Good day, and welcome to the Cracker Barrel Fiscal 2013 Fourth Quarter Earnings Conference Call. Today's conference is being recorded and will be available for replay starting today from 2:00 p.m. Eastern through October 2 at 11:59 p.m. You may access that playback by dialing (719) 457-0820 and entering the passcode 6122389. At this time, for opening remarks and introductions, I would like to turn the call over to Josh Greear. Please go ahead, sir.

Thanks, Stef. Good morning, and welcome to Cracker Barrel's fourth quarter fiscal 2013 conference call and webcast. This morning, we issued a press release announcing our fourth quarter and fiscal year end results and outlook for the 2014 fiscal year. In this press release and on the call, we will refer to non-GAAP financial measures for the current 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 Opportunity 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 severance and 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 Investors 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 known as forward-looking statements, which involve risks and uncertainties and, in many cases, are beyond managers' 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 results are summarized in the cautionary description of risks and uncertainties found at the…

Thanks, Josh. Good morning, everyone. Tomorrow is the 44th anniversary of the founding of Cracker Barrel and we're very pleased to celebrate this milestone by reporting positive news. As you can see from today's press release, our fourth quarter and fiscal year were successes on many fronts. We exceeded our previously stated expectations for the quarter and concluded another strong year for Cracker Barrel Old Country Store and our shareholders. Over the course of the last year, we remained focused and executed remarkably well on the 6 business priorities that were laid out at the beginning of the year. There were many accomplishments during fiscal 2013 and I'd like to share a few of our highlights. We were voted #1 in the 2013 Consumer Picks survey Family Dining category, conducted by Nation's Restaurant News, and ranked first in 9 of the 10 categories. We won first place for the Food and Beverage category in Technomic's inaugural Chain Restaurants Consumers' Choice Award. In every quarter of the year, we achieved positive traffic, grew restaurant and retail sales, and beat Knapp-Track casual dining index. We increased our employee satisfaction scores and retention rates among our store managers and hourly employees. With excellent support from our information technology team, we rolled out several new systems to support operations and reduce costs, we expanded our music program to appeal to younger audiences with our sponsorship of Brad Paisley's Beat This Summer Tour. We improved our operating margin -- profit and margins, despite continued food commodity pricing pressure. We increased adjusted earnings per share by 14.5% for fiscal 2013 compared to fiscal 2012. During 2013, we generated $200 million in cash from operations, which allowed us to pay down $125 million in debt, repurchase shares, increase our dividend to shareholders by 50% and continue investing…

Good morning, everyone, and thank you, Sandy. I would like to begin by discussing our financial performance for the fourth quarter of fiscal 2013 and the full fiscal year and then our outlook for the 2014 fiscal year. As I discuss our results, I will refer to adjusted financial information for the 2013 fiscal year, as well as for the 2012 fourth quarter and fiscal year. For the 2013 fiscal year, we made adjustments to GAAP operating and net income in the first and second quarters to exclude the impact of proxy contest and severance expenses and their related tax effects. We also made an adjustment to the income tax provision to exclude the prior year benefit of the reinstatement of the Work Opportunities Tax Credit. For the 2012 fiscal year, we made adjustments to GAAP operating and net income to exclude the impact of proxy contest, severance and restructuring effect -- expenses and their related tax effects. We also made adjustments to revenue, operating and net income to exclude the impact of an additional 53rd week. The last page of this morning's press release contains a reconciliation from our GAAP financial results to this non-GAAP adjusted information. In this morning's release, we reported fourth quarter net income of $34.3 million or $1.43 per diluted share, representing a 19.2% increase over prior year adjusted earnings per diluted share of $1.20. For the full fiscal year, we reported adjusted net income of $119.1 million or $4.97 per diluted share, representing a 14.5% increase over the prior year's adjusted EPS of $4.34. Our revenue in the quarter was $674.1 million, an increase of 3.9%, compared to adjusted revenue of $649 million in the prior year quarter. Our restaurant revenues increased 4.3% to $549.7 million and our retail revenue increased 2% to $124.4…

[Operator Instructions] And our first question will be from Joe Buckley, Bank of America Merrill Lynch.

Larry, these questions are probably for you. They're on the cash and CapEx numbers. If you're opening 7 to 8 new units, I think you said the new unit CapEx is $35 million. Why so high? Or is that some spending in anticipation of openings beyond fiscal '14?

