SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[x] Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the fiscal year ended August 2, 2002
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (No Fee Required)
For the transition period from to
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Commission file number
000-25225
CBRL GROUP, INC.
(Exact name of registrant as specified in its charter)
Tennessee 62-1749513
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Hartmann Drive, P.O. Box 787 37088-0787
Lebanon, Tennessee (Zip code)
(Address of principal executive offices)
Registrant's telephone number, including area code:
(615)444-5533
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock
(Par Value $.01)
Common Stock Purchase Rights
(No Par Value)
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 _
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
The aggregate market value of voting stock held by nonaffiliates of the
registrant is $1,135,966,969 as of September 27, 2002. As of that date, there
were 50,296,762 shares of common stock outstanding.
Documents Incorporated by Reference
Document from which Portions Part of Form 10-K
are Incorporated by Reference into which incorporated
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1. Annual Report to Shareholders Part II
for the fiscal year ended
August 2, 2002 (the "2002 Annual Report")
2. Proxy Statement for Annual Part III
Meeting of Shareholders
to be held November 26, 2002
the "2002 Proxy Statement")
Except for specific historical information, the matters discussed in
this Form 10-K, as well as the 2002 Annual Report that is incorporated herein by
reference, are forward-looking statements that involve risks, uncertainties and
other factors which may cause actual results and performance of CBRL Group, Inc.
to differ materially from those expressed or implied by those statements. All
forward-looking information is provided by the Company pursuant to the safe
harbor established under the Private Securities Litigation Reform Act of 1995
and should be evaluated in the context of these factors. . Forward-looking
statements generally can be identified by the use of forward-looking terminology
such as "assumptions", "target", "guidance", "plans", "projection", "may",
"will", "would", "expect", "intend", "estimate", "anticipate", "believe",
"potential", or "continue" (or the negative of each of these terms) or similar
terminology. Factors which will affect actual results include, but are not
limited to: adverse general economic conditions including uncertain consumer
confidence effects on sales; the actual results of pending or threatened
litigation or governmental investigations; changes in generally accepted
accounting principles or in capital market conditions that could affect
valuations of restaurant companies in general or the Company `s goodwill in
particular; the effects of negative publicity; weather conditions and customer
travel activity and retail buying trends; the effect of plans intended to
improve operational execution and performance including retail logistics
initiatives; commodity, workers' compensation, group health and utility price
changes; the effects of increased competition at Company locations on sales and
on labor recruiting, cost and retention; the ability of and cost to the Company
to recruit, train and retain qualified restaurant hourly and management
employees; the ability of the Company to identify successful new lines of retail
merchandise; the availability and costs of acceptable sites for development; the
acceptance of the Company's concepts as the Company continues to expand into new
markets and geographic regions; changes in or implementation of additional
governmental rules and regulations affecting accounting, wage and hour matters,
health and safety, pensions and insurance; practical or psychological effects of
terrorist acts or military or government responses; changes in interest rates
affecting the Company's financing costs; income, payroll and other tax issues
including changes in government policy, settlement of audits, and changes
affecting the Company's ability to plan and structure its operations; other
undeterminable areas of government or regulatory actions or regulations; and
other factors described from time to time in the Company's filings with the
Securities and Exchange Commission, press releases and other communications.
PART I
ITEM 1. BUSINESS
OVERVIEW
CBRL Group, Inc. (the "Company") is a holding company that, through
certain affiliates, is engaged in the operation and development of the Cracker
Barrel Old Country Store(R) and Logan's Roadhouse(R) restaurant and retail
concepts. The Company was organized under the laws of the state of Tennessee in
August 1998.
CONCEPTS
Cracker Barrel Old Country Store
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Cracker Barrel Old Country Store, Inc. ("Cracker Barrel"),
headquartered in Lebanon, Tennessee, through its various affiliates, as of
October 25, 2002, operates 461 full service "country store" restaurants and gift
shops, which are located in 41 states, primarily the southeast, midwest,
mid-atlantic and southwest regions of the United States. Stores primarily are
located along interstate highways, however, 48 stores are not located along the
interstate highways, but instead are located near "tourist destinations" or are
considered "off-interstate" stores by Cracker Barrel. These "off-interstate"
stores represent a significant part of Cracker Barrel's efforts to expand the
brand. Cracker Barrel intends to open approximately half of its new stores in
fiscal 2003 along interstate highways as compared to 30% in fiscal 2002. The
restaurants serve breakfast, lunch and dinner daily between the hours of 6:00
a.m. and 10:00 p.m. (11:00 p.m. on Fridays and Saturdays) and feature home style
country cooking from Cracker Barrel's own recipes using quality ingredients and
emphasizing authenticity. Menu items are moderately priced and include country
ham, chicken, fish, roast beef, beans, turnip greens, vegetable plates, salads,
sandwiches, pancakes, eggs, bacon, sausage and grits among other items. The
restaurants do not serve alcoholic beverages. The stores are constructed in a
rustic, country store design and feature a separate retail area offering a wide
variety of decorative and functional items specializing in rocking chairs,
holiday gifts and toys, apparel, cast iron cookware and foods, including various
old fashioned candies and jellies among other things. Cracker Barrel stores are
intended to appeal to both the traveler and the local customer and consistently
have been a consumer favorite. Cracker Barrel was ranked as the top family
dining chain for the twelfth consecutive year in the 2002 Restaurants &
Institutions magazine "Choice in Chains" annual consumer survey.
Logan's Roadhouse
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Logan's Roadhouse, Inc. ("Logan's"), headquartered in Nashville,
Tennessee, through its various affiliates, as of October 25, 2002, operates 89
Logan's Roadhouse restaurants and franchises an additional 12 Logan's
restaurants in 17 states. Logan's restaurants feature steaks, ribs, chicken and
seafood dishes among other items served in a distinctive atmosphere reminiscent
of an American roadhouse of the 1930s and 1940s. The restaurants are open seven
days a week for lunch and dinner and offer full bar service. Logan's serves
lunch and dinner between the hours of 11:00 a.m. and 10:00 p.m. (11:00 p.m. on
Fridays and Saturdays). The Logan's concept is designed to appeal to a broad
range of customers by offering generous portions of moderately-priced, high
quality food in a very casual, relaxed dining environment that is lively and
entertaining. The fun atmosphere is enhanced by display cooking of grilled items
and complimentary peanuts, which the guests are encouraged to enjoy and let the
shells fall on the floor. Alcoholic beverages represented approximately 9% of
Logan's net sales in fiscal 2002. The Logan's menu is designed to appeal to a
wide variety of tastes, and emphasizes extra-aged, hand-cut USDA choice steaks
and signature dishes such as baked sweet potatoes and made-from-scratch yeast
rolls.
OPERATIONS
Cracker Barrel Old Country Store
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Store Format: The format of Cracker Barrel stores consists of a rustic,
country-store style building. All stores are freestanding buildings. Store
interiors are subdivided into a dining room consisting of approximately 30% of
the total interior store space, and a retail shop consisting of approximately
22% of such space, with the balance primarily consisting of kitchen and storage
areas. All stores have stone fireplaces, which burn wood where permitted. All
are decorated with antique-style furnishings and other authentic and nostalgic
items, similar to those used and sold in the past in original old country
stores. The front porch of each store features a row of the signature Cracker
Barrel rocking chairs that are used by guests waiting for a table and are sold
in the retail shop. The kitchens contain modern food preparation and storage
equipment allowing for flexibility in menu variety and development.
