Bob Evans Farms, Inc. (NASDAQ:BOBE) today announced its financial
results for the fiscal 2017 first quarter ended Friday, July 29,
2016. On a GAAP basis, the Company reported net income of
$9.2 million, or $0.46 per diluted share, compared with net income
of $4.3 million, or $0.19 per diluted share, in the corresponding
period last year. On a non-GAAP basis, net income was $9.6
million, or $0.48 per diluted share, compared with net income of
$11.7 million, or $0.51 per diluted share, in the corresponding
period last year.
First-quarter fiscal 2017 commentary President
and Chief Executive Officer Saed Mohseni said, “BEF Foods began
fiscal 2017 with continued strong volume growth during the first
quarter. Additionally, BEF Foods achieved market share gains
in both its key side-dish and sausage product categories. We have
completed the expansion of our Lima, Ohio, refrigerated side-dish
plant and are now gearing up to meet peak holiday production which
begins during the back half of the second quarter. The Lima
plant expansion provides the added production capacity that is
critical to our ongoing efforts to gain additional points of
distribution, particularly in West Coast growth markets.
“While Bob Evans Restaurant sales remained challenged during the
first quarter, we are encouraged by the moderating sales trend that
began in July and continued into the second quarter, with
quarter-to-date same-store sales of -2.0 percent through August 29.
We believe our efforts to enhance the guest experience through
improved hospitality and food quality are gaining the attention of
guests and improving our sales trend. Positive guest comments
increased 24 percent during the first quarter, while negative
comments declined substantially; a trend we believe will contribute
to future sales improvements. Our focus during the second
quarter will be the system-wide launch of our exciting new
value-oriented, guest-friendly menu along with relentless attention
to improving the guest experience.”
First-quarter fiscal 2017 Bob Evans
Restaurants segment summaryBob Evans Restaurants’ net
sales were $220.4 million, a decline of $18.3 million, or 7.7
percent, compared to net sales of $238.7 million in the
corresponding period last year. Same-store sales declined 4.3
percent with the balance of the net sales decline due to net
restaurant closures during the past year. Five restaurants
were closed and no new restaurants opened during the quarter.
At the end of the quarter, the Company operated 522
restaurants.
Same-Store Sales (SSS) Restaurants |
May |
June |
July |
1Q FY ’17 |
521 |
|
-2.8 |
% |
|
-6.1 |
% |
|
-4.1 |
% |
|
-4.3 |
% |
Bob Evans Restaurants’ GAAP operating income was $11.6 million,
compared to GAAP operating income of $9.8 million in the
corresponding period last year. Bob Evans Restaurants’
non-GAAP operating income was $12.1 million, compared to $20.3
million in the corresponding period last year, a decline of $8.2
million. The decline in non-GAAP operating income was due
primarily to lower sales and incremental investment in labor hours
to support efforts to improve guest hospitality along with
increased hourly wage rates as a result of minimum wage increases,
partially offset by lower commodity costs, reduced discounting, and
lower healthcare costs. Additionally, the April 2016
sale-leaseback transaction of 143 restaurant properties reduced
operating income by approximately $0.4 million due to a $2.7
million increase in rent, partially offset by a $2.3 decline in
depreciation compared to the prior year period.
First-quarter fiscal 2017 BEF Foods
segment summaryBEF Foods’ net sales were $85.9 million, an
increase of $2.9 million, or 3.5 percent, compared to $83.0 million
in the corresponding period last year. Pounds sold increased
6.4 percent while average net selling price per pound declined 2.7
percent compared to the corresponding period last year. The
decline in average net selling price reflects an increased sales
mix of lower-priced, although higher-margin, side-dish products
relative to sausage, as well as reduced net sausage pricing through
increased trade spending. From a net sales perspective, a
12.5 percent increase in side-dish pounds sold and a 4.9 percent
increase in sausage pounds sold were partially offset by a $2.2
million increase in trade spending (reduces net sales), a 9.9
percent decline in food service pounds sold, and a 7.6 decline in
frozen product pounds sold compared to the corresponding period
last year.
