What changed in this filing

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Item 1. Financial Statements

2021-05-25 compared with 2021-02-23 · 153 added, 78 removed, 397 unchanged (37% of the section changed)

30 unchanged sentences

Common stock – 400,000,000 shares of $ 0.01 par value authorized;

23,724,412 shares issued and outstanding at January 29, 2021, and 23,697,396 shares issued and outstanding at July 31, 2020

23,726,372 shares issued and outstanding at April 30, 2021 , and 23,697,396 shares issued and outstanding at July 31, 2020

Additional paid-in capital

6 unchanged sentences

CRACKER BARREL OLD COUNTRY STORE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(In thousands, except share data)

Quarter Ended

Six Months Ended

Nine Months Ended

Total revenue

4 unchanged sentences

Gain on sale and leaseback transaction

Operating income

Operating income (loss)

Interest expense, net

Income before income taxes

Income (loss) before income taxes

Provision for income taxes (income tax benefit)

Loss from unconsolidated subsidiary

Net income per share:

Net income (loss)

Net income (loss) per share:

Weighted average shares:

1 unchanged sentence

CRACKER BARREL OLD COUNTRY STORE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited and in thousands)

Quarter Ended

Six Months Ended

Nine Months Ended

Net income (loss)

Other comprehensive income (loss) before income tax expense (benefit):

2 unchanged sentences

Other comprehensive income (loss), net of tax

Comprehensive income

Comprehensive income (loss)

See Notes to unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(Unaudited and in thousands, except share data)

For the Nine Month Period Ended April 30, 2021

Comprehensive

14 unchanged sentences

Share-based compensation

Issuance of share-based compensation awards

Issuance of share-based compensation awards, net of shares withheld for employee taxes

Balances at January 29, 2021

Comprehensive Income (Loss):

Other comprehensive income, net of tax

Total comprehensive income

Cash dividends previously declared in prior quarters

Share-based compensation

Issuance of share-based compensation awards, net of shares withheld for employee taxes

Balances at April 30, 2021

See Notes to unaudited Condensed Consolidated Financial Statements.

CRACKER BARREL OLD COUNTRY STORE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited and in thousands, except share data)

For the Nine Month Period Ended May 1, 2020

Comprehensive

Shareholders’

Income (Loss)

Balances at August 2, 2019

16 unchanged sentences

Balances at January 31, 2020

Comprehensive Loss:

Other comprehensive loss, net of tax

Total comprehensive loss

Cash dividends declared - $ 1.30 per share

Share-based compensation

Issuance of share-based compensation awards

Purchases and retirement of common stock

Balances at May 1, 2020

See Notes to unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(Unaudited and in thousands)

Six Months Ended

Nine Months Ended

Cash flows from operating activities:

Net income (loss)

Net loss from unconsolidated subsidiary

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

8 unchanged sentences

Other current liabilities

Long-term operating lease liabilities

Deferred income taxes

13 unchanged sentences

Purchases and retirement of common stock

Deferred financing costs

Dividends on common stock

Net cash used in financing activities

Net increase in cash and cash equivalents

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents, beginning of period

23 unchanged sentences

COVID-19 Impact

The COVID-19 pandemic continues to negatively impact the Company’s sales and traffic due to changes in consumer behavior as federal, state and local governmental authorities have imposed unprecedented restrictions on travel, group gatherings and non-essential activities, such as “social distancing” guidance, shelter-in-place orders and limitations on or full prohibitions of dine-in services.

Dining room service continues to be impacted by the COVID-19 pandemic, and, in the second quarter of 2021, the Company experienced an increased number of dining room closures and capacity restrictions as compared to the first quarter of 2021.

As of February 16, 2021, eight of the Company’s restaurants were not open for dine-in services to some extent .

While recovery is progressing and all dining rooms were open to some extent during the third fiscal quarter, the COVID-19 pandemic continues to negatively impact the Company’s sales and traffic as a result of both changes in consumer behavior and federal, state and local governmental authorities’ continuation of various restrictions on travel, group gatherings and limitations on dine-in services.

Dining room service was operational to varying degrees, yet in most locations continued to be impacted by capacity restrictions, social distancing guidelines and decreased consumer demand for in-person dining.

