Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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(Address of principal executive offices)
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(Zip code)
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Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Rights to Purchase Series A Junior Participating
Preferred Stock (Par Value $0.01)
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|
(Nasdaq Global Select Market)
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Accelerated filer ☐
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Non-accelerated filer ☐
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Smaller reporting company
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Emerging growth company
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PART I. FINANCIAL INFORMATION
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Page | ||
ITEM 1. Financial Statements (Unaudited)
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3
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4
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5
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6 |
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7 |
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15 | |||
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25 |
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25 | |||
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PART II. OTHER INFORMATION
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26 |
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26 | |||
26
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27 |
ASSETS
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October 27,
2023
|
July 28,
2023*
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||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Accounts receivable
|
|
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||||||
Inventories
|
|
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||||||
Prepaid expenses and other current assets
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||||||
Total current assets
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||||||
Property and equipment
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||||||
Less: Accumulated depreciation and amortization
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||||||
Property and equipment – net
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||||||
Operating lease right-of-use assets, net
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||||||
Goodwill
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||||||
Intangible assets
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||||||
Other assets
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||||||
Total assets
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$
|
|
$
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$
|
|
$
|
|
||||
Other current liabilities
|
|
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||||||
Total current liabilities
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|
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||||||
Long-term debt
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|
||||||
Long-term operating lease liabilities
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||||||
Other long-term obligations
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||||||
Commitments and Contingencies (Note 10)
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||||||||
Shareholders’ Equity:
|
||||||||
Preferred stock –
|
|
|
||||||
Common stock –
|
|
|
||||||
Additional paid-in capital
|
||||||||
Retained earnings
|
|
|
||||||
Total shareholders’ equity
|
|
|
||||||
Total liabilities and shareholders’ equity
|
$
|
|
$
|
|
Quarter Ended
|
||||||||
October 27, | October 28, | |||||||
2023
|
2022
|
|||||||
Total revenue
|
$
|
|
$
|
|
||||
Cost of goods sold (exclusive of depreciation and rent)
|
|
|
||||||
Labor and other related expenses
|
|
|
||||||
Other store operating expenses
|
|
|
||||||
General and administrative expenses
|
|
|
||||||
Operating income
|
|
|
||||||
Interest expense, net
|
|
|
||||||
Income before income taxes
|
|
|
||||||
Provision for income taxes
|
|
|
||||||
Net income
|
$
|
|
$
|
|
||||
Net income per share:
|
||||||||
Basic
|
$
|
|
$
|
|
||||
Diluted
|
$
|
|
$
|
|
||||
Weighted average shares:
|
||||||||
Basic
|
|
|
||||||
Diluted
|
|
|
Common Stock
|
Additional
Paid-In
|
Retained
|
Total
Shareholders’
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Equity
|
||||||||||||||||
Balances at July 28, 2023
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||
Comprehensive Income:
|
||||||||||||||||||||
Net income
|
—
|
|
|
|
|
|||||||||||||||
Total comprehensive income
|
—
|
|
|
|
|
|||||||||||||||
Cash dividends declared - $
|
—
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Share-based compensation
|
—
|
|
|
|
|
|||||||||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||
Balances at October 27, 2023
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Common Stock
|
Additional
Paid-In
|
Retained
|
Total
Shareholders’
|
|||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Equity
|
||||||||||||||||
Balances at July 29, 2022
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|||||||||||
Comprehensive Income:
|
||||||||||||||||||||
Net income
|
—
|
|
|
|
|
|||||||||||||||
Total comprehensive income
|
—
|
|
|
|
|
|||||||||||||||
Cash dividends declared - $
|
—
|
|
|
(
|
)
|
(
|
)
|
|||||||||||||
Share-based compensation
|
—
|
|
|
|
|
|||||||||||||||
Issuance of share-based compensation awards, net of shares withheld for employee taxes
|
|
|
(
|
)
