UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTIONS 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(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 1, 2003
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
---------- ----------
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
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2) Yes X No __
The aggregate market value of voting stock held by nonaffiliates of the
registrant, by reference to the price at which the common equity was last sold,
or the average bid and asked price of such common equity, as of the last
business day of the quarter ended January 31, 2003, was $1,548,719,735. For
purposes of this computation, all directors, executive officers and 10%
beneficial owners of the registrant are assumed to be affiliates. This
assumption is not a conclusive determination for purposes other than this
calculation.
As of September 26, 2003, there were 48,001,226 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
- ----------------------------- -----------------------
1. Annual Report to Shareholders Part II
for the fiscal year ended
August 1, 2003 (the "2003 Annual Report")
2. Proxy Statement for Annual Part III
Meeting of Shareholders
to be held November 25, 2003
(the "2003 Proxy Statement")
PART I
PAGE
ITEM 1. BUSINESS 5
ITEM 2. PROPERTIES 14
ITEM 3. LEGAL PROCEEDINGS 17
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 17
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS 20
ITEM 6. SELECTED FINANCIAL DATA 20
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS 20
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 20
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 20
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE 20
ITEM 9A. CONTROLS AND PROCEDURES 20
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 21
ITEM 11. EXECUTIVE COMPENSATION 21
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 21
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 21
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 21
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K 21
SIGNATURES 23
Except for specific historical information, the matters discussed in
this Form 10-K, as well as the 2003 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", "outlook", "plans", "projection",
"may", "will", "would", "expect", "intend", "estimate", "anticipate", "believe",
"potential" or "continue" (or the negative or other derivatives of each of these
terms) or similar terminology. Factors which could materially affect actual
results include, but are not limited to: the effects of uncertain consumer
confidence or general or regional economic weakness on sales and customer travel
activity; practical or psychological effects of terrorist acts or war and
military or government responses; consumer behavior based on concerns over
nutritional aspects of the Company's products or restaurant food in general;
competitive marketing and operational initiatives; commodity, workers'
compensation, group health and utility price changes; the effects of plans
intended to improve operational execution and performance; 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 and acquire successful new lines of retail merchandise;
changes in foreign exchange rates affecting the Company's future retail
inventory purchases; the availability and cost of acceptable sites for
development and the Company's ability to identify such sites; changes in
accounting principles generally accepted in the United States of America or
changes in capital market conditions that could affect valuations of restaurant
companies in general or the Company's goodwill in particular; changes in
interest rates affecting the Company's financing costs; increases in
construction costs; changes in or implementation of additional governmental or
regulatory rules, regulations and interpretations affecting accounting, tax,
wage and hour matters, health and safety, pensions and insurance; the actual
results of pending or threatened litigation or governmental investigations and
the costs and effects of negative publicity associated with these activities;
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 ("SEC"), press releases, and other
communications.
PART I
ITEM 1. BUSINESS
OVERVIEW
CBRL Group, Inc. (the "Company") is a holding company that, through
certain subsidiaries, 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. We maintain an internet website at http://www.cbrlgroup.com. We
make available free of charge on or through our internet website our annual
reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form
8-K, and amendments to those reports filed or furnished pursuant to Section
13(a) or 15(d) of the Securities and Exchange Act of 1934 (the "Exchange Act")
as soon as reasonably practicable after we file such material with, or furnish
it to, the SEC.
CONCEPTS
Cracker Barrel Old Country Store
- --------------------------------
Cracker Barrel Old Country Store, Inc. ("Cracker Barrel"),
headquartered in Lebanon, Tennessee, through its various affiliates, as of
October 15, 2003, operates 484 full service "country store" restaurants and gift
shops, which are located in 41 states. Stores primarily are located along
interstate highways; however, 59 stores are located near "tourist destinations"
or are considered "off-interstate" stores. These "off-interstate" stores
represent a significant part of Cracker Barrel's expected future efforts to
expand the brand. However, in fiscal 2004 Cracker Barrel intends to open up to
75% of its new stores along interstate highways as compared to approximately
half in fiscal 2003. The Company believes that it should focus primarily on
available interstate locations where Cracker Barrel generates the greatest brand
awareness. 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 trademarked rustic, old country store design and feature a
separate retail area offering a wide variety of decorative and functional items
specializing in rocking chairs, holiday and seasonal gifts and toys, apparel,
cookware and foods, including various old fashioned candies and jellies among
other things. Cracker Barrel sometimes offers items for sale in the retail store
that are also featured on the restaurant menu, such as pies or cornbread mix.
