Welcome to the Cracker Barrel Old Country Store third quarter 2009 conference call. (Operator Instructions) At this time for opening remarks and introductions I would like to turn the call over to Ms. Barbara Gould. Please go ahead.

Thank you. Welcome to our third quarter 2009 conference call and web cast this morning. Our press release announcing our fiscal 2009 third quarter results and our updated outlook for fiscal 2009 was released before the market opened this morning. In our press release and during this call, statements may be made by management of their beliefs and expectation as to the company's future operating results. These are what are known as forward-looking statements which involve risks and uncertainties that in many cases are beyond the control of the company and may cause actual results to differ materially from management's expectations. We urge caution to our listeners and readers in considering forward-looking statements or information. Many of these factors that can affect results are summarized in the cautionary description of risk and uncertainties found at the end of this morning's press release and are described in detail in our annual and quarterly reports that we file with the SEC and we urge you to read this information carefully. We also remind you that we don't review or comment on earnings estimates made by other parties. In addition, any guidance that we give speaks only as of the date it is given and we do not update our own guidance or express continuing comfort with it except as required by law and in broadly disseminated disclosures such as this morning's press release and this call. The Company disclaims any obligation to update both information on trends or guidance and should we provide any updates after today, they will be made only by broad dissemination such as press releases or in our filings with the SEC. We plan to release fiscal 2009 fourth quarter earnings and comparable store restaurant and retail sales for fiscal May, June and July on Tuesday, September 15 before the market opens. On the call with me this morning our Cracker Barrel's Chairman, President and CEO, Mike Woodhouse and our Executive Vice President and CFO, Sandy Cochran. Mike will begin with the review of the business. Sandy will review the financials and outlook and then Mike will return to close. We will then respond to your questions. Mike?

Thanks Barb. Good morning everyone and thanks for joining us this morning. We have a lot of good news to share with you, most importantly that we continue to outperform the casual dining industry in traffic and at the same time have year-over-year margin improvement based on sustainable cost measures that will support the strength of the brand. This has been accomplished through a combination of factors that all relate to guest satisfaction whether it is in how quickly people are served, creating something new on the menu or getting the newest music from your favorite country artist. We continue to receive confirmation that our brand is relevant to the lifestyles people want to live. Most recently, for example, Cracker Barrel has won for the eight consecutive year the Welcome Mat Award for sit-down restaurants, an award given by the Good Sam Club, the world’s largest RV owner’s organization. The core idea behind our plans is to tightly manage the cost of the stores and of the home office while at the same time training and re-certifying execution standards at our stores with what we call the One Best Way so that we can deliver the great experience that our guests have come to expect each and every time they visit one of our stores. Speaking of country music, we were pleased to work with Dolly Parton this quarter to release her Backwoods Barbie Collector’s Edition CD exclusively at Cracker Barrel. The CD is ranked in the top 20 on Billboard Magazine’s Top Country Album’s Chart since we released it on May 23, an indication of our growing position as a music retailer in a fast changing industry. We also offered 1,350 limited edition Dolly Parton rocking chairs at $199 each and we have sold all but 13 of those…

Thanks Mike. Let’s review in more detail the financials. For the third quarter of 2009 we reported a 13% increase in diluted earnings per share of $0.52 compared with $0.46 per diluted share in the third quarter of last year. Income from continuing operations of $11.9 million was $1.5 million higher than last year reflecting higher operating income and lower interest expense this year partially offset by a higher effective tax rate. Revenue from continuing operations during the fiscal third quarter increased slightly to $568 million reflecting top line growth in restaurant revenue which was driven by store growth offset by a year-over-year decline in retail. Although we have outpaced the Knapp-Track Index by approximately 1.5% over the past two years, our restaurant performance is even stronger comparatively in the second and third quarters of this year. Despite this, our comparable store restaurant sales declined 0.9% and guest traffic was down 3.6% for the quarter. Our average check increased 2.8% including a menu price increase of approximately 3.4% which was partially offset by negative mix. The mix was affected primarily by fewer guests ordering beverages and desserts. Our focus remains mainly on maintaining the guest experience which includes ample portions of high quality food at a fair price and not reducing portions or food quality as a means to offsetting inflationary pressure. Cracker Barrel’s comparable store retail sales were down 7.4% in the third quarter of 2009. We continue to see softness in apparel and toys offset by strength in food and media. Looking at sales on a monthly basis, the quarter was impacted by the shift in Easter which moved sales from March to April. Overall, however, we believe comparable store restaurant and retail sales in the quarter benefited by approximately 1% because of a later Easter. Operating income…