Products: Cracker Barrel's restaurants, which generated approximately
77% of Cracker Barrel's total revenue in fiscal 2002, offer home-style country
cooking featuring Cracker Barrel's own recipes emphasizing authenticity and
quality. The restaurants offer breakfast, lunch and dinner from a
moderately-priced menu. Breakfast items can be ordered at any time throughout
the day and include juices, eggs, pancakes, bacon, country ham, sausage, grits,
and a variety of biscuit specialties, including gravy and biscuits and country
ham and biscuits. Prices for a breakfast meal range from $1.99 to $7.99. Lunch
and dinner items include country ham, chicken and dumplings, chicken fried
chicken, meatloaf, country fried steak, pork chops, fish, steak, roast beef,
vegetable plates, salads, sandwiches, soups and specialty items such as pinto
beans and turnip greens. Lunches and dinners range in price from $2.99 to
$13.99. The average check per customer for fiscal 2002 was $7.39. Cracker Barrel
from time to time adjusts its prices. A price increase of less than 1% was
instituted in February 2002.
The retail area of the stores, which generated approximately 23% of
Cracker Barrel's total revenue in fiscal 2002, offers a wide variety of
decorative and functional items such as rocking chairs, holiday gifts and toys,
apparel, cast iron cookware, old-fashioned crockery, handcrafted figurines, a
book-on-audio sale and exchange program and various other gift items, as well as
various candies, preserves, smoked sausage, syrups and other food items. Many of
the candy items, smoked bacon, jellies and jams, along with other high quality
products, are sold under the "Cracker Barrel Old Country Store" brand name.
Product Development and Merchandising: Cracker Barrel maintains a
product development department, which develops new and improved menu items in
response either to shifts in customer preferences or to create customer
interest. Cracker Barrel merchandising specialists are involved on a continuing
basis in selecting and positioning merchandise in the retail shop with an
overall nostalgic theme. Management believes that Cracker Barrel has adequate
flexibility to meet future shifts in consumer preference on a timely basis.
Coordinated seasonal promotions are used regularly in the restaurants and retail
shops.
Store Management and Quality Controls: Cracker Barrel store management
typically consists of a general manager, four associate managers and a retail
manager who are responsible for approximately 100 employees on two shifts. The
relative complexity of operating a Cracker Barrel requires an effective
management team at the individual store level. As a motivation to store managers
to improve sales and operational efficiency, Cracker Barrel has a bonus plan
designed to provide store management with an opportunity to share in the profits
of their store. Starting in fiscal 2000, Cracker Barrel implemented a
supplemental bonus plan, providing managers an opportunity to earn an additional
bonus based on achieving specific operational targets. Cracker Barrel also
offers managers stock options based on their position and tenure. To assure that
individual stores are operated at a high level of quality, Cracker Barrel
emphasizes the selection and training of store managers. It also employs
District Managers to support individual store managers and Regional Vice
Presidents to support individual District Managers. Each District Manager's
individual span of control typically is seven to eight individual restaurants,
and Regional Vice Presidents support eight to ten District Managers. Each store
is assigned to both a restaurant and a retail District Manager and each District
is assigned to both a restaurant and a retail Regional Vice President. The
various levels of restaurant and retail management work closely together.
The store management recruiting and training program begins with an
evaluation and screening process. In addition to multiple interviews and
background and experience verification, Cracker Barrel conducts testing which is
designed to identify those applicants most likely to be best suited to manage
store operations. Those candidates who successfully pass this screening process
are then required to complete an 11-week training program consisting of eight
weeks of in-store training and three weeks of training at Cracker Barrel's
corporate facilities. This program allows new managers the opportunity to become
familiar with Cracker Barrel operations, culture, management objectives,
controls and evaluation criteria before assuming management responsibility.
Cracker Barrel provides its managers with ongoing training through its various
management development classes. Additionally, the Company is developing and
implementing internet-based computer-assisted instruction capability to train
both hourly and management staff consistently at all locations.
Purchasing and Distribution: Cracker Barrel negotiates directly with
food vendors as to price and other material terms of most food purchases.
Cracker Barrel is a party to a prime vendor contract with an unaffiliated
distributor with custom distribution centers in Lebanon, Tennessee; McKinney,
Texas; Gainesville, Florida; and Belcamp, Maryland. This vendor's contract
pricing terms were adjusted in July 2000, and the contract will remain in effect
until both parties mutually modify it in writing or until terminated by either
Cracker Barrel or the distributor upon 180 days written notice to the other
party. Cracker Barrel purchases the majority of its food products and restaurant
supplies on a cost-plus basis through its unaffiliated distributor. The
distributor is responsible for placing food orders and warehousing and
delivering food products to Cracker Barrel's stores. Deliveries generally are
made once per week to the individual stores. Certain perishable food items are
purchased locally by Cracker Barrel stores.
Three food categories (beef, pork and poultry) account for the largest
shares of Cracker Barrel's food purchasing expense at approximately 14%, 14% and
13% each, respectively. The single food item within these categories accounting
for the largest share of Cracker Barrel's food purchasing expense is chicken
tenderloin. Cracker Barrel presently purchases its beef through six vendors,
pork through ten vendors, and poultry through ten vendors. Cracker Barrel
purchases its chicken tenderloin through seven vendors. Should any food items
from these vendors become unavailable, management is of the opinion that these
food items could be obtained in sufficient quantities from other sources at
competitive prices.
The majority of retail items (approximately 65% in fiscal 2002) are
centrally purchased directly by Cracker Barrel from domestic and international
retail vendors and warehoused at the Company's owned Lebanon distribution
center. The distribution center fulfills retail item orders generated by Cracker
Barrel's automated replenishment system and generally ships the retail orders
once a week to the individual stores. Certain retail items, not centrally
purchased and warehoused at the distribution center, are drop-shipped directly
from Cracker Barrel's vendors to its stores. The distribution center is a
367,200 square foot warehouse facility with 36 foot ceilings and 170 bays, and
includes an additional 13,800 square feet of office and maintenance space. The
facility originally was built in 1993 and expanded in 1996.
On January 29, 2001, the Company entered into a new dedicated carriage
agreement with an unaffiliated transportation company for the transportation of
retail merchandise from the Cracker Barrel distribution center throughout the
Cracker Barrel system. This agreement commenced on April 1, 2001 for a period of
60 months and is structured to facilitate the growth of Cracker Barrel's retail
business over the term of the agreement, but is terminable by either party upon
180 days written notice to the other party. The transportation company or
Cracker Barrel may terminate the agreement 90 days following notice of a breach
that remains uncured.
Cost and Inventory Controls: Cracker Barrel's computer systems and
various analysis tools are used to evaluate store operating information and
provide management with reports to determine if any material variances in food
costs, labor costs or operating expenses have occurred. Management also monitors
individual store restaurant and retail sales on a daily basis and closely
monitors sales mix, sales trends, operational costs and inventory levels. The
information generated by the computer systems, analysis tools and monitoring
processes are used to manage the operations of the store, replenish retail
inventory levels and to facilitate retail purchasing decisions. These systems
and processes also are used in the development of budget analyses and planning.
Guest Satisfaction: Cracker Barrel is committed to providing its guests
a home-style, country-cooked meal, served with genuine hospitality in a
comfortable environment, in a way that evokes memories of the past. The
concept's commitment to offering guests a quality experience begins with its
employees. Its mission statement, "Pleasing People", means all people, guests
and employees alike, and the Company's employees are trained and reinforced on
the importance in a culture of mutual respect. Cracker Barrel also is committed
to staffing each store with an experienced management team to ensure attentive
customer service and consistent food quality. Through the regular use of guest
surveys and store visits by its District Managers and Regional Vice Presidents,
management receives valuable feedback, which it uses in its ongoing efforts to
improve the stores and to demonstrate Cracker Barrel's continuing commitment to
pleasing its guests.
