UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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Cracker Barrel Old Country Store, Inc.
(Name of Registrant as Specified In Its Charter)
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Cracker Barrel Old Country Store, Inc. (the “Company”) used the following presentation at the Wells Fargo 2013 Retail & Restaurants Summit beginning on October 1, 2013. This presentation was also posted to the Company’s “Proxy Contest” webpage on the Company’s website at http://investor.crackerbarrel.com.
Cracker Barrel
Old Country Store
Wells Fargo
2013 Retail & Restaurants Summit
October 1, 2013
Cracker Barrel
Old Country Store
Safe Harbor statement
Cracker Barrel Old Country Store, Inc. (“Cracker Barrel” or the “Company”) urges caution in considering current trends and earnings guidance disclosed in this presentation. Except for specific historical information, matters discussed in this presentation are forward looking statements that involve risks, uncertainties and other factors that may cause actual results and performance of the Company to differ materially from those expressed or implied in this discussion. All forward-looking information is provided pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995.
More detailed information on risks, uncertainties, and other factors is provided in the Company’s filings with the U.S. Securities and Exchange Commission (the “SEC”), press releases and other communications.
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Cracker Barrel
Old Country Store
Important Additional Information
Cracker Barrel, its directors and certain of its executive officers may be deemed to be participants in the solicitation of proxies from Cracker Barrel shareholders in connection with the matters to be considered at Cracker Barrel’s 2013 Annual Meeting. Cracker Barrel has filed a preliminary proxy statement with the U.S. Securities and Exchange Commission (the “SEC”) in connection with the solicitation of proxies from Cracker Barrel shareholders for the 2013 Annual Meeting. When completed, a definitive proxy statement and a form of proxy will be mailed to Cracker Barrel shareholders. INVESTORS AND SHAREHOLDERS ARE STRONGLY ENCOURAGED TO READ THE PRELIMINARY PROXY STATEMENT, THE DEFINITIVE PROXY STATEMENT AND ACCOMPANYING WHITE PROXY CARD WITH RESPECT TO THE 2013 ANNUAL MEETING, AND OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE AS THEY WILL CONTAIN IMPORTANT INFORMATION. Detailed information regarding the identity of potential participants, and their direct or indirect interests, by security holdings or otherwise, is set forth in the proxy statement and other materials to be filed with the SEC in connection with Cracker Barrel’s 2013 Annual Meeting. Information regarding the direct and indirect beneficial ownership of Cracker Barrel’s directors and executive officers in Cracker Barrel securities is set forth in the proxy statement and other materials to be filed with the SEC in connection with Cracker Barrel’s 2013 Annual Meeting. Shareholders will be able to obtain the proxy statement, any amendments or supplements to the proxy statement and other documents filed by Cracker Barrel with the SEC for no charge at the SEC’s website at www.sec.gov. Copies will also be available at no charge at the Investor Relations section of our corporate website at www.crackerbarrel.com.
This presentation contains excerpts from certain previously published material. Unless otherwise indicated, consent of the author and publication to use the material as proxy soliciting material has not been sought or obtained.
