Cracker Barrel Reports Fourth Quarter And Full Year Fiscal 2021 Results And Declares Quarterly Dividend

Board increases quarterly dividend to pre-pandemic level of $1.30 per share

Cracker Barrel Old Country Store, Inc. (“Cracker Barrel” or the “Company”) (Nasdaq: CBRL) today reported its financial results for the fourth quarter of fiscal 2021 ended July 30, 2021.

Fourth Quarter Fiscal 2021 Highlights

  • Total revenue in the fourth quarter of $784.4 million was approximately flat compared to the fourth quarter of fiscal 2019 total revenue of $787.1 million.
  • Compared to the fourth quarter of fiscal 20191, comparable store restaurant sales decreased 6.8% and comparable store retail sales increased 18.2%.
    • Comparable store off-premise restaurant sales grew 108.6% compared to the fourth quarter of 20191 and represented approximately 19% of restaurant sales.
  • GAAP operating income in the fourth quarter was $62.7 million, or 8.0% of total revenue, and adjusted2 operating income was $65.9 million, or 8.4% of total revenue.
  • GAAP net income was $36.4 million, or 4.6% of total revenue. EBITDA was $93.5 million, or 11.9% of total revenue, which represented a 30 basis point sequential improvement compared to fiscal 2021 third quarter EBITDA margin.
  • GAAP earnings per diluted share were $1.53, and adjusted2 earnings per diluted share were $2.25.
  • The Company announced that its Board of Directors declared a regular quarterly dividend of $1.30 per share and authorized share repurchases up to $100 million of the Company’s outstanding common stock.

Commenting on the fourth quarter results, Cracker Barrel President and Chief Executive Officer Sandra B. Cochran said, “Despite the well-known headwinds that the industry continues to face with respect to staffing, commodity and wage inflation, and the resurgence of the pandemic, we were pleased that our fourth quarter profitability continued to trend positively from the third quarter and that our off-premise sales, retail business, and Maple Street Biscuit Company concept continued to outperform.  In addition to these strengths, our impressive field and home office support teams delivered on multiple fronts throughout the year, including cost-savings, the introduction of our new dinner menu and the continued roll-out of beer and wine to our stores, and helped ensure our continued recovery in 2021.  I’m confident that these and other initiatives position us well for 2022 despite the uncertain environment.”

Fourth Quarter Fiscal 2021 Results
Revenue
The Company reported total revenue of $784.4 million for the fourth quarter of fiscal 2021, representing an increase of 58.4% compared to the fourth quarter of fiscal 2020, and a decrease of 0.3% compared to the fourth quarter of 2019.  

Cracker Barrel comparable store restaurant and retail sales compared to the fourth quarter of fiscal 20191 and versus the fourth quarter of fiscal 2020 were as follows:

Versus FY19
Comparable Period1

Versus FY20

Comparable Period

Fourth Quarter Ended
7/30/21

Fourth Quarter Ended
7/30/21

Comparable restaurant sales

-6.8%

53.5%

Comparable retail sales

18.2%

74.8%

Operating Income
GAAP operating income in the fourth quarter was $62.7 million, or 8.0% of total revenue. Excluding the approximately $3.2 million in non-cash amortization related to the gains on the previously disclosed sale and leaseback transactions adjusted2 operating income for the fourth quarter was $65.9 million, or 8.4% of total revenue.

Net Income, EBITDA and Earnings per Diluted Share
GAAP net income in the fourth quarter was $36.4 million, or 4.6% of total revenue, and EBITDA was $93.5 million, or 11.9% of total revenue. GAAP earnings per diluted share were $1.53, and adjusted2 earnings per diluted share were $2.25.

Convertible Debt Offering
As previously disclosed, during the fourth quarter the Company completed the private offering of $300 million of 0.625% convertible senior notes due 2026, which generated net proceeds of approximately $291 million.

The Company used approximately $30 million net, of the proceeds to fund the cost of entering into certain convertible note hedging transactions to minimize the risk of potential future dilution from the offering. The remainder of the proceeds were used to pay down debt under the Company’s revolving credit facility. The Company ended the fourth quarter with approximately $327 million in total debt.

The Company also paid approximately $18 million to terminate the interest rate swaps that it had been using to hedge interest rate risk on the debt outstanding under the Company’s revolving credit facility. We anticipate this action will result in savings on interest expense over the next two years.