BEF Foods’ GAAP and non-GAAP operating income was $15.4 million,
compared to $15.9 million in the corresponding period last year, a
decline of $0.5 million. The decline was due primarily to
$2.1 million of increased sow cost, $2.2 million of increased trade
spending, and a planned $1.2 million increase in advertising;
largely offset by increased volume, favorable sales mix, and lower
SG&A costs. Additionally, the October 2015 sale-leaseback
transaction of two industrial properties reduced operating income
by approximately $0.4 million due to a $1.0 million increase in
rent, partially offset by a $0.6 decline in depreciation compared
to the prior year period.
First-quarter fiscal 2017 Corporate and
Other summary Corporate and Other GAAP and non-GAAP
operating costs were $13.3 million, compared to $17.4 million in
the corresponding period last year, a decline of $4.1
million. The decline was due primarily to lower legal and
professional fees and lower compensation costs; partially offset by
increased depreciation and amortization resulting from
technology-related capital expenditures.
First-quarter fiscal 2017
taxes – The Company’s provision for
income taxes is based on a current estimate of the annual effective
income tax rate adjusted to reflect the impact of discrete items.
The Company recognized GAAP tax expense of 22.4 percent for the
quarter, compared to 24.3 percent in the corresponding period last
year. The decrease in the tax rate was driven primarily by the
impact of yearly variances in the forecasted annual rate related to
wage credits, the domestic productions activities deduction, and
officers’ life insurance. For non-GAAP items, the tax rate
was 22.6 percent, reflecting the Company’s annual non-GAAP
estimated tax rate adjusted for the impact of first quarter
discrete items.
First-quarter fiscal 2017 balance sheet
highlights – The Company’s cash balance and outstanding
debt at the end of the quarter were $4.4 million and $364.6
million, respectively, compared to $6.1 million and $491.1 million
at the end of the corresponding period last year. The Company
was in compliance with its debt covenants at the end of the
quarter. The decrease in borrowings was primarily the result
of the use of proceeds from recent real estate monetization
transactions and operating cash flow to reduce debt, partially
offset by share repurchases, capital expenditures, and dividend
payments. On a pro-forma basis, assuming the 2016
sale-leaseback transactions occurred at the beginning of fiscal
2016, the Company’s quarter-end leverage ratio was 3.24.
Fiscal year 2017 outlookChief Administrative
and Chief Financial Officer Mark Hood said, "We have adjusted our
fiscal 2017 outlook to reflect underlying changes in certain of our
assumptions and are increasing our GAAP diluted EPS guidance range
to $2.00 to $2.17, from $1.95 to $2.12. Likewise, our
non-GAAP diluted EPS guidance range has been raised to $2.05 to
$2.20, from $2.00 to $2.15 previously.
“At Bob Evans Restaurants, we continue to expect full-year
negative low-single digit to flat same-store sales and a neutral to
slightly positive commodity cost environment. Additionally,
we will continue to invest in improving the guest experience to
drive sales. As for BEF Foods, we have lowered our sow cost
forecast to reflect current expectations for the remainder of the
fiscal year. At the corporate level, we have lowered our
interest expense guidance to reflect a lower than anticipated
interest rate environment this year and we will maintain our focus
on lowering corporate and other costs required to support our
businesses.”