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Cracker Barrel
Old Country Store
A truly unique brand and experience
Highly differentiated concept providing wholesome connections to our guests
Our 624 old-fashioned country stores welcome 215 million guests a year
Approximately $2.6B in annual revenues with roughly 20% coming from our retail business
Welcome break for travelers across 42 states…travelers make up approximately 40% of our business
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Cracker Barrel
Old Country Store
Quality ingredients hand-crafted with care
USDA Grade AA real butter
Florida orange juice
Oven roasted turkey breasts
Sugar cured ham steaks
Arabica coffee beans
USDA domestic ground beef
Russet Burbank potatoes
Grade A pure sour cream
USDA Choice chuck roast 1/2” thick
Whole hog smoked sausage
USDA choice country fried steak
Grade A farm fresh eggs
USDA inspected chicken tenderloins
USDA Grade AA real butter
Trans Fat and cholesterol free vegetable oil
Farm raised rainbow trout
Dumplins hand-rolled daily
Wild Maine blueberries
Freshly brewed iced tea
Real mashed potatoes
Scratch biscuits with real buttermilk
Natural Colby cheese
Real Half & Half
All natural vanilla bean ice cream
Biscuit steak cut from the tenderloin
Long-cured country ham
Wild caught North Atlantic Haddock and Cod
Farm raised domestic catfish
Westminster Thin SquareTM crackers
Stewart’sTM Root Beer and Orange n’ Cream Soda
Earl GreyTM decaffeinated tea
TwiningTM Darjeeling tea
Dickinson’sTM preserves and jam
Hickory smoked thick sliced bacon
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Cracker Barrel
Old Country Store
Retail is integral to the Cracker Barrel experience
The experience begins with rockers on the front porch… which are also the top seller
The retail shop doubles as a guest waiting area…and produces sales per square foot of approximately $400 and gross margins around 50%
Emphasis on nostalgic and unique merchandise with a large selection of items under $20
– Apparel
– Branded Food
– Toys and Games
– Music
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Cracker Barrel
Old Country Store
We’ve been successful delivering the guest experience
TECHNOMIC
Winner in Food and Beverage category among all full service chains – Technomic’s inaugural Chain Restaurant Consumers’ Choice Awards
#1 Family Dining Restaurant and Top Honors in Food Quality, Service, Cleanliness, Menu Variety, Atmosphere, Reputation, Craveability, Likely to Return and Likely to Recommend - Nation’s Restaurant News, Consumer Picks 2013 National Survey
NATION’S Restaurant News CONSUMER PICKS
THE NEWS LEADER OF THE FOODSERVICE INDUSTRY WWW.NRN.COM
“Best Breakfast” among Family Dining Chains - Zagat’s 2010 & 2011 Consumer Surveys
Top of the Full-Service Restaurants in Casual and Family Dining - Consumer Brand Metrics Program, Technomic, Inc.
ZAGAT
Top “Family Dining” Chain for 19 Consecutive Years in “Choice in Chains” Annual Consumer Survey - Restaurants & Institutions Magazine
FORTUNE
“America’s Most Admired Companies” for the food service industry 12 consecutive years - Fortune
Best National Restaurant Chain in Readers’ Choice awards - Packaged Travel Insider
Insider READERS’ CHOICE AWARD
Gold Award – Courier Magazine’s Favorite Group Friendly Restaurant - NTA Tour Operators
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Cracker Barrel
Old Country Store
Standing out in a sea of sameness
Cracker Barrel is perceived to be more unique than its competitors
Technomic Brand Metrics Study - Brand Uniqueness
