Good day, everyone, and welcome to the Cracker Barrel Fiscal 2013 Second Quarter Earnings Conference Call. Today's conference is being recorded and will be available for replay today from 2:00 p.m. Eastern through March 12 at 11:59 p.m. Eastern by dialing (719) 457-0820 and entering passcode 7587468. At this time, for opening remarks and introductions, I am pleased to turn the call over to Coco Kyriopoulos. Please go ahead, ma'am.

Thank you, Jennifer. Good morning, and welcome to Cracker Barrel's Second Quarter Fiscal 2013 Conference Call and Webcast. This morning, we issued a press release announcing our second quarter results and outlook for the 2013 fiscal year. In this press release and on this call, we will refer to non-GAAP financial measures for the current quarter and fiscal year, adjusted to exclude severance and proxy contest expenses and their related tax effects, as well as adjustments related to the retroactive reinstatement of the Work Opportunities Tax Credit. We will also refer to non-GAAP financial measures for the prior year and prior-year quarter, adjusted to exclude charges and tax effects related to the prior-year proxy contests. The company believes that excluding these charges and tax effects from its financial results provides information that may be more indicative of the company's ongoing operating performance, while improving comparability to prior periods. This information is not intended to be considered in isolation or as a substitute for financial information prepared in accordance with GAAP. The last page of the press release includes a reconciliation from the non-GAAP information to the GAAP financials. The press release can be found in the Investor section of our website, crackerbarrel.com. In that press release and during this call, statements may be made by management of their beliefs and expectations of the company's future operating results or expected future events. These are what are known as forward-looking statements, which involve risks and uncertainties and, in many cases, are beyond management's control and may cause actual results to differ materially from expectations. We urge caution to our listeners and readers in considering forward-looking statements and information. Many of the factors that could affect the results are summarized in the cautionary description of risks and uncertainties found at the end of this morning's press release and are described in detail in our reports that we filed with, or furnished to, the SEC. We urge you to read this information carefully. We also remind you that we do not comment on earnings estimates made by other parties. In addition, any guidance or outlook we provide or statements we make regarding trends speak only as of the date they are given, and we do not update or express continuing comfort with our guidance, outlooks or trends, except in broadly disseminated disclosures, such as this morning's press release, filings with the SEC or as otherwise required by law. On the call with me this morning are Cracker Barrel's President and CEO, Sandy Cochran; and Senior Vice President and CFO, Larry Hyatt. Sandy will begin with a review of the business, and Larry will review the financials and outlook. We will then open up the call for questions, and Sandy will return to close. We ask that you please limit your questions to matters relating to the company's performance, outlook and plans. And with that, I'll now turn the call over to Cracker Barrel's President and CEO, Sandra Cochran. Sandy?

Thanks, Coco, and good morning, everyone. We're pleased with our second quarter results, as they exceeded our expectations and reflect the continued success of our marketing, menu and operational initiatives. Highlights of our success in delivering a strong guest experience during the quarter include: This was the fifth consecutive quarter of positive traffic, positive restaurant and retail sales and outperformance of the Knapp-Track casual dining index for sales and traffic, and it was another strong quarter of strong guest satisfaction for us. In January, research from Technomic, a well-recognized industry research firm, further affirmed what our business results are showing: Cracker Barrel won the food and beverage category for full service restaurant. This study covered 115 of the leading restaurant chains in more than 60 different attributes. Before I highlight more details of the second quarter, I'd like to congratulate all of our 70,000 employees on the consistent progress we've made over the last 2 years. As a result, for the first time in 10 years, the company generated positive store traffic against our prior-year quarter with positive store traffic. And while we've grown traffic and revenue, we've also increased our operating income and earnings per share. Larry will review the financial results for the quarter in more detail, and I'll update you on the progress we're making on our 2013 business priorities. We have several priorities focused around our long-term strategy of enhancing our core business. Starting with refreshing and developing select menu categories that reinforce the affordability of Cracker Barrel and the availability of healthy options for our guests. Our holiday promotion, which featured limited-time offerings and on-menu items, was positively received by our guests and contributed to the increase in average check over the quarter. Our near-term focus is driving our affordability message, primarily at the dinner…

