UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Cracker Barrel Old Country Store, Inc. | ||||
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Cracker Barrel Old Country Store, Inc. (the “Company”) used the following presentation at the Wells Fargo Retail and Restaurants Summit beginning on October 2, 2012. This presentation was also posted to the Company’s Investor Relations website, investor.crackerbarrel.com. A screenshot of the “Events & Presentations” section of the Investor Relations website follows the presentation below.
 Wells Fargo
2012 Retail & Restaurant Summit
October 2, 2012 |
 Safe Harbor
statement Safe Harbor statement
Cracker
Barrel
Old
Country
Store,
Inc.
(“Cracker
Barrel”
or
the
“Company”)
urges
caution
in
considering
current
trends
and
earnings
guidance
disclosed
in
this
presentation.
Except
for
specific
historical
information, matters discussed in this presentation are forward looking
statements that involve risks, uncertainties and other factors that may
cause actual results and performance of the Company to differ materially
from those expressed or implied in this discussion. All forward-looking
information is provided pursuant to the safe harbor established under the
Private Securities Litigation Reform Act of 1995.
More detailed information on risks, uncertainties, and other factors is
provided in the Company’s filings with the U.S. Securities and Exchange
Commission (the “SEC”), press releases and other communications.
2 |
 Important
Additional Information Important Additional Information
Cracker Barrel, its directors and certain of its executive officers may be deemed to be
participants
in
the
solicitation
of
proxies
from
Cracker
Barrel
shareholders
in
connection
with the matters to be considered at Cracker Barrel’s 2012 Annual Meeting. Cracker
Barrel has filed a preliminary proxy statement with the SEC in connection with such
solicitation of proxies from Cracker Barrel shareholders. When completed, a definitive
proxy statement and a form of proxy will be mailed to Cracker Barrel shareholders.
INVESTORS AND SHAREHOLDERS ARE STRONGLY ENCOURAGED TO READ THE
PRELIMINARY PROXY STATEMENT, THE DEFINITIVE PROXY STATEMENT AND
ACCOMPANYING
WHITE
PROXY
CARD
AND
OTHER
DOCUMENTS
FILED
WITH
THE
SEC
CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL
CONTAIN IMPORTANT INFORMATION. Detailed information regarding the identity of
potential participants, and their direct or indirect interests, by security holdings or
otherwise, is set forth in the proxy statement and other materials to be filed with the
SEC in connection with Cracker Barrel's 2012 Annual Meeting.
Shareholders will be
able to obtain the proxy statement, any amendments or supplements to the proxy
statement and other documents filed by Cracker Barrel with the SEC for no charge at
the
SEC's
website
at
www.sec.gov.
Copies
will
also
be
available
at
no
charge
at
the
Investor
Relations
section
of
our
corporate
website
at
www.crackerbarrel.com.
This presentation contains excerpts from certain previously published material.
Unless otherwise indicated, consent of the author and publication to use the material
as proxy soliciting material has not been sought or obtained.