|
|
(
|
)
|
|||||||||||||
Purchases and retirement of common stock
|
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||
Balances at October 28, 2022
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months Ended
|
||||||||
October 27, | October 28, | |||||||
2023
|
2022
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
|
|
||||||
Amortization of debt issuance costs
|
||||||||
Loss on disposition of property and equipment
|
|
|
||||||
Share-based compensation
|
|
|
||||||
Noncash lease expense
|
|
|
||||||
Amortization of asset recognized from gain on sale and leaseback transactions
|
|
|
||||||
Changes in assets and liabilities:
|
||||||||
Inventories
|
(
|
)
|
(
|
)
|
||||
Other current assets
|
|
(
|
)
|
|||||
Accounts payable
|
(
|
)
|
(
|
)
|
||||
Other current liabilities
|
(
|
)
|
|
|||||
Other long-term assets and liabilities
|
(
|
)
|
(
|
)
|
||||
Net cash used in operating activities |
(
|
)
|
(
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Purchase of property and equipment
|
(
|
)
|
(
|
)
|
||||
Proceeds from insurance recoveries of property and equipment
|
|
|
||||||
Proceeds from sale of property and equipment
|
|
|
||||||
Net cash used in investing activities |
(
|
)
|
(
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Proceeds from issuance of long-term debt |
||||||||
Principal payments under long-term debt |
( |
) | ||||||
Taxes withheld from issuance of share-based compensation awards
|
(
|
)
|
(
|
)
|
||||
Purchases and retirement of common stock |
( |
) | ||||||
Dividends on common stock
|
(
|
)
|
(
|
)
|
||||
Net cash provided by financing activities |
|
|
||||||
Net decrease in cash and cash equivalents
|
(
|
)
|
(
|
)
|
||||
Cash and cash equivalents, beginning of period
|
|
|
||||||
Cash and cash equivalents, end of period
|
$
|
|
$
|
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest, net of amounts capitalized
|
$
|
|
$
|
|
||||
Income taxes
|
$
|
|
$
|
|
||||
Supplemental schedule of non-cash investing and financing activities*:
|
||||||||
Capital expenditures accrued in accounts payable
|
$
|
|
$
|
|
||||
Dividends declared but not yet paid
|
$
|
|
$
|
|
1. |
Condensed Consolidated Financial Statements
|
2. |
Fair Value Measurements
|
Level 1
|
Level 2
|
Level 3
|
Total Fair
Value
|
|||||||||||||
Cash equivalents*
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Deferred compensation plan assets**
|
|
|||||||||||||||
Total assets at fair value
|
$
|
|
Level 1
|
Level 2
|
Level 3
|
Total Fair
Value
|
|||||||||||||
Cash equivalents*
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Deferred compensation plan assets**
|
|
|||||||||||||||
Total assets at fair value
|
$
|
|
*
|
**
|
3. |
Inventories
|
October 27, 2023
|
July 28, 2023
|
|||||||
Retail
|
$
|
|
$
|
|
||||
Restaurant
|
|
|
||||||
Supplies
|
|
|
||||||
Total
|
$
|
|
$
|
|
4. |
Debt
|
October 27, 2023
|
July 28, 2023 | |||||||
Liability component | ||||||||
Principal
|
$
|
|
$ | |||||
Less: Debt issuance costs (1)
|
|
|||||||
Net carrying amount
|
$
|
|
$ |
(1) |
|
Quarter Ended
October 27, 2023
|
Quarter Ended
October 28, 2022
|
|||||||
Coupon interest
|
$
|
|
$ | |||||
Amortization of issuance costs | ||||||||
Total interest expense
|
$
|
|
$ |
5. |
Seasonality
|
6. |
Segment Information
|
7. |
Revenue Recognition
|
Quarter Ended
|
||||||||
October 27,
2023
|
October 28,
2022
|
|||||||
Revenue:
|
||||||||
Restaurant
|
$
|
|
$
|
|
||||
Retail
|
|
|
||||||
Total revenue
|
$
|
|
$
|
|
8. |
Leases
|
Quarter Ended
|
Quarter Ended
|
|||||||
October 27, 2023 | October 28, 2022 | |||||||
Operating lease cost
|
$
|
|
$
|
|
||||
Short term lease cost
|
|
|
||||||
Variable lease cost
|
|
|
||||||
Total lease cost
|
$
|
|
$
|
|
Quarter Ended
|
Quarter Ended
|
|||||||
October 27, 2023 |
October 28, 2022
|
|||||||
Operating cash flow information:
|
||||||||
Cash paid for amounts included in the measurement of lease liabilities
|
$
|
|
$
|
|
||||
Noncash information:
|
||||||||
Right-of-use assets obtained in exchange for new operating lease liabilities
|
|
|
||||||
Lease modifications or reassessments increasing or (decreasing) right-of-use assets
|
|
(
|
)
|
|||||
Lease modifications removing right-of-use assets
|
(
|
)
|
(
|
)
|
October 27, 2023
|
October 28, 2022
|
|||||||
Weighted-average remaining lease term
|
|
|
||||||
Weighted-average discount rate
|
|
%
|
|
%
|
Year
|
Total
|
|||
Remainder of 2024
|
$
|
|
||
2025
|
|
|||
2026
|
|
|||
2027
|
|
|||
2028
|
|
|||
Thereafter
|
|
|||
Total future minimum lease payments
|
|
|||
Less imputed remaining interest
|
(
|
)
|
||
Total present value of operating lease liabilities
|
$
|
|
9. |
Net Income Per Share and Weighted Average Shares
|
Quarter Ended
|
||||||||
October 27,
2023
|
October 28,
2022
|
|||||||
Net income per share numerator
|
$
|
|
$
|
|
||||
Net income per share denominator:
|
||||||||
Weighted average shares
|
|
|
||||||
Add potential dilution:
|
||||||||
Nonvested stock awards and units
|
|
|
||||||
Diluted weighted average shares
|
|
|
10. |
Commitments and Contingencies
|
• |
Comparable store restaurant sales increase/(decrease): To calculate comparable store restaurant sales increase/(decrease), we determine total restaurant sales of stores open at least six full quarters before the beginning of the
applicable period, measured on comparable calendar weeks. We then subtract total comparable store restaurant sales for the current year period from total comparable store restaurant sales for the applicable historical period to calculate
the absolute dollar change. To calculate comparable store restaurant sales increase/(decrease), which we express as a percentage, we divide the absolute dollar change by the comparable store restaurant sales for the historical period.