Marketing: Outdoor advertising (i.e., billboards) is the primary
advertising medium utilized to reach consumers in the primary trade area for
each Cracker Barrel store and also to reach interstate travelers and tourists.
Outdoor advertising accounted for approximately 50% of advertising expenditures
in fiscal 2002. In recent years Cracker Barrel has utilized other types of
media, such as radio and print, in its core markets to maintain customer
awareness, and outside of its core markets to increase name awareness and to
build brand loyalty. Cracker Barrel defines its core markets based on geographic
location, longevity in the market and name awareness in each market. Cracker
Barrel plans to maintain its overall advertising spending at approximately 2% of
Cracker Barrel's net sales in fiscal 2003, as it has since fiscal 2000. Outdoor
advertising should continue to represent approximately 50% of advertising
expenditures in fiscal 2003. New store locations generally are not advertised in
the media until several weeks after they have been opened in order to give the
staff time to adjust to local customer habits and traffic volume, after which
time a full marketing plan is implemented.
Logan's Roadhouse
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Store Format: Logan's restaurants are constructed of rough-hewn cedar
siding in combination with bands of corrugated metal outlined in red neon.
Interiors are decorated with murals and other artifacts depicting scenes or
billboard advertisements reminiscent of American roadhouses of the 1930s and
1940s, concrete and wooden planked floors and neon signs. The lively, upbeat,
friendly, relaxed atmosphere seeks to appeal to families, couples, single adults
and business persons. The restaurants feature display cooking and an
old-fashioned meat counter displaying ribs and hand-cut steaks, and also include
a spacious, comfortable bar area. While dining or waiting for a table, guests
may eat complimentary roasted in-shell peanuts and toss the shells on the floor,
and watch as cooks prepare steaks and other entrees on gas-fired mesquite
grills.
Products: Logan's restaurants offer a wide variety of items designed to
appeal to a broad range of consumer tastes. Specialty appetizers include hot
wings "roadhouse-style", baby back ribs basket and "roadhouse" nachos. Logan's
dinner menu features an assortment of specially seasoned USDA choice steaks,
extra-aged, and cut by hand on premises. Guests also may choose from slow-cooked
baby back ribs, seafood, mesquite grilled shrimp, mesquite grilled pork chops,
grilled chicken and an assortment of hamburgers, salads and sandwiches. All
dinner entrees include dinner salad, made-from-scratch yeast rolls and a choice
of brown sugar and cinnamon sweet potato, baked potato, mashed potatoes, steamed
vegetables, fries or rice pilaf at no additional cost. Logan's express lunch
menu provides specially priced items to be served in less than 15 minutes. All
lunch salads are served with made-from-scratch yeast rolls, and all lunch
sandwiches are served with home-style potato chips at no additional cost. Prices
range from $4.79 to $8.79 for lunch items and from $4.99 to $17.99 for dinner
entrees. Logan's generally targets to achieve value parity or advantage relative
to key competitors, especially on comparable menu items. The average check per
customer for fiscal 2002 was $11.41. Logan's adjusts its prices from time to
time and increased menu prices approximately 1% in July 2002. Approximately 9%
of Logan's net sales in fiscal 2002 were from alcoholic beverages.
Product Development and Merchandising: Logan's strives to obtain
consistent quality items at competitive prices from reliable sources. Logan's
tests various new products in an effort to obtain the highest quality products
possible and to be responsive to changing customer tastes. In order to maximize
operating efficiencies and provide the freshest ingredients for its food
products, purchasing decisions are made by Logan's corporate management.
Management believes that Logan's has adequate flexibility to meet future shifts
in consumer preference on a timely basis.
Restaurant Management and Quality Controls: Restaurant management
typically consists of a general manager, one kitchen manager and four assistant
managers who are responsible for approximately 75 hourly employees. Each
restaurant employs a skilled meat-cutter to cut steaks from USDA choice beef.
The general manager of each restaurant is responsible for the day-to-day
operations of the restaurant, including maintaining the standards of quality and
performance established by Logan's corporate management. The relative complexity
of operating a Logan's restaurant requires an effective management team at the
individual restaurant level. As a motivation to restaurant managers to increase
revenues and operational efficiency, Logan's has a bonus plan that rewards
managers for improving sales and profits, achieving Logan's standard of guest
satisfaction as measured through the secret shopper program, and achieving key
operating costs targets. Management believes that having five to six managers in
its restaurants contributes to the attentive service and high quality food.
Logan's restaurant management teams typically are comprised of two non-
management employees promoted into management positions who therefore fully
understand the Logan's concept, and three to four managers with high levels of
previous management experience. To assure that individual restaurants are
operated at a high level of quality, Logan's has Regional Managers to support
individual restaurant managers, three Regional Directors and one Vice President
of Operations to support individual Regional Managers. Each Regional Manager
supports 4 to 5 individual restaurants, and each Regional Director supports 7 to
8 Regional Managers. Through regular visits to the restaurants, the Vice
President of Operations, the Regional Directors and the Regional Managers ensure
that the Logan's concept, strategy and standards of quality are being adhered to
in all aspects of restaurant operations.
In November 2000 Logan's opened a modern training facility in
Nashville, Tennessee to support and improve the training of new management
candidates.
Logan's requires that its restaurant managers have significant
experience in the full-service restaurant industry. All new managers are
required to complete a comprehensive ten-week training course. This course is
comprised of eight weeks of training at a Logan's restaurant and two weeks of
classroom training conducted at the Logan's training facility in Nashville. The
entire course emphasizes the Logan's operating strategy, procedures and
standards. Logan's also has a specialized training program required for managers
and hourly service employees on responsible alcohol service.
Purchasing and Distribution: Logan's negotiates directly with food
vendors as to price and other material terms of most food purchases. Logan's
purchases the majority of its food products and restaurant supplies on a
cost-plus basis through the same unaffiliated distributor that is used by
Cracker Barrel. The distributor is responsible for placing food orders and
warehousing and delivering food products for Logan's restaurants. Certain
perishable food items are purchased locally by the restaurants.
The single food category accounting for the largest share
(approximately 35%) of Logan's food purchasing expense is beef. Steaks are
hand-cut on the premises. Logan's presently purchases its beef through one
supply contract. Should any beef items from this supplier become unavailable for
any reason, management believes that such items could be obtained in sufficient
quantities from other sources at competitive prices.
Cost and Inventory Controls: Management closely monitors sales, product
costs and labor at each of its restaurants. Weekly restaurant operating results
are analyzed by management to detect trends at each location, and negative
trends are promptly addressed. Financial controls are maintained through
management of an accounting and information management system that is
implemented at the restaurant level. Administrative and management staff prepare
daily reports of sales, labor and customer counts. On a weekly basis, condensed
operating statements are compiled by the accounting department and provide
management a detailed analysis of sales, product and labor costs, with a
comparison to budget and prior year performance. These systems also are used in
the development of budget analyses and planning.
Guest Satisfaction: Logan's is committed to providing its guests
prompt, friendly, efficient service, keeping table-to-server ratios low and
staffing each restaurant with an experienced management team to ensure attentive
guest service and consistent food quality. Through the regular use of marketing
research, guest feedback to the managers while in the restaurant and an
independently run "secret shoppers" program, management receives valuable
feedback, which it uses to improve restaurants and demonstrate a continuing
interest in guest satisfaction.