Guidance Metric |
FY ‘17 |
Consolidated net sales |
$1.28 to $1.33 billion |
Bob Evans Restaurants same-store
sales |
negative low-single digit to
flat |
Bob Evans Restaurants commodity
pricing |
approximately flat |
BEF Foods net sales |
$400 to $420 million |
BEF Foods sow cost (per
hundredweight) |
$50-$53 |
Capital expenditures |
$75 to $80 million |
Depreciation and amortization |
$71 to $75 million |
Net interest expense |
$10 to $12 million |
Tax rate |
23.5% to 24.5% |
Diluted weighted-average share
count |
approximately 20 million
shares |
Remaining share repurchase
authorization |
$78.5 million |
GAAP diluted earnings per share |
$2.00 to $2.17 |
Non-GAAP diluted earnings per
share |
$2.05 to $2.20 |
This outlook is subject to a number of factors beyond the
Company’s control, including the risk factors discussed in the
Company’s fiscal 2016 Annual Report on Form 10‑K and its other
subsequent filings with the Securities and Exchange
Commission.
Investor Conference CallThe Company will host a
conference call to discuss its first-quarter fiscal 2017 results at
8:30 a.m. (ET) on Wednesday, August 31, 2016. The dial-in
number for the conference call is (855) 468-0551, access code
60710233. A replay will be available at (800) 585-8367,
access code 60710233.
A simultaneous webcast will be available at
http://investors.bobevans.com/events.cfm. The archived webcast will
also be available on the Web site.
(1)Non-GAAP Financial
MeasuresThe Company uses non-GAAP financial measures to
monitor and evaluate the ongoing performance of the Company.
The Company believes the additional measures are useful to
investors for financial analysis. Excluding these items
reflects operating results that are more indicative of the
Company’s ongoing operating performance and improve comparability
to prior periods. However, non-GAAP measures are not in
accordance with, nor are they a substitute for, GAAP
measures. Reconciliations to the applicable GAAP financial
measures are included in the attached schedules.
Safe Harbor Statement under the Private Securities
Litigation Reform Act of 1995Certain statements in this
news release that are not historical facts are forward-looking
statements. Forward-looking statements involve various important
assumptions, risks and uncertainties. Actual results may differ
materially from those predicted by the forward-looking statements
because of various factors and possible events. We discuss these
factors and events, along with certain other risks, uncertainties
and assumptions, under the heading “Risk Factors” in Item 1A of our
Annual Report on Form 10-K for the fiscal year ended April 29,
2016, and in our other filings with the Securities and Exchange
Commission. We note these factors for investors as contemplated by
the Private Securities Litigation Reform Act of 1995. Predicting or
identifying all such risk factors is impossible. Consequently,
investors should not consider any such list to be a complete set of
all potential risks and uncertainties. Any strategic
transaction with respect to our restaurant real estate remains
subject to closing conditions and there can be no assurance of such
a closing. Forward-looking statements speak only as of the
date on which they are made, and we undertake no obligation to
update any forward-looking statement to reflect circumstances or
events that occur after the date of the statement to reflect
unanticipated events. All subsequent written and oral
forward-looking statements attributable to us or any person acting
on behalf of the Company are qualified by the cautionary statements
in this section.
About Bob Evans Farms, Inc.Bob Evans Farms,
Inc. owns and operates full-service restaurants under the Bob Evans
Restaurants brand name. At the end of the first fiscal
quarter (July 29, 2016), Bob Evans Restaurants owned and operated
522 family restaurants in 18 states, primarily in the Midwest,
mid-Atlantic and Southeast regions of the United States. Bob Evans
Farms, Inc., through its BEF Foods segment, is also a leading
producer and distributor of refrigerated side dishes, pork sausage
and a variety of refrigerated and frozen convenience food items
under the Bob Evans and Owens brand names. For more
information about Bob Evans Farms, Inc., visit
www.bobevans.com.