|
• |
Comparable store average restaurant sales: To calculate comparable store average restaurant sales, we determine total restaurant sales of stores open at least six full quarters before the beginning of the applicable period,
measured on comparable calendar weeks, and divide by the number of comparable stores for the applicable period.
|
• |
Comparable store retail sales increase/(decrease): To calculate comparable store retail sales increase/(decrease), we determine total retail sales of stores open at least six full quarters before the beginning of the applicable
period, measured on comparable calendar weeks. We then subtract total comparable store retail sales for the current year period from total comparable store retail sales for the applicable historical period to calculate the absolute dollar
change. To calculate comparable store retail sales increase/(decrease), which we express as a percentage, we divide the absolute dollar change by the comparable store retail sales for the historical period.
|
• |
Comparable store retail average weekly sales: To calculate comparable store average retail sales, we determine total retail sales of stores open at least six full quarters before the beginning of the applicable period, measured on
comparable calendar weeks, and divide by the number of comparable stores for the applicable period.
|
• |
Comparable restaurant guest traffic increase/(decrease): To calculate comparable restaurant guest traffic increase/(decrease), we determine the number of entrees sold in our dine-in and off-premise business from stores open at
least six full quarters at the beginning of the applicable period, measured on comparable calendar weeks. We then subtract total entrees sold for the current year period from total entrees sold for the applicable historical period to
calculate the absolute numerical change. To calculate comparable restaurant guest traffic increase/(decrease), which we express as a percentage, we divide the absolute numerical change by the total entrees sold for the historical period.
|
• |
Average check increase per guest: To calculate average check per guest, we determine comparable store restaurant sales, as described above, and divide by comparable guest traffic (as described above). We then subtract average
check per guest for the current year period from average check per guest for the applicable historical period to calculate the absolute dollar change. The absolute dollar change is divided by the prior year average check number to
calculate average check increase per guest, which we express as a percentage.
|
Quarter Ended
|
||||||||
October 27,
|
October 28,
|
|||||||
2023
|
2022
|
|||||||
Total revenue
|
100.0
|
%
|
100.0
|
%
|
||||
Cost of goods sold (exclusive of depreciation and rent)
|
31.0
|
33.5
|
||||||
Labor and other related expenses
|
37.0
|
34.8
|
||||||
Other store operating expenses
|
24.7
|
23.4
|
||||||
General and administrative expenses
|
5.9
|
5.5
|
||||||
Operating income
|
1.4
|
2.8
|
||||||
Interest expense, net
|
0.6
|
0.4
|
||||||
Income before income taxes
|
0.8
|
2.4
|
||||||
Provision for income taxes
|
0.1
|
0.4
|
||||||
Net income
|
0.7
|
%
|
2.0
|
%
|
|
Quarter Ended
|
|||||||
|
October 27,
|
October 28,
|
||||||
|
2023
|
2022
|
||||||
Net change in units:
|
||||||||
Cracker Barrel
|
1
|
—
|
||||||
MSBC
|
1
|
3
|
||||||
|
||||||||
Units in operation at end of the period:
|
||||||||
Cracker Barrel
|
661
|
664
|
||||||
MSBC
|
60
|
54
|
||||||
Total units at end of the period
|
721
|
718
|
Quarter Ended
|
||||||||
October 27,
2023
|
October 28,
2022
|
|||||||
Revenue in dollars:
|
||||||||
Restaurant
|
$
|
660,793
|
$
|
662,234
|
||||
Retail
|
163,046
|
177,285
|
||||||
Total revenue
|
$
|
823,839
|
$
|
839,519
|
||||
Total revenue by percentage relationships:
|
||||||||
Restaurant
|
80.2
|
%
|
78.9
|
%
|
||||
Retail
|
19.8
|
%
|
21.1
|
%
|
||||
Average unit volumes(1):
|
||||||||
Restaurant
|
$
|
975.6
|
$
|
974.9
|
||||
Retail
|
246.7
|
266.8
|
||||||
Total revenue
|
$
|
1,222.3
|
$
|
1,241.7
|
||||
Comparable store sales increase (decrease)(2):
|
||||||||
Restaurant
|
(0.5
|
%)
|
7.1
|
%
|
||||
Retail
|
(8.1
|
%)
|
4.3
|
%
|
||||
Restaurant and retail
|
(2.1
|
%)
|
6.5
|
%
|
||||
Average check increase
|
6.6
|
%
|
8.9
|
%
|
||||
Comparable restaurant guest traffic decrease(2):
|
(7.1
|
%)
|
(1.8
|
%)
|
Quarter Ended
|
||||||||
|
October 27,
2023
|
October 28,
2022
|
||||||
Cost of Goods Sold in dollars:
|
||||||||
Restaurant
|
$
|
173,441
|
$
|
192,516
|
||||
Retail
|
82,118
|
89,024
|
||||||
Total Cost of Goods Sold
|
$
|
255,559
|
$
|
281,540
|
||||
Cost of Goods Sold by percentage of revenue:
|
||||||||
Restaurant
|
26.2
|
%
|
29.1