45 40 35 30 25 20 15 10 5 0
Cracker Barrel
Old Country Store
Brand A Brand B Brand C Brand D Brand E Brand F Brand G Brand H Brand I
Applebee’s Neighborhood Grill & Bar
chili’s
Bob Evans RESTAURANT
Steak ‘n Shake FAMOUS FOR STEAKBURGERS
Cracker Barrel
Old Country Store
Red Lobster
Olive Garden
OUTBACK STEAKHOUSE
Denny’s
IHOP
-Source: Technomic Consumer Brand Metrics Study – Q1 2011 – 2013; * Brands include: Cracker Barrel, Applebee’s, Bob Evans, Chili’s, Denny’s, IHOP, Olive Garden, Outback, Red Lobster, Steak n’ Shake; Rating significantly lower than Cracker Barrel at the 95% level of confidence
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Cracker Barrel
Old Country Store
Leader in eight of ten categories
Cracker Barrel
Old Country Store
Brand A Brand B Brand C Brand D Brand E Brand F Brand G Brand H Brand I
Rank % % % % % % % % % %
Menu Variety 1st 65 50* 56* 51* 52* 55* 57* 53* 63 49*
Availability of Healthy Options 1st 53 46* 48* 40* 40* 43* 49* 43* 48* 28*
Welcoming, comfortable atmosphere 1st 71 54* 59* 55* 46* 50* 65* 66* 65* 50*
Kid-friendly 1st 63 45* 51* 45* 47* 52* 47* 43* 44* 50*
Portion for price paid 1st 66 54* 57* 53* 52* 52* 60* 55* 58* 50*
Ability to provide value through high-quality menu items 1st 59 44* 50* 45* 40* 43* 51* 51* 53* 44*
Prices relative to other, similar restaurants 1st 57 42* 44* 39* 41* 40* 43* 40* 41* 42*
Food Quality 1st 73 58* 63* 50* 51* 57* 69* 70 73 57*
Food Taste & Flavor 2nd 72 59* 65* 62* 53* 59* 70 72 75 61*
Pleasant, Friendly Service 2nd 76 67* 73 69* 64* 64* 74 77 76 67*
Source: Technomic Consumer Brand Metrics Study Q1 2011 – Q1 2013; * Brands include: Cracker Barrel, Applebee’s, Bob Evans, Chili’s, Denny’s, IHOP, Olive Garden, Outback, Red Lobster, Steak n’ Shake. *Rating significantly lower than Cracker Barrel at the 95% level of confidence (Base: approx. 930 respondents per chain)
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Crackel Barrel
Old Country Store
Consistently Casual beating Dining Knapp-TrackTM
Rolling 4-week Sales Average
FY 2012 Q4 FY 2013 Q1 FY 2013 Q2 FY 2013 Q3 FY 2013 Q4
Percent Variance Over Prior Year
-10.0% 5.0% 0.0% -5.0% -10.0%
Knapp-Track
Cracker Barrel
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Oct-12 Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Seventh quarter of positive Same Store traffic growth
26 out of the last 29 quarters we have outperformed the Knapp
Track Casual Dining Index
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Crackel Barrel
Old Country Store
CBRL relative performance
All indices using market capitalization weighting methodology
Indexed Price
160%
150%
140%
130%
120%
110%
100%
90%
80%
Sep-2012
Nov-2012
Jan-2013
Mar-2013
May-2013
July-2013
Sep-2013
CBRL
54.8%
36.0%
19.0%
18.5%
16.8%
7.0%
Daily from 26-Sep-2012 to 26-Sep-2013
Cracker Barrel Old Country
S&P 600 Restaurant Index
Restaurant Peer
S&P 1500 Restaurant Index
S&P 500 Restaurant Index
S&P 500 Index
Source: Bloomberg as of 18-Jun-2013
Note: Restaurant Peers includes BH, BOBE, EAT, CAKE, DRI, DENN, RT, TXRH. S&P 500 Restaurant Index includes the restaurant companies in the S&P 500 Index: CMG, DRI, MCD, SBUX, YUM. S&P 600 Restaurant Index includes the restaurant companies in the S&P 600 Index: BJRI, BH, BWLD, CEC, CBRL, DIN, JACK, PZZA, RRGB, RT, RUTH, SONC, TXRH. S&P 1500 Restaurant Index includes the restaurant companies in the S&P 1500 Index: BJRI, BH, BOBE, EAT, BWLD, CEC, CAKE, CMG, CBRL, DRI, DIN, DPZ, JACK, MCD, PNRA, PZZA, RRGB, RT, RUTH, SONC, SBUX, TXRH, WEN, YUM.