Yes, Joe. A couple of things. One is since the anticipated openings in 2014 are expected to be relatively back-end loaded in the course of 2014 so that more of that capital expenditure related to those stores is going to occur in the 2014 year, as compared to what we have seen in some of the prior years where the CapEx is spread among the opening year and the prior year. Additionally, we are working to identify stores for potential 2015 openings and we are anticipating some CapEx related to those stores in the 2014 fiscal year.

Okay. And then are there any technology equipment CapEx programs included in that $90 million to $100 million?

Well, we said that we anticipate CapEx of $90 million to $100 million, including about $35 million in new stores, $45 million in maintenance CapEx, which anticipates another $10 million to $20 million that will be spent in a combination of technology enhancements and sales-driving initiatives and margin-driving initiatives.

Okay. And then just one quick follow-up. The cash balance at year end, is that the seasonal high point for cash?

It's what typically happens, Joe. If you look at the pattern of higher years, typically, our cash balance from the fourth quarter to the first quarter will go down as a result of the seasonal build of the holiday inventories. It tends to then to go back in the second quarter, as we have had the cash benefit of those holiday sales.

And our next question comes from Jeff Omohundro with Davenport & Co. Jeffrey F. Omohundro - Davenport & Company, LLC, Research Division: Questions on the Wholesome Fixin's and the rollout. I wonder if you could talk a little bit about the test market results. Just any details in day-part preference on items, your expectations on mix and check impact? And then I have a follow-up on that.

Okay. Well I -- first, let me reiterate what -- it's a new menu category featuring over 10 options, breakfast, lunch, and dinner, where you can find items with a specific calorie claim. We did test it. We had about 60 stores with it over a number of weeks. We're not going to disclose the results of that, specifically, other than to say, Jeff, that we used the results of that test to fine-tune the assortment, improve the operational training program and so on, and to fine-tune our advertising strategy. I'll ask Chris to speak to what we were looking to accomplish through that in terms of moving people's thought about the brand. And we are comfortable that the program will do that over the long term. So, Chris?

Sure. Thanks, Sandy. Over 2 years ago, we identified better-for-you as a need that we wanted to focus on. And since then, we've been introducing a variety of items, like our fresh salad category, and additional sides, which include more fresh ingredients. The third phase of that focus has been Wholesome Fixin's. And as Sandy said, Wholesome Fixin's is a new menu category featuring over 10 options of breakfast, lunch and dinner, where the guest can find options below a specific calorie claim. We view this as a long-term move to help broaden consideration for visits. And as a reminder, close to 50% of the people in the markets we operate use us once a year more often. So when we spoke to those guests, they told us that they're restricting some of their visits because they perceive their foods as rich, fried and heavy. So we worked to build a statement to address this by providing that guest with more options. As Sandy said, we launched the program on the 26th of August. We began media support, which included national cable and spot radio, last week. And as Sandy also indicated, we've been very pleased with how the operators have brought it to market and guest reaction to it, so far. Jeffrey F. Omohundro - Davenport & Company, LLC, Research Division: And I guess as a follow-up to that, you mentioned the step up in media support around this new program. Could you quantify that, the year-over-year change in spend, particularly in fiscal Q1?

Sure. Jeff, first, I'll speak to what is reflected in the company's guidance for an annual spend. Over the past 2 years, we've spent in the range of 2.2% to 2.3% of sales on advertising. We anticipate a similar number in 2014, yet the timing of that spend may be a little different than in the prior year. We anticipate that because of the media spend in support of the Wholesome Fixin's' rollout that our advertising spend in the first quarter, as compared to the prior year's first quarter, will be about $3 million higher. So that's roughly $0.08 to $0.09 a diluted share. Jeffrey F. Omohundro - Davenport & Company, LLC, Research Division: And are you thinking about this as investment spending in fiscal Q1 rather than necessarily spending that you would expect an immediate traffic response to? Because looking at the fiscal Q1 guidance, I know you're having the managers' meeting this year, you didn't have it last year, you had it the year before, and I think that's $0.05 to $0.06. Just trying to deconstruct some of these drags on Q1. That's my last question.