In connection with the offering, the Company also repurchased $35 million of its common stock.

Quarterly Dividend and Share Repurchase Authorization
The Company’s Board of Directors declared a quarterly dividend to common shareholders of $1.30 per share, payable on November 9, 2021 to shareholders of record on October 22, 2021. This dividend represents a return to the Company’s pre-pandemic quarterly dividend level. Additionally, the Board of Directors authorized share repurchases up to $100 million of the Company’s outstanding common stock.

Fiscal 2021 Results
Revenue
The Company reported total revenue of $2.81 billion for fiscal 2021, representing an increase of 11.8% compared to fiscal 2020 and a decrease of 8.2% compared to fiscal 2019. Comparable store restaurant sales for fiscal 2021 increased 8.4% compared to fiscal 2020, including a 5.3% increase in store traffic and a 3.1% increase in average check. Comparable store retail sales for fiscal 2021 increased 20.9% compared to fiscal 2020.

Operating Income
GAAP operating income in fiscal 2021 was $366.7 million, or 13.0% of total revenue, compared to $103.6 million, or 4.1% of total revenue, in fiscal 2020. Adjusted2 operating income for fiscal 2021 was $166.8 million.

Net Income, EBITDA and Earnings per Diluted Share
GAAP net income was $254.5 million, or 9.0% of total revenue, and EBITDA was $488.0 million, or 17.3% of total revenue, in fiscal 2021. Adjusted2 EBITDA was $275.4 million, or 9.8% of total revenue. GAAP earnings per diluted share were $10.71, and adjusted2 earnings per diluted share were $5.14.

Fiscal 2022 Outlook
As a result of the ongoing business impact and significant uncertainty created by the COVID-19 pandemic, including the nationwide increase in infections and responsive public health restrictions brought about by the rise of the “Delta variant” of the virus, the Company is not providing its customary annual earnings guidance for fiscal 2022 at this time.

For the full fiscal year 2022, the Company expects:

  • Commodity and wage inflation in the mid-to-high single digits;
  • Capital expenditures of approximately $120 million;
  • An effective tax rate of approximately 18%; and
  • The opening of three new Cracker Barrel locations and 15 new Maple Street Biscuit Company locations.

The Company reminds investors that its outlook for fiscal 2022 reflects a number of assumptions, many of which are outside the Company’s control. 

1 For the purpose of comparing to fiscal 2019, comparable stores are defined as restaurants open a full 30 months before the beginning of the applicable period.

About Cracker Barrel Old Country Store
Established in 1969 in Lebanon, Tenn., Cracker Barrel and its affiliates operate more than 660 company-owned Cracker Barrel Old Country Store locations in 45 states and own the fast-casual Maple Street Biscuit Company.

CRACKER BARREL OLD COUNTRY STORE, INC.

CONDENSED CONSOLIDATED INCOME STATEMENT

(Unaudited)

(In thousands, except share and per share amounts, percentages and ratios)

   Fourth Quarter Ended  

Twelve Months Ended

Percentage

Percentage

7/30/21

7/31/20

Change

7/30/21

7/31/20

Change

Total revenue

$784,405

$495,065

58%

$2,821,444

$2,522,792

12%

Cost of goods sold, exclusive of depreciation and rent

235,754

150,778

56

865,261

779,937

11

Labor and other related expenses

268,702

187,785

43

983,120

924,994

6

Other store operating expenses

180,333

141,267

28

676,301

614,733

10

General and administrative expenses

36,948

40,950

(10)

147,825

146,975

1

Gain on sale and leaseback transactions

0

(69,954)

(100)

(217,722)

(69,954)

211

Impairment

0

4,160

(100)

0

22,496

(100)

Operating income

62,668

40,079

56

366,659

103,611

254

Interest expense

24,964

9,944

151

56,108

22,327

151

Income before income taxes

37,704

30,135

25

310,551

81,284

282

Provision for income taxes (income tax benefit)

1,341

5,069

(74)

56,038

(28,683)

295

Loss from unconsolidated subsidiary

0

0

0

(142,442)

Net income (loss)

$36,363

$25,066

45

$254,513

($32,475)

884

Earnings (loss) per share – basic:

$1.54

$1.06

45

$10.74

($1.36)

890

Earnings (loss) per share – diluted:

