SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended October 30, 1998
Commission file number 0-7536
CRACKER BARREL OLD COUNTRY STORE, INC.
A Tennessee Corporation I.R.S. EIN: 62-0812904
Hartmann Drive, P. O. Box 787
Lebanon, Tennessee 37088-0787
615-444-5533
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
61,159,974 Shares of Common Stock
Outstanding as of November 27, 1998
1
PART I
Item 1. Financial Statements
CRACKER BARREL OLD COUNTRY STORE, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(In thousands, except share data)
(Unaudited)
October 30, July 31,
1998 1998*
____ _____
ASSETS
Current assets:
Cash and cash equivalents $ 24,906 $ 62,593
Receivables 3,660 5,192
Inventories 111,125 91,609
Prepaid expenses 6,249 5,432
________ ________
Total current assets 145,940 164,826
________ ________
Property and equipment, net 829,729 812,321
Other assets 15,429 14,961
________ ________
Total assets $991,098 $992,108
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 32,931 $ 38,212
Accrued expenses 74,600 63,110
Current portion of long-term debt 2,500 2,500
Current portion of other long-term
obligations 200 200
________ ________
Total current liabilities 110,231 104,022
________ ________
Long-term debt 59,500 59,500
Other long-term obligations 25,188 25,212
Shareholders' equity:
Common stock - $.50 par value, 31,256 31,240
authorized 150,000,000 shares,
issued 62,512,739 at October 30,
1998 and 62,480,775 at July 31,
1998
Additional paid-in capital 251,818 251,236
Retained earnings 546,719 520,898
________ ________
829,793 803,374
Less treasury stock, at cost,
1,357,500 and 0 shares,
respectively (33,614) --
________ ________
Total shareholders' equity 796,179 803,374
________ ________
Total liabilities and shareholders'
equity $991,098 $992,108
======== ========
See notes to condensed consolidated financial statements.
(*) This condensed consolidated balance sheet has been derived from the
audited consolidated balance sheet as of July 31, 1998.
2
CRACKER BARREL OLD COUNTRY STORE, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share data)
(Unaudited)
Quarter Ended
____________________________
October 30, October 31,
1998 1997
____ ____
Net sales:
Restaurant $269,693 $242,230
Retail 81,803 70,525
________ ________
Total net sales 351,496 312,755
Cost of goods sold 118,761 106,492
________ ________
Gross profit 232,735 206,264
Labor & related expenses 118,381 106,100
Other store operating expenses 53,663 46,489
________ ________
Store operating income 60,691 53,675
General and administrative 19,056 15,882
________ ________
Operating income 41,635 37,793
Interest expense 785 1,060
Interest income 565 820
________ ________
Pretax income 41,415 37,553
Provision for income taxes 15,282 13,820
________ ________
Net income $ 26,133 $ 23,733
======== ========
Earnings per share:
Basic $ .42 $ .39
======== ========
Diluted $ .42 $ .38
======== ========
Weighted average shares:
Basic 62,151 61,279
======== ========
Diluted 62,667 62,326
======== ========
Dividends per share $ .005 $ .005
======== ========
See notes to condensed consolidated financial statements.
3
CRACKER BARREL OLD COUNTRY STORE, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
_________________________
October 30, October 31,
1998 1997
____ ____
Cash flows from operating activities:
Net income $26,133 $23,733
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 12,130 10,464
(Gain)loss on disposition of property
and equipment (230) 437
Changes in assets and liabilities:
Inventories (19,516) (13,159)
Other assets (623) (792)
Accounts payable (5,281) 45
Other current assets and liabilities 12,205 12,463
_______ _______
Net cash provided by operating activities 24,818 33,191
_______ _______
Cash flows from investing activities:
Proceeds from maturities of investments -- 317
Purchase of property and equipment (29,653) (41,381)
Proceeds from sale of property and equipment 500 661
_______ _______
Net cash used in investing activities (29,153) (40,403)
_______ _______
Cash flows from financing activities:
Treasury stock purchases (33,614) --
Proceeds from exercise of stock options 598 9,273
Principal payments under long-term debt and other
long-term obligations (24) (33)
Dividends on common stock (312) (306)
_______ _______
Net cash (used in) provided by financing
activities (33,352) 8,934
_______ _______
Net (decrease) increase in cash and cash
equivalents (37,687) 1,722
Cash and cash equivalents, beginning of year 62,593 64,933
_______ _______
Cash and cash equivalents, end of period $24,906 $66,655
======= =======
Supplemental disclosures of cash flow
information:
Cash paid during the three months for:
Interest $ 853 $ 832
Income taxes 1,296 6,092
See notes to condensed consolidated financial statements.