In response to the COVID-19 pandemic, the Company has instituted operational protocols to comply with applicable regulatory requirements to protect the health and safety of employees and guests, and the Company has implemented various strategies to support the recovery of its business and navigate through the uncertain environment.

20 unchanged sentences

Maple Street Biscuit Company

Effective October 10, 2019, the Company acquired 100 % ownership of Maple Street Biscuit Company (“MSBC”), a breakfast and lunch fast casual concept, for a purchase price of $ 36,000 , of which $ 32,000 was paid to the sellers in cash with the remaining $ 4,000 being held as security for the satisfaction of indemnification obligations of the sellers, if any.

Effective October 10, 2019, the Company acquired 100 % ownership of Maple Street Biscuit Company (“MSBC”), a breakfast and lunch fast casual concept, for a purchase price of $ 36,000 , of which $ 32,000 was paid to the sellers in cash at closing with the remaining $ 4,000 being held as security for the satisfaction of indemnification obligations of the sellers, if any.

The first installment of $ 1,500 , to be held as security, was paid to the principal seller in the first quarter of 2021, and the remaining amount, if any, will be paid in a final installment to the sellers on the two-year anniversary of closing.

The Company believes that this acquisition supports its strategic initiative to extend the brand by becoming a market leader in the breakfast and lunch-focused fast casual dining segment of the restaurant industry and by providing a platform for growth.

At January 29, 2021, MSBC had 36 company-owned and seven franchised fast casual locations across eight states.

At April 30, 2021, MSBC had 37 company-owned and seven franchised fast casual locations across eight states.

The goodwill of $ 4,690 arising from the acquisition consisted largely of the Company’s determination of the value of MSBC’s future free cash flows less the value of the identifiable tangible and intangible assets and liabilities.

3 unchanged sentences

Fair Value Measurements

The Company’s assets and liabilities measured at fair value on a recurring basis at January 29, 2021 were as follows:

The Company’s assets and liabilities measured at fair value on a recurring basis at April 30, 2021 were as follows:

Cash equivalents*

18 unchanged sentences

The fair values of the Company’s accounts receivable and accounts payable approximate their carrying amounts because of their short duration.

The fair value of the Company’s variable rate debt, based on quoted market prices, which are considered Level 1 inputs, approximates its carrying amount at January 29, 2021 and July 31, 2020.

The fair value of the Company’s variable rate debt, based on quoted market prices, which are considered Level 1 inputs, approximates its carrying amount at April 30, 2021 and July 31, 2020.

Inventories were comprised of the following at:

January 29, 2021

April 30, 2021

July 31, 2020

2 unchanged sentences

In the fourth quarter of 2020, the Company drew an additional $ 39,395 under this option for a one-year period.

The Company’s outstanding borrowings under the 2019 Revolving Credit Facility were $ 874,395 and $ 949,395 , respectively, at January 29, 2021 and July 31, 2020 .

At January 29, 2021 , the Company had $ 31,626 of standby letters of credit, which reduce the Company’s borrowing availability under the 2019 Revolving Credit Facility (see Note 12 for more information on the Company’s standby letters of credit).

At January 29, 2021, the Company had $ 83,374 in borrowing availability under the 2019 Revolving Credit Facility.

I n the third quarter of 2021 , the Company entered into an amendment to the 2019 Revolving Credit Facility which reduced the commitment amount from $ 950,000 to $ 800,000 .

The Company’s outstanding borrowings under the 2019 Revolving Credit Facility were $ 614,395 and $ 949,395 , respectively, at April 30, 2021 and July 31, 2020 .

At April 30, 2021 , the Company had $ 31,626 of standby letters of credit, which reduce the Company’s borrowing availability under the 2019 Revolving Credit Facility (see Note 13 for more information on the Company’s standby letters of credit).

At April 30, 2021, the Company had $ 193,374 in borrowing availability under the 2019 Revolving Credit Facility.

In accordance with the 2019 Revolving Credit Facility, outstanding borrowings bear interest, at the Company’s election, either at LIBOR or prime plus a percentage point spread based on certain specified financial ratios under the 2019 Revolving Credit Facility.

At January 29, 2021, $ 400,000 of the Company’s outstanding borrowings were swapped at a weighted average interest rate of 5.86 % (see Note 6 for information on the Company’s interest rate swaps).

At January 29, 2021, the weighted average interest rate on the remaining $ 474,395 of the Company’s outstanding borrowings was 3.77 %.