Marketing: Logan's employs an advertising and marketing strategy
designed to establish and maintain a high level of name recognition and to
attract new customers. Logan's primarily uses radio advertising in selected
markets. Management's goal is to develop a sufficient number of restaurants in
certain markets to permit the cost-efficient use of television, radio and
outdoor advertising. Logan's currently spends approximately 1.3% to 1.7% of its
net sales on advertising. Logan's also engages in a variety of promotional
activities, such as contributing time, money and complimentary meals to
charitable, civic and cultural programs, in order to increase public awareness
of Logan's restaurants. Logan's also has numerous tie-ins with the National
Football League's Tennessee Titans, including two concession facilities (named
"Logan's Landing") inside Nashville, Tennessee's Coliseum and various promotions
during and around the games as well as other events, such as home football games
for Tennessee State University. Additionally, Logan's peanuts are sold at the
Gaylord Entertainment Center, home of the Nashville Predators of the National
Hockey League.
Franchising: Prior to the Company acquiring Logan's Roadhouse, Inc.,
Logan's entered into three area development agreements and accompanying
franchise agreements. Subsequent to the acquisition, Logan's terminated one of
the area development agreements. Franchisees operate 12 Logan's restaurants in 4
states, and they have rights under the existing agreements, subject to
development terms, conditions and timing requirements, to open up to 15
additional locations in those same states plus parts of Oregon. Certain of the
agreements provide for the possible acquisition of the franchise locations by
Logan's under specified terms. Management currently is not planning any other
future franchising opportunities beyond the current development agreements.
EXPANSION
The Company opened the following 20 new Cracker Barrel stores in fiscal
2002:
Interstate 10 (1) Gulfport, Mississippi
Interstate 59 (1) Ft. Payne, Alabama
Interstate 75 (1) Dry Ridge, Kentucky
Interstate 275 (1) St. Petersburg, Florida
Interstate 385 (1) Simpsonville, South Carolina
Interstate 675 (1) Centerville, Ohio
Destination (2) Rehoboth Beach, Delaware and Destin, Florida
Off Interstate (12) Decatur and Mobile, Alabama; Clermont and Leesburg, Florida;
Bloomington, Indiana; Danville, Kentucky; Mt. Laurel, New
Jersey; Greenville, North Carolina; Sandusky, Ohio;
Pittsburg, Pennsylvania; Greenwood, South Carolina; and
Alcoa, Tennessee
The Company plans to open 23 new Cracker Barrel stores during fiscal
2003, of which the following four of those stores are already open:
Interstate 40 (1) Morrisville, North Carolina
Interstate 275 (1) Milford, Ohio
Off Interstate (2) Tampa, Florida and Athens, Georgia
The Company opened the following 9 new Logan's restaurants in fiscal
2002:
Indiana (2) Evansville and Mishawaka
Ohio (2) Mansfield and Reynoldsburg
Michigan (1) Grandville
Mississippi (1) Tupelo
Missouri (1) Cape Girardeau
Tennessee (1) Gallatin
Virginia (1) Lynchburg
The Company plans to open twelve new Logan's restaurants during fiscal
2003, of which the following five restaurants are already open:
Tennessee (2) Chattanooga and Smyrna
Indiana (1) Ft. Wayne
Michigan (1) Walker
Texas (1) Beaumont
Prior to committing to a new location, Cracker Barrel and Logan's
perform extensive reviews of various available sites, gathering cost,
demographic, traffic and other data. This information is analyzed by computer
models to help with the decision on building at a new location. Cracker Barrel
and Logan's utilize in-house engineers to consult on architectural plans,
develop engineering plans and oversee new construction. Cracker Barrel and
Logan's are currently engaged in the process of seeking and selecting new sites,
negotiating purchase or lease terms and developing chosen sites.
It traditionally has been the Company's strategy to own its properties.
However, on July 31, 2000, the Company's Cracker Barrel subsidiary completed a
sale-leaseback transaction involving 65 of its owned Cracker Barrel stores, and
in recent years it has made greater use of ground leases for real estate
acquisitions. The sale-leaseback transaction was for an initial term of 21 years
plus up to 20 additional years of options. New leases typically have base terms
of ten to fifteen years with renewal options at pre-determined rates for another
fifteen to twenty years. Of the 461 Cracker Barrel stores open as of October 25,
2002, the Company owns 344, while the other 117 properties are either ground
leases or ground and building leases. Based on recent and projected new store
development, the average cost for a new Cracker Barrel store is approximately
$850,000 to $1,025,000 for land on purchased sites and development cost of
$2,200,000 to $2,300,000, including approximately $610,000 in furniture,
fixtures and equipment. In addition, approximately $320,000 is budgeted for
pre-opening expenses. The current Cracker Barrel store prototype is
approximately 10,000 square feet with 194 seats in the restaurant and 2,200
square feet in the retail gift shop. The Company typically projects that a new
Cracker Barrel store will generate annual sales of approximately $4,150,000 to
$4,200,000 and mature operating cash flow before rent of approximately 19% of
sales. The Company plans, for the foreseeable future, to open a higher
percentage of leased units than purchased units.
Of the 101 Logan's restaurants open as of October 25, 2002, 12 are
franchised restaurants. Of the remaining 89 Logan's restaurants, the Company
owns 49. The other 41 restaurants are ground leases. The average cost for a new
Logan's, based on recent and projected new restaurant development, is
approximately $750,000 to $900,000 for land on purchased sites and $2,000,000 to
$2,200,000 for development cost, including approximately $510,000 in furniture,
fixtures and equipment. In addition, pre-opening expenses of approximately
$130,000 are budgeted. The current Logan's restaurant prototype is approximately
8,060 square feet with 277 seats, including 19 seats at the bar. The Company
typically projects annual sales for a new Logan's restaurant of approximately
$3,000,000 to $3,100,000 and mature operating cash flow before rent of
approximately 20% of sales. The Company's plans reflect a higher percentage of
leased units than purchased units for the foreseeable future.
EMPLOYEES
As of August 2, 2002, CBRL Group, Inc. employed 21 people, of whom 8
were in advisory and supervisory capacities, and 6 were officers of the Company.
Cracker Barrel employed 53,667 people, of whom 405 were in advisory and
supervisory capacities, 2,790 were in store management positions and 28 were
officers. Logan's employed 7,209 people, of whom 54 were in advisory and
supervisory capacities, 482 were in restaurant management positions and 4 were
officers. Many of the restaurant personnel are employed on a part-time basis.
Competition for and availability of qualified new employees has become more
difficult in recent years, contributing to increases in store labor expenses.
None of the employees of the Company or its subsidiaries are represented by any
union, and management considers its employee relations to be good.
COMPETITION
The restaurant business is highly competitive and often is affected by
changes in the taste and eating habits of the public, local and national
economic conditions affecting spending habits, and population and traffic
patterns. Restaurant industry segments overlap and often provide competition for
widely diverse restaurant concepts. In exceptionally good economic times,
consumers can be expected to patronize a broader range of restaurants and the
breadth of competition at different restaurant segments is likewise increased.
The principal basis of competition in the industry is the quality, variety and
price of the food products offered. Site selection, quality and speed of
service, advertising and the attractiveness of facilities are also important.