$1.53

$1.05

46

$10.71

($1.36)

888

Weighted average shares:

    Basic

23,611,922

23,694,385

(0)

23,692,063

23,865,367

(1)

    Diluted

23,705,547

23,760,922

(0)

23,767,390

23,865,367

(0)

Ratio Analysis

Total revenue:

    Restaurant

79.2%

81.1%

78.9%

80.5%

    Retail

20.8

18.9

21.1

19.5

            Total revenue

100.0

100.0

100.0

100.0

Cost of goods sold, exclusive of depreciation and rent

30.1

30.5

30.7

30.9

Labor and other related expenses

34.2

37.9

34.8

36.7

Other store operating expenses

23.0

28.5

24.0

24.4

General and administrative expenses

4.7

8.3

5.2

5.8

Gain on sale and leaseback transactions

0.0

(14.1)

(7.7)

(2.8)

Impairment

0.0

0.8

0.0

0.9

Operating income

8.0

8.1

13.0

4.1

Interest expense

3.2

2.0

2.0

0.9

Income before income taxes

4.8

6.1

11.0

3.2

Provision for income taxes (income tax benefit)

0.2

1.0

2.0

(1.1)

Loss from unconsolidated subsidiary

0.0

0.0

0.0

(5.6)

Net income (loss)

4.6%

5.1%

9.0%

(1.3%)

CRACKER BARREL OLD COUNTRY STORE, INC.

CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited and in thousands, except share amounts)

7/30/21

7/31/20

Assets

   Cash and cash equivalents

$144,593

$436,996

   Accounts receivable

27,372

20,157

   Inventories

138,320

139,091

   Prepaid expenses and other current assets

43,311

46,768

   Property and equipment, net

979,850

1,130,061

   Operating lease right-of-use assets, net

974,477

691,949

   Intangible assets

21,285

20,960

   Other assets

57,796

53,586

   Goodwill

4,690

4,690

           Total assets

$2,391,694

$2,544,258

Liabilities and Shareholders’ Equity

   Accounts payable

$135,176

$103,504

   Other current liabilities

330,086

347,552

   Long-term debt

327,253

910,000

   Long-term operating lease liabilities

748,305

632,630

   Other long-term obligations

88,615

104,465

   Deferred income taxes

98,626

27,718

   Shareholders’ equity, net

663,633

418,389

          Total liabilities and shareholders’ equity

$2,391,694

$2,544,258

Common shares issued and outstanding

23,497,166

23,697,396

CRACKER BARREL OLD COUNTRY STORE, INC.

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

(Unaudited and in thousands)

Twelve Months Ended

7/30/21

7/31/20

Cash flows from operating activities:

             Net income (loss)

$254,513

($32,475)

             Loss from unconsolidated subsidiary

0

142,442

             Depreciation and amortization

108,604

118,178

             Amortization of debt discount and issuance costs

864

0

             Loss on disposition of property and equipment

4,064

6,469

             Gain on sale and leaseback transactions

(217,722)

(69,954)

             Impairment

0

23,160

             Share-based compensation, net of excess tax benefit

8,729

6,386

             Noncash lease expense

55,817

63,442

             Amortization of asset recognized from gain on sale and leaseback transaction

12,735

0

             Decrease in inventories

771

16,094

             (Decrease) increase in accounts payable

31,672

(30,593)

             Net changes in other assets and liabilities

41,856

(82,147)

                           Net cash provided by operating activities

301,903

161,002

Cash flows from investing activities:

             Purchase of property and equipment, net of insurance recoveries

(70,130)

(296,008)

             Proceeds from sale of property and equipment

149,960

207,253

             Notes receivable from unconsolidated subsidiary

0

(35,500)

             Acquisition of business, net of cash acquired

(1,500)

(32,971)

                           Net cash (used in) provided by investing activities

78,330

(157,226)

Cash flows from financing activities:

              Net (payments) proceeds from long-term debt

(572,967)

549,395

              Proceeds from issuance of warrants

31,710

0

              Purchases of convertible note hedge

(62,010)

0

              (Taxes withheld) from issuance of share-based compensation awards

(2,282)

(2,160)

              Purchases and retirement of common stock

(35,000)

(55,007)

              Deferred financing costs

(420)

(1,348)

              Dividends on common stock

(31,667)

(94,544)

                           Net cash provided by (used in) financing activities

(672,636)

396,336

Net increase (decrease) in cash and cash equivalents

(292,403)

400,112

Cash and cash equivalents, beginning of period

436,996

36,884

Cash and cash equivalents, end of period

$144,593

$436,996

CRACKER BARREL OLD COUNTRY STORE, INC.