3 |
 A truly unique
brand and experience A truly unique brand and experience
•
Highly differentiated concept
providing wholesome
connections to our guests
•
Our 620 old-fashioned country
stores welcome 215 million
guests a year
•
Approximately $2.6B in annual
revenues with roughly 20%
coming from our retail business
•
Welcome break for travelers
across 42 states…travelers
make up approximately 40% of
our business
4 |
 Quality
ingredients hand-crafted with care
Quality ingredients
hand-crafted with care
•
USDA Grade AA real butter
•
Dumplins hand-rolled daily
•
Fresh squeezed Florida orange juice
•
Oven roasted turkey breasts
•
USDA domestic ground beef
•
USDA
Choice
chuck
roast
½”
thick
•
Sugar cured ham steaks
•
USDA choice country fried steak
•
USDA inspected chicken tenderloins
•
Russet Burbank potatoes
•
Trans Fat and cholesterol free vegetable oil
•
Grade A pure sour cream
•
Wild Maine blueberries
•
Arabica coffee beans
•
Grade A farm fresh eggs
•
USDA Grade AA real butter
•
Farm raised rainbow trout
•
Freshly brewed iced tea
•
Real mashed potatoes
•
Scratch
biscuits with real buttermilk
•
Natural Colby cheese
•
Real Half & Half
•
All natural vanilla bean ice cream
•
Biscuit steak cut from the tenderloin
•
Whole hog smoked sausage
•
Long-cured country ham
•
Farm raised domestic catfish
•
Hickory smoked thick sliced bacon
•
Stewart’s
™
Root
Beer
and
Orange
n’
Cream
Soda
•
Dickinson’s™
preserves
and
jam
•
Wild caught North Atlantic Haddock and Cod
•
Westminster
Thin
Square™
crackers
•
Earl
Grey™
decaffeinated
tea
•
Twining™
Darjeeling
tea
5 |
 Retail is
integral to the Cracker Barrel experience
Retail is integral to the
Cracker Barrel experience
•
The experience begins with
rockers on the front porch…
which are also the top seller
•
The retail shop doubles as a
guest waiting area…and produces
sales per square foot of
approximately $400 and gross
margins around 50%
•
Emphasis on nostalgic and
unique merchandise with a large
selection of items under $20
–
Apparel
–
Branded Food
–
Toys and Games
–
Music
6 |
 We’ve been
successful delivering the guest experience
We’ve been successful
delivering the guest experience
Most RV-Friendly Sit-Down Restaurant in America
for
10
Consecutive
Years
-
The
Good
Sam
Club
Top of the Full-Service Restaurants in Casual and Family Dining
-
Consumer Brand Metrics Program, Technomic, Inc.
Top “Family Dining”
Chain for 19 Consecutive Years in “Choice in Chains”
Annual
Consumer
Survey
-
Restaurants
&
Institutions
Magazine
#1 Family Dining Restaurant and Top Honors in Service,
Cleanliness, Menu Variety, Atmosphere, Reputation, Craveability,
Likely
to
Return
and
Likely
to
Recommend
-
Nation’s
Restaurant
News, Consumer Picks 2012 National Survey
“Best
Breakfast”
among
Family
Dining
Chains
-
Zagat’s
2010
&
2011
Consumer
Surveys
Best
National
Restaurant
Chain
in
Readers’
Choice
awards
-
Packaged
Travel
Insider
Gold
Award
–
Courier
Magazine’s
Favorite
Group
Friendly
Restaurant
-
NTA
Tour
Operators
7
“America’s
Most
Admired
Companies”
for
the
food
service
industry
12
consecutive
years
-
Fortune |
 Standing out in
a sea of sameness Standing out in a sea of sameness
8
Brand
A
Brand
B
Brand
C
Brand
D
Brand
E
Brand
F
Brand
G
Brand
H
Brand
I
Is Unique
%
%
%
%
%
%
%
%
%
%
Agree Completely
42
18
*
22
*
23
*
17
*
23
*
28
*
26
*
29
*
29
*
Cracker Barrel is perceived to be more unique than its competitors
-Source: Technomic Consumer Brand Metrics Study – Q1 2011 – 2012; * Brands
include: Cracker Barrel, Applebee’s, Bob Evans, Chili’s, Denny’s, IHOP, Olive