Thanks Sandy. Just to summarize, our focus is on getting the word out about Cracker Barrel because we think we have a lot to talk about and our new billboards and TV advertising are doing that. When our guests come to the stores our focus is on providing new and interesting and attractive offerings. I think our new menu offerings and some that we have planned in the future and our summer retail items will do that and we want to provide an overall great experience. Our training and re-training and certifying with One Best Way is aimed at doing that. One of the things that we focused on is to think about our guest experience as an investment and not a cost center. I think that guides us in terms of how we see our guests and I think our guests are rewarding us with the traffic we are seeing in today’s difficult times. With that I would like to open the call for questions.

(Operator Instructions) The first question comes from the line of Brad Ludington - KeyBanc Capital Markets.

I wanted to ask just kind of a house cleaning question. On the interest rate swap liability is your nominal amount going down here in May, is there anything that will flow through on the interest line related to an adjustment for that?

No.

When you look at the labor line, it is good to see in the fourth quarter I think you said you are expecting less pressure from the health plan but can you comment on what you think the minimum wage increase could do going beyond that? I guess beyond July and August?

We’ll be talking about next year in our next conference call and providing guidance. I think we would prefer to keep our remarks right now to what is going on in the third and fourth quarters. As we said, wage inflation is running about 1% which we think is pretty good. We have some focus on hiring wages so that in this difficult environment we are, if you will, taking advantage of that situation by making certain that we are not over paying on the front end as we hire people which then helps manage our overall labor costs as we go forward.

Given that the development is done for the year should we expect the lower absolute dollars on the G&A line to continue in the fourth quarter?

We are guiding to I think flat G&A for the year.

Yes, flat for the year but directionally we should see some improvement in the fourth quarter.

The next question comes from Robert Derrington – Morgan, Keegan & Co. Robert Derrington – Morgan, Keegan & Co. : A couple of again laundry list questions. I am not sure whether Sandy or Mike is the one to ask, if you could help me clarify on the sale/leaseback you talk about net proceeds of $53-54 million. I thought last conference call we were talking about net proceeds of $55-60 million.

Since I was on the last conference call let me start this. That is true. I think it is also fair to say that the commercial real estate market has been heading down for some period of time and we are, I think and I believe we have a very good couple of good deals here. They are not done yet but very close. Given the market environment we are very, very pleased with the outcome. Robert Derrington – Morgan, Keegan & Co. : What I was curious about in that number was the variance versus the prior expectation due to the store level value per store or was it the value for the distribution center?

Well the high end of the range last time had a higher number of stores. We hadn’t settled on a number of stores. I think the focus has to be on the low end of the range which was the number that related to the actual number of stores we expected. Robert Derrington – Morgan, Keegan & Co. : How should we think about the rent impact on the P&L from that transaction both the small base and restaurants?

Very, very limited in the fourth quarter because we are not expecting to close the deal until some time in July. We will talk about that with our guidance for next year in September. Robert Derrington – Morgan, Keegan & Co. : When you look at the media spend I know that you have been pretty cautious on spending on media because you wanted to make sure you get a good return on your dollars. Do you feel like you are getting that on the dollars you are spending for both TV and radio you have been using recently?