BOBE–E
|
Bob Evans Farms, Inc. |
Earnings
Release Fact Sheet (unaudited) |
First quarter Fiscal 2017, Three months ended July 29, 2016
compared to the corresponding period a year ago: |
|
(in thousands, except
per share amounts) |
|
|
|
|
Basic EPS |
|
Diluted EPS |
|
Three Months Ended |
|
Three Months Ended |
|
Three Months Ended |
|
July 29, 2016 |
|
July 24, 2015 |
|
July 29, 2016 |
|
July 24, 2015 |
|
July 29, 2016 |
|
July 24, 2015 |
Operating Income (Loss)
as Reported |
|
|
|
|
|
|
|
|
|
|
|
Bob Evans
Restaurants |
$ |
11,602 |
|
|
$ |
9,796 |
|
|
|
|
|
|
|
|
|
BEF
Foods |
15,387 |
|
|
15,851 |
|
|
|
|
|
|
|
|
|
Corporate
and Other |
(13,291 |
) |
|
(17,385 |
) |
|
|
|
|
|
|
|
|
Operating
Income |
13,698 |
|
|
8,262 |
|
|
|
|
|
|
|
|
|
Net
interest expense |
1,893 |
|
|
2,606 |
|
|
|
|
|
|
|
|
|
Income Before
Income Taxes |
11,805 |
|
|
5,656 |
|
|
|
|
|
|
|
|
|
Provision
(benefit) for income taxes |
2,643 |
|
|
1,376 |
|
|
|
|
|
|
|
|
|
Net Income as
reported |
9,162 |
|
|
4,280 |
|
|
$ |
0.46 |
|
|
$ |
0.19 |
|
|
$ |
0.46 |
|
|
$ |
0.19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
Bob Evans
Restaurants |
|
|
|
|
|
|
|
|
|
|
|
Store
closure costs |
807 |
|
|
|
|
|
|
|
|
|
|
|
Litigation Reserves |
(278 |
) |
|
10,500 |
|
|
|
|
|
|
|
|
|
|
529 |
|
|
10,500 |
|
|
|
|
|
|
|
|
|
Total adjustments |
|
|
|
|
|
|
|
|
|
|
|
Store
closure costs |
807 |
|
|
— |
|
|
|
|
|
|
|
|
|
Litigation Reserves |
(278 |
) |
|
10,500 |
|
|
|
|
|
|
|
|
|
|
529 |
|
|
10,500 |
|
|
|
|
|
|
|
|
|
Non-GAAP
operating income (loss) |
|
|
|
|
|
|
|
|
|
|
|
Bob Evans
Restaurants |
12,131 |
|
|
20,296 |
|
|
|
|
|
|
|
|
|
BEF
Foods |
15,387 |
|
|
15,851 |
|
|
|
|
|
|
|
|
|
Corporate
and Other |
(13,291 |
) |
|
(17,385 |
) |
|
|
|
|
|
|
|
|
Total non-GAAP
operating income |
14,227 |
|
|
18,762 |
|
|
|
|
|
|
|
|
|
Adjustments to net interest expense |
— |
|
|
— |
|
|
|
|
|
|
|
|
|
Non-GAAP net
interest expense |
1,893 |
|
|
2,606 |
|
|
|
|
|
|
|
|
|
Non-GAAP
Income Before Taxes |
12,334 |
|
|
16,156 |
|
|
|
|
|
|
|
|
|
Adjustments to income tax provision (benefit) |
141 |
|
|
3,076 |
|
|
|
|
|
|
|
|
|
Non-GAAP
Provision for Income Taxes |
2,784 |
|
|
4,452 |
|
|
|
|
|
|
|
|
|
Non-GAAP Net
Income |
$ |
9,550 |
|
|
$ |
11,704 |
|
|
$ |
0.48 |
|
|
$ |
0.51 |
|
|
$ |
0.48 |
|
|
$ |
0.51 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Shares Outstanding |
|
|
|
|
19,792 |
|
|
22,733 |
|
|
19,964 |
|
|
22,881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First quarter Fiscal 2017, Three months ended July 29, 2016
compared to the corresponding period a year ago: |
|
(in thousands) |
|
Three Months Ended |
|
|
Consolidated Results |
|
Bob Evans Restaurants |
|
|
July 29, 2016 |
|
% of Sales |
|
July 24, 2015 |
|
% of Sales |