The Company believes that Cracker Barrel achieves high retail sales per square
foot (over $425 annually) both by offering interesting merchandise and by having
a significant source of retail customers from the high volume of restaurant
customers, an average of over 8,000 per week in a typical store. 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 thirteenth consecutive year in the 2003 Restaurants
& Institutions magazine "Choice in Chains" annual consumer survey. Additionally,
Cracker Barrel was named "Chain of the Year" by Restaurant Hospitality magazine
in its August 2003 issue.
Logan's Roadhouse
- -----------------
Logan's Roadhouse, Inc. ("Logan's"), headquartered in Nashville,
Tennessee, through its various affiliates, as of October 15, 2003, in 17 states
operates 101 Logan's Roadhouse restaurants and franchises an additional 16
Logan's restaurants. Logan's restaurants feature steaks, ribs, chicken and
seafood dishes and combinations 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 buckets of complimentary peanuts on every
table, which the guests are encouraged to enjoy and let the shells fall on the
floor. Alcoholic beverages represented less than 9% of Logan's net sales in
fiscal 2003. The Logan's menu is designed to appeal to a wide variety of tastes,
and emphasizes extra-aged, hand-cut on premises USDA choice steaks and signature
dishes such as baked sweet potatoes and made-from-scratch yeast rolls.
OPERATIONS
Cracker Barrel Old Country Store
- --------------------------------
Store Format: The format of Cracker Barrel stores consists of a
trademarked rustic, old 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, storage and training areas. All stores have stone
fireplaces, which burn wood where permitted. All are decorated with
antique-style furnishings and other authentic and nostalgic items, reminiscent
of and similar to those found 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 restaurant operations, which generated
approximately 77% of Cracker Barrel's total revenue in fiscal 2003, 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. The Company also periodically features new items as
off-menu specials to enhance customer interest and identify potential future
additions to the menu. Lunches and dinners range in price from $2.99 to $12.99.
The average check per customer for fiscal 2003 was $7.54. Cracker Barrel from
time to time adjusts its prices. A price increase of less than 1% was instituted
in November 2002.
The retail operations, which generated approximately 23% of Cracker
Barrel's total revenue in fiscal 2003, offer 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.
Cracker Barrel sometimes offers items for sale in the retail store that are also
featured on the restaurant menu, such as pies or cornbread mix. The Company
believes that Cracker Barrel achieves high retail sales per square foot (over
$425 annually) both by offering interesting merchandise and by having a
significant source of retail customers from the high volume of restaurant
customers, an average of over 8,000 per week in a typical store.
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 targeted to appeal to travelers. Cracker Barrel recently
introduced the first editions of proprietary "Heritage Music" CDs featuring
various styles of traditional American music from bluegrass, to blues, to Cajun,
to gospel and to other styles. 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 over 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 maintains a bonus plan designed
to provide store management with an opportunity to share in the profits of their
store. Additionally, Cracker Barrel has a supplemental bonus plan, providing
managers an opportunity to earn additional bonus based on achieving specific
operational targets. Cracker Barrel also offers general managers stock options.
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 in the final stages
of implementing internet-based computer-assisted instruction capability to train
both hourly and, eventually, 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; Elkton, Maryland; and Ft. Mill, South Carolina. In
June 2003 this vendor's contract was renewed through fiscal 2007 with no price
increase from fiscal 2002 pricing until fiscal 2005. The contract does provide
for fuel cost adjustments under certain conditions. 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%, 13% and
13% each, respectively, but each category does include several individual items.
The single food item within these categories accounting for the largest share of
Cracker Barrel's food purchasing expense is chicken tenderloin at approximately
7% of food purchases in fiscal 2003. Cracker Barrel presently purchases its beef
through seven vendors, pork through eight vendors, and poultry through eleven
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 2003) are
centrally purchased directly by Cracker Barrel from domestic and international
retail vendors and warehoused at the Company's owned Lebanon distribution
center. Approximately 25% of Cracker Barrel's retail purchases in fiscal 2003
were directly from the People's Republic of China, and the Company believes that
other of its retail merchandise vendors may also make such purchases of items
sold to Cracker Barrel. 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.
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 forecasts, budget analyses,
and planning.