Yes. We are spending against about ¼ of the system. Some of the markets we are advertising in are markets that we also advertised with our TV test last year so it would be unrealistic to expect a big lift. I think in today’s market protecting the lift we gained last year is pretty good. As I look around me and look at the restaurant industry and look at the effect of advertising on it and advertising of various competitors I think that what we are achieving is pretty good. We are also getting in the newly advertised TV markets a good lift. We are going to continue to…we have the second round to go against Camp Fire and then we are going to look at how we did and build our plans for next year. I expect at this point to continue to be advertising on radio and TV next fiscal year.

The next question comes from Stephen Anderson - MKM Partners LLC.

Camp Fire Grill have you engineered that to make that part of the Best of the Barrel initiative being as you had announced a similar menu about 10 years ago with the Camp Fire Grill?

I’m sorry, the Best of the Barrel menu we replaced with a new core menu across the whole system in March. Camp Fire Grill is built on, as you point out, a very successful product I think 9-10 years ago. We re-ran it again since then. We have tweaked it a bit this time, added the beef and are getting very good guest feedback.

It may be a little early to ask this question but do you have any insight into fiscal 2010 food costs and have you locked in any costs on that yet?

That is something we will talk about in September.

The next question comes from Brian Elliott – Raymond James. Brian Elliott – Raymond James: A couple of follow-up questions. First, on the Easter shift just curious why you think there was as much as a point benefit to the later Easter although both years within the quarter?

I think the later Easter always benefits retail. Retailers in general benefit from a later Easter with a longer selling season. So on the retail side I think that is what is going on. On the restaurant side a later Easter allows a very clear distinction between spring break and Easter so we get two travel opportunities within the quarter which helps build restaurant traffic. Brian Elliott – Raymond James: On the taxes, what are we seeing pretty meaningful reduction in tax guidance. What is driving that?

It is largely due to some additional roll off’s of FIN 48 reserves which we are anticipating in the fourth quarter. Brian Elliott – Raymond James: Will that clean them up or might that be a benefit as we move into next year as well possibly?

We’ll talk about our guidance for next year in September. Brian Elliott – Raymond James: Will we still have some further reserves that we may or may not be able to realize?

Well it is a dynamic process because we are rolling in and rolling out all the time. We are really up and running on FIN 48. Brian Elliott – Raymond James: I probably need a refresher on that.

I have a book with about 600 pages you can have. Brian Elliott – Raymond James: My staff was all on vacation this week so we will get it next week. Could you help a little bit just aggregate the impact of the porch sale which was a factor in the cost of goods improvement? How much do you think was from that timing shift?

Well two things happened with moving our porch sale as we did. One is we had lower sales in the third quarter than we would have. We have higher or better margins because we don’t have the heavy mark down’s. So you have really got to look at both of those. I don’t think with the net of those is totally meaningful or material I guess. Brian Elliott – Raymond James: All things being equal we could expect higher sales and lower margins relative to what we would have been had the porch sale obviously stayed in the third quarter right? So it makes the improvement in COGS higher than it otherwise would have been here in Q3?

Correct. Both of those effects, as you correctly point out, are in our guidance. Brian Elliott – Raymond James: How many lease commitments have been made for 2010 and more generally how do you think about development in the new fiscal year?

Well we have announced we are going to open seven. It is going to be front end loaded. Leases we have three leases. Brian Elliott – Raymond James: Commitments, purchases and leases I guess is the question.

Oh, commitments? We are committed on six I think.

The next question comes from Analyst for Joe Buckley – Bank of America/Merrill Lynch. Analyst for Joe Buckley – Bank of America/Merrill Lynch: I was wondering if you could just talk generally about discounting across casual dining and if that is having any impact on you. How do you see yourselves positioned and maybe room there to be more promotional?