|
July 29, 2016 |
|
% of Sales |
|
July 24, 2015 |
|
% of Sales |
Operating income as
reported |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales |
|
$ |
306,317 |
|
|
|
|
$ |
321,713 |
|
|
|
|
$ |
220,376 |
|
|
|
|
$ |
238,669 |
|
|
|
Cost of
sales |
|
93,250 |
|
|
30.4 |
% |
|
96,322 |
|
|
29.9 |
% |
|
55,236 |
|
|
25.1 |
% |
|
61,469 |
|
|
25.8 |
% |
Operating
wage and fringe benefit expenses |
|
100,698 |
|
|
32.9 |
% |
|
104,959 |
|
|
32.6 |
% |
|
91,515 |
|
|
41.5 |
% |
|
95,465 |
|
|
40.0 |
% |
Other
operating expenses |
|
55,642 |
|
|
18.2 |
% |
|
51,589 |
|
|
16.0 |
% |
|
42,544 |
|
|
19.3 |
% |
|
39,935 |
|
|
16.7 |
% |
Selling,
general and administrative expenses |
|
25,455 |
|
|
8.3 |
% |
|
40,428 |
|
|
12.6 |
% |
|
8,404 |
|
|
3.8 |
% |
|
18,524 |
|
|
7.8 |
% |
Depreciation and amortization expense |
|
17,574 |
|
|
5.7 |
% |
|
20,153 |
|
|
6.3 |
% |
|
11,075 |
|
|
5.0 |
% |
|
13,480 |
|
|
5.6 |
% |
Total as
reported |
|
13,698 |
|
|
4.5 |
% |
|
8,262 |
|
|
2.6 |
% |
|
11,602 |
|
|
5.3 |
% |
|
9,796 |
|
|
4.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales |
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
Cost of
sales |
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
Operating
wage and fringe benefit expenses |
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
Other
operating expenses |
|
(340 |
) |
|
|
|
— |
|
|
|
|
(340 |
) |
|
|
|
— |
|
|
|
Selling,
general and administrative expenses |
|
(189 |
) |
|
|
|
(10,500 |
) |
|
|
|
(189 |
) |
|
|
|
(10,500 |
) |
|
|
Depreciation and amortization expense |
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
|
Total
Adjustments |
|
529 |
|
|
|
|
10,500 |
|
|
|
|
529 |
|
|
|
|
10,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
306,317 |
|
|
|
|
321,713 |
|
|
|
|
220,376 |
|
|
|
|
238,669 |
|
|
|
Cost of
sales |
|
93,250 |
|
|
30.4 |
% |
|
96,322 |
|
|
29.9 |
% |
|
55,236 |
|
|
25.1 |
% |
|
61,469 |
|
|
25.8 |
% |
Operating
wage and fringe benefit expenses |
|
100,698 |
|
|
32.9 |
% |
|
104,959 |
|
|
32.6 |
% |
|
91,515 |
|
|
41.5 |
% |
|
95,465 |
|
|
40.0 |
% |
Other
operating expenses |
|
55,302 |
|
|
18.1 |
% |
|
51,589 |
|
|
16.0 |
% |
|
42,204 |
|
|
19.2 |
% |
|
39,935 |
|
|
16.7 |
% |
Selling,
general and administrative expenses |
|
25,266 |
|
|
8.3 |
% |
|
29,928 |
|
|
9.4 |
% |
|
8,215 |
|
|
3.7 |
% |
|
8,024 |
|
|
3.4 |
% |
Depreciation and amortization expense |
|
17,574 |
|
|
5.7 |
% |
|
20,153 |
|
|
6.3 |
% |
|
11,075 |
|
|
5.0 |
% |
|
13,480 |
|
|
5.6 |
% |
Total
non-GAAP operating income |
|
$ |
14,227 |
|
|
4.6 |
% |
|
$ |
18,762 |
|
|
5.8 |
% |
|
$ |
12,131 |
|
|
5.5 |
% |
|
$ |
20,296 |
|
|
8.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Three Months Ended |
|
|
BEF Foods |
|