4
CRACKER BARREL OLD COUNTRY STORE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands)
1. Condensed Consolidated Financial Statements
___________________________________________
The condensed consolidated balance sheet as of October 30, 1998 and
the related condensed consolidated statements of income and cash flows
for the quarters ended October 30, 1998 and October 31, 1997, have
been prepared by the Company, without audit; in the opinion of
management, all adjustments for a fair presentation of such condensed
consolidated financial statements have been made.
These condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and
notes thereto contained in the Company's Annual Report on Form 10-K
for the year ended July 31, 1998.
Deloitte & Touche LLP, the Company's independent accountants, have
performed a limited review of the financial information included
herein. Their report on such review accompanies this filing.
2. Income Taxes
____________
The provision for income taxes for the quarter ended October 30, 1998
has been computed based on management's estimate of the tax rate for
the entire fiscal year of 36.9%. The variation between the statutory
tax rate and the effective tax rate is due primarily to employer tax
credits for FICA taxes paid on tip income. The Company's effective
tax rate for both the quarter ended October 31, 1997 and for the
entire fiscal year of 1998 was 36.8%.
3. Seasonality
___________
The sales and profits of the Company are affected significantly by
seasonal travel and vacation patterns because of its interstate
highway locations. Historically, the Company's greatest sales and
profits have occurred during the period of June through August. Early
December through the last part of February, excluding the Christmas
holidays, has historically been the period of lowest sales and
profits. Therefore, the results of operations for the quarter ended
October 30, 1998 cannot be considered indicative of the operating
results for the full fiscal year.
4. Earnings per Share and Weighted Average Shares
______________________________________________
In February 1997, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings Per Share," which requires presentation of basic and diluted
earnings per share. Basic earnings per share is computed by dividing
income available to common shareholders by the weighted average number
of common shares outstanding for the reporting period. Diluted
earnings per share reflects the potential dilution that could occur if
securities, options or other contracts to issue common stock were
exercised or converted into common stock. As required, the Company
adopted the provisions of SFAS No. 128 in the quarter ended January
30, 1998. All prior year weighted average and per share information
has been restated in accordance with SFAS No. 128. Outstanding stock
options issued by the Company represent the only dilutive effect
reflected in diluted weighted average shares. Weighted average basic
shares for the quarters ended October 30, 1998 and October 31, 1997
were 62,150,537 and 61,278,643, respectively. Weighted average
diluted shares for the quarters ended October 30, 1998 and October 31,
1997 were 62,667,110 and 62,326,362, respectively.
5
5. Recent Accounting Pronouncements Adopted
________________________________________
In June 1997, SFAS No. 130, "Reporting Comprehensive Income," was
issued. SFAS No. 130 specifies how to report and display
comprehensive income and its components. This statement is effective
for fiscal years beginning after December 15, 1997, with restatement
of all prior periods shown. The Company adopted SFAS No. 130 in the
first quarter of fiscal 1999. There is no difference between
comprehensive income and net income as reported by the Company for all
periods shown.
6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
All dollar amounts reported or discussed in Item 2 are shown in
thousands. Except for specific historical information, many of the matters
discussed in this Form 10-Q may express or imply projections of revenues or
expenditures, statements of plans and objectives or future operations or
statements of future economic performance. Those, and similar statements
are forward-looking statements that involve risks, uncertainties and other
factors which may cause the actual performance of Cracker Barrel Old
Country Store, Inc. to differ materially from those expressed or implied by
such statements. Factors which will affect actual results include, but are
not limited to: the availability and costs of acceptable sites for
development; the ability of the Company to retain qualified employees, and
to recruit and train restaurant personnel in its expansion locations; the
acceptance of the Cracker Barrel concept as the Company continues to expand
into new geographic regions; continued successful acquisition of additional
concepts to expand; successful development of new and regional menu items;
the continued success of the Company's frequency-based Cracker Barrel Old
Country Store Neighborhood program; changes in or implementation of
additional governmental rules and regulations affecting wage and hour
matters, health and safety and other areas affected by governmental
actions, and other factors described from time to time in the Company's
filings with the Securities and Exchange Commission, press releases and
other communications. In addition, the Company discusses certain Year 2000
issues based on a "reasonably likely worst case." That discussion
necessarily relies on assumptions which are not related to existing facts,
and it must be expected that actual circumstances and their effects on the
Company will differ.