Good morning, everyone, and thank you, Sandy. I would like to begin by discussing our financial performance for the second quarter of fiscal 2013 and then our outlook for the 2013 fiscal year. For the second quarter of fiscal 2013, we reported GAAP net income of $35.2 million or $1.47 per diluted share and adjusted net income of $34.3 million or $1.43 per diluted share compared with adjusted net income of $27.9 million or $1.20 per diluted share in the prior-year quarter. We made 3 adjustments to GAAP net income. First, expenses related to the proxy contest were $1.2 million in the second quarter or $0.04 per diluted share. In comparison, proxy contest expenses in the prior-year quarter were $3.2 million or $0.10 per diluted share. Second, during the second quarter, we made organizational changes, which resulted in severance and related expenses of $0.5 million or $0.02 per diluted share. Third, in early January, the federal government reinstated the Work Opportunity Tax Credit, or WOTC, and made it retroactive to January 1, 2012. While the full benefit of the WOTC reinstatement on our second quarter earnings was $0.19 per diluted share, the $0.09 per diluted share relating to the prior fiscal year is excluded from adjusted EPS. Our revenue in the quarter was $702.7 million compared to $673.2 million in the prior-year second quarter. Our restaurant revenues increased 4.9% to $528.2 million, and retail revenues increased 2.8% to $174.5 million. Our comparable store restaurant sales increased 3.3%, as traffic increased 0.2% and average check increased 3.1%. The increase in average check reflected menu price increases of approximately 2.6% and a favorable mix impact of 0.5%. Our comparable store retail sales increased 3.1% in the second quarter. The company estimates that inclement weather in the second quarter reduced comparable store traffic…

[Operator Instructions] And our first question will come from Jeff Omohundro with Davenport & Company. Jeffrey F. Omohundro - Davenport & Company, LLC, Research Division: My question relates to the guidance in the current quarter. I certainly appreciate the EPS guidance. But would you give a little more granularity around your thinking around the weather impact? And certainly, a number of companies have discussed the impact of late tax refunds and the currently challenging macro environment with gas prices up so much. I'd just appreciate, perhaps, if you could also maybe provide the embedded comp guidance supporting the EPS story for Q3.

Jeff, we have noted that we saw some significant impact from weather in our February month. We've not quantified it. But it appears for the month it could conceivably be in the range of about 100 basis points. We've seen some impact, and Sandy expressed a little caution. I expressed a little caution on the consumer impact from FICA taxes going up 2% on January 1. It's very hard to quantify what the timing result is of the delayed tax refunds. I'm aware of the fact that many retailers have done that and far fewer restaurant companies have. And we don't usually offer quarterly sales guidance. We typically offer full-year sales guidance. And the quarterly guidance tends to be limited to earnings per share. Jeffrey F. Omohundro - Davenport & Company, LLC, Research Division: And then as a follow-up to that, with average check growth where it is now given this macro environment, could you just update us a little bit on your thinking around pricing? And what check growth do you really think is appropriate?

Yes. We said in the Analyst and Investor Day last year that over about a 3-year period that we were looking for average menu price increases in the 1% to 2% range and have said that, with respect to 2013, that we would be targeting something roughly in the 2% range. Second quarter, we had menu price increases in the 2.6% range. A part of that timing, it's a timing of menu price increases versus rollover of prior increases. We still anticipate that menu price increases for the full fiscal year will be in the 2% range. We take a very methodical and very analytical approach to menu price increases. We do very extensive substitution studies to very extensive elasticity studies, and we have historically seen and continued to see in this year's second quarter that those increases do pull through.

Jeff, I think you touched -- Jeff, I think you're touching on some important themes for both the second quarter and the quarter we're in. We feel really good about the delivery of the brand experience, certainly, that we've been delivering. But in this type of market, we're being very careful about doing things which could negatively disrupt guest behavior. I think that the programs we're putting into the market address the consumer needs and the demands. But as Larry said, we're very mindful and concerned about where the consumer is right now with respect to the pricing decisions we're making and about the competitive activity and the level of promotions that we are and could be dealing with.

And next, we'll take a call from Joe Buckley with Bank of America Merrill Lynch.