There are many restaurant companies catering to the public some of
which are substantially larger and have greater financial and marketing
resources than those of the Company and which compete directly and indirectly in
all areas in which the Company operates.
TRADEMARKS
Cracker Barrel through its affiliate, CBOCS General Partnership, owns
certain registered copyrights and trademarks relating to the name "Cracker
Barrel Old Country Store", as well as its logo, menus, designs of buildings,
general trade dress and other aspects of operations. Logan's owns or has applied
for certain registered copyrights and trademarks relating to the name "Logan's
Roadhouse", as well as its logo, menus, designs of buildings, general trade
dress and other aspects of operations. The Company believes that the use of
these names have value in maintaining the atmosphere and public acceptance of
its mode of operations. The Company's policy is to obtain registration of its
copyrights and trademarks whenever possible and to pursue vigorously any
infringement of its copyrights and trademarks.
RESEARCH AND DEVELOPMENT
While research and development are important to the Company, these
expenditures have not been material due to the nature of the restaurant and
retail industry.
SEASONAL ASPECTS
Historically the profits of the Company have been lower in the second
fiscal quarter than in the first and third fiscal quarters and highest in the
fourth fiscal quarter. Management attributes these variations primarily to the
decrease in interstate tourist traffic during the winter months and the increase
in interstate tourist traffic during the summer months. In the second quarter of
fiscal 2002, the Company benefited from unusually mild winter weather. The
Company's retail sales historically have been highest in the Company's second
fiscal quarter, which includes the Christmas holiday season.
SEGMENT REPORTING
The Company has one reportable segment. See Notes 2 and 8 to the
consolidated financial statements contained in the 2002 Annual Report
incorporated by reference in Part II of this Annual Report on Form 10-K for more
information on segment reporting.
WORKING CAPITAL
In the restaurant industry, substantially all sales are either for cash
or credit card. Like most other restaurant companies, the Company is able to,
and may from time to time, operate with negative working capital. Restaurant
inventories purchased through the Company's principal food distributor now are
on terms of net zero days, while restaurant inventories purchased locally
generally are financed from normal trade credit. Retail inventories purchased
domestically generally are financed from normal trade credit, while imported
retail inventories generally are purchased through letters of credit and wire
transfers. These various trade terms are aided by rapid turnover of the
restaurant inventory.
ITEM 2. PROPERTIES
The Company's corporate headquarters are located on approximately 10
acres of land owned by the Company in Lebanon, Tennessee. The Company utilizes
10,000 square feet of office space for its corporate headquarters.
The Cracker Barrel Old Country Store, Inc. corporate headquarters and
warehouse facilities are located on approximately 120 acres of land owned by
Cracker Barrel Old Country Store, Inc. in Lebanon, Tennessee. Cracker Barrel
utilizes approximately 110,000 square feet of office space for its corporate
headquarters and decorative fixtures warehouse and 367,200 square feet of
warehouse facilities and an additional 13,800 square feet of office and
maintenance space for its retail distribution center.
The Logan's Roadhouse, Inc. corporate headquarters and training
facility are located in approximately 31,000 square feet of office space in
Nashville, Tennessee, under a lease expiring on April 1, 2010.
Cracker Barrel Old Country Store, Inc. opened a retail-only mall store,
named "The Store," in a regional mall in Nashville, Tennessee in July 1999 to
test this growth opportunity to leverage the Cracker Barrel's merchandising and
logistical expertise. The retail-only mall store is leased and is presently
considered a research and development site.
In addition to the various corporate facilities, 20 properties owned or
leased for future development, Cracker Barrel's retail-only mall store and 12
parcels of excess real property and improvements including two leased
properties, which the Company intends to dispose of, the Company owns or leases
the following Cracker Barrel and Logan's store properties as of October 25,
2002:
State Cracker Barrel Logan's Combined
- ----- -------------- ------------- -------------
Owned Leased Owned Leased Owned Leased
----- ------ ----- ------ ----- ------
Tennessee 29 10 11 4 40 14
Florida 34 4 4 1 38 5
Texas 23 4 6 10 29 14
Georgia 23 6 5 2 28 8
Ohio 20 8 1 2 21 10
Indiana 17 5 5 3 22 8
Alabama 14 8 5 2 19 10
Kentucky 16 8 - 5 16 13
North Carolina 19 6 - - 19 6
Michigan 13 2 2 6 15 8
Virginia 15 1 6 1 21 2
Illinois 21 1 - - 21 1
South Carolina 11 6 - - 11 6
Pennsylvania 8 7 - - 8 7
Louisiana 7 2 3 2 10 4
Missouri 11 2 - 1 11 3
Mississippi 8 3 - 1 8 4
Arkansas 4 6 - - 4 6
Arizona 2 7 - - 2 7
New York 7 1 - - 7 1
West Virginia 3 4 - 1 3 5
Oklahoma 4 2 - - 4 2
Kansas 4 1 - - 4 1
New Jersey 2 3 - - 2 3
Wisconsin 5 - - - 5 -
Colorado 3 1 - - 3 1
Maryland 3 1 - - 3 1
Iowa 3 - - - 3 -
Massachusetts - 3 - - - 3
New Mexico 2 1 - - 2 1
Utah 3 - - - 3 -
Connecticut 1 1 - - 1 1
Minnesota 2 - - - 2 -
Montana 2 - - - 2 -
Nebraska 1 1 - - 1 1
Delaware - 1 - - - 1
Idaho 1 - - - 1 -
New Hampshire 1 - - - 1 -
North Dakota 1 - - - 1 -
Rhode Island - 1 - - - 1
South Dakota 1 - - - 1 -
Total 344 117 48 41 394 156
See "Business-Operations" and "Business-Expansion" for additional
information on the Company's stores.
ITEM 3. LEGAL PROCEEDINGS
The Company's Cracker Barrel Old Country Store, Inc. subsidiary
("Cracker Barrel") is involved in certain lawsuits, four of which are filed by
the same plaintiffs' attorneys, among others, and are not ordinary routine
litigation incidental to its business: Serena McDermott and Jennifer Gentry v.
Cracker Barrel Old Country Store, Inc., 4:99 -CV-0001-HLM, a collective action
under the federal Fair Labor Standards Act ("FLSA"), was served on Cracker
Barrel on May 3, 1999; Kelvis Rhodes, Maria Stokes et al. v. Cracker Barrel Old
Country Store, Inc., 4:99-CV-217-HLM, an action under Title VII of the Civil
Rights Act of 1964 and Section 1981 of the Civil Rights Act of 1866, was served
on Cracker Barrel on September 15, 1999; Flounice Stanley, Calvin Slack et al.
v. Cracker Barrel Old Country Store, Inc., 4:01-CV-326-HLM, a collective action
under the FLSA, was served on Cracker Barrel on April 12, 2002; and the National
Association for the Advancement of Colored People ("NAACP"), Betty Thomas et
al. v. Cracker Barrel Old Country Store, Inc., 4:01-CV-325-HLM, an action under
Title II of the Civil Rights Act of 1964 and Section 1981 of the Civil Rights
Act of 1866, was served on Cracker Barrel on April 12, 2002. All of these cases
are filed, and are pending, in the United States District Court for the Northern
District of Georgia, Rome Division.
The McDermott case alleges that certain tipped hourly employees were
required to perform excessive non-serving duties without being paid the minimum
wage or overtime compensation for that work and that certain hourly employees
were required to wait "off the clock," without pay for the wait. The McDermott
case seeks recovery of unpaid wages and overtime wages related to those claims.
