Cracker Barrel Old Country Store, Inc. · NASDAQ:CBRL
Cracker Barrel Old Country Store — Proxy Contest (October 2013)
10 slides from Cracker Barrel Old Country Store's proxy contest presentation, Oct 28, 2013
Slide 1: Why $20 per share Special Dividend is a prudent proposal
Why $20 per share Special Dividend is a prudent proposal 28 OCTOBER 2013
Slide 2: The Proposal: $20 per share Special Dividend
The Proposal: $20 per share Special Dividend * Proposal by largest investor in the Company + Analyst review on Special Dividend favorable + Jefferies is highly confident of arranging for debt financing + Leverage ratio in line with peer group despite higher than average real estate holdings * Pro fo
Slide 3: $20 per share Special Dividend is prudent
$20 per share Special Dividend is prudent Fact: The Company has delevered by approx. $500M over last 5 years from $776M to $278M. We are proposing to relever to $754M in Net Debt. Company proposal to repurchase Biglari Capital shares would have resulted in relevering to $711M in Net Debt in February
Slide 4: Jefferies' Highly Confident Letter
Jefferies’ Highly Confident Letter * Biglari Capital has obtained a highly confident letter from Jefferies LLC regarding its ability to provide financing for the Special Dividend « Jefferies has consummated 34 restaurant debt financings since 2010 for an aggregate value of over $7.8 billion.
Slide 5: Purchasing vs $20 Special Dividend
Purchasing Biglari Capital shares vs $20 Special Dividend ~ Cracker Barrel offer to repurchase Biglari Capital shares - Biglari Capital Special Equivalent to $13 pershare Special Dividend __ Dividend Proposal Total Outlay (approximate) $305M $476M Total Pro Forma Debt $830M $876M Less Cash* su19M s2
Slide 6: Cracker Barrel's risk profile strengthened since offer to purchase
racker Barrel's risk profile strengthened since, offer to purchase Biglari Capital shares " Balance Sheet strengthened = Net Debt down by $125M since Board offer " Management expects higher earnings = EBITDA guidance up by $22M since Board offer * Financing environment remains favorable
Slide 7: Pro forma leverage ratio in line with peers despite higher real estate holdings
Pro forma leverage ratio in line with peers despite higher real estate holdings Net Debt !/LTM EBITDA? Real Estate Ownership (%)° Bloomin’ Brands 34 20% We believe Cheesecake Factory 0.6 0% relatively large Denny's 25 2% estat DineEquity 41 6% Teal Gctale: Darden 2.6 49% holdings Brinker Intl 19 22%
Slide 8: Analyst views $20 Special Dividend as reasonable
Analyst views $20 Special Dividend as reasonable “Given CBRL’s lack of leverage, we think there is significant room to return excess capital to shareholders.” “If the BH proposal is adopted, it would bring the leverage ratio to about 3x, which is reasonable in our view.” “We think a special dividend
Slide 9: We believe there is no valid argument against significant Special Dividend
We believe there is no valid argument against significant Special Dividend Board Claim Fact “substantial increase in , leverage andin the Company’srisk profile" Pro Forma leverage ratiois the same as would have resulted from the Board's offer to purchase Biglari Capital shares. Since Board's offer,
Slide 10: Support the Special Dividend proposal
Support the Special Dividend proposal Why you should support the Special Dividend: We believe the Special Dividend engenders an optimal capital structure = We believe the Special Dividend would maximize value for all shareholders = Pro forma leverage ratio is prudent and in line with peers The decis
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