It's Andrew Charles on for Joe. Not to understate your solid sales gains, but it looks like the Family Dining segment was solid across-the-board this quarter. Can you talk about the competitive activity you're seeing in the segment?

It appears to be focused on the dinner daypart. I would say, in terms of the discounting, which is, given that we compete in our breakfast daypart with the Family Dining; but at lunch/dinner with the Casual Dining, our competitive landscape is broader than just the family diners. I think that we -- as I just mentioned, I think that the programs that we're putting into place, which are addressing value, affordability and the "better for you" are what consumers are looking for though. And I'm pleased with the results that we're getting.

Okay. And if you were able to repurchase Biglari's stock, how would you finance it?

As noted, we have $150 million of capacity on the revolver. We ended the second quarter, which is admittedly a seasonal high for us because of the holiday season and because of gift card sales, but we ended it with $183 million. Without going into specifics, as we noted in the letter we sent to Biglari Holdings, we were highly confident that we would have been able to finance it.

And now, we'll hear from Chris O'Cull with KeyBanc.

Sandy, the team has implemented several menu and advertising changes in the past couple of years. Is there evidence that it's appealing to a broader group of consumers, when you've changed it?

Yes, it is. We think that it is appealing. It is accomplishing what we wanted, which was not only addressing what our core users were looking for, but it was also appealing to younger and lighter users that are often looking for customization, "Better for you" and our ability to reinforce that on our menu and offer some new things, I think, has been helpful.

What initiatives have been the most effective in your mind?

I think it's the combination of really all the initiatives that we've started over a year ago, the advertising campaign, the "Handcrafted by Cracker Barrel," which coupled national, sort of, brand advertising with the radio that reinforced maybe the specific items on our menu, as well as the Daily Lunch Special work we did, the "better for you" items in our menu. I don't want to underestimate the work we've been doing in our stores in delivering on the guest experience. I think our field teams have done an extraordinary job of providing the kind of guest experience that people are looking for. Our retail team has done an excellent job in their assortments and in delivering retail service. So I think, in times like this, consumers are looking for value and they're looking for some brands they trust. And I think Cracker Barrel just continues to deliver that.

Okay. Fair enough. And then, would you talk about the company's plan to use excess cash?

Sure, Chris. And again, as noted, the company ended the quarter with $183 million. Sandy noted that over the last 6 quarters, we have doubled the cash dividend. We've repurchased $15 million worth of shares, have retired about $25 million of debt. We will be looking at the maturation of the company swaps at the beginning of May, which gives us additional flexibility to pay down debt. We continue to have a share repurchase authorization of $100 million from the Board, and we'll be closely monitoring opportunities to make share repurchases to counter dilution. And as the company announced a couple of weeks ago, we tried to do a major share repurchase, but the offer was turned down.

Does the company have a stated dividend policy or a payout ratio that you're targeting?

Not a specific payout ratio. But as we said at our Analyst and Investor Meeting last year, we anticipate a gradual, steady increase in the company's dividend over time.

Okay. And then, in terms of debt repayment, what amount of the swaps expire in May? And what would be the next move down -- what would be the pricing if you move down the grid? I'm assuming there's a grid in the credit agreement that allows you to have better pricing over LIBOR. What is that -- what's that move in May if you would've paid down the debt?

Yes. A couple of questions there. Right now, the notional value of the swaps is $525 million, and it swaps 3 months LIBOR for 557 basis points. The -- that swap matures at the beginning of May and is replaced by $400 million of forward swaps at much lower rates, meaning that the company, at that time, will have the flexibility to pay its debt down should we choose to by about $125 million. Right now, our pricing grid is 175 over LIBOR. That gets set on a fiscal year basis, so that future reductions in that margin would be in such -- it changes quarterly. So there's some potential for some modest reduction in the pricing grid. But the big reduction will be the reduction from 557 basis points, which is our current LIBOR swap, to something in the range of 200 basis points on our forward swaps.

And now, we'll take a question from Imran Ali with Wells Fargo.

This is Imran for Jeff Farmer. Just a quick question. Just following up on your lowered unit development guidance. Is that still relating to permitting or construction delays into next year, or are there other dynamics in play?

