012, the Company was in compliance with all debt covenants. The Credit Facility also imposes restrictions on the amount of dividends the Company is permitted to pay. If there is no default existing and the total of our availability under the Revolving Credit Facility plus the Company's cash and cash equivalents on hand is at least $100,000, the Company may: (1) pay cash dividends on shares of its common stock if the aggregate amount of dividends paid in any fiscal year is less than 15% of Consolidated EBITDA from continuing operations (as defined in the Credit Facility) during the immediately preceding fiscal year; or (2) increase its regular quarterly cash dividend in any quarter by an amount not to exceed the greater of $0.01 per share or 10% of the amount of the dividend paid in the prior fiscal quarter. The note payable consists of a five-year note with a vendor with an original principal amount of $507 and represents the financing of prepaid maintenance for telecommunications equipment. The note payable is payable in monthly installments of principal and interest of $9 through October 16, 2013 and bears interest at 2.88% per year. |