Guest Satisfaction: Cracker Barrel is committed to providing its guests
a home-style, country-cooked meal, and a variety of retail merchandise served
and sold with genuine hospitality in a comfortable environment, in a way that
evokes memories of the past. Cracker Barrel'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.
Cracker Barrel also has for many years had a guest relations call center that
takes comments and suggestions from guests and forwards them to operations or
other management for information and follow up.
Marketing: Outdoor advertising (i.e., billboards, state department of
transportation signs) 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 60% of advertising expenditures in fiscal 2003. 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
2004, as it has since fiscal 2000. Outdoor advertising should continue to
represent approximately 60% of advertising expenditures in fiscal 2004. 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 may
be implemented.
Logan's Roadhouse
- -----------------
Store Format: Logan's restaurants generally 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 USDA choice 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. In the waiting area they also may watch as cooks prepare steaks
and other entrees on gas-fired mesquite grills. Many of the restaurants feature
a complimentary Wurlitzer(R) jukebox in the waiting or bar area. All of these
features are intended to emphasize a relaxed, roadhouse-type environment.
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 rib baskets and "roadhouse" nachos. The
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 2003 was $11.61. Logan's adjusts its
prices from time to time, but had no menu price increases in fiscal 2003. Less
than 9% of Logan's net sales in fiscal 2003 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: Logan's restaurant
management typically consists of a general manager, one kitchen manager and four
assistant managers who are responsible for approximately 78 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 maintains a bonus plan that rewards
managers for improving sales and hourly turnover, achieving Logan's standard of
guest satisfaction as measured through a secret shopper program, and achieving
key operating cost 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
persons who were promoted into management positions from non-management
positions and, 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, four Directors of
Operations and one Vice President of Operations to support individual Regional
Managers. Each Regional Manager supports 4 to 5 individual restaurants, and each
Director of Operations supports 7 to 8 Regional Managers. Through regular visits
to the restaurants, the Vice President of Operations, the Directors of
Operations 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.
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 item accounting for the largest share (approximately
34%) of Logan's food costs 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
outsourced "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 1.4% 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 certain 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 16 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 11
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
Cracker Barrel opened the following 23 new stores in fiscal 2003:
Interstate Off-Interstate
---------- --------------
Florida 1 6
Georgia 1 3
Ohio 2 -
Tennessee 1 1
Kentucky 1 -
Michigan 1 -
New Jersey 1 -
North Carolina 1 -
Pennsylvania 1 1
Virginia - 1
West Virginia 1 -
Cracker Barrel plans to open 24 new stores during fiscal 2004, of which
four of those stores are already open as of October 15, 2003:
Interstate Off-Interstate
---------- --------------
Florida - 1
Kentucky 1 -
Ohio 1 -
Pennsylvania 1 -
Logan's opened the following 12 new company-operated restaurants and 4
franchised restaurants in fiscal 2003:
Company-Operated Franchised
---------------- ----------
Indiana 3 -
North Carolina - 2
Tennessee 3 -
Alabama 2 -
Texas 2 -
California - 1
Georgia 1 -
Michigan 1 -
South Carolina - 1
Logan's plans to open 11 new company-operated restaurants and four
franchised restaurants during fiscal 2004, of which five company-operated
restaurants are already open as of October 15, 2003:
Michigan 2
Alabama 1
Mississippi 1
Texas 1
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. Both Cracker Barrel and
Logan's currently are 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, Cracker Barrel 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 options for up to 20
additional years. 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 484 Cracker Barrel stores open as of October 15, 2003, the Company
owns 350, while the other 134 properties are either ground leases or ground and
building leases. The current Cracker Barrel store prototype is approximately
10,000 square feet including 2,200 square feet in the retail gift shop. The
prototype has 194 seats in the restaurant. Based on recent and projected new
store development, the average cost for approximately 2.5 acres of land for a
purchased site for a new Cracker Barrel store is expected to be between $900,000
and $1,000,000. Development costs of a new restaurant are approximately
$2,400,000, including furniture, fixtures and equipment of approximately
$670,000. Individual site costs, however, can vary materially from these
estimates depending on local real estate, site and construction conditions. In
addition, approximately $300,000 is budgeted for pre-opening expenses. The
Company typically projects that a new Cracker Barrel store will generate annual
sales of approximately $4,250,000 to $4,450,000. The Company's plans reflect a
higher percentage of purchased stores than leased stores for the foreseeable
future.