Garden, Outback, Red Lobster, Steak n’ Shake; Rating significantly lower than Cracker
Barrel at the 95% level of confidence |
 Leader in seven
of ten categories Leader in seven of ten categories
Brand
A
Brand
B
Brand
C
Brand
D
Brand
E
Brand
F
Brand
G
Brand
H
Brand
I
Rank
%
%
%
%
%
%
%
%
%
%
Menu Variety
64
51
*
56
*
56
*
52
*
51
*
53
*
52
*
61
44
*
Availability of
Healthy Options
52
46
51
43
*
39
*
42
*
48
42
*
48
26
*
Welcoming,
comfortable
atmosphere
70
53
*
59
*
56
*
46
*
49
*
63
63
66
46
*
Kid-friendly
60
44
*
49
*
45
*
47
*
50
*
49
*
42
*
41
*
48
*
Portion for price
paid
65
54
*
56
*
54
*
51
*
50
*
61
57
*
59
46
*
Ability to provide
value through
high-quality
menu items
57
42
*
48
*
46
*
38
*
43
*
49
*
51
53
43
*
Prices relative to
other, similar
restaurants
57
39
*
43
*
41
*
41
*
39
*
41
*
43
*
44
*
41
*
Food Quality
71
56
*
62
*
60
*
48
*
57
*
68
69
73
51
*
Food Taste &
Flavor
72
58
*
64
*
62
*
51
*
57
*
69
74
75
55
*
Pleasant,
Friendly Service
74
67
74
70
62
*
63
*
72
76
77
64
*
9
Source: Technomic Consumer Brand Metrics Study – Q1 2011 – 2012; * Brands include:
Cracker Barrel, Applebee’s, Bob Evans, Chili’s, Denny’s, IHOP, Olive
Garden, Outback, Red Lobster, Steak n’ Shake; Rating significantly lower than Cracker
Barrel at the 95% level of confidence 1
1
1
1
1
1
1
2
3
3
st
rd
st
st
st
st
st
rd
nd
st |
 Improve same store sales
and traffic trends
Accelerating same store sales
growth in last three quarters with Q4
traffic up 1.4%
Cut costs and leverage fixed
costs to enhance profitability
FY 2012 operating margin growth of
50 bps
Reconfigure the Board with
new members bringing a
fresh perspective
7 new board members, including a
new
independent
Chairman
¹
Fill in key management
positions to enhance
functional capabilities
First Year CEO and new head of
retail
Develop a long-term plan to
maintain operating
momentum
Outperforming casual dining peers
in Knapp-Track for three
consecutive quarters
What we accomplished this past year
What we accomplished this past year
(1) Changes to board since 20-Jun-2011. New Chairman to succeed into
position affective November 2012
10 |
 We
have
regained
and
are
maintaining
our
positive gap to Knapp-Track™
Casual Dining
Knapp-Track
Cracker Barrel
Source:
Knapp
Track
Casual
Dining
Index
Updated
through
August
3
FY 2012 Q1
FY 2012 Q2
FY 2012 Q3
11
Rolling 4-week Traffic Average
21 out of the last 24 quarters we have outperformed
the Knapp Track Casual Dining Index
FY 2012 Q4
-10%
-5%
0%
5%
10%
rd
TM |
  Business
priorities Financial outcomes
Fiscal 2012 was a Successful Year
Fiscal 2012 was a Successful Year
12
(in millions, except per share data)
12
(in millions, except per share data)
(1)Severance, other charges and tax effects related to operational restructuring
(2)
(Charges) Gain and tax effects of impairment net of gain on sale of property
(3)Refinancing costs and tax effects related to the Company’s $750 million credit
facility (4)Charges and tax effects of the proxy contest concluded at the Company’s
annual meeting of shareholders 2012 GAAP
Adj (1)(4)
53rd Week
Adj 2012
2011 GAAP
Adj (1)(2)(3)(4)
Adj 2011
% growth on Adj
Sales
$2,580
($51)
$2,529
$2,434
$2,434
3.9%
Operating income
$191
$7
($10)
$188
$167
$1
$169
11.6%
EPS
$4.40
$0.21
($0.27)
$4.34
$3.61
$0.20
$3.81
13.9%
2012
2011
% growth
Cash balance
$152
$52
190.7%
LT debt
$642
$673
-4.6%
Dividends declared
$1.12
$0.86
30.2% |
 Source: Bloomberg as of 17-Aug-2012
Note: Peer set includes BH, BOBE, EAT, CAKE, DRI, DENN, RT, TXRH.