At April 30, 2021, $ 400,000 of the Company’s outstanding borrowings were swapped at a weighted average interest rate of 5.86 % (see Note 6 for information on the Company’s interest rate swaps).

At April 30, 2021, the weighted average interest rate on the remaining $ 214,395 of the Company’s outstanding borrowings was 3.69 %.

The 2019 Revolving Credit Facility contains customary financial covenants, which include maintenance of a maximum consolidated total leverage ratio and a minimum consolidated interest coverage ratio.

As a result of the uncertainty regarding the impact of the COVID-19 pandemic on the Company’s financial position and results of operations, the Company has obtained a waiver for the financial covenants for the fourth quarter of 2020 and the first and second quarters of 2021 (“Covenant Relief Period”).

During this Covenant Relief Period, the Company is required to maintain certain liquidity measures (defined as the availability under the 2019 Revolving Credit Facility plus unrestricted cash and cash equivalents) of at least $ 140,000 .

Additionally, during this Covenant Relief Period, the Company’s cash payments with respect to capital expenditures may not exceed $ 60,000 in the aggregate.

As of January 29, 2021 , the Company’s cash payments with respect to capital expenditures during the Covenant Relief Period were $ 37,030 .

As a result of the uncertainty regarding the impact of the COVID-19 pandemic on the Company’s financial position and results of operations, the Company has obtained waivers for the financial covenants for the fourth quarter of 2020 and the first and second quarters of 2021 (“Covenant Relief Period”) as well as the third and fourth quarters of 2021 (“Extended Covenant Relief Period”).

During these relief periods, the Company is required to maintain certain liquidity measures (defined as the availability under the 2019 Revolving Credit Facility plus unrestricted cash and cash equivalents) of at least $ 140,000 .

Additionally, during the Extended Covenant Relief Period, the Company’s cash payments with respect to capital expenditures may not exceed $ 70,000 in the aggregate.

As of April 30, 2021 , the Company’s cash payments with respect to capital expenditures during the Extended Covenant Relief Period were $ 12,704 .

The 2019 Revolving Credit Facility also imposes restrictions on the amount of dividends the Company is permitted to pay and the amount of shares the Company is permitted to repurchase.

2 unchanged sentences

notwithstanding (1) and (2), so long as immediately after giving effect to the payment of any such dividends, Cash Availability is at least $ 100,000 , the Company may declare and pay cash dividends on shares of its common stock in an aggregate amount not to exceed in any fiscal year the product of the aggregate amount of dividends declared in the fourth quarter of the immediately preceding fiscal year multiplied by four .

In the third quarter of 2021 , the Company entered into an amendment to the 2019 Revolving Credit Facility which reduced the commitment amount of $ 950,000 to $ 800,000 and extended the waiver for the financial covenants for the third and fourth quarters of 2021 (“Extended Covenant Relief Period”).

During this Extended Covenant Relief Period, the Company is required to maintain certain liquidity measures (defined as the availability under the 2019 Revolving Credit Facility plus unrestricted cash and cash equivalents) of at least $ 140,000 .

During this Extended Covenant Relief Period, the Company’s cash payments with respect to capital expenditures are prohibited from exceeding $ 70,000 in the aggregate.

Additionally, during the Extended Covenant Relief Period, the Company is subject to additional restrictions on its ability to pay dividends.

The Company is prohibited from declaring or paying cash dividends during the third quarter of 2021.

The Company was prohibited from declaring or paying cash dividends during the third quarter of 2021.

The Company may declare but not pay cash dividends during the fourth quarter of 2021 .

5 unchanged sentences

The interest rates on the portion of the Company’s outstanding debt covered by its interest rate swaps are fixed at the rates in the table below plus the Company’s credit spread.

The Company’s credit spread at January 29, 2021 was 3.50 %.

The Company’s credit spread at April 30, 2021 was 3.50 %.

All of the Company’s interest rate swaps are accounted for as cash flow hedges.

7 unchanged sentences

If, on a net basis, the Company owes the counterparty, the Company regards its credit exposure to the counterparty as being zero.