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Cracker Barrel
Old Country Store
Since 1969, our mission has been Pleasing People®
AN OUTSTANDING EMPLOYEE EXPERIENCE
AN OUTSTANDING GUEST EXPERIENCE
IMPROVED SALES & TRAFFIC
ENHANCE THE CORE
Grow same store sales with menu development and retail merchandise that meet guests’ evolving needs and reinforce the brand
Maintain our marketing message of quality and value and deliver a consistent guest experience while improving margin
EXPAND THE FOOTPRINT
Evolve the store prototype to increase new unit profitability
Moderate new store growth with a continued focus on best locations and consistent execution
EXTEND THE BRAND
Extend the power of the Cracker Barrel brand beyond the physical stores
Create long-term value through new revenue streams
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Cracker Barrel
Old Country Store
Business priorities for FY 2014
1Focus on Better-for-You menu additions and reinforce Everyday Value
Introduce better-for-you menu items with our Wholesome Fixin’s program launch
Increase value proposition with menu and process adjustments designed to increase overall guest satisfaction while maintaining our affordable price points
2 Continue messaging in support of the brand, menu, and merchandise
Continue “Handcrafted” marketing campaign with additional national television during the first quarter to support the Wholesome Fixin’s launch
3 Drive retail sales with quality, depth, and breadth of the merchandise assortment
Increase the quality and number of themes
Create consistency with promotions and inventory pipeline to smooth the sales curve
4 Focus on improving operations and margins by applying technology and process improvements
Evolve the employee and guest experiences
Implement technology to improve through-put, efficiencies and food quality
Streamline processes to increase labor productivity
5 Maximize long-term total shareholder value
Grow the quarterly dividend over time
Reinvest capital in the business to support existing stores and expand the footprint with modest new unit growth
Extend the brand outside the four walls
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Cracker Barrel
Old Country Store
Consistent EPS Growth
Adjusted* Annual EPS
$5.25
$5.00
$4.75
$4.50
$4.25
$4.00
$3.75
$3.50
$3.25
$3.00
$3.62
$3.81
$4.34
$4.97
FY2010 FY2011 FY2012 FY2013
* Adjusted EPS is a non- GAAP financial measure that reflects operating results that are more indicative of the
Company’s ongoing operating performance and improves comparability to prior year periods. Please see attached appendix or the Company’s Investor Relations website at www.crackerbarrel.com for a full reconciliation to GAAP accounting.
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Cracker Barrel
Old Country Store
Competitive dividend
Dividend Yield
2.9%
4.5%
2.3%
2.3%
1.3%
1.9%
Peer Median: 1.9%
0 0 0
CBRL DRI BOBE EAT TXRH CAKE BH DENN RT
DARDEN Bob Evans® Farms TEXAS The Cheesecake Factory BIGLARI HOLDINGS INC. Denny’s Ruby Tuesday
Dividend Payout Ratio1
60.9%
70.1%
52.1%
43.6%
43.6%
29.8%
Peer Median: 43.6%
0 0 0
CBRL(2) DRI BOBE EAT TXRH CAKE BH DENN RT
DARDEN Bob Evans Farms® TEXAS The Cheesecake Factory BIGLARI HOLDINGS INC. Denny’s Ruby Tuesday
(1) Calculated as latest annualized dividend per share divided by latest twelve months reported diluted earnings per share. Adjusted earnings per share diluted earnings per share from continuing operations used where disclosed by each company.
(2) Please see appendix for adjusted EPS to GAAP reconciliation.
Source: Yahoo Finance Note: Market data as of 9-16-2013 15
Cracker Barrel
Old Country Store
A strong brand, well-positioned to continue to deliver shareholder value
We believe Cracker Barrel is well positioned because:
A truly unique brand and guest experience
Proven executive team led the Company through a strong fiscal year
Strategy built on past success which provides a long runway of shareholder value creation
ENHANCE THE CORE
EXPAND THE FOOTPRINT
EXTEND THE BRAND
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Crakcer Barrel
Old Country Store
Appendix
Adjusted EPS to GAAP reconciliation
2013 GAAP Adj (1)(2)(3) Adj 2013 2012 GAAP Adj (1)(2) 53rd Week Adj 2012 2011 GAAP Adj (1)(2) Adj 2011
EPS $4.90 $0.07 $4.97 $4.40 $0.21 ($0.27) $4.34 $3.61 $0.20 $3.81
(1) Charges and tax effects of the proxy contest concluded at the Company’s annual meeting of shareholders.
(2) Severance, other charges and tax effects related to organizational changes.
(3) Provision for taxes adjusted to exclude the $2.1 million prior year favorable effect of the retroactive reinstatement of the work opportunity tax credit.
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