Of the 117 Logan's restaurants open as of October 15, 2003, 16 are
franchised restaurants. Of the remaining 101 Logan's restaurants, 54 are owned
and 47 are ground leases. The current Logan's restaurant prototype is
approximately 8,060 square feet with 277 seats, including 19 seats at the bar.
Based on recent and projected new store development, the average cost for
1.6-1.9 acres of land for a purchased site for a new Logan's is expected to be
between $750,000 to $850,000. Development costs of a new restaurant are
approximately $2,100,000, including furniture, fixtures and equipment of
approximately $500,000. Individual site costs, however, can vary materially from
these estimates depending on local real estate, site and construction
conditions. In addition, pre-opening expenses of approximately $140,000 are
budgeted. The Company typically projects annual sales for a new Logan's
restaurant of approximately $2,950,000 to $3,050,000. The Logan's prototype is
under review and development cost estimates could vary in future months. The
Company plans a higher percentage of leased units than purchased units for the
foreseeable future.
EMPLOYEES
As of August 1, 2003, 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 57,073 people, of whom 436 were in advisory and
supervisory capacities, 2,936 were in store management positions and 33 were
officers. Logan's employed 8,098 people, of whom 68 were in advisory and
supervisory capacities, 550 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 always been
difficult, contributing to increases in store labor expenses, but general
economic and labor market conditions have been relatively soft in recent
quarters, contributing to less wage pressure than in prior years. 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 either Cracker Barrel or Logan's and which compete
directly and indirectly in all areas in which either Cracker Barrel or Logan's
operates.
TRADEMARKS
Cracker Barrel and Logan's deem the trademarks owned by them or their
affiliates to be of substantial value Their policy is to obtain federal
registration of their trademarks and other intellectual property whenever
possible and to pursue vigorously any infringement of 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 first
three fiscal quarters and highest in the fourth fiscal quarter, which includes
much of the summer vacation and travel season. Management attributes these
variations primarily to the decrease in interstate tourist traffic and
propensity to dine out during the school year and winter months and the increase
in interstate tourist traffic and propensity to dine out during the summer
months. The Company's retail sales historically have been highest in the
Company's second fiscal quarter, which includes the Christmas holiday shopping
season.
SEGMENT REPORTING
The Company has one reportable segment. See Notes 2 and 8 to the
consolidated financial statements contained in the 2003 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 a working capital deficit. 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 through normal trade credit. Because of its retail
operations, which have a lower product turnover than the restaurant business,
the Company carries larger inventories than many in the restaurant industry.
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 product turnover of the restaurant inventory. Employee compensation and
benefits payable generally may be related to weekly, bi-weekly or semi-monthly
pay cycles, and many other operating expenses have normal trade terms.
ITEM 2. PROPERTIES
The Company's corporate headquarters are located on approximately 10
acres of land owned by Cracker Barrel Old Country Store, Inc. in Lebanon,
Tennessee. The Company utilizes 10,000 square feet of office space for its
corporate headquarters.
The Cracker Barrel 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 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 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.
Cracker Barrel owns and operates a motel in Lebanon, Tennessee which is
used for housing its management trainees when they are in the classroom portion
of their training, and which also serves the general public.
In addition to the various corporate facilities, 21 properties owned or
leased for future development, Cracker Barrel's retail-only mall store and motel
and 9 parcels of excess real property and improvements including one leased
property, which the Company intends to dispose of, Cracker Barrel and Logan's
own or lease the following store properties as of October 15, 2003:
State Cracker Barrel Logan's Combined
- ----- -------------- ------------- -------------
Owned Leased Owned Leased Owned Leased
Tennessee 30 11 12 4 42 15
Florida 36 9 4 1 40 10
Texas 23 4 8 10 31 14
Georgia 24 8 5 3 29 11
Ohio 21 9 1 2 22 11
Alabama 14 8 6 4 20 12
Indiana 17 5 6 4 23 9
Kentucky 17 9 - 5 17 14
Michigan 13 3 2 8 15 11
North Carolina 19 6 - - 19 6
Virginia 15 2 6 1 21 3
Illinois 21 1 - - 21 1
Pennsylvania 8 10 - - 8 10
South Carolina 11 6 - - 11 6
Louisiana 7 2 3 2 10 4
Missouri 11 2 - 1 11 3
Mississippi 8 3 1 1 9 4
Arkansas 4 6 - - 4 6
Arizona 2 7 - - 2 7
West Virginia 3 5 - 1 3 6
New York 7 1 - - 7 1
New Jersey 2 4 - - 2 4
Oklahoma 4 2 - - 4 2
Kansas 4 1 - - 4 1
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 350 134 54 47 404 181
See "Business-Operations" and "Business-Expansion" for additional
information on the Company's and its subsidiaries' properties.