Yes. Specifically, we had 1 store that, because of delays, moved from 2013 to 2014; and then had 1 store that, because of the changes to the criteria, our more stringent site evaluation, we just basically have made a decision not to move forward with.

Got it. And so, on a separate note -- I mean, you touched on this earlier. But I think you -- just in terms of other restaurant companies, what they've encountered recently, I think some of them have pointed the increased inter-week, intra-sales volatility, which in turn, has resulted in both labor and food prep inefficiencies. Have you experienced similar top and bottom line trends?

I think I would say that the sales trends over the last few months have been volatile. Some of that I think is relating to weather and pending weather and traffic patterns have been changing with shifts in holidays and school calendars and things like that. But underneath that, there does seem to be a higher volatility than we've had in previous years.

And then, as far as labor and food prep are concerned, with the additional tools both in the labor scheduling area and the food production area, that our operating teams now have, we seem to be managing through that volatility.

Got it. Okay. That's helpful. And lastly, I was wondering, do you have any updates on, I think, the licensing agreement you had with the Smithfield Foods? Any updated views on the potential opportunity or something that you think you can speak to?

Well, we continue to be excited about the opportunities that licensing will give us to extend our brand. But as you might be aware, we are involved in some litigation concerning that initiative. So I'm not really prepared to talk about the specifics today other than to say that there's numerous defenses -- we have numerous defenses against the claims, and we intend to defend the lawsuit vigorously.

And now, we'll take a question from Amit Kapoor with Gabelli & Company. Amitabh Kapoor - Gabelli & Company, Inc.: In your prepared remarks in the press release and in some questions, you've addressed general economic conditions and consumer spending. Can you remind us in view, in light of the higher gas prices? Defensively, what have you successfully done to respond to those prices? And how have sales and consumer traffic responded in -- as a consequence of the measures you might take?

Well, I'm not exactly sure. Let me try to answer it, Amit. If I don't, I'll take another stab. So I think that the correlation that we see and we talk about the most is miles driven to our traffic. And we do see higher gas prices as less correlated to traffic. But in general, it impacts disposable income and therefore, has an impact on the consumer, which we don't think is helpful. One of the reasons we think there's so much focus right now on affordability and ensuring that we reinforce the value that you can get at a Cracker Barrel and in our experience is important. So I think what we've been doing to address the overall consumer environment is ensuring that we're very thoughtful about where we increase prices, that we're very thoughtful about promoting items that reinforce and highlight our affordability and ensuring that we deliver the kind of guest experience that if you do choose to spend your dollars in a restaurant visit that you're happy after you've come to Cracker Barrel.

And now, we'll hear from Michael Gallo with CL King. Michael W. Gallo - CL King & Associates, Inc., Research Division: Sandy, my question is on the affordability message and the overall marketing message. In the 200-or-so billboards that you refreshed with the more aggressive affordability image around the $7.69 entrées, I was wondering if you saw an increase in those -- in guest traffic at those stores relative to the other stores that had more of the traditional billboard image. And then also, if you can just give us an update on what you saw in terms of lift as you ran TV versus billboard and whether you think you have the right optimal mix between the medium or whether you think you might refine that in the coming year.

Well, our billboards on the Country Dinner Plate just went it. So we wouldn't have a read yet since we didn't put those up until January after we got through a holiday promotion. With respect to our media mix, what -- so what we have is radio and TV and billboards. Our billboard program has been in place for a number of years. We have over 1,600. We think it gives us 23 billion impressions, so that's sort of an embedded program. Our radio and TV, we do monitor after each of the flights. I'm very happy with the TV and what it delivered. We're still evaluating the radio and how comfortable we are with it, how we could improvement it and how important it was in terms of the mix, I think, we're still working on.

And at this time, I would like to go ahead and turn the conference back over to Ms. Sandy Cochran for any closing or additional remarks.

Well, thank you, all, for joining us today. I'm pleased with our second quarter results and the progress we've made on our business priorities. We look forward to building on the success of this quarter during the second half of the year, and we appreciate your interest and support.

Thank you. That does conclude today's teleconference. We do thank you, all, for your participation.