Cracker Barrel Reports 9% Increase in Fourth Quarter EPS

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

• Fourth-quarter diluted EPS from continuing operations of $0.99, an increase of 8.8% compared with the prior-year quarter

• Revenue for the fourth quarter declined 1.0% to $595.6 million compared with the prior-year quarter

• Operating income margin in the fourth quarter was 7.0% of total revenue compared with 6.9% in the prior-year quarter

• Net cash flow from operating activities increased $39.7 million to $164.2 million in fiscal 2009

• Closed sale/leaseback transactions and paid down $133.0 million of long-term debt in the fourth quarter

Cracker Barrel Old Country Store, Inc. (Nasdaq: CBRL) today reported income from continuing operations of $0.99 per diluted share for the fourth quarter of fiscal 2009, compared with $0.91 per diluted share from continuing operations in the fourth quarter of fiscal 2008, an increase of 8.8%. Income from continuing operations was $22.8 million compared with $20.6 million in the fourth quarter of fiscal 2008, with the increase reflecting improved gross margin, relatively flat operating income, lower interest expense and a lower effective tax rate in the fourth quarter of fiscal 2009.

Fourth-Quarter Fiscal 2009 Results

Revenue from continuing operations
Total revenue from continuing operations of $595.6 million for the fourth quarter represented a decrease of 1.0% from the fourth quarter of fiscal 2008. Comparable store restaurant sales for the period decreased 1.4%, including a 2.4% higher average check. Comparable store retail sales were down 7.0% for the quarter.

Income from continuing operations
Operating income from continuing operations of $41.4 million was 7.0% of total revenue for the fourth quarter of fiscal 2009 compared with $41.6 million, or 6.9% of total revenue, in the fourth quarter of fiscal 2008. Operating margin improved primarily because of higher gross margins and lower general and administrative expenses partially offset by impairment charges and higher healthcare expenses.

Commenting on the fourth-quarter results, Cracker Barrel Chairman, President and Chief Executive Officer Michael A. Woodhouse said, 'We are pleased to report a solid increase in earnings per share for the quarter despite a challenging sales environment. We improved our operating margin as a result of lower food cost inflation, effective management of our operating costs, and lower G&A expenses, which more than offset charges taken for impairment and higher healthcare costs. We continued to outperform many in the casual dining industry as measured by comparable store sales published in the industry-monitoring Knapp-Track(TM) report. We've done this by providing good customer value, which means ample portions of high quality food at a fair price. Our goal is to build traffic in our restaurants and increase retail sales by leveraging the strength of the Cracker Barrel brand.'

Fiscal 2009 Results
Total revenue from continuing operations of $2.37 billion for fiscal 2009 decreased 0.7% from fiscal 2008. For the year, comparable store restaurant sales decreased 1.7%, including a 2.9% higher check. Comparable store retail sales decreased 5.9%.

Fiscal 2009 income from continuing operations was $66.0 million, or $2.89 per diluted share, compared with income from continuing operations of $65.3 million, or $2.79 per diluted share, in fiscal 2008.

Net cash flow provided by operating activities was $164.2 million, compared with $124.5 million in fiscal 2008, reflecting slightly higher net income from continuing operations and better working capital management in fiscal 2009. Retail inventory at 2009 fiscal year end was $108.4 million, a 13.0% reduction from the prior year. Capital expenditures for the year were $67.8 million. Cash provided by operating activities and net proceeds from the sale/leaseback transactions were used to reduce long-term debt by $142.8 million during the year. At fiscal year end, long-term debt was $645.5 million, including current maturities.

Fiscal 2010 Outlook
The Company urges caution in considering its current trends and the outlook disclosed in this press release. The restaurant industry is highly competitive, and trends and guidance are subject to numerous factors, risks and influences, some of which are discussed in the cautionary language at the end of this press release and others that are described in the Company's Annual Report on Form 10-K for the fiscal year ended August 1, 2008, which can be found on the Securities and Exchange Commission's website, sec.gov, and the Company's website, crackerbarrel.com. The Company disclaims any obligations to update disclosed information on trends or targets other than in its periodic filings with the Securities and Exchange Commission.

The Company commented that its outlook for fiscal 2010 reflects many assumptions, the accuracy of which is not yet known. Based on current trends and estimates, the Company presently expects fiscal 2010 total revenue to increase approximately 0.5% to 2.5% over revenue in fiscal 2009. The revenue increase reflects the expected opening of seven new Cracker Barrel units during the year, projected comparable store restaurant sales between a decrease of 0.5% to an increase of 1.5% and comparable store retail sales between a decrease of 1.5% to an increase of 0.5%. The fiscal 2010 outlook includes approximately $4.9 million of net operating expenses related to the sale/leaseback transactions completed late in fiscal 2009. Depreciation for the year is expected to be $61 to $63 million. The Company expects fiscal 2010 operating income margin as a percent of revenues to be approximately 5.7% to 6.0% compared with 6.0% in fiscal 2009. Net interest expense is estimated at $46 to $48 million, and diluted shares outstanding are expected to average approximately 23 million. The Company's Board of Directors has authorized the repurchase from time to time during this fiscal year common stock in numbers sufficient to offset dilution resulting from the exercise of options and other share-based compensation. The Company expects its full year 2010 effective tax rate to be between 27.5% and 28.5%. Based on the assumptions outlined above, full-year income from continuing operations per diluted share is projected to be in the range of $2.85 to $3.10 per share. The Company expects capital expenditures during fiscal 2010 to be between $70 and $75 million. The Company cautioned that it may opportunistically refinance or extend the maturities of a portion of its long-term debt during fiscal 2010. The foregoing guidance does not include any assumptions regarding the terms, timing or amount of any refinancing, any charges that would result from early extinguishment of debt, or any expense associated with the issuance of any new indebtedness.

Commenting on the outlook, Mr. Woodhouse said, 'As we look forward in fiscal 2010, the economic environment is challenging--consumer sentiment is unclear, unemployment remains high, and discounting in our industry continues. We are focused on delivering a great experience for our guests each and every day, sustaining the cost containment actions implemented in fiscal 2009, and improving our profitability through investment in long-term initiatives that provide for improved labor scheduling, retail merchandising and speed of service.'

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