S&P Restaurant Index includes the restaurant companies in the S&P 500
Index: CMG, DRI, MCD, SBUX, YUM. S&P 600 Restaurant Index includes the restaurant companies in the
S&P 600 Index: BJRI, BH, BWLD, CEC, CBRL, DIN, JACK, PZZA, PEET, RRGB, RT,
RUTH, SONC, TXRH. S&P 1500 Restaurant Index includes the restaurant
companies in the S&P 1500 Index: BJRI, BH, BOBE, EAT, BWLD, CEC, CAKE,
CMG, CBRL, DRI, DIN, JACK, MCD, PNRA, PZZA, PEET, RRGB, RT, RUTH, SONC, SBUX, TXRH,
WEN, YUM. 90%
100%
110%
120%
130%
140%
150%
160%
170%
Sep-2011
Nov-2011
Jan-2012
Feb-2012
Apr-2012
Jun-2012
Aug-2012
Daily from 12-Sep-2011 to 17-Aug-2012
Cracker Barrel
Peer Set
S&P 500 Restaurant Index
S&P 600 Restaurant Index
S&P 1500 Restaurant Index
S&P 500 Index
59.7%
31.3%
28.2%
22.0%
12.8%
10.7%
All indices
using market
capitalization weighting
methodology
CBRL relative performance
CBRL relative performance
13 |
 Thoughtful
board succession planning Thoughtful board succession planning
14
Sandy Cochran, President and CEO, Cracker
Barrel, former CEO, Books-A-Million
William McCarten, Chairman of the Board,
DiamondRock Hospitality Company, former
President and CEO, HMS Host Corporation
Designated Chairman, James Bradford, Attorney, Dean
Vanderbilt’s Owen Graduate School of Management,
former President and CEO of United Glass Corporation
Coleman Peterson, President/CEO, Hollis
Enterprises, LLC, former EVP and Chief
People Officer, Walmart
Andrea Weiss, President and CEO, Retail
Consulting, former Chairman Cortefiel
Group, SA
Richard Dobkin, retired; Managing Partner of the
Tampa, FL office of Ernest & Young, LLP
Announced retiring: Robert Dale, Charles Jones, B.F. Lowery, Michael Woodhouse
Martha Mitchell, retired, Senior Partner and SVP,
Fleishman-Hillard
Tom Barr, current VP, Global Coffee at
Starbuck’s Coffee Company
Glenn Davenport, former Chairman and CEO,
Morrison Group
Norm Johnson, Executive Chairman and former
CEO , Clarcor, Inc.
7 new members within
last 18 months |
 Our
three-year strategy Our three-year strategy
Continued commitment to
profitable new unit
growth
New store growth of
2-3% per year
Extend the power
of the Cracker Barrel brand
beyond the physical stores
Long
term
value
created
through new revenue
streams
Focus on business
priorities
Grow
traffic
by
understanding and meeting
guests’
evolving
needs
Maintain our
value
promise
to the guest and
deliver a
consistent guest
experience that aligns
with our brand
15
with a continued focus on
best
locations
and
consistent execution |
 Priorities for
FY 2013 Priorities for FY 2013
Refresh Select Menu Categories
Invest in and Leverage
Technology to Support
Operations and Reduce Costs
•
Reinforce value proposition for guests with a refresh
of Country Dinner Plates
•
Introduce better-for-you programs, including new
sides and Wholesome Fixins’
Grow Retail Sales with Unique
Merchandise
•
Focus on unique, exclusive, authentic merchandise
•
Improve productivity with visual merchandising and
space planning
•
Implement technology to improve efficiencies and
food quality
•
Streamline processes to increase labor productivity
16
•
Target 2-3% annual new unit growth over the next
three years
•
Pay competitive dividends and repurchase shares
Improve Ecommerce Business
and Develop Licensing Platform
•
Grow ecommerce awareness and revenues
•
Lay groundwork to sell Cracker Barrel branded
products in grocery stores
Focus on Maximizing
Shareholder Returns
Build on Successful Handcrafted
Marketing Campaign
•
Continue national media strategy
•
Introduce new “Hand-crafted”
creative for TV, radio,
and billboards |
 A strong brand,
well-positioned to continue to deliver shareholder value
A strong brand, well-positioned
to continue to deliver shareholder value
We believe Cracker Barrel is well positioned because:
17
•
A truly unique brand and guest experience
•
Proven executive team led the Company through a strong fiscal year
•
New strategy building on past success to provide a long runway of
shareholder value creation |
 |