Sure. Let me talk about our financial guidance for Q1 and then I will turn it over to Chris to talk some about the anticipated impact of that media spend in the first quarter. Four things are largely driving the guidance in the first quarter. One is that because of the higher commodity cost, we have calculated that the difference between 2% commodity cost increases, which is our anticipated range for the year, and the above 4% in the first quarter, is a drag on first quarter earnings on a pretax basis of about $3 million. The general managers' conference, we anticipate a comparable spend to the one that we did in the 2012 fiscal year first quarter, which is in the range of $2 million. And then the additional training labor that is associated with the Wholesome Fixin's' rollout, as compared to what our normal training labor has been in the past and the first quarter, would be about $1 million. So if you add up the difference in cost of goods, the general manager conference, the advertising and labor in support of the Wholesome Fixin's' rollout, that adds up to about $9 million, pretax, which is in the range of $0.25. And now I'll turn it over to Chris to talk about that advertising in the first quarter.

Thank you, Larry. So Wholesome Fixin's is certainly new for Cracker Barrel and different in terms of what the offering is, relative to what the guests can expect today. So we recognize we needed to design something to introduce it into the marketplace and to really let people know it's there. So our thinking is that this will broaden consideration, over time, and that's our expectation for this.

Moving on now to Michael Gallo with CL King Financial. Michael W. Gallo - CL King & Associates, Inc., Research Division: Just wanted to drill down a little bit on the advertising commentary. Larry, I think you said $3 million higher in the first quarter but relatively flattish spend for the year, so do you expect the advertising spending, year-on-year, to be down in quarters 2 through 4? Is there a shift in how you're going to spend that, billboard versus national? How should we think about kind of Q2 through Q4? Obviously, you have more difficult comparison. If I heard your commentary correctly, it sounds like there's going to be less media weight behind those quarters.

Yes. Michael, we anticipate, as I said in response to an earlier question, that our spend for the year will be in the range of 2.2% to 2.3% of revenues. We are anticipating and have built in to that number the same anticipated national television and radio spend in the holiday season in the second quarter, and the travel season in the fourth quarter. We are anticipating that we'll be maintaining our 1,600 billboards. And so the $3 million of media spend to support the Wholesome Fixin's' rollout, as -- we basically wouldn't be able to reallocate that from some other places. Second is 2.2% to 2.3% of a higher sales number is more dollars. In terms of the specific implication on the second, third and fourth quarters, since the company has not offered specific guidance for the second, third and fourth quarter, I'd rather not be specific on that.

And next we'll move to Jay Donnelly with Wells Fargo.

This is Jay Donnelly on for Jeff Farmer. I was just curious, kind of, as you've changed your menu and promotional strategy over the last 24 months or so, have you seen evidence that your customer mix has changed? I guess, I mean local versus travel customers or a slightly younger demographic?

Well, we are seeing that though our advertising program is delivering what we wanted, so let me backup, we looked at that 3 ways: awareness, attitude and change in behavior. And we do believe we're seeing improvements in unaided awareness in how the guests perceived the brand and increased frequency across all the user groups. So we were looking to build frequency. And for some of the programs, we're looking to build it at lunch, the CDPs, with some particular, trying to drive it at the dinner day-part and we believe we were able to do that.

Okay. And then just a second question. Kind of given the current competitive environment, if do you have any thoughts and if you could share them, what your thoughts are on menu pricing power?

Well, our menu pricing strategy has not changed. So over the last I don't know how many years a decade I think, our strategy has been to raise prices, modest single digits. We've done that over a variety of commodity environments. We're very thoughtful about the way we do it. We test into it after we implement a price increase, we have hold back stores so that we can evaluate to a degree to which we're able to pull the price through and how it may have shifted behavior. Larry told you what our guidance was for the year, which we think is consistent with that philosophy. The only thing I'd add is that this year, as last year and really the year before, we're being very, very thoughtful and careful about the way -- what we're doing and how, given what we believe to be is a continued, very challenged consumer.

And our next question comes from Amit Kapoor with Gabelli & Co. Amitabh Kapoor - Gabelli & Company, Inc.: Can you guys refresh us on how you think about capital allocations, specifically free cash flow, using the use of -- for dividend versus share buybacks? And then I have an unrelated follow-up question, please.

Sure. Amit, as both Sandy mentioned in her comments this morning and as I mentioned in my comments this morning, we remain committed to a balanced approach to capital allocation and we are focused on increasing total shareholder returns, which, as we noted, increased by about 65% in the last fiscal year, which includes evaluating all of our options on an ongoing basis. In the 2013 fiscal year, we paid out approximately $45 million in dividends. And on the basis of the announced dividend increase, we anticipate that we'll be paying approximately $72 million in dividends in the 2014 fiscal year. And as I mentioned in our guidance, we are anticipating capital expenditures in the $90 million to $100 million range. Amitabh Kapoor - Gabelli & Company, Inc.: Okay. Just switching gears. On the Affordable Care Act, is there any additional color that you might have from being closer to implementation? And any impact that it might have on the long-term perspective that you take on the business? I'd appreciate any color there.