Let me try the short version and then maybe we will expand to the longer version. We are very cognizant of the fact there is a lot of discounting going on out there. A lot of special prices. A lot of BOGO’s. A lot of everything. I would just first of all repeat what I said in my prepared remarks that we have been running 1.5% ahead of Knapp-Track traffic for the last two years and in the most recent two quarters we have improved on that run rate. Those two quarters are when the discounting really started happening. I don’t want to sound complacent because we are actually anything but complacent around here but I think that the focus on the value as it relates to the guest experience, the quality of the product and the fact we are not taking anything off the plate and we are not disappointing in any way is actually working in our favor in this environment. I don’t want to comment on specific competitors, but as I observe the industry as well as discounting there is a lot of product offering changes going on in the form of portion sizes and quality specs and so on and so forth. That is what the industry is doing. What we are doing is offering what we have always offered at the same price and I would just stand behind the traffic numbers and say so far the consumer is voting in our favor. Analyst for Joe Buckley – Bank of America/Merrill Lynch: Are you seeing any kind of sequential noise by day part for the comp? I guess specifically for breakfast and then maybe weekend versus week day?

I think the one noticeable trend is I guess is probably true across the industry is weekday dinner. That is probably the most discretionary of the offerings. I think in a sense that even though there is no compulsion to go out and eat on the weekends, I think people like to have that as a treat and want that as part of their lifestyle. Between the week, the weekday dinners, it is a little softer than the other day parts.

The next question comes from Brad Ludington - KeyBanc Capital Markets.

I wanted to follow-up on the comment about how AAA is forecasting travel will be up year-over-year. Is there expectation that with travel up people will be probably watching their dollars a little bit more, I would assume there is expectations that your retail will still be hurt. Do you think they will still be saving their dollars on stopping in for breakfast, lunch or dinner while they are on the road as well? Or is that something you have looked at?

I think when we look back at last year’s fourth quarter, the summer time period, our traffic relative to that time frame did soften. We were still running at or slightly above for a period of a couple of months there. I think that is almost certainly in part a result of $4 gas last year. I think we are going to see more miles driven and when people drive they are going to stop and eat. I think we benefit from that.

With the retail same store sales guidance it seems to imply you expect fourth quarter same store sales to sequentially deteriorate a little bit at least from the third quarter. Is there potential for the porch sale shift to turn that around and maybe show up side to that guidance?

No, the porch sale is in the guidance.

The next question comes from Chris O'Cull - SunTrust Robinson Humphrey.

Given the commodity inflation has moderated do you expect to take less pricing in coming quarters?

They are partially related obviously because what we have said in this commodity crunch for the last couple of years is we at least need to cover our dollar increases in food costs. I think pricing, let me say it this way, I think to the extent commodities are reasoning it puts less pressure on having to take price. I think pricing in this market is a very sensitive thing. As we have always said we are taking pricing. We do test them. We are not seeing any measurable impact on traffic from the price increases we have taken but we are very sensitive to the price that consumers are willing to pay for a meal. That is where as we see continued discounting I think that sort of sticker effect will get on people’s minds. Again, there is absolutely no sign of negative reaction to any pricing we have taken. We are going to keep our options open. When we talk about providing value price is part of that equation and we will price where we think appropriate to sustain the relative benefit we are getting in traffic.

I know you have done a really good job of using these exception reports to manage or improve your costs. When you look forward where do you think some of the best opportunities to reduce costs or control costs in some of these outlier stores? Does it still lay within the labor line or do you find more of it in controllable expenses going forward or is there some sort of food waste gap that you have got? Where do you see most of the opportunity going forward?

An outlier store can be an outlier by virtue of any one of the cost lines that you mentioned. We are not looking at a single line. We are looking as far as outliers on the various lines and giving them tools to correct that. So the outlying group is a dynamic group, stores correct and then others fall into the outlier groups. So if you think about it in terms of we have standards obviously in all of those areas of getting the whole system to get tighter against that regression line against standards. That is really what we are trying to do. So there is a continuing opportunity that runs across everything.

This new labor system that you are talking about testing soon, is that going to be the tool that these guys need to maybe manage labor better or have they had some ad hoc reporting systems today that have helped them reduce that labor cost?

We have a system today that we have had for some time. Today when we are managing labor we are managing it using that system. The new system will give us a more precise tool to manage labor by hour of day and by day of week.

So we should expect maybe some further savings in the labor line after using this new tool?

Well, yes. Those were the terms of the tool. My hesitation is simply in terms of don’t expect it next week because we haven’t announced the roll out yet.

The next question comes from Larry Miller - RBC Capital Markets.

As you look back historically as guest satisfaction scores begin to improve or actually decline how long until you typically see the change in sales either way?

I think that is a tough thing to call. The only way I can measure sales in this environment is on a relative basis. We specifically are focused on traffic because sales becomes a difficult number when we have discounting and so on and so forth. Again, our traffic is doing better absolutely and better relatively than it has and I would expect continuing guest satisfaction to sustain that direction.

Let me ask another way that you might have more data. How much improved are the guest satisfaction scores relative to maybe 3, 6 or 12 months ago?

I’ll say it as to all of our operators who are listening. They are great but they are not enough.

The next question comes from Robert Derrington – Morgan, Keegan & Co. Robert Derrington – Morgan, Keegan & Co. : Could you give us a little bit of perspective on the product development you have at this point in time? It seems like this fiscal year we have seen a little more creative offerings than we have seen in awhile coming out of the test kitchen ultimately into the restaurants. Is there more in the pipeline? If there are, like the Camp Fire meals would those be a limited time offer or should we expect that some of these things obviously beyond skillets get to the menu and stay on the menu?

We have a pipeline, as somewhere in all this I think I alluded to the fall promotion. It just so happens that our 40th anniversary is in September so when we get to our fall promotion we have constructed that around a theme that we are calling Back and Forth which is about looking back to our tradition and heritage and looking forward to where we are trying to go. We are doing that with food so we are bringing in some tried and true items but we have some new items that are taking us further down the road and sort of expanding our appeal, expanding our relevance and expanding in the areas of fresh and good for you. So it is going to be the products are great. We have signed off on all of them. That is really, I think, going to be interesting to watch our guests respond to this kind of offering. I am very, very encouraged with the progress we made in the last 8-9 months in product development. We have changed the process. We are managing to put things through faster and we have this new kitchen which is really helping as well. The important thing is we have a very clear strategy around our menu and around our products which is designed, as I said, to move the brand forward as well as reinforce its strength. Yes, we will see some products moving onto the menu potentially as we broaden the offerings because there are going to be some potentially new categories that we would want to see on the menu after the promotion. Robert Derrington – Morgan, Keegan & Co. : You have my curiosity peaked. When you look at the skillet obviously those had a really favorable cost profile. Do the Camp Fire meals also have good cost of sales view as well?

One of the expectations we have with our promotions is that we will see an improvement from a mix point of view, or mix driven improvement in margin. Camp Fire does that for us.

The next question comes from Stephen Anderson - MKM Partners LLC.

One quick question on the retail side. Have you noticed any kind of change in terms of the average ticket on retail?

There really hasn’t been any significant change. The challenge on retail is in terms of units per guest.

The next question comes from Paul [Porst] – [Danzell Capital Partners]. Paul [Porst] – [Danzell Capital Partners]: On the 15 units and the sale/leaseback could you remind us again where they are located and why you chose these 15 and maybe AUV’s relative to the rest of the store count or the stores? How should we look at these relative to the rest of the stores?

It was a fairly diverse geographically portfolio of our stores that were relatively new and we will give you some more details after we close but I don’t think we will be disclosing the details of the volumes for those specific stores. Paul [Porst] – [Danzell Capital Partners]: You will disclose the cap rate at that time as well?

At this time we are not planning to.

We have no further questions. At this time I would like to turn the call back over to Michael Woodhouse.

Thanks everyone for joining us today. I hope you have a sense that in these difficult times we have a clear sense of where we are going. Everything is focused around the guest experience and improving the guest experience through the things we do, the things we offer and by staying true to the brand. We are not going to use short-term tactics. We think we are doing very well with our current direction. We are working with our strong cash flow to maintain our dividend, reduce our debt and we think we are headed for a really positive future. Thanks for joining us. We will be back in September.

This concludes today’s conference. You may now disconnect.