Supplemental Information

(Unaudited)

Fourth Quarter Ended

7/30/21

7/31/20

Net Change in Company-Owned Units During Quarter:

    Cracker Barrel

0

(1)

    Maple Street Biscuit Company

0

7

Company-Owned Units in Operation at End of Quarter:

    Cracker Barrel

664

663

    Maple Street Biscuit Company

37

35

Fourth Quarter Ended

Twelve Months Ended

7/30/21

7/31/20

7/30/21

7/31/20

Total revenue*: (In thousands)

      Restaurant

$609,865

$394,985

$2,188,761

$2,010,892

      Retail

162,894

93,536

594,007

490,749

      Total revenue

$772,759

$488,521

$2,782,768

$2,501,641

Cost of goods sold* (exclusive of depreciation and rent): (In thousands)

      Restaurant

$153,706

$97,981

$559,297

$510,448

      Retail

79,404

51,479

297,312

264,255

      Total cost of goods sold

$233,110

$149,460

$856,609

$774,703

Average unit volume*: (In thousands)

      Restaurant

$918.5

$595.1

$3,298.7

$3,037.5

      Retail

245.3

141.0

895.3

741.3

      Total

$1,163.8

$736.1

$4,194.0

$3,778.8

Operating Weeks*

8,632

8,628

34,503

34,452

Note*: This information is for Cracker Barrel stores only and excludes Maple Street Biscuit Company and Holler & Dash

Q4 2021 s. Q4 2020

12 mo. 2021 vs.

12 mo. 2020

Comparable Cracker Barrel store sales period to period increase:

Restaurant

53.5%

8.4%

Retail

74.8%

20.9%

Number of Cracker Barrel locations in comparable store base:

658

655

CRACKER BARREL OLD COUNTRY STORE, INC.
Reconciliation of GAAP-basis operating results to non-GAAP operating results
(Unaudited and in thousands, except per share amounts)

Adjusted Operating Income and Earnings Per Share
In the accompanying press release, the Company makes reference to its fourth quarter fiscal 2020 and fiscal 2021 adjusted operating income and earnings per share. In regards to fiscal 2021, this reconciliation excludes the gain on sale of assets from the sale and leaseback transaction that closed in the first quarter, non-cash amortization of the asset recognized from the gains on the sale and leaseback transactions, interest expense related to the termination of interest rate swaps and the convertible senior notes offering carried out in the fourth quarter, expenses related to the proxy contest initiated by affiliates of Sardar Biglari in connection with the Company’s 2020 annual meeting of shareholders, and the related tax impacts of these items. In regards to fiscal 2020, this reconciliation excludes non-cash asset impairment charges related to store assets, expenses related to COVID-19, an impairment charge related to its equity investment in Punch Bowl Social and the related tax impacts of these items. The Company believes excluding these items from its financial results provides investors with an enhanced understanding of the Company’s financial results and enhances comparability across periods. This information is not intended to be considered in isolation or as a substitute for operating income or earnings per share information prepared in accordance with GAAP.

Fourth Quarter Ended July 30, 2021

Twelve Months Ended July 30, 2021

As Reported

Adjustment

As Adjusted

As Reported

Adjustments

As Adjusted

(1) (2) (3)

(1) (2) (4) (5) (6)

Total Revenue

$784,405

$784,405

$2,821,444

$2,821,444

Store operating expense

684,789

(3,184)

681,605

2,524,682

(12,735)

2,511,947

General and administrative expense

36,948

36,948

147,825

(5,154)

142,671

Gain on sale and leaseback transactions

(217,722)

217,722

Operating income

62,668

3,184

65,852

366,659

(199,833)

166,826

Interest expense

24,964

(18,852)

6,112

56,108

(18,852)

37,256

Income before income taxes

37,704

22,036

59,740

310,551

(180,981)

129,570

Provision for income taxes

1,341

5,178

6,519

56,038

(48,582)

7,456

Net income

$36,363

$16,858

$53,221

$254,513

($132,399)