Results of Operations
The following table highlights operating results by percentage
relationships to total net sales for the quarter ended October 31, 1998 as
compared to the same period a year ago:
Quarter Ended
_____________
October 30, October 31,
1998 1997
____ ____
Net sales:
Restaurant 76.7% 77.5%
Retail 23.3 22.5
_____ _____
Total net sales 100.0 100.0
Cost of goods sold 33.8 34.0
_____ _____
Gross profit 66.2 66.0
Labor & related expenses 33.7 33.9
Other store operating expenses 15.2 14.9
_____ _____
Store operating income 17.3 17.2
General and administrative 5.4 5.1
_____ _____
Operating income 11.9 12.1
Interest expense 0.3 0.3
Interest income 0.2 0.2
_____ _____
Pretax income 11.8 12.0
Provision for income taxes 4.4 4.4
_____ _____
Net income 7.4% 7.6%
===== =====
7
Same Store Sales Analysis
307 Store Average
Quarter Ended
October 30, October 31,
1998 1997
____ ____
Restaurant $754.6 $770.1
Retail 222.9 223.3
______ ______
Restaurant & retail $977.5 $993.4
====== ======
Sales
_____
Net sales for the first quarter of fiscal 1999 increased 12% compared
to last year's first quarter. Same store restaurant sales decreased 2.0%
and same store retail sales decreased 0.2%, for a total same store sales
(restaurant and retail) decrease of 1.6%. Same store restaurant sales
decreased primarily due to decreases in customer traffic of approximately
6%, partially offset by an effective 4.1% menu price increase for the
quarter. Same store retail sales decreased primarily due to the decrease
in restaurant customer traffic of approximately 6%. This decrease was
partially offset by an improved assortment of retail items in the stores
versus the prior year. New stores accounted for the balance of the first
quarter net sales increase.
Cost of Goods Sold
__________________
Cost of goods sold as a percentage of net sales for the quarter ended
October 30, 1998 decreased to 33.8% from 34.0% in the first quarter of last
year. This decrease was primarily due to improved initial mark-ons for
retail merchandise, partially offset by an increasing mix of retail sales,
which have a higher cost of goods than restaurant sales, and increases in
dairy and poultry prices.
Labor and Related Expenses
__________________________
Labor and related expenses include all direct and indirect labor and
related costs incurred in store operations. Labor and related expenses as
a percentage of net sales decreased to 33.7% in the first quarter this year
from 33.9% last year. This decrease was primarily due to the lower bonus
payouts under the store-level bonus program. This decrease was partially
offset by hourly wage inflation at the stores of approximately 4%.
Other Store Operating Expenses
______________________________
Other store operating expenses include all unit-level operating costs,
the major components of which are operating supplies, repairs and
maintenance, advertising expenses, utilities and depreciation and
amortization. Other store operating expenses as a percentage of net sales
increased to 15.2% in the first quarter of fiscal 1999 from 14.9% in the
first quarter of last year. This increase was primarily due to higher
maintenance, depreciation and utility costs versus the prior year.
General and Administrative Expenses
___________________________________
General and administrative expenses as a percentage of net sales
increased to 5.4% in the first quarter of fiscal 1999 from 5.1% in the
first quarter of last year. The primary reasons for the increase were the
increased general and administrative expenses from the Company's recent
acquisition of Carmine Giardini's Gourmet Market and La Trattoria
Ristorante and the costs related to the holding company formation.
8
Interest Expense
________________
Interest expense decreased to $785 in the first quarter of fiscal 1999
from $1,060 in the first quarter of last year. The decrease primarily
resulted from lower average debt outstanding during the quarter as compared
to last year.
Interest Income
_______________
Interest income decreased to $565 in the first quarter of fiscal 1999
from $820 in the first quarter of last year. The decrease was primarily
due to lower average funds available for investment.
Recent Accounting Pronouncements Not Yet Adopted
________________________________________________
In June 1997, SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," was issued. SFAS No. 131 requires the
disclosure of certain information about operating segments in the financial
statements. This statement is effective for fiscal years beginning after
December 15, 1997, with restatement of all prior periods shown if not
impracticable to do so. The Company will adopt SFAS No. 131 in fiscal
1999. The Company is currently evaluating the effect that SFAS No. 131
will have on the Company's consolidated financial statements upon adoption.
