Cracker Barrel Old Country Store, Inc. Reports EPS of $0.52 for Fiscal 2009 Third-Quarter

Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL):

- Fully diluted income per share from continuing operations was $0.52 for the third quarter of fiscal 2009 compared with $0.46 in the prior-year quarter

- Revenue for the third quarter increased 0.1% to $567.6 million compared with the prior-year quarter

- Comparable store restaurant sales for the quarter decreased 0.9% from the prior-year quarter while comparable store retail sales decreased 7.4%

- Operating income margin from continuing operations in the quarter was 5.1% of total revenue compared with 4.9% in the prior-year quarter

- Letter of Intent on sale-leaseback of 15 stores and contract on sale-leaseback of retail distribution center

Cracker Barrel Old Country Store, Inc. ('Cracker Barrel,' or the 'Company') (Nasdaq: CBRL) today reported income from continuing operations of $0.52 per diluted share for the third quarter of fiscal 2009, compared with $0.46 per diluted share from continuing operations in the third quarter of fiscal 2008. Income from continuing operations was $11.9 million compared with $10.5 million in the third quarter of fiscal 2008, which reflects this year's higher operating income and lower interest expense partially offset by a higher tax rate.

Third-Quarter Fiscal 2009 Results

Revenue from continuing operations

In the third quarter of fiscal 2009, total revenue of $567.6 million increased 0.1% from the third quarter of fiscal 2008. Comparable store restaurant sales for the period decreased 0.9%, including a 2.8% higher average check. The average menu price increase for the quarter was approximately 3.4% compared with last year. Comparable store retail sales were down 7.4% for the quarter. During the quarter, the Company opened three new Cracker Barrel Old Country Store(R) units, completing its planned new store development of 11 stores for fiscal 2009.

The Company noted that the shift of Easter from March to April unfavorably affected sales in March but benefited sales in April. For the full quarter, a later Easter benefited comparable store restaurant and retail sales by approximately 1%.

Operating Income

In the third quarter of fiscal 2009, operating income of $29.0 million was 5.1% of total revenue compared with $27.7 million, or 4.9% of total revenue, in the third quarter of fiscal 2008. Operating margin improved primarily because of lower food inflation and higher retail gross margin primarily due to the timing of a porch sale. Excluding healthcare costs, which were significantly higher than last year, labor and related expenses improved as a percent of sales.

Commenting on the third-quarter results, Cracker Barrel Chairman, President and Chief Executive Officer Michael A. Woodhouse said, 'We are pleased to report a 13% increase in earnings per share for the quarter and a 20 basis point improvement in operating margin on flat sales despite higher healthcare costs. This shows that we are making measurable progress in cost controls and improved profitability at the store level. Of equal significance, our latest surveys indicate that we are achieving higher levels of customer satisfaction. Longer term, the process improvements we are putting in place set the stage for greater operating leverage when the consumer environment improves.'

Year-to-date Fiscal 2009 Results

Total revenue from continuing operations of $1.8 billion year-to-date for fiscal 2009 represented a decrease of 0.6% over fiscal 2008. Comparable store restaurant sales declined 1.8%, including a 3.1% higher check. Comparable store retail sales decreased 5.6%.

The Company reported income from continuing operations of $43.1 million, or $1.90 per diluted share, compared with income from continuing operations of $44.7 million, or $1.88 per diluted share, in fiscal 2008.

Year-to-date net cash provided by operating activities was $90.1 million, compared with $83.8 million in fiscal 2008, reflecting the reduction in retail inventories and timing differences in interest, accounts payable and income tax payments.

Updates Fiscal 2009 Outlook

The Company commented that its outlook for fiscal 2009 reflects many assumptions, the accuracy of which is not yet known. Based on current trends and estimates, the Company presently expects fiscal 2009 total revenue to be flat to down 0.5% compared to fiscal 2008. The revenue estimate assumes comparable store restaurant sales will be down 1.5% to 2%, and comparable store retail sales will be down 6% to 7% compared with fiscal 2008. The Company expects its fiscal 2009 operating income margin as a percent of revenues from continuing operations to range from 5.8% to 6.1%. Commodity cost inflation for the fourth quarter of fiscal 2009 is expected to be flat to up 0.5% with more than 90% of product needs currently contracted for the remainder of fiscal 2009. Depreciation for the year is expected to be approximately $60 million. Net interest expense is estimated to be approximately $52 to $52.5 million, and diluted shares outstanding are expected to be between 22.5 to 23 million. The Company expects its full year 2009 effective tax rate to be approximately 26% to 27%. Based on the foregoing assumptions, income from continuing operations per diluted share for the 2009 fiscal year is projected to be between $2.70 and $2.90 per share. The Company continues to expect capital expenditures for fiscal 2009 to be approximately $65 million.

Commenting on the outlook, Mr. Woodhouse said, 'With the continued uncertainty in the economy and its impact on casual dining, the steps we have taken have improved our near-term profitability and should help make us a stronger competitor for the long-term. Central to the strength of the Cracker Barrel brand are the consistently high-quality meals at the affordable prices that our guests have come to expect. Our company's strong cash flow allows us to invest in our brand, pursue growth, maintain our dividend and reduce our debt. With demographic trends supporting growth in our target customer base, we aim to remain the first choice among diners who will be satisfied only by honest value, consistent quality, and delicious food served in ample portions."

Update on Sale-Leaseback and Reduction of Debt

The Company also announced today that, following a competitive bidding process, it has a contract on the sale-leaseback of its retail distribution center and has entered into a Letter of Intent for the sale-leaseback of 15 stores. The Company continues to expect to conclude both sale-leaseback transactions before the end of the fiscal year. Total net proceeds from the sales, which are presently expected to be approximately $53 to $54 million, as well as excess cash flow from operations, will be used to reduce outstanding debt.

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