ITEM 3. LEGAL PROCEEDINGS
Part I, Item 3 of the Company's Annual Report on Form 10-K for the
fiscal year ended August 2, 2002 (filed with the Commission on October 25, 2002)
is incorporated herein by this reference.
Part II, Item 1 of the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended January 31, 2003 (filed with the Commission on March
17, 2003) is incorporated herein by this reference.
Item 5 of the Company's Current Report on Form 8-K filed with the
Commission on August 6, 2003 is incorporated herein by this reference.
Item 5 of the Company's Current Report on Form 8-K filed with the
Commission on October 1, 2003 is incorporated herein by this reference.
See also Note 9 to the Company's Consolidated Financial Statements
filed or incorporated by reference into in Part II, Item 8 of this Annual Report
on Form 10-K, which also is incorporated herein by this reference.
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 26, 2003:
Name Age Position with Registrant
- ---- --- ------------------------
Dan W. Evins 68 Chairman of the Board
Michael A. Woodhouse 58 President & Chief Executive Officer
Lawrence E. White 53 Senior Vice President, Finance
& Chief Financial Officer
James F. Blackstock 56 Senior Vice President,
General Counsel and Secretary
Norman J. Hill 61 Senior Vice President, Human
Resources
Patrick A. Scruggs 39 Vice President of Accounting and
Tax, Assistant Treasurer and Chief
Accounting Officer
Donald M. Turner 55 President and Chief Operating
Officer of Cracker Barrel Old
Country Store, Inc.
David L. Gilbert 46 Chief Administrative Officer of
Cracker Barrel Old Country
Store, Inc.
G. Thomas Vogel 39 President and Chief Operating
Officer of Logan's Roadhouse, Inc.
The following information summarizes the business experience of each
executive officer of the Company for at least the past five years:
Prior to his employment with the Company in January 1999, Mr. Evins was
Chairman of the Board and Chief Executive Officer ("CEO") 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. Mr. Evins has 34 years
of experience in the restaurant and retail industries.
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. Mr. Woodhouse served the Company as
Senior Vice President of Finance and Chief Financial Officer from January 1999
to July 1999, as Executive Vice President and Chief Operating Officer from
August 1999 until July 2000 and then as President and Chief Operating Officer
from August 2000 until July 2001 when he assumed his current positions. Mr.
Woodhouse has 19 years of experience in the restaurant industry and 11 years of
experience in the retail industry.
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 has 16 years of experience in the restaurant
industry and 4 years of experience in the retail industry.
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. from June 1997 until January 1999. Mr. Blackstock has
10 years of experience in the restaurant and retail industries.
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. from October 1996. Mr. Hill has 24 years of experience in the restaurant
industry and 7 years of experience in the retail industry.
Prior to his employment with the Company in January 1999, Mr. Scruggs was
employed by Cracker Barrel Old Country Store, Inc. since April 1989. Mr. Scruggs
has served as Assistant Treasurer of Cracker Barrel Old Country Store, Inc.
since August 1993. Mr. Scruggs has 14 years of experience in the restaurant and
retail industries.
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. Mr. Turner has 22 years of experience
in the restaurant industry and 24 years of experience in the retail industry.
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 has
25 years of experience in the restaurant industry and 2 years of experience in
the retail industry.
Prior to his employment with Logan's Roadhouse, Inc. in August 2003, Mr.
Vogel was with Darden Restaurants Inc., since August 1991 serving in various
capacities for its Red Lobster concept, including Senior Vice President of
Operations, West/Southeast Divisions from June 1999 to August 2003, Vice
President of Food and Beverage from November 1997 to June 1999, and Concept
Development Director from March 1995 to November 1997. Mr. Vogel has 17 years of
experience in the restaurant industry.
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 14,777
shareholders of record as of September 26, 2003.