Corporate and Other |
|
|
July 29, 2016 |
|
% of Sales |
|
July 24, 2015 |
|
% of Sales |
|
July 29, 2016 |
|
July 24, 2015 |
Operating income (loss)
as reported |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales |
|
$ |
85,941 |
|
|
|
|
$ |
83,044 |
|
|
|
|
$ |
— |
|
|
$ |
— |
|
Cost of
sales |
|
38,014 |
|
|
44.2 |
% |
|
34,853 |
|
|
42.0 |
% |
|
— |
|
|
— |
|
Operating
wage and fringe benefit expenses |
|
9,184 |
|
|
10.7 |
% |
|
9,494 |
|
|
11.4 |
% |
|
— |
|
|
— |
|
Other
operating expenses |
|
13,098 |
|
|
15.2 |
% |
|
11,654 |
|
|
14.0 |
% |
|
— |
|
|
— |
|
Selling,
general and administrative expenses |
|
6,464 |
|
|
7.6 |
% |
|
6,795 |
|
|
8.2 |
% |
|
10,586 |
|
|
15,109 |
|
Depreciation and amortization expense |
|
3,794 |
|
|
4.4 |
% |
|
4,397 |
|
|
5.3 |
% |
|
2,705 |
|
|
2,276 |
|
Total as
Reported |
|
15,387 |
|
|
17.9 |
% |
|
15,851 |
|
|
19.1 |
% |
|
(13,291 |
) |
|
(17,385 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales |
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
— |
|
Cost of
sales |
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
— |
|
Operating
wage and fringe benefit expenses |
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
— |
|
Other
operating expenses |
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
— |
|
Selling,
general and administrative expenses |
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
— |
|
Depreciation and amortization expense |
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
— |
|
Total
adjustments |
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating
income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Sales |
|
85,941 |
|
|
|
|
83,044 |
|
|
|
|
— |
|
|
— |
|
Cost of
sales |
|
38,014 |
|
|
44.2 |
% |
|
34,853 |
|
|
42.0 |
% |
|
— |
|
|
— |
|
Operating
wage and fringe benefit expenses |
|
9,184 |
|
|
10.7 |
% |
|
9,494 |
|
|
11.4 |
% |
|
— |
|
|
— |
|
Other
operating expenses |
|
13,098 |
|
|
15.2 |
% |
|
11,654 |
|
|
14.0 |
% |
|
— |
|
|
— |
|
Selling,
general and administrative expenses |
|
6,464 |
|
|
7.6 |
% |
|
6,795 |
|
|
8.2 |
% |
|
10,586 |
|
|
15,109 |
|
Depreciation and amortization expense |
|
3,794 |
|
|
4.4 |
% |
|
4,397 |
|
|
5.3 |
% |
|
2,705 |
|
|
2,276 |
|
Total
non-GAAP operating income (loss) |
|
$ |
15,387 |
|
|
17.9 |
% |
|
$ |
15,851 |
|
|
19.1 |
% |
|
$ |
(13,291 |
) |
|
$ |
(17,385 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except
per share amounts) |
Three Months Ended |
|
July 29, 2016 |
% of Sales |
July 24, 2015 |
% of Sales |
Net
Sales |
$ |
306,317 |
|
|
$ |
321,713 |
|
|
Cost of sales |
93,250 |
|
30.4 |
% |
96,322 |
|
29.9 |
% |
Operating wage and
fringe benefit expenses |
100,698 |
|
32.9 |
% |
104,959 |
|
32.6 |
% |
Other operating
expenses |
55,642 |