On March 17, 2000, the Court granted the plaintiffs' motion in the McDermott
case to send notice to a provisional class of plaintiffs, defined as all persons
employed as servers and all second-shift hourly employees at Cracker Barrel Old
Country Store restaurants since January 4, 1996, and 10,838 potential plaintiffs
filed "opt-in" forms to the McDermott case. The Court could subsequently amend
the definition of the collective group, and if amended, the scope of the
collective action could either be reduced or increased or, if appropriate, the
Court could dismiss the collective aspects of the case entirely. In that last
situation, each opt-in plaintiff would have to decide whether or not to pursue
an independent action. Extensive discovery with respect to the merits of
individual claims, scheduled through December 2002, is being conducted in the
McDermott case. Motions with respect to class certification and other issues are
expected to be made in early 2003.
The Rhodes case seeks certification as a company-wide class action, a
declaratory judgment to redress an alleged systemic pattern and practice of
racial discrimination in employment opportunities, an order to effect certain
hiring and promotion goals and back pay and other related monetary damages. In
May 2002, the Rhodes plaintiffs filed a motion for class certification proposing
a class of all current and former employees and applicants for employment who
might have suffered discrimination in hiring, promotion, job assignment and
cross-training. The briefing process on class certification has been completed,
and this matter awaits ruling by the Court. No collective group has been finally
certified in the McDermott case, and no class has yet been certified in the
Rhodes case. Liquidated damages equal to the actual damages are sought in the
McDermott and the Stanley cases.
The Stanley case is a purported collective action filed by current and
former employees asserting three claims based upon alleged violations of the
FLSA: (1) that Personal Achievement Responsibility (PAR) IV level employees are
routinely required to perform quasi-managerial duties or duties related to
training without receiving minimum wage or overtime compensation for that work,
(2) that employees classified as trainers routinely work off the clock to
prepare for training sessions at home or on store premises and to conduct
pre-training activities, and (3) that store opener employees were mis-classified
as salaried exempt and are due overtime compensation. Plaintiffs seek unpaid
compensation and back pay, liquidated damages, prejudgment interest, attorneys'
fees and costs, and unspecified injunctive relief. No express amount of monetary
damages is claimed in the Stanley case and no substantial discovery has taken
place in that case.
The NAACP/Thomas case is an alleged race discrimination class action
filed by the NAACP and customers of Cracker Barrel alleging that Cracker Barrel
has a pattern and practice of race-based discriminatory treatment of
African-American customers and white customers when accompanied by
African-American customers, and seeking certification of a class action.
Plaintiffs and their counsel have denied that they seek to recover compensatory
damages, instead claiming to seek only nominal, actual and punitive damages.
Plaintiffs also seek unspecified declaratory and injunctive relief and have
demanded an award of punitive and nominal damages in the amount of $100 million,
plus reasonable attorneys' fees and costs. On August 16, 2002, the Magistrate
Judge entered a Report and Recommendation that the District Court grant
defendant's Rule 23(c) Motion and, as a matter of law, deny plaintiffs' Request
for Class Certification. The plaintiffs filed an objection to the Magistrate
Judge's Report and Recommendation, and Cracker Barrel filed a response to that
objection. On October 1, 2002, the District Court issued its ruling, based on
the law and the facts, granting defendant's Rule 23 (c) Motion for Denial of
Class Certification, adopting the Magistrate Judge's Report and Recommendation
and overruling the plaintiffs' objections to the Report and Recommendation. The
failure of plaintiffs to comply with the Court's time deadline was stated as an
alternative ground for accepting the Magistrate Judge's Report and
Recommendation.
In August 2002, Cracker Barrel received a letter from the Department of
Justice ("DOJ") informing Cracker Barrel that it was the subject of a DOJ
investigation pursuant to Title II of the Civil Rights Act of 1964. On August
20, 2002, DOJ sent a request for information to Cracker Barrel seeking basic
information about locations of restaurants and broad based data about customer
complaints and company policies. The DOJ is empowered to investigate matters
under Title II of the Civil Rights Act of 1964, and Cracker Barrel is in the
process of gathering information to provide to the DOJ. Pursuant to Title II,
DOJ remedies are limited to injunctive or preventive relief. Remedies for public
accommodation claims typically relate to implementation or revision of policies
and procedures for responding to, and methods for monitoring, customer
complaints. If the Company and DOJ were not able to agree informally to resolve
any concerns raised, then the DOJ could seek to intervene in the pending action.
It is not possible at this time to provide an opinion as to how likely it is
that the DOJ will have any concerns or will pursue them in court, or as to any
other likely outcome of the investigation.
Cracker Barrel believes it has substantial defenses to the claims made
in each of these cases, and it is defending each of these cases vigorously.
Because discovery has not been completed to date, neither the likelihood of an
unfavorable outcome nor the amount of ultimate liability, if any, with respect
to these cases or the investigation can be determined at this time. The Company
has established a reserve of $3.5 million with respect to the McDermott case
based on offers of judgment to those plaintiffs. None of those offers of
judgement was accepted. With the exception of that reserve, no provision for any
potential liability has been made in the consolidated financial statements of
the Company with respect to these lawsuits or the DOJ investigation. In the
event of an unfavorable result in any of these cases or in the DOJ
investigation, the Company's results of operations and financial condition could
be materially and adversely affected.
In addition to the litigation and investigation described in the
preceding paragraphs, the Company is a party to other legal proceedings
incidental to its business. In the opinion of management, based upon information
currently available, the ultimate liability with respect to these other actions
will not materially affect the Company's consolidated financial statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
Pursuant to Instruction 3 to Item 401(b) of Regulation S-K and General
Instruction G(3) to Form 10-K, the following information is included in Part I
of this Form 10-K.
Executive Officers of the Registrant
- ------------------------------------
The following table sets forth certain information concerning the executive
officers of the Company, as of September 27, 2002:
Name Age Position with Registrant
- ---- --- ------------------------
Dan W. Evins 67 Chairman of the Board
Michael A. Woodhouse 57 President & Chief Executive Officer
of the Company and CEO of Cracker
Barrel Old Country Store, Inc.
Lawrence E. White 52 Senior Vice President, Finance
& Chief Financial Officer
James F. Blackstock 55 Senior Vice President,
General Counsel and Secretary
Norman J. Hill 60 Senior Vice President, Human
Resources
Donald M. Turner 54 President and Chief Operating
Officer of Cracker Barrel Old
Country Store, Inc.
David L. Gilbert 45 Chief Administrative Officer of
Cracker Barrel Old Country
Store, Inc.
Peter W. Kehayes 45 President and Chief Operating
Officer of Logan's Roadhouse, Inc.
The following background material is provided for those executive
officers who have been employed by the Registrant for less than five years:
Prior to his employment with the Company in January 1999, Mr. Evins was
Chairman of the Board and Chief Executive Officer of Cracker Barrel Old Country
Store, Inc. since its founding in 1969. He continued to serve as CEO of Cracker
Barrel Old Country Store, Inc. until August 2001.
Prior to his employment with the Company in January 1999, Mr. Woodhouse
was Senior Vice President of Finance and Chief Financial Officer of Cracker
Barrel Old Country Store, Inc. since December 1995. Since August 2001 he now
also serves as CEO of Cracker Barrel Old Country Store, Inc.
Prior to his employment with the Company in September 1999, Mr. White
was Executive Vice President and Chief Financial Officer of Boston Chicken, Inc.
from 1998 to 1999. Mr. White was Executive Vice President and Chief Financial
Officer of El Chico Restaurants, Inc. from 1992 to 1998 and also served as its
Chief Operating Officer during a period in 1994 and 1995.