The Company does not expect the adoption of SFAS No. 131 to have a material
effect on the Company's consolidated financial statements. In June 1998,
SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities," was issued. SFAS No. 133 specifies how to report and display
derivative instruments and hedging activities. This statement is effective
for fiscal years beginning after June 15, 1999. The Company will adopt
SFAS No. 133 in the first quarter of fiscal 2000. The Company is currently
evaluating the effect that SFAS No. 133 will have on the Company's
consolidated financial statements upon adoption. In March 1998, the
American Institute of Certified Public Accountants issued Statement of
Position ("SOP") 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use." SOP 98-1 provides guidance on
when costs incurred for internal-use computer software are capitalized or
expensed and guidance on whether computer software is for internal use.
SOP 98-1 is effective for fiscal years beginning after December 15, 1998
and applies to internal-use software costs incurred for all projects,
including those in progress upon initial application of the SOP. The
Company is currently evaluating the effect that SOP 98-1 will have on the
Company's consolidated financial statements upon adoption. In April 1998,
SOP 98-5, "Reporting of the Costs of Start-up Activities," was issued. SOP
98-5 requires that the Company expense start-up costs of new stores as
incurred rather than when the store opens as is the Company's current
practice. SOP 98-5 is effective for fiscal years beginning after December
15, 1998. The Company is currently evaluating the effect that SOP 98-5
will have on the Company's consolidated financial statements upon adoption.
The Company does not expect the adoption of either SOP 98-1 or SOP 98-5 to
have a material effect on the Company's consolidated financial statements.
Year 2000
_________
Many software applications and computer operational programs written
in the past were not designed to recognize calendar dates beginning in the
Year 2000. The failure of such applications or systems used by the Company
or by its material suppliers to properly recognize the dates beginning in
the Year 2000 could result in miscalculations or systems failures which
potentially could have an adverse effect on the Company's operations.
The Company's Year 2000 preparations began in fiscal 1998. The
preparations include identification, assessment, and testing of all Company
software, hardware and equipment that could be affected by the Year 2000
issue and remedial action, where necessary, followed by further testing.
Analysis to identify internal Year 2000 deficiencies is in process and an
inventory of systems designated as critical has been developed. As the
Year 2000 remediation efforts progress, the Company will first focus,
wherever possible, on those systems designated critical. The Company has
begun correction of deficiencies found and anticipates completion of the
Year 2000 analysis by January 31, 1999 with completion of the remediation
efforts by July 31, 1999. The Company's estimated total cost of analysis
and remediation of the Year 2000 issues is not anticipated to have a
material adverse effect on the Company's consolidated financial position,
results of operations or cash flows.
9
The Company has also contacted critical suppliers of products and
services to determine the extent to which the Company may be vulnerable to
such suppliers' failures to resolve their own Year 2000 compliance issues.
To assess the Year 2000 risks to the Company's continuity of supply of
products and services, an inventory of significant vendors has been
compiled. These vendors were sent letters and questionnaires requesting
information as to the status of their Year 2000 readiness and certification
that their information systems are Year 2000 compliant. Based on responses
received from most of these vendors, it appears that Year 2000 issues are
being addressed. The Company has not verified the contents, nor is it the
source, of Year 2000 statements incorporated, or relied upon by the
Company, in this disclosure from persons or entities other than the
Company. The Company is continuing to pursue responses from significant
vendors that have not responded to date and will discuss with them any
material Year 2000 concerns that are identified.
The Company anticipates timely completion of the internal Year 2000
readiness efforts. However, if new systems cannot be implemented on a
timely basis, modifications to existing systems cannot be accomplished on a
timely basis, information technology resources do not remain available, or
other unanticipated events occur, there could be material adverse effects
on the Company's consolidated financial position, results of operations and
cash flows. As part of the Year 2000 readiness efforts, the Company is
developing contingency plans to identify activities which will need to be
performed in the event of internal systems failures. The contingency plans
are expected to be completed by July 31, 1999. Although the Company has
not yet been informed of material Year 2000 issues by its significant
vendors, there is no assurance that these vendors will be Year 2000
compliant on a timely basis. Similarly, the Company has no reliable
information concerning the expected Year 2000 effects on the nation's
securities markets, banking system and utilities and other infrastructure.