|
18.2 |
% |
51,589 |
|
16.0 |
% |
Selling, general and
administrative expenses |
25,455 |
|
8.3 |
% |
40,428 |
|
12.6 |
% |
Depreciation and
amortization expense |
17,574 |
|
5.7 |
% |
20,153 |
|
6.3 |
% |
Operating
Income |
13,698 |
|
4.5 |
% |
8,262 |
|
2.6 |
% |
Net interest
expense |
1,893 |
|
0.6 |
% |
2,606 |
|
0.8 |
% |
Income Before
Income Taxes |
11,805 |
|
3.9 |
% |
5,656 |
|
1.8 |
% |
Provision
(Benefit) for income taxes |
2,643 |
|
0.9 |
% |
1,376 |
|
0.4 |
% |
Net
Income |
$ |
9,162 |
|
3.0 |
% |
$ |
4,280 |
|
1.3 |
% |
Earnings Per
Share — Net Income |
|
|
|
|
Basic |
$ |
0.46 |
|
|
$ |
0.19 |
|
|
Diluted |
$ |
0.46 |
|
|
$ |
0.19 |
|
|
|
|
|
|
|
Cash Dividends
Paid Per Share |
$ |
0.34 |
|
|
$ |
0.31 |
|
|
|
|
|
|
|
Weighted
Average Shares Outstanding |
|
|
|
|
Basic |
19,792 |
|
|
22,733 |
|
|
Dilutive shares |
172 |
|
|
148 |
|
|
Diluted |
19,964 |
|
|
22,881 |
|
|
|
|
|
|
|
Shares
outstanding at quarter end |
19,764 |
|
|
22,352 |
|
|
Consolidated Balance Sheets |
|
(in thousands, except
par values) |
July 29, 2016 |
|
April 29, 2016 |
Assets |
|
|
|
Current
Assets |
|
|
|
Cash and
equivalents |
$ |
4,402 |
|
|
$ |
12,896 |
|
Accounts receivable,
net |
30,023 |
|
|
28,893 |
|
Inventories |
25,843 |
|
|
24,997 |
|
Federal and state
income taxes receivable |
4,431 |
|
|
— |
|
Prepaid expenses and
other current assets |
11,391 |
|
|
9,307 |
|
Current assets held for
sale |
30,539 |
|
|
31,644 |
|
Total Current Assets |
106,629 |
|
|
107,737 |
|
Property, plant
and equipment |
1,276,861 |
|
|
1,263,413 |
|
Less accumulated
depreciation |
678,912 |
|
|
665,777 |
|
Net Property, Plant and Equipment |
597,949 |
|
|
597,636 |
|
Other
Assets |
|
|
|
Deposits and other |
4,449 |
|
|
4,622 |
|
Notes receivable |
21,564 |
|
|
20,886 |
|
Rabbi trust assets |
20,943 |
|
|
20,662 |
|
Goodwill and other
intangible assets |
19,790 |
|
|
19,829 |
|
Non-current deferred
tax assets |
28,818 |
|
|
29,002 |
|
Total Other Assets |
95,564 |
|
|
95,001 |
|
Total
Assets |
$ |
800,142 |
|
|
$ |
800,374 |
|
Liabilities and Stockholders’ Equity |
|
|
|
Current
Liabilities |
|
|
|
Current portion of
long-term debt |
$ |
3,421 |
|
|
$ |
3,419 |
|
Accounts payable |
37,599 |
|
|
37,518 |
|
Accrued property, plant
and equipment purchases |
6,186 |
|
|
5,308 |
|
Accrued non-income
taxes |
14,433 |
|
|
15,696 |
|
Accrued wages and
related liabilities |
16,202 |
|
|
26,358 |
|
Self-insurance
reserves |
19,639 |
|
|
20,169 |
|
Deferred gift card
revenue |
12,793 |
|
|
14,147 |
|
Current taxes
payable |
589 |
|
|
9,473 |
|
Current reserve for
uncertain tax provision |
1,481 |
|
|
1,481 |
|
Other accrued
expenses |
26,225 |
|
|
31,988 |
|
Total Current Liabilities |
138,568 |
|
|
165,557 |
|
Long-Term
Liabilities |
|
|