Mr. Blackstock served the Company as Vice President, General Counsel
and Secretary from January 1999 to February 2000 when he was promoted to Senior
Vice President. Prior to his employment with the Company in January 1999, Mr.
Blackstock was Vice President, General Counsel and Secretary of Cracker Barrel
Old Country Store, Inc. since June 1997.
Prior to his employment with the Company in January 2002, Mr. Hill was
Senior Vice President of Human Resources for Cracker Barrel Old Country Store,
Inc. since October 1996.
Mr. Turner returned to Cracker Barrel Old Country Store, Inc. in
December 1999, serving as Executive Vice President and Chief Operations Officer
until his promotion to President and Chief Operating Officer in August 2001.
Prior to his return to Cracker Barrel Old Country Store, Inc. in November 1999,
Mr. Turner was retired. Mr. Turner retired from Cracker Barrel Old Country
Store, Inc. as Senior Vice President and Chief Operations Officer in 1993, prior
to which he served in various capacities since 1976.
Prior to his employment with Cracker Barrel Old Country Store Inc. in
July 2001, Mr. Gilbert was with Shoney's Inc. serving as its Executive Vice
President and Chief Administrative Officer from January 1999 to July 2001 and
its Senior Vice President of Real Estate from January 1998 to January 1999. Mr.
Gilbert was with Applebee's International (successor to Restaurant Concepts,
Inc. by merger) serving as its Executive Director of Development from 1995 to
January 1998 and its Director of Development and Purchasing from 1989 to 1995.
Mr. Kehayes joined Logan's in August 1997, where he served as Senior
Vice President of Operations from October 1997 until his promotion to President
and Chief Operating Officer in April 2000.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock is traded on The Nasdaq Stock Market
(National Market System) ("Nasdaq") under the symbol CBRL. There were 15,923
shareholders of record as of September 27, 2002.
The table "Market Price and Dividend Information" on page 20 of the
2002 Annual Report is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The table "Selected Financial Data" on page 20 of the 2002 Annual
Report is incorporated herein by this reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following portions of the 2002 Annual Report are incorporated
herein by this reference:
Management's Discussion and Analysis of Financial Condition and Results
of Operations on pages 21 through 25.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The following portion of the 2002 Annual Report is incorporated herein
by this reference:
Management's Discussion and Analysis of Financial Condition and Results
of Operations on page 24.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following portions of the 2002 Annual Report are incorporated
herein by this reference:
Consolidated Financial Statements and Independent Auditors' Report on
pages 26 through 36.
Quarterly Financial Data (Unaudited) on page 35.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item with respect to directors of the
Company is incorporated herein by this reference to the section entitled
"Proposal 1: Election of Directors" in the 2002 Proxy Statement. The information
required by this item with respect to executive officers of the Company is set
forth in Part I of this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated herein by this
reference to the sections entitled "Board of Directors and Committees" and
"Executive Compensation" in the 2002 Proxy Statement. The matters labeled
"Report of the Compensation and Stock Option Committee" and "Shareholder Return
Performance Graph" shall not be deemed to be incorporated by reference into this
Annual Report on Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information required by this item is incorporated herein by this
reference to the sections entitled "Stock Ownership of Management and Certain
Beneficial Owners" and "Equity Compensation Plan Information" in the 2002 Proxy
Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated herein by this
reference to the section entitled "Certain Transactions" in the 2002 Proxy
Statement.
ITEM 14. CONTROLS AND PROCEDURES
Under transition provisions contained in the final rules adopted by the
Securities and Exchange Commission relating to, among other things, the
evaluation of the Company's disclosure controls and procedures, the Company is
not required to perform the evaluation of its disclosure controls and procedures
for purposes of this Report. Accordingly, the required disclosure related to
such final rules is not applicable to the Company.
PART IV
ITEM 15. EXHIBITS AND REPORTS ON FORM 8-K
A. List of documents filed as part of this report:
1. The following Financial Statements and the Report of Deloitte
& Touche LLP on pages 26 through 36 of the 2002 Annual Report
are incorporated herein by this reference:
Independent Auditors' Report dated September 12, 2002
Consolidated Balance Sheet as of August 2, 2002 and August 3, 2001
Consolidated Statement of Income for each of the three fiscal
years ended August 2, 2002, August 3, 2001 and July 28, 2000
Consolidated Statement of Changes in Shareholders' Equity for
each of the three fiscal years ended August 2, 2002,
August 3, 2001 and July 28, 2000
Consolidated Statement of Cash Flows for each of the three fiscal
years ended August 2, 2002, August 3, 2001 and July 28, 2000
Notes to Consolidated Financial Statements
2. The exhibits listed in the accompanying Index to Exhibits on pages
18 and 19 are filed as part of this annual report.
B. Reports on Form 8-K:
On June 20, 2002, the Company furnished a Current Report on Form
8-K, Item 9 to report the Company's quarter-to-date information on
current sales trends and reaffirm its earnings guidance for the
fourth fiscal quarter and full fiscal year, all as had been
announced by a press release on June 20, 2002.
On July 11, 2002, the Company furnished a Current Report on Form
8-K, Item 9 to report the effectiveness of the Company's
Registration Statement on Form S-3, as amended, relating to the
resale by holders of its zero-coupon senior convertible notes
("Notes") due 2032, shares of CBRL common stock issuable upon
conversion and/or redemption of the Notes and guarantees of the
Notes by its subsidiaries, all as had been announced by a press
release on July 11, 2002. In addition, the Company reported the
completion of its 1.5 million share repurchase authorization and
the authorization of a new 1.0 million share repurchase program,
all as had been announced by a press release on July 11, 2002.
On July 18, 2002, the Company furnished a Current Report on Form
8-K, Item 9 to report the Company's quarter-to-date information on
current sales trends and reaffirm its earnings guidance for the
fourth fiscal quarter and full fiscal year, all as had been
announced by a press release on July 18, 2002.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Cracker Barrel Old Country Store, Inc. has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CBRL GROUP, INC.
By: /s/Michael A. Woodhouse By: /s/Patrick A. Scruggs
--------------------------- -----------------------------
Michael A. Woodhouse Patrick A. Scruggs
President and CEO Assistant Treasurer
(Principal Executive Officer) (Principal Accounting Officer)
By: /s/Lawrence E. White
----------------------------
Lawrence E. White
Senior Vice President, Finance and CFO
(Principal Financial Officer)
Date: October 25, 2002
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated.
/s/Robert V. Dale /s/B.F. Lowery
- --------------------------------- ---------------------------------
Robert V. Dale, Director B. F. Lowery, Director
Date: October 25, 2002 Date: October 25, 2002
--------------------------- ---------------------------
/s/Dan W. Evins /s/Gordon L. Miller
- --------------------------------- ---------------------------------
Dan W. Evins, Director Gordon L. Miller, Director
Date: October 25, 2002 Date: October 25, 2002
--------------------------- ---------------------------
/s/Edgar W. Evins /s/Martha M. Mitchell
- --------------------------------- ---------------------------------
Edgar W. Evins, Director Martha M. Mitchell, Director
Date: October 25, 2002 Date: October 25, 2002
--------------------------- ---------------------------
/s/Robert C. Hilton /s/Jimmie D. White
- --------------------------------- ----------------------------------
Robert C. Hilton, Director Jimmie D. White, Director
Date: October 25, 2002 Date: October 25, 2002
---------------------------- ---------------------------
/s/Charles E. Jones, Jr. /s/Michael A. Woodhouse
- ---------------------------------- ----------------------------------
Charles E. Jones, Jr., Director Michael A. Woodhouse, Director
Date: October 25, 2002 Date: October 25, 2002
---------------------------- ----------------------------
/s/Charles T. Lowe, Jr.