The table "Market Price and Dividend Information" on page 20 of the
2003 Annual Report is incorporated herein by reference. Item 12 of this Annual
Report on Form 10-K is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The table "Selected Financial Data" on page 20 of the 2003 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 2003 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 2003 Annual Report is incorporated herein
by this reference:
Management's Discussion and Analysis of Financial Condition and Results
of Operations on pages 22 and 23.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following portions of the 2003 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.
ITEM 9A. CONTROLS AND PROCEDURES
The Chief Executive Officer and the Chief Financial Officer of the
Company have carried out an evaluation of the effectiveness of the Company's
disclosure controls and procedures (as defined in Rule 13a-14(c) promulgated
under the Exchange Act). Based upon this evaluation, the Chief Executive Officer
and the Chief Financial Officer have concluded that as of August 1, 2003, the
Company's disclosure controls and procedures were adequate for the purposes set
forth in the definition thereof in Exchange Act Rule 13a-14(c).
There have been no significant changes (including corrective actions
with regard to significant deficiencies and material weaknesses) in the
Company's internal controls or in other factors that could significantly affect
internal controls subsequent to the date of their most recent evaluation.
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 2003 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 2003 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 2003 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 2003 Proxy
Statement.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by this item is incorporated herein by this
reference to the sections entitled "Fees Paid to Auditors" and "What is the
Audit Committee's pre-approval policy and procedure with respect to audit and
non-audit services provided by our auditors?" in the 2003 Proxy Statement. The
remainder of the section entitled "Audit Committee Report" shall not be deemed
to be incorporated by reference into this Annual Report on Form 10-K.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) List of documents filed as part of this report:
1. The following Consolidated Financial Statements and the
Independent Auditors' Report of Deloitte & Touche LLP on pages 26
through 36 of the 2003 Annual Report are incorporated herein by
this reference:
Independent Auditors' Report dated September 10, 2003
(September 25, 2003 as to Note 13)
Consolidated Balance Sheet as of August 1, 2003 and August 2, 2002
Consolidated Statement of Income for each of the three fiscal
years ended August 1, 2003, August 2, 2002 and August 3, 2001
Consolidated Statement of Changes in Shareholders' Equity for each
of the three fiscal years ended August 1, 2003, August 2, 2002 and
August 3, 2001
Consolidated Statement of Cash Flows for each of the three fiscal
years ended August 1, 2003, August 2, 2002 and August 3, 2001
Notes to Consolidated Financial Statements
2. The exhibits listed in the accompanying Index to Exhibits on pages
24 through 26 are filed as part of this annual report.
(b) Reports on Form 8-K filed during the last quarter of the period
covered by this Annual Report on Form 10-K:
Form 8-K dated July 17, 2003, reporting under Item 9 the issuance
of a press release announcing the Company's fiscal 2003 fourth
quarter-to-date earnings, sales trends and reaffirming the
earnings guidance for the fourth fiscal quarter of fiscal 2003.
Form 8-K dated July 9, 2003, reporting under Item 9 the Board of
Directors' authorization to repurchase up to 1 million additional
shares of the Company's common stock.
Form 8-K dated June 19, 2003, reporting under Item 9 the issuance
of a press release announcing the Company's fiscal 2003 fourth
quarter-to-date sales and operating trends discussing the outlook
for the remainder of the quarter.
Form 8-K dated May 30, 2003, reporting under Item 9 the Board of
Directors' authorization to repurchase up to 1 million additional
shares of the Company's common stock.
Form 8-K (as amended) dated May 22, 2003, reporting under Item 9
issuance of a press release announcing the Company's fiscal 2003
third quarter earnings, current sales trends and earnings guidance
for the remainder of fiscal 2003.
Form 8-K dated May 15, 2003, reporting under Item 9 the issuance
of a press release announcing the availability of the Company's
third quarter fiscal 2003 conference call on the internet.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 on this 15th day of
October, 2003.
CBRL GROUP, INC.
By: /s/Michael A. Woodhouse
-----------------------
Michael A. Woodhouse
President and Chief Executive Officer
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.