$122,114

Earnings per share – basic

$1.54

$0.71

$2.25

$10.74

($5.59)

$5.15

Earnings per share – diluted

$1.53

$0.72

$2.25

$10.71

($5.57)

$5.14

(1) Adjusted for the non-cash amortization of the asset recognized from the gain on sale and leaseback transactions

(2) Adjusted for interest expense related to the termination of swaps and the convertible senior notes offering

(3) Adjusted for the tax impacts of (1) and (2) above

(4) Adjusted for proxy contest-related expenses

(5) Adjusted for the gain on sale of assets related to the sale and leaseback transaction

(6) Adjusted for the tax impacts of (1), (2), (4), and (5) above

Fourth Quarter Ended July 31, 2020

Twelve Months Ended July 31, 2020

As Reported

Adjustment

As Adjusted

As Reported

Adjustments

As Adjusted

(1) (2)

(1) (2)

Total Revenue

$495,065

$495,065

$2,522,792

$2,522,792

Store operating expense

479,830

479,830

2,319,664

(3,947)

2,315,717

Impairment

4,160

(4,160)

22,496

(22,496)

General and administrative expense

40,950

(5,711)

35,239

146,975

(8,833)

138,142

Gain on sale and leaseback transactions

(69,954)

69,954

(69,954)

69,954

Operating income (loss)

40,079

(60,083)

(20,004)

103,611

(34,678)

68,933

Interest expense

9,944

9,944

22,327

22,327

Income (loss) before income taxes

30,135

(60,083)

(29,948)

81,284

(34,678)

46,606

(Income tax benefit) Provision for income taxes

5,069

(14,891)

(9,822)

(28,683)

26,678

(2,005)

Loss from unconsolidated subsidiary

(142,442)

142,442

Net income (loss)

$25,066

($45,192)

($20,126)

($32,475)

$81,086

$48,611

Earnings (loss) per share – basic

$1.06

($1.91)

($0.85)

($1.36)

$3.40

$2.04

Earnings (loss) per share – diluted

$1.05

($1.90)

($0.85)

($1.36)

$3.40

$2.04

(1) Adjusted for non-cash impairment charges related to store assets, expenses related to COVID-19, the gain on sale of assets related to the sale and leaseback transaction that occurred during the fourth quarter, and impairment charge related to the Company’s equity investment in its unconsolidated subsidiary, Punch Bowl Social. This adjustment does not excluded from the Company’s results the approximately $17 million payment the Company made to its hourly store employees during the third quarter of 2020 to provide short-term financial assistance as their hours were being reduced as a result of dining room closures in response to the COVID-19 pandemic

(2) These adjustments include the tax impacts on the actual tax benefits recorded in the Condensed Consolidated Income Statement, including the deferral of recognition for the tax benefits of capital loss on impairment of the unconsolidated subsidiary

CRACKER BARREL OLD COUNTRY STORE, INC.
Reconciliation of GAAP-basis operating results to non-GAAP operating results (Unaudited and in thousands)

EBITDA
In the accompanying press release, the Company makes reference to its fourth quarter fiscal 2021 EBITDA. The Company defines EBITDA as net income excluding depreciation and amortization, non-cash amortization of the asset recognized from the gains on sale and leaseback transactions, interest expense and tax expense. This information is not intended to be considered in isolation or as a substitute for net income prepared in accordance with GAAP.

Third Quarter
Ended April 30,
2021

Fourth Quarter
Ended July 30,
2021

Twelve Months
Ended July 20,
2021

Net Income

$              33,470

$              36,363

$             254,513

 (+) Depreciation & Amortization

27,162

27,672

108,604

 (+) Amortization of asset recognized from gain on sale and leaseback transactions

3,183

3,184

12,735

 (+) Interest Expense

9,614

24,964

56,108

 (+) Tax Expense

9,406

1,341

56,038

EBITDA

$              82,835

$              93,524

$             487,998

Adjustments

 (-) Gain on sale and leaseback transaction

(217,722)

 (+) Proxy contest-related expenses

5,154

Adjusted EBITDA

$              82,835

$              93,524

$             275,430

Investor Contact: 

Jessica Hazel 

(615) 235-4367

Media Contact: 

Heidi Pearce

(615) 235-4135

SOURCE Cracker Barrel Old Country Store, Inc.