The Company therefore relies generally on the ability of the federal
government and its agencies, such as the IRS and SEC to effectively address
such issues on a national scale. Unanticipated failures or significant
delays in furnishing products or services by significant vendors or general
public infrastructure service providers could have a material adverse
effect on the Company's consolidated financial position, results of
operations and cash flows. Where practicable, the Company is assessing and
attempting to mitigate its risks with respect to the failure of its
significant vendors and public infrastructure to be Year 2000 ready as part
of its contingency planning. In the worst case reasonably to be expected,
assuming that the nation's financial system and overall public
infrastructure continues to operate substantially as they had prior to the
Year 2000, some of the Company's internal systems may fail to operate
properly and some of its significant vendors may fail to perform
effectively or may fail to timely or completely deliver products. In those
circumstances, the Company expects to be able to conduct all of its
necessary business operations manually and to obtain necessary products
from alternative vendors and business operations would generally continue;
however, there would be some disruption which could have a material adverse
effect on the Company's consolidated financial position, results of
operations and cash flows. The Company has no basis upon which to
reasonably analyze the psychological or other direct or indirect effects on
its guests, and consumers generally, from Year 2000 issues or experiences
unrelated to the Company. The actual effect, if any, on the Company's
consolidated financial position, results of operations or cash flows from
the failure of its internal systems or of its significant vendors to be
Year 2000 ready can not be reasonably predicted.
Liquidity and Capital Resources
_______________________________
The Company's operating activities provided net cash of $24,818 for
the three-month period ended October 30, 1998. Most of this cash was
provided by net income adjusted for depreciation and amortization.
Increases in inventories and decreases in accounts payable were partially
offset by decreases in other current assets and increases in other current
liabilities.
Capital expenditures were $29,653 for the three-month period ended
October 30, 1998. Land purchases and the construction of new stores
accounted for substantially all of these expenditures. Capitalized
interest was $404 for the quarter ended October 30, 1998 as compared to
$387 for the quarter ended October 31, 1997. This difference was primarily
due to the timing of new store construction in fiscal 1999 as compared to
the same period a year ago.
10
The Company's internally generated cash along with cash at July 31,
1998 were sufficient to finance all of its stock buyback program and all of
its growth in the first three months of fiscal 1999.
On September 9, 1998, the Company announced that the Board of
Directors had authorized the repurchase of up to 3 million shares of the
Company's common stock. This will allow the Company to repurchase
approximately 5% of the 62.5 million shares outstanding. The purchases are
to be made from time to time in the open market at prevailing market
prices. One effect of the share repurchase will be to minimize dilution to
existing shareholders as shares are issued under the Company's Stock Option
Plan. As of October 30, 1998, the Company has purchased a total of
1,357,500 shares. The Company expects to complete the purchase of
substantially all of the remaining 1,642,500 shares authorized by the Board
of Directors by the end of the third quarter. The Company estimates
that its capital expenditures for fiscal 1999 will be approximately
$175,000, substantially all of which will be land purchases and the
construction of new stores. On December 2, 1996 the Company received the
proceeds from a $50,000 5-year term loan bearing interest at a three-month
LIBOR-based rate ("London Interbank Offered Rate"). Concurrently, the
Company entered into a swap agreement with a bank to fix the interest rate
at 6.36% for the life of the term loan. This $50,000 term loan is part of
a $125,000 bank credit facility that also includes a $75,000 revolver.
Management believes that cash at October 30, 1998, along with cash
generated from the Company's operating activities and its available $75
million revolver, will be sufficient to finance its continued operations,
the completion of its 3 million share stock buyback program and its
continued expansion plans through fiscal 2000.
11
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Shareholders of
Cracker Barrel Old Country Store, Inc.
Lebanon, Tennessee
We have reviewed the accompanying condensed consolidated balance sheet of
Cracker Barrel Old Country Store, Inc. as of October 30, 1998, and the
related condensed consolidated statements of income and cash flows for the
quarters ended October 30, 1998 and October 31, 1997. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical
procedures to financial data and of making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope
than an audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express
such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to such condensed consolidated financial statements for them
to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Cracker Barrel Old Country
Store, Inc. as of July 31, 1998, and the related consolidated statements of
income, shareholders' equity, and cash flows for the year then ended (not
presented herein); and in our report dated September 9, 1998, we expressed
an unqualified opinion on those financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance
sheet as of July 31, 1998 is fairly stated, in all material respects, in
relation to the balance sheet from which it has been derived.
DELOITTE & TOUCHE LLP
Nashville, Tennessee
December 4, 1998
12
PART II
Item 1. Legal Proceedings
_____________________
None.
Item 2. Changes in Securities
_____________________
None.