Amit, I'm not sure there's much color we can add. We do intend to have our enrollment, as we always do, during the month of November. We don't anticipate a material increase in our costs and we expect to comply with the law.

Moving on next to Stephen Anderson with Miller Tabak. Stephen Anderson - Miller Tabak + Co., LLC, Research Division: Just taking a look at -- going back to the Analyst Day you had back in April of 2012 in which you look for about 2% to 3% new unit growth pace. In the last couple of years, that pace has really generally been in that 1% range. Given the refreshes you've done, really in the last 2 years, to simulate same-restaurant sales growth, do you think there is a time which you could get back to that 2% to 3% range that you had mentioned back at Analyst Day?

Stephen, one of our long-term strategies is to expand the footprint of the existing Cracker Barrel Old Country Store brand. We also said in that Analyst and Investor Day that we were using new analytical tools to guide us to invest in those locations that will be accretive to long-term shareholder value. In the 2013 fiscal year, we opened 8 stores. We anticipate that we'll open 7 or 8 stores in the 2014 fiscal year. As to what the potential pipeline is beyond that, at this point, it's very difficult to say.

And next we'll go to Bob Derrington with Wunderlich Securities.

Larry, can you give us a little bit of color on -- when you talked about your interest expense guidance, the net interest expense guidance of $16 million to $18 million, does that anticipate any material change in the company's long-term debt outstanding between now and the end of the year?

We currently have $400 million of swaps. And so that we therefore don't anticipate a reduction in our debt balance below its current level of $400 million.

That's no reduction, what about on the other side? Is there any anticipation that, that level will go up materially?

On the basis of what we have currently in our guidance, no, sir.

And moving on next to Joe Buckley with Bank of America Merrill Lynch.

Just a couple follow-ups. Could you talk about the new store performance over the last year or so?

Joe, we have now have just started opening the first new stores that we have fully applied our new site selection methodology to. And I can say we've been pleased with the results of those stores.

Okay. And is that very recent? Is that more like the fourth quarter openings or the second half openings?

I'd prefer to not get specific. It's approximately half the stores that we opened in 2013.

Okay. And then secondly, the Wholesome Fixin's sounds like a bigger initiative than perhaps I understood when I read the press release. Can you talk a little bit about like the $1 million of training, but what's kind of different in the preparation? And then can you just talk about -- a little bit about the emphasis on it? Were some of the menu mix changes around some of the other better-for-you items growing and kind of pushing you in this direction?

So what the training was, Joe -- this is really the first sort of substantive change to our core menu in 10 years, I would guess. The difference between this and our LTOs is that those, obviously, we do 5 a year and -- but this was broader in terms of the number of items and designed to go on the menu. And we wanted to be sure our servers and all of our field employees were familiar with the programs so that they could help guests navigate through the offering. So our investment in training was every single cook and grill cook and server and manager had to be familiarized with it and trained on it and able to answer questions. In terms of the items, the preparation is not dissimilar. There's a number of proteins that we do on the grill. We may put, for example, on the chicken, it's a buttermilk kind of crust on it that's been baked. Breakfast, it's a number of egg items, but the sides are fruit and cheese grids and maybe turkey bacon, versus our more traditional sides of biscuits and traditional bacon and so on. And so there is a lot of similarity in terms of the preparation. But we wanted to be sure we got it right. In addition, as Chris mentioned, during the summer, we actually rolled out some healthier side items, which were complementary and part of Wholesome Fixin's, but many of our guests are ordering them with just their standard offerings. For example, we added steamed broccoli and a steamed mix vegetable, which is available now for the first time at Cracker Barrel. So there was some training associated and learnings associated with that.

And that does conclude today's question-and-answer session. At this time, I will turn the conference back over to Sandy Cochran for closing remarks.

Thank you, all, for joining us today. As we head into the first quarter of the fiscal year, I'm pleased with the progress that we made in our strategic priorities in 2013 and with the momentum that's carrying us into fiscal 2014. I look forward to building on this success and executing our new priorities. We remain confident that we have the right strategy and the right leadership in place to move the brand forward and drive shareholder value. We appreciate your interest and support.

That does conclude today's program. Thank you, all, for joining.