- ----------------------------------
Charles T. Lowe, Jr., Director
Date: October 25, 2002
----------------------------
CERTIFICATIONS
--------------
I, Michael A. Woodhouse certify that:
1. I have reviewed this annual report on Form 10-K of CBRL Group, Inc.;
2. Based on my knowledge, this annual 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 annual report;
3. Based on my knowledge, the financial statements, and other
financial information included in this annual 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
annual report.
Date: October 25, 2002
/s/ Michael A. Woodhouse
-----------------------------------
Michael A. Woodhouse, President and
Chief Executive Officer
CERTIFICATIONS
--------------
I, Lawrence E. White certify that:
1. I have reviewed this annual report on Form 10-K of CBRL Group, Inc.;
2. Based on my knowledge, this annual 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
annual report;
3. Based on my knowledge, the financial statements, and other
financial information included in this annual 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 annual report.
Date: October 25, 2002
/s/ Lawrence E. White
----------------------------------------
Lawrence E. White, Senior Vice President, Finance and
Chief Financial Officer
INDEX TO EXHIBITS
Exhibit
3(I), 4(a) Charter (1)
3(II), 4(b) Bylaws (1)
4(c) Shareholder Rights Agreement dated 9/7/1999 (2)
4(d) Registration Rights Agreement, dated as of April 3, 2002,
by and among the Company, the Guarantors (as defined
therein), and Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated (3)
4(e) Indenture, dated as of April 3, 2002, among the Company, the
Guarantors (as defined therein) and Wachovia Bank, National
Association, as trustee, relating to the Company's zero-coupon
convertible senior notes (3)
4(f) Form of Certificate for the Company's zero-coupon convertible
senior notes (included in the Indenture filed as Exhibit 4(e)
hereof) (3)
4(g) Form of Guarantee of the Company's zero-coupon convertible
senior notes (included in the Indenture filed as Exhibit
4(e) hereof) (3)
10(a) Credit Agreement dated 2/16/1999, relating to the $50,000,000
Term Loan and the $300,000,000 Revolving Credit Facility (4)
10(b) First Amendment to Credit Agreement dated 7/29/1999 (4)
10(c) Second Amendment to Credit Agreement dated 9/29/1999 (4)
10(d) Third Amendment to Credit Agreement dated 2/29/2000 (5)
10(e) Fourth Amendment to Credit Agreement dated 9/12/2001 (6)
10(f) Lease dated 8/27/1981 for lease of Macon, Georgia, store
between Cracker Barrel Old Country Store, Inc. and B. F.
Lowery, a director of the Company (7)
10(g) The Company's 1987 Stock Option Plan, as amended (8)
10(h) The Company's Amended and Restated Stock Option Plan, as
amended (4)
10(i) The Company's 2000 Non-Executive Stock Option Plan
10(j) The Company's Non-Employee Director's Stock Option Plan, as
amended (9)
10(k) The Company's Non-Qualified Savings Plan, effective 1/1/1996,
as amended (8)
10(l) The Company's Deferred Compensation Plan, effective 1/1/1994 (7)
10(m) Executive Employment Agreement executed January 15, 2002
between Dan W. Evins and the Company (3)
10(n) Executive Employment Agreement executed July 25, 2002 between
Michael A. Woodhouse and the Company
10(o) Executive Employment Agreement executed February 21, 2002
among Peter W. Kehayes, the Company and Logan's Roadhouse,
Inc. (3)
10(p) Change-in-control Agreement for Dan W. Evins dated 10/8/1999 (4)
10(q) Change-in-control Agreement for Michael A. Woodhouse dated
10/8/1999 (4)
10(r) Change-in-control Agreement for Lawrence E. White dated
10/8/1999 (4)
10(s) Change-in-control Agreement for James F. Blackstock dated
10/8/1999 (4)
10(t) Change-in-control Agreement for Norman J. Hill dated 10/13/1999
10(u) Change-in-control Agreement for Donald M. Turner dated
12/6/1999 (6)
10(v) Change-in-control Agreement for David L. Gilbert dated 10/3/2001
10(w) Change-in-control Agreement for Peter W. Kehayes dated 10/8/1999
10(x) Master Lease dated July 31, 2000 between Country Stores Property
I, LLC ("Lessor") and Cracker Barrel Old Country Store, Inc.
("Lessee") for lease of 21 Cracker Barrel Old Country Store(R)
sites (5)
10(y) Master Lease dated July 31, 2000 between Country Stores Property
I, LLC ("Lessor") and Cracker Barrel Old Country Store, Inc.
("Lessee") for lease of 9 Cracker Barrel Old Country Store(R)
sites*
10(z) Master Lease dated July 31, 2000 between Country Stores Property
II, LLC ("Lessor") and Cracker Barrel Old Country Store, Inc.
("Lessee") for lease of 23 Cracker Barrel Old Country Store(R)
sites*
10(aa) Master Lease dated July 31, 2000 between Country Stores Property
III, LLC ("Lessor") and Cracker Barrel Old Country Store, Inc.
("Lessee") for lease of 12 Cracker Barrel Old Country Store(R)
sites*
10(ab) CBRL Group, Inc. Long-Term Incentive Plan Cover Letter (3)
10(ac) CBRL Group, Inc. Long-Term Incentive Plan (3)
10(ad) CBRL Group, Inc. Long-Term Incentive Summary Plan Description (3)
13 Pertinent portions, incorporated by reference herein, of the
Company's 2002 Annual Report to Shareholders
21 Subsidiaries of the Registrant
23 Consent of Deloitte & Touche LLP
99 Sarbanes-Oxley Certifications
*Document not filed because essentially identical in terms and conditions to
Exhibit 10(u).
(1) Incorporated by reference to the Company's Registration Statement on
Form S-4/A under the Securities Act of 1933 (File No. 333-62469).
(2) Incorporated by reference to the Company's Forms 8-K and 8-A under the
Securities Exchange Act of 1934, filed September 21, 1999
(File No. 000-25225).
(3) Incorporated by reference to the Company's Quarterly Report on Form
10-Q under the Securities Exchange Act of 1934 for the quarterly period
ended May 3, 2002 (File No. 000-25225).
(4) Incorporated by reference to the Company's Annual Report on Form 10-K
under the Securities Exchange Act of 1934 for the fiscal year ended
July 30, 1999 (File No. 000-25225).
(5) Incorporated by reference to the Company's Annual Report on Form 10-K
under the Securities Exchange Act of 1934 for the fiscal year ended
July 28, 2000 (File No. 000-25225).
(6) Incorporated by reference to the Company's Annual Report on Form 10-K
under the Securities Exchange Act of 1934 for the fiscal year ended
August 3, 2001 (File No. 000-25225).
(7) Incorporated by reference to the Company's Registration Statement on
Form S-7 under the Securities Act of 1933 (File No. 2-74266).
(8) Incorporated by reference to the Company's Registration Statement on
Form S-8 under the Securities Act of 1933 (File No. 33-45482).
(9) Incorporated by reference to the Company's Annual Report on Form 10-K
under the Securities Exchange Act of 1934 for the fiscal year ended
August 2, 1991 (File No. 0-7536).