Cracker Barrel Old Ctry Store (NASDAQ:CBRL)

CAPS Rating: 4 out of 5

A holding company, through its subsidiaries, is engaged in the operation and development of the Cracker Barrel Old Country Store(r) restaurant and retail concept.

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Player Avatar TMF1000 (99.68) Submitted: 10/18/2012 3:01:20 PM : Outperform Start Price: $24.89 CBRL Score: +215.26

Cracker Barrel was placed on my Caps at $26.26 on 8/12/2009. The present price is $66.90. Its present PE ratio is 15.21 and its cash flow yield is 8.8%. I believe even today, it will continue to beat the S&P500 signficantly going forward. It now pays a $2.00 a year dividend, giving it a dividend yield of 2.99%

Cracker Barrel is a country styled casual dining restaurant. Its restaurants are along highways where traffic can be hurt by higher gas prices. Today they have 660 restaurants which is a fairly small store base considering Applebees has nearly 2000 stores. The company has room to grow and is working on a smaller store concept that will be cheaper to build and allow them to be more flexible when looking for store locations. I would like to see them diversify away from the highways.

The Company is also working to make it easier for diners to buy low calorie meals – 450 calories for breakfast and 600 for lunch and dinner – with their “wholesome fixins” program. They also introduced a $5.99 lunch special which was credited for increasing traffic. They represent a good value and a fun experience for children that like candy and toys which are sold in the retail part of their restaurant. Retail sales are about 20% of total sales.

They also own $296 million in a land and another $726 million in buildings. This gives them real estate value of about $44 per share. This gives them an option to sell real estate and lease it back if they need cash. If we include restaurant and equipment which appears to be owned also we add another $400 million. This would make the assets per share increase to $60.87 per share. They don’t break it down well, so it’s hard to know what figure represents assets that could easily be sold. But I believe they only lease 62 restaurants.

They generated $138.9 million or $5.88 per share in cash flow giving them a cash flow yield of 8.8%. They pay a $2.00 annual dividend which gives them a dividend yield of 3% which isn’t bad in our low interest rate environment. The dividend will cost them about $47 million a year which they should easily be able to cover and even raise it regularly.

It isn’t going to be a fast grower like BWLD, but it is steady and it pays a nice dividend. Biglari/Cracker barrel proxy fight is costing them some money, but he does keep them on their toes, perhaps it evens out. I don’t really want them to grow too fast. I like their disciplined approach. They offer a good value to customers and they are fairly small compared to other casual dining restaurants. I believe the growth will come.

September 19, 2012 4Q:2012 earnings’ highlights:
** 4Q revenue was $700.01 million up 14% from $612.942 million
** Fiscal 2012 revenue was $2.58 billion up from $2.434 billion
** TTM revenue per share was $2.58 billion or $109.19 per share
** 4Q earnings were $1.47 up from $0.75
** Fiscal 2012 earnings were $4.40 up from $3.61
** Diluted share count 23.628 million
** Cash $151.962 million; Debt $525.036 million
** Cash flow for the quarter was $54.4 million up from $30.45 million
** Cash flow for the year was $138.9 million up from $60.25 million
** TTM cash flow was $138.9 million or $5.88 per share
** Capital expenditures for the year was $80.922 million up from $77.962 million
** Annual dividend $2.00
** Stores 660: Same store sales were up 3.8%
** Trading range between September 19, 2012 and the present October 18, 2012 was $64.54 to $69.30: PE ratio range: 14.67 to 15.75: PS ratio range was .59 to .63: Cash flow yield range was 8.5% to 9.1%: Dividend yield range was 2.9% to 3.1%

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