Item 3. Defaults Upon Senior Securities
_______________________________
None.
Item 4. Submission of Matters to a Vote of Security Holders
___________________________________________________
A. The annual meeting of shareholders was held November 24, 1998.
B. Election of Directors: All members of the Board of Directors
are elected annually. The following directors were re-elected
for one-year terms of office: James C. Bradshaw, Robert V.
Dale, Dan W. Evins, Edgar W. Evins, William D. Heydel, Robert
C. Hilton, Charles E. Jones, Jr., Charles T. Lowe, Jr., B. F.
Lowery, Ronald N. Magruder, Gordon L. Miller, Martha M.
Mitchell and Jimmie D. White.
C. Other Matters:
Proposal 1 - Election of Directors.
FOR ABSTAIN
___ _______
James C. Bradshaw 50,381,606 438,000
Robert V. Dale 50,411,245 408,361
Dan W. Evins 50,401,466 418,140
Edgar W. Evins 50,398,621 420,985
William D. Heydel 50,313,431 506,175
Robert C. Hilton 50,344,008 475,598
Charles E. Jones, Jr. 50,406,905 412,701
Charles T. Lowe, Jr. 50,394,167 425,439
B.F. Lowery 50,399,013 420,593
Ronald N. Magruder 50,560,001 259,605
Gordon L. Miller 50,328,176 491,430
Martha M. Mitchell 50,409,289 410,317
Jimmie D. White 50,344,743 474,863
13
Proposal 2 - To approve the selection of Deloitte and
Touche LLP as the Company's independent auditors for the
1999 fiscal year.
Votes cast for 50,410,059
__________
Votes cast against 123,973
__________
Votes cast to abstain 285,574
__________
Proposal 3 - To consider and take action on a shareholder
proposal, requesting that the Board of Directors implement
non-discriminatory policies relating to sexual orientation.
Votes cast for 5,553,854
__________
Votes cast against 26,546,926
__________
Votes cast to abstain 3,623,951
__________
Broker non-votes 15,094,875
__________
Proposal 4 - To consider and act upon a proposal
for the tax-free reorganization of the Company into a
holding company structure by the approval of the Plan of
Merger, attached to the 1998 Proxy Statement and Prospectus
as Appendix A, providing for the merger of CBRL Acquisition
Corp., a wholly-owned subsidiary of CBRL Group, Inc., with
and into the Company, all as described in the 1998 Proxy
Statement and Prospectus.
Votes cast for 26,296,448
__________
Votes cast against 8,863,735
__________
Votes cast to abstain 564,548
__________
Broker non-votes 15,094,875
__________
Item 5. Other Information
_________________
None.
Item 6. Exhibits and Reports on Form 8-K
________________________________
(a) The following exhibits are filed pursuant to Item 601 of
Regulation S-K
(15)Letter regarding unaudited financial information.
(b) The Company filed a Current Report on Form 8-K on September
9, 1998 pursuant to Item 5 of such form to announce a stock
repurchase program involving up to 3,000,000 shares of its
common stock.
14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CRACKER BARREL OLD COUNTRY STORE, INC.
Date: 12/4/98 By /s/Michael A. Woodhouse
_______ _____________________________________________
Michael A. Woodhouse, Chief Financial Officer
Date: 12/4/98 By /s/Patrick A. Scruggs
_______ _____________________________________________
Patrick A. Scruggs, Assistant Treasurer
15
December 4, 1998
Cracker Barrel Old Country Store, Inc.
Hartmann Drive
Lebanon, Tennessee 37088-0787
We have made a review, in accordance with standards established by the
American Institute of Certified Public Accountants, of the unaudited
interim financial information of Cracker Barrel Old Country Store, Inc. for
the quarters ended October 30, 1998 and October 31, 1997, as indicated in
our report dated December 4, 1998; because we did not perform an audit, we
expressed no opinion on that information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended October 30, 1998, is
incorporated by reference in Registration Statement Nos. 2-86602, 33-15775,
33-37567, 33-45482 and 333-01465 on Forms S-8, Registration Statement No.
333-62469 on Form S-4 and Registration Statement No. 33-59582 on Form S-3.
We also are aware that the aforementioned report, pursuant to Rule 436(c)
under the Securities Act of 1933, is not considered a part of the
Registration Statement prepared or certified by an accountant or a report
prepared or certified by an accountant within the meaning of Sections 7 and
11 of that Act.
DELOITTE & TOUCHE LLP
Nashville, Tennessee
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