A summary of the Company’s interest rate swaps at January 29, 2021 is as follows:

A summary of the Company’s interest rate swaps at April 30, 2021 is as follows:

Effective Date

11 unchanged sentences

August 7, 2019

The estimated fair value of the Company’s derivative instruments as of January 29, 2021 and July 31, 2020 were as follows:

The estimated fair value of the Company’s derivative instruments as of April 30, 2021 and July 31, 2020 were as follows:

Balance Sheet Location

January 29, 2021

April 30, 2021

July 31, 2020

4 unchanged sentences

Total liabilities**

** These interest rate swap liabilities are recorded gross at both January 29, 2021 and July 31, 2020 since there were no offsetting assets under the Company’s master netting agreements.

** These interest rate swap liabilities are recorded gross at both April 30, 2021 and July 31, 2020 since there were no offsetting assets under the Company’s master netting agreements.

The estimated fair value of the Company’s interest rate swap liabilities incorporates the Company’s non-performance risk (see Note 3).

The adjustment related to the Company’s non-performance risk at January 29, 2021 and July 31, 2020 resulted in reductions of $ 593 and $ 978 , respectively, in the fair value of the interest rate swap liabilities.

The adjustment related to the Company’s non-performance risk at April 30, 2021 and July 31, 2020 resulted in reductions of $ 431 and $ 978 , respectively, in the fair value of the interest rate swap liabilities.

The offset to the interest rate swap liabilities are recorded in accumulated other comprehensive loss (“AOCL”), net of the deferred tax asset, and will be reclassified into earnings over the term of the underlying debt.

As of January 29, 2021, the estimated pre-tax portion of AOCL that is expected to be reclassified into earnings over the next twelve months is $ 6,223 .

As of April 30, 2021, the estimated pre-tax portion of AOCL that is expected to be reclassified into earnings over the next twelve months is $ 6,230 .

Cash flows related to the interest rate swaps are included in the interest expense line in the Condensed Consolidated Statements of Income and in operating activities in the Condensed Consolidated Statements of Cash Flows.

The following table summarizes the pre-tax effects of the Company’s derivative instruments on AOCL for the six months ended January 29, 2021 and the year ended July 31, 2020:

The following table summarizes the pre-tax effects of the Company’s derivative instruments on AOCL for the nine months ended April 30, 2021 and the year ended July 31, 2020:

Amount of Income (Loss) Recognized

in AOCL on Derivatives

Six Months Ended

January 29, 2021

Nine Months Ended

April 30, 2021

July 31, 2020

1 unchanged sentence

Interest rate swaps

The following table summarizes the pre-tax effects of the Company’s derivative instruments on income for the quarters and six months ended January 29, 2021 and January 31, 2020:

The following table summarizes the pre-tax effects of the Company’s derivative instruments on income for the quarters and nine months ended April 30, 2021 and May 1, 2020:

Location of Loss

5 unchanged sentences

Quarter Ended

Six Months Ended

Nine Months Ended

Cash flow hedges:

1 unchanged sentence

Interest expense

The following table summarizes the amounts reclassified out of AOCL related to the Company’s interest rate swaps for the quarter and six months ended January 29, 2021:

The following table summarizes the amounts reclassified out of AOCL related to the Company’s interest rate swaps for the quarter and nine months ended April 30, 2021:

Amount Reclassified from AOCL

1 unchanged sentence

Quarter Ended

Six Months Ended

Nine Months Ended

Condensed Consolidated

4 unchanged sentences

Provision for income taxes

No gains or losses representing amounts excluded from the assessment of effectiveness were recognized in earnings for the six months ended January 29, 2021.

The following table summarizes the changes in AOCL, net of tax, related to the Company’s interest rate swaps for the six months ended January 29, 2021:

No gains or losses representing amounts excluded from the assessment of effectiveness were recognized in earnings for the nine months ended April 30, 2021.

The following table summarizes the changes in AOCL, net of tax, related to the Company’s interest rate swaps for the nine months ended April 30, 2021:

Changes in AOCL

3 unchanged sentences

Other comprehensive income, net of tax

AOCL balance at January 29, 2021

AOCL balance at April 30, 2021

Historically, the net income of the Company has been lower in the first and third quarters and higher in the second and fourth quarters.

17 unchanged sentences

Quarter Ended

Six Months Ended

Nine Months Ended

Total revenue

15 unchanged sentences

The Company recognizes gift card breakage by applying its estimate of the rate of gift card breakage over the period of estimated redemption.

For the quarter and six months ended January 29, 2021, gift card breakage was $ 1,754 and $ 2,694 .

For the quarter and six months ended January 31, 2020, gift card breakage was $ 2,422 and $ 3,660 .

Deferred revenue related to the Company’s gift cards was $ 112,981 and $ 94,754 , respectively, at January 29, 2021 and July 31, 2020.

Revenue recognized in the Condensed Consolidated Statements of Income for the six months ended January 29, 2021 and January 31, 2020, respectively, for the redemption of gift cards which were included in the deferred revenue balance at the beginning of the fiscal year was $ 26,944 and $ 29,751 .

For the quarter and nine months ended April 30, 2021, respectively, gift card breakage was $ 1,247 and $ 3,940 .

For the quarter and nine months ended May 1, 2020, respectively, gift card breakage was $ 1,574 and $ 5,234 .

Deferred revenue related to the Company’s gift cards was $ 98,510 and $ 94,754 , respectively, at April 30, 2021 and July 31, 2020.

Revenue recognized in the Condensed Consolidated Statements of Income for the nine months ended April 30, 2021 and May 1, 2020, respectively, for the redemption of gift cards which were included in the deferred revenue balance at the beginning of the fiscal year was $ 35,157 and $ 33,937 .

The Company has ground leases for its leased stores and office space leases that are recorded as operating leases under various non-cancellable operating leases.

18 unchanged sentences

Assumptions used in determining the Company’s incremental borrowing rate include the Company’s implied credit rating and an estimate of secured borrowing rates based on comparable market data.

The following table summarizes the components of lease cost for operating leases for the quarter ended and six months ended January 29, 2021 as compared to the same periods in the prior year:

The following table summarizes the components of lease cost for operating leases for the quarter ended and nine months ended April 30, 2021 as compared to the same periods in the prior year:

Quarter Ended

Six Months Ended

January 29, 2021

January 31, 2020

January 29, 2021

January 31, 2020

Nine Months Ended

April 30, 2021

Operating lease cost

2 unchanged sentences

Total lease cost

The following table summarizes supplemental cash flow information and non-cash activity related to the Company’s operating leases for the quarter ended and six months ended January 29, 2021 as compared to the same periods in the prior year:

The following table summarizes supplemental cash flow information and non-cash activity related to the Company’s operating leases for the quarter ended and nine months ended April 30, 2021 as compared to the same periods in the prior year:

Quarter Ended

Six Months Ended

Nine Months Ended

Operating cash flow information:

6 unchanged sentences

Lease modifications removing right-of-use assets

The following table summarizes the weighted-average remaining lease term and the weighted-average discount rate for operating leases as of January 29, 2021 and January 31, 2020:

January 29, 2021

January 31, 2020

The following table summarizes the weighted-average remaining lease term and the weighted-average discount rate for operating leases as of April 30, 2021 and May 1, 2020:

April 30 , 2021

Weighted-average remaining lease term

Weighted-average discount rate

The following table summarizes the maturities of undiscounted cash flows reconciled to the total lease liability as of January 29, 2021:

The following table summarizes the maturities of undiscounted cash flows reconciled to the total lease liability as of April 30, 2021:

Remainder of 2021

23 unchanged sentences

The terms and conditions of the Original Lease and New Master Lease are the same and no material changes were made to the terms thereof.

Net Income Per Share and Weighted Average Shares

Basic consolidated net income per share is computed by dividing consolidated net income available to common shareholders by the weighted average number of shares of common stock outstanding for the reporting period.

Shareholder Rights Plan

On April 9, 2021 , the Company’s Board of Directors declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of common stock, par value $ 0.01 per share, and adopted a shareholder rights plan, as set forth in the Rights Agreement dated as of April 9, 2021 (the “Rights Agreement”), by and between the Company and American Stock Transfer & Trust Company, LLC, as rights agent.

The dividend was payable on April 19, 2021 to the shareholders of record on April 19, 2021 .

The Rights Agreement is intended to replace the Company’s previous shareholder rights plan adopted in 2018 (the “2018 Plan”), and it became effective immediately following the expiration of the 2018 Plan at the close of business on April 9, 2021 .

The 2018 Plan and the preferred share purchase rights issued thereunder expired by their own terms and shareholders of the Company were not entitled to any payment as a result of the expiration of the 2018 Plan.

The Rights Agreement will terminate unless approved by shareholders at the Company’s 2021 annual meeting.

The Rights initially trade with, and are inseparable from, the Company’s common stock.

The Rights are evidenced only by certificates or book entries that represent shares of common stock.

New Rights will accompany any new shares of common stock the Company issues after April 9, 2021 until the Distribution Date described below.

Exercise Price

Each Right will allow its holder to purchase from the Company one one-hundredth of a share of Series A Junior Participating Preferred Stock (a “Preferred Share”) for $ 600.00 (the “Exercise Price”), once the Rights become exercisable.

This portion of a Preferred Share will give the shareholder approximately the same dividend and liquidation rights as would one share of common stock.

Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights.

Exercisability

The Rights will not be exercisable until 10 days after the public announcement that a person or group has become an “Acquiring Person” by obtaining beneficial ownership of 20 % or more of the Company’s outstanding common stock.

Certain synthetic interests in securities created by derivative positions – whether or not such interests are considered to be ownership of the underlying common stock or are reportable for purposes of Regulation 13D of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) – are treated as beneficial ownership of the number of shares of the Company’s common stock equivalent to the economic exposure created by the derivative.

The date when the Rights become exercisable is the “Distribution Date.” Until that date, the common stock certificates will also evidence the Rights, and any transfer of shares of common stock will constitute a transfer of Rights.

After that date, the Rights will separate from the common stock and will be evidenced by book-entry credits or by Rights certificates that the Company will mail to all eligible holders of common stock.

Any Rights held by an Acquiring Person will be void and may not be exercised.

At April 30, 2021, none of the Rights were exercisable.

Consequences of a Person or Group Becoming an Acquiring Person

If a person or group becomes an Acquiring Person, all holders of Rights except the Acquiring Person may, for $ 600.00 , purchase shares of the Company’s common stock with a market value of $ 1,200.00 , based on the market price of the common stock prior to such acquisition.

If the Company is later acquired in a merger or similar transaction after the Distribution Date, all holders of Rights except the Acquiring Person may, for $ 600.00 , purchase shares of the acquiring corporation with a market value of $ 1,200.00 , based on the market price of the acquiring corporation’s stock prior to such transaction.

Notional Shares .

Shares held by affiliates and associates of an Acquiring Person, and Notional Common Shares (as defined in the Rights Agreement) held by counterparties to a Derivatives Contract (as defined in the Rights Agreement) with an Acquiring Person, will be deemed to be beneficially owned by the Acquiring Person.

Preferred Share Provisions

Each one one-hundredth of a Preferred Share, if issued:

will not be redeemable;

will entitle holders to quarterly dividend payments of $ 0.01 per share, or an amount equal to the dividend paid on one share of common stock, whichever is greater;

will entitle holders upon liquidation either to receive $ 1.00 per share or an amount equal to the payment made on one share of common stock, whichever is greater;

will have the same voting power as one share of common stock;

if shares of the Company’s common stock are exchanged via merger, consolidation, or a similar transaction, will entitle holders to a per share payment equal to the payment made on one share of common stock.

The value of one one-hundredth of a Preferred Share will generally approximate the value of one share of common stock.

The Board of Directors may redeem the Rights for $ 0.01 per Right at any time before any person or group becomes an Acquiring Person.

If the Board of Directors redeems any Rights, it must redeem all of the Rights.

Once the Rights are redeemed, the only right of the holders of Rights will be to receive the redemption price of $ 0.01 per Right.

The redemption price will be adjusted if the Company has a stock split or stock dividends of its common stock.

Qualifying Offer Provision

The Rights would also not interfere with any all-cash, fully financed tender offer, exchange offer of common stock of the offeror meeting certain terms and conditions further described below, or a combination thereof, in each case for all shares of common stock that remain open for a minimum of 60 business days and subject to a minimum condition of a majority of the outstanding shares and provide for a 20 -business day “subsequent offering period” after consummation (such offers are referred to as “qualifying offers”).

If an offer includes shares of common stock of the offeror, the Rights would not interfere with such offer if such consideration consists solely of freely-tradeable common stock of a publicly-owned United States corporation;

such common stock is listed or admitted to trading on the New York Stock Exchange, Nasdaq Global Select Market or Nasdaq Global Market;

the offeror has already received stockholder approval to issue such common stock prior to the commencement of such offer or no such approval is or will be required;

the offeror has no other class of voting stock outstanding;

no person (including such person’s affiliated and associated persons) beneficially owns twenty percent ( 20 %) or more of the shares of common stock of the offeror then outstanding at the time of commencement of the offer or at any time during the term of the offer;

and the offeror meets the registrant eligibility requirements for use of a registration statement on Form S-3 for registering securities under the Securities Act of 1933, as amended, including the filing of all reports required to be filed pursuant to the Exchange Act in a timely manner during the twelve (12) calendar months prior to the date of commencement, and throughout the term, of such offer.

In the event the Company receives a qualifying offer and the Board of Directors has not redeemed the Rights prior to the consummation of such offer, the consummation of the qualifying offer will not cause the offeror or its affiliates to become an Acquiring Person, and the Rights will immediately expire upon consummation of the qualifying offer.

After a person or group becomes an Acquiring Person, but before an Acquiring Person owns 50 % or more of the Company’s outstanding common stock, the Board of Directors may extinguish the Rights by exchanging one share of common stock or an equivalent security for each Right, other than Rights held by the Acquiring Person.

Anti-Dilution Provisions

The Board of Directors may adjust the purchase price of the Preferred Shares, the number of Preferred Shares issuable and the number of outstanding Rights to prevent dilution that may occur from a stock dividend, a stock split, a reclassification of the Preferred Shares or common stock.

No adjustments to the Exercise Price of less than 1 % will be made.

The terms of the Rights Agreement may be amended by the Board of Directors without the consent of the holders of the Rights.

After a person or group becomes an Acquiring Person, the Board of Directors may not amend the agreement in a way that adversely affects holders of the Rights.

If the Rights Agreement is approved by the shareholders at the 2021 annual meeting, the Rights will expire on April 9, 2024 .

If shareholders do not approve the Rights Agreement, it will expire immediately following certification of the vote at the 2021 annual meeting.

Net Income (Loss) Per Share and Weighted Average Shares

B asic consolidated net income per share is computed by dividing consolidated net income available to common shareholders by the weighted average number of shares of common stock outstanding for the reporting period.

Diluted consolidated net income per share reflects the potential dilution that could occur if securities, options or other contracts to issue shares of common stock were exercised or converted into shares of common stock and is based upon the weighted average number of shares of common stock and common equivalent shares outstanding during the reporting period.

Common equivalent shares related to nonvested stock awards and units issued by the Company are calculated using the treasury stock method.

The outstanding nonvested stock awards and units issued by the Company represent the only dilutive effects on diluted consolidated net income per share.

The outstanding nonvested stock awards and units issued by the Company represent the only dilutive effects on diluted consolidated net income per shar e.

The following table reconciles the components of diluted earnings per share computations:

Quarter Ended

Six Months Ended

Net income per share numerator

Net income per share denominator:

Nine Months Ended

Net income (loss) per share numerator

Net income (loss) per share denominator:

Weighted average shares

6 unchanged sentences

Related to its workers’ compensation insurance coverage, the Company is contingently liable pursuant to standby letters of credit as credit guarantees to certain insurers.

As of January 29, 2021, the Company had $ 31,626 of standby letters of credit related to securing reserved claims under workers’ compensation insurance and the July 29, 2020 and August 4, 2020 sale and leaseback transactions .

As of April 30, 2021 , the Company had $ 31,626 of standby letters of credit related to securing reserved claims under workers’ compensation insurance and the July 29, 2020 and August 4, 2020 sale and leaseback transactions .

All standby letters of credit are renewable annually and reduce the Company’s borrowing availability under its 2019 Revolving Credit Facility (see Note 5).

At January 29, 2021, the Company has recorded a provision of $ 344 in the Condensed Consolidated Balance Sheet for amounts to be paid as of result of non-performance by the primary obligor for lease payments associated with two properties occupied by a third party.

At April 30, 2021, the Company has recorded a provision of $ 344 in the Condensed Consolidated Balance Sheet for amounts to be paid as of result of non-performance by the primary obligor for lease payments associated with two properties occupied by a third party.

The Company enters into certain indemnification agreements in favor of third parties in the ordinary course of business.

The Company believes that the probability of incurring an actual liability under such indemnification agreements is sufficiently remote that no such liability has been recorded in the Condensed Consolidated Balance Sheet as of January 29, 2021.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements