For Investors Only: Cracker Barrel, KOG

Updates

Later, 3:37 pm: SeekingAlpha on the KOG-LR deal:

The transaction appears to be reasonably valued, although by no means a "steal" taking into account the quality of acreage being acquired. I attribute approximately $250-$325 million M&A value to existing production and wells-in-progress included in the transaction (based on the very limited operating data disclosed and using certain decline curve assumptions). That implies approximately $335-$410 million paid for the undeveloped acreage and translates to valuation of ~$10,000-$12,500 per undeveloped acre, assuming that 80% of the acreage being acquired is undeveloped.

Original Post

Cracker Barrel beats by $0.08, beats on revs; raises FY13 EPS, in-line, reaffirms FY13 revs guidance; raises dividend 50%: Reports Q3 (Apr) earnings of $1.02 per share, $0.08 better than the Capital IQ Consensus Estimate of $0.94; revenues rose 5.2% year/year to $640.4 mln vs the $630.56 mln consensus.

KOG buys Liberty Resources. Not mentioned in today's presentation at the RBC Capital Markets Conference (a pdf file).

Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or what you think you read here.

First, KOG, from Yahoo!Finance which often lags.

• operating cash flow (annual): $320 million.
• total cash: $6 million
• total debt: $1.2 billion; getting close to $2 billion?
• market cap: $2.3 billion

The KOG-Liberty Resources deal:

• $660 million cash / 42,000 net acres = $15,000/acre
• 6,000 boepd production x $50 = $110 million. $660 million - $110 million = $550 million
• $550 million / 42,000 net acres = $13,000/acre
• plus a drilling rig

I've blogged numerous times: one of the problems KOG has -- a Bakken only company. The story continues. 

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Now, back to Cracker Barrel.

Cracker Barrel is a relatively high-cost choice for interstate travelers. McDonald's, et al, are notably less expensive for the family of four.  Beating expectations, three things come to mind: a) Cracker Barrel customers relatively immune to menu prices; b) Cracker Barrel customers traveling; c) gasoline prices not impacting traveling and/or disposable income while on the road.