|
%
|
||||
Retail
|
50.4
|
%
|
50.2
|
%
|
First Quarter
Increase (Decrease)
as a Percentage of
Total Retail Revenue
|
||||
Freight expense
|
0.4
|
%
|
||
Provision for obsolete inventory
|
(0.3
|
%)
|
Quarter Ended
|
||||||||
October 27,
2023
|
October 28,
2022
|
|||||||
Labor and related expenses
|
37.0
|
%
|
34.8
|
%
|
First Quarter
Increase as a Percentage
of Total Revenue
|
||||
Store hourly labor
|
1.5
|
%
|
||
Store management compensation
|
0.4
|
%
|
||
Employee health care expense
|
0.2
|
%
|
Quarter Ended
|
||||||||
October 27,
2023
|
October 28,
2022
|
|||||||
Other store operating expenses
|
24.7
|
%
|
23.4
|
%
|
First Quarter
Increase as a Percentage
of Total Revenue
|
||||
Advertising expense
|
0.8
|
%
|
||
Store occupancy costs
|
0.2
|
%
|
||
General insurance expense
|
0.1
|
%
|
Quarter Ended
|
||||||||
October 27,
2023
|
October 28,
2022
|
|||||||
General and administrative expenses
|
5.9
|
%
|
5.5
|
%
|
Quarter Ended
|
||||||||
October 27,
2023
|
October 28,
2022
|
|||||||
Interest expense, net
|
$
|
4,938
|
$
|
3,532
|
Quarter Ended
|
||||||||
October 27,
2023
|
October 28,
2022
|
|||||||
Effective tax rate
|
15.7
|
%
|
14.7
|
%
|
• |
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.
|
• |
Impairment of Long-Lived Assets
|
• |
Insurance Reserves
|
• |
Retail Inventory Valuation
|
• |
Lease Accounting
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INDEX TO EXHIBITS
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Exhibit
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3.1
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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 under the Exchange Act on April 10, 2012 (Commission File No. 001-25225)
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3.2
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Second Amended and Restated Bylaws of Cracker Barrel Old Country Store, Inc. (incorporated by reference to Exhibit 3.2 to the
Company’s Quarterly Report on Form 10-Q filed under the Exchange Act on June 7, 2022)
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Confidential Separation Agreement and Release, between Jennifer Tate and the Company, dated as of August 28, 2023† (filed
herewith)
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Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
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Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
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Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
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Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
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101.INS
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Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
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101.SCH
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Inline XBRL Taxonomy Extension Schema
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101.CAL
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Inline XBRL Taxonomy Extension Calculation Linkbase
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101.LAB
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Inline XBRL Taxonomy Extension Label Linkbase
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101.PRE
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Inline XBRL Taxonomy Extension Presentation Linkbase
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101.DEF
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Inline XBRL Taxonomy Extension Definition Linkbase
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104
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Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
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†Denotes management contract or compensatory plan, contract or arrangement.
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Date: November 30, 2023
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By:
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/s/Craig A. Pommells
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Craig A. Pommells, Senior Vice President, Chief Financial Officer
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Date: November 30, 2023
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By:
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/s/Brian T. Vaclavik
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Brian T. Vaclavik, Vice President, Corporate Controller and
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Principal Accounting Officer
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