|
Deferred
compensation |
18,143 |
|
|
17,761 |
|
Reserve for uncertain
tax positions |
2,547 |
|
|
2,752 |
|
Deferred rent and
other |
6,153 |
|
|
5,851 |
|
Long-term deferred
gain |
55,571 |
|
|
56,371 |
|
Credit facility
borrowings and other long-term debt |
361,134 |
|
|
335,638 |
|
Total Long-Term Liabilities |
443,548 |
|
|
418,373 |
|
Stockholders’
Equity |
|
|
|
Common stock, $.01 par
value; authorized 100,000 shares; issued 42,638 shares at July 29,
2016, and April 29, 2016 |
426 |
|
|
426 |
|
Capital in excess of
par value |
243,758 |
|
|
244,304 |
|
Retained earnings |
834,676 |
|
|
832,323 |
|
Treasury stock, 22,874
shares at July 29, 2016, and 22,881 shares at April 29, 2016,
at cost |
(860,834 |
) |
|
(860,609 |
) |
Total Stockholders’ Equity |
218,026 |
|
|
216,444 |
|
Total
Liabilities and Stockholders' Equity |
$ |
800,142 |
|
|
$ |
800,374 |
|
|
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows |
|
|
Three Months Ended |
|
July 29, 2016 |
|
July 24, 2015 |
Operating
activities: |
|
|
|
Net
income |
$ |
9,162 |
|
|
$ |
4,280 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
17,574 |
|
|
20,153 |
|
Loss
(Gain) on disposal of fixed assets |
276 |
|
|
(701 |
) |
(Gain)
Loss on rabbi trust assets |
(281 |
) |
|
169 |
|
Loss
(Gain) on deferred compensation |
279 |
|
|
(138 |
) |
Share-based compensation |
1,440 |
|
|
2,048 |
|
Accretion
on long-term note receivable |
(558 |
) |
|
(499 |
) |
Deferred
income taxes |
184 |
|
|
— |
|
Amortization of deferred financing costs |
406 |
|
|
418 |
|
Cash
provided by (used for) assets and liabilities: |
|
|
|
|
|
|
|
Accounts
receivable |
(1,130 |
) |
|
664 |
|
Inventories |
(846 |
) |
|
(2,095 |
) |
Prepaid
expenses and other current assets |
(2,084 |
) |
|
(1,048 |
) |
Accounts
payable |
81 |
|
|
7,726 |
|
Federal
and state income taxes |
(13,520 |
) |
|
8,935 |
|
Accrued
wages and related liabilities |
(10,156 |
) |
|
(7,160 |
) |
Self-insurance |
(530 |
) |
|
2,392 |
|
Accrued
non-income taxes |
(1,263 |
) |
|
562 |
|
Deferred
revenue |
(1,354 |
) |
|
(1,185 |
) |
Other
assets and liabilities |
(5,584 |
) |
|
5,624 |
|
Net cash (used in)
provided by operating activities |
(7,904 |
) |
|
40,145 |
|
Investing activities: |
|
|
|
Purchase
of property, plant and equipment |
(18,985 |
) |
|
(12,264 |
) |
Proceeds
from sale of property, plant and equipment |
2,109 |
|
|
1,597 |
|
Deposits
and other |
(206 |
) |
|
(98 |
) |
Net cash used in
investing activities |
(17,082 |
) |
|
(10,765 |
) |
Financing activities: |
|
|
|
Cash
dividends paid |
(6,724 |
) |
|
(7,028 |
) |
Gross
proceeds from credit facility borrowings and other long-term
debt |
97,272 |
|
|
170,739 |
|
Gross
repayments of credit facility borrowings and other long-term
debt |
(71