Name Title Date
- ---- ----- ----
/s/Dan W. Evins
- ---------------
Dan W. Evins Chairman of the Board and Director October 15, 2003
/s/Michael A. Woodhouse
- -----------------------
Michael A. Woodhouse President, Chief Executive Officer and Director October 15, 2003
/s/Lawrence E. White
- --------------------
Lawrence E. White Senior Vice President, Finance and Chief October 15, 2003
Financial Officer (Principal Financial Officer)
/s/James F. Blackstock
- ----------------------
James F. Blackstock Senior Vice President, General Counsel and October 15, 2003
Secretary
/s/Patrick A. Scruggs
- ---------------------
Patrick A. Scruggs Assistant Treasurer and Chief Accounting October 15, 2003
Officer
(Principal Accounting Officer)
/s/James D. Carreker
- --------------------
James D. Carreker Director October 15, 2003
/s/Robert V. Dale
- -----------------
Robert V. Dale Director October 15, 2003
/s/Robert C. Hilton
- -------------------
Robert C. Hilton Director October 15, 2003
/s/Charles E. Jones, Jr.
- ------------------------
Charles E. Jones, Jr. Director October 15, 2003
/s/B.F. Lowery
- --------------
B.F. Lowery Director October 15, 2003
- -------------------
Gordon L. Miller Director October 15, 2003
/s/Martha M. Mitchell
- ---------------------
Martha M. Mitchell Director October 15, 2003
- ------------------
Andrea M. Weiss Director October 15, 2003
- ------------------
Jimmie D. White Director October 15, 2003
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) 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(e) Form of Certificate for the Company's zero-coupon convertible
senior notes (included in the Indenture filed as Exhibit 4(e)
hereof) (3)
4(f) Form of Guarantee of the Company's zero-coupon convertible senior
notes (included in the Indenture filed as Exhibit 4(e) hereof) (3)
4(g),10(a) Credit Agreement dated 2/21/2003, relating to the $300,000,000
Revolving Credit Facility (4)
10(b) 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 (5)
10(c) The Company's 1987 Stock Option Plan, as amended (6)
10(d) The Company's Amended and Restated Stock Option Plan, as amended
(7)
10(e) The Company's 2000 Non-Executive Stock Option Plan (8)
10(f) The Company's 1989 Non-Employee Director's Stock Option Plan, as
amended (9)
10(g) The Company's Non-Qualified Savings Plan, effective 1/1/1996, as
amended (6)
10(h) The Company's Deferred Compensation Plan, effective 1/1/1994 (5)
10(i) The Company's 2002 Omnibus Incentive Compensation Plan
10(j) Executive Employment Agreement executed January 15, 2002 between
Dan W. Evins and the Company (3)
10(k) Executive Employment Agreement executed July 25, 2002 between
Michael A. Woodhouse and the Company (8)
10(l) Change-in-control Agreement for Dan W. Evins dated 10/8/1999 (7)
10(m) Change-in-control Agreement for Michael A. Woodhouse dated
10/8/1999 (7)
10(n) Change-in-control Agreement for Lawrence E. White dated 10/8/1999
(7)
10(o) Change-in-control Agreement for James F. Blackstock dated 10/8/1999
(7)
10(p) Change-in-control Agreement for Norman J. Hill dated 10/13/1999 (8)
10(q) Change-in-control Agreement for Donald M. Turner dated 12/6/1999
(10)
10(r) Change-in-control Agreement for David L. Gilbert dated 10/3/2001
(8)
10(s) Change-in-control Agreement for George T. Vogel dated October 3,
2003
10(t) Change-in-control Agreement for Patrick A. Scruggs dated October
13, 1999
10(u) 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
(11)
10(v) 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(w) 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(x) 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(y) CBRL Group, Inc. Long-Term Incentive Plan Cover Letter (3)
10(z) CBRL Group, Inc. Long-Term Incentive Plan (3)
10(aa) CBRL Group, Inc. Long-Term Incentive Summary Plan Description (3)
13 Pertinent portions, incorporated by reference herein, of the
Company's 2003 Annual Report to Shareholders
21 Subsidiaries of the Registrant
23 Consent of Deloitte & Touche LLP
31 Rule 13a-14(a)/15d-14(a) Certifications
32 Section 1350 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 Quarterly Report on Form
10-Q under the Securities Exchange Act of 1934 for the quarterly period ended
January 31, 2003 (File No. 000-25225).
(5) Incorporated by reference to the Company's Registration Statement on
Form S-7 under the Securities Act of 1933 (File No. 2-74266).
(6) Incorporated by reference to the Company's Registration Statement on
Form S-8 under the Securities Act of 1933 (File No. 33-45482).
(7) 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).
(8) 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,
2002 (File No. 000-25225).
(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).
(10) 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).
(11) 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).