Biglari-affiliated Lion Fund II LP submitted the board-seat nominations earlier this month for Biglari and Philip Cooley, vice chairman of Biglari Holdings. San Antonio, Texas-based Biglari and affiliated companies own more than 19 percent of Cracker Barrel’s shares.
Cracker Barrel shareholders rejected proxy board bids in 2011 and 2012 by Biglari, whose company owns the Steak ‘n Shake and Western Sizzlin brands. Biglari has criticized the family-dining company’s performance and management.
Lebanon, Tenn.-based Cracker Barrel also said Monday it intended to reduce the number of directors from 10 to nine with the impending retirement of Martha M. Mitchell, who has served on the board since 1993.
Directors will be selected later this year at the company’s 2013 annual shareholder meeting, the date of which will be released with the company’s proxy in a few weeks, a spokesperson said.
In rejecting Biglari’s third proposed board nomination, Cracker Barrel said the board’s nominating committee considered past shareholder votes, as well as “uncertainty over Mr. Biglari's ultimate agenda and continued business and legal concerns over conflicts of interest.”
Cracker Barrel chairman James W. Bradford said in a statement: “Despite being rejected by a significant margin of the vote of our shareholders in each of the last two years, Mr. Biglari has again chosen to re-fight the battle to elect himself and Mr. Cooley.”
Bradford added that Cracker Barrel has “a strong, independent and highly capable board.”
In June Cracker Barrel reported net income for its May 3-ended third quarter was $24.6 million, or $1.02 per share, an increase from $19.0 million, or 81 cents per share, in the same period last year.
Revenue for the quarter was $640.4 million, $522.6 million of which came from restaurant operations, increasing from $608.5 million, $500 million of which came from the restaurant operations, in the prior-year quarter. Cracker Barrel units contain retail stores that generate revenue in addition to foodservice sales.
Cracker Barrel has 624 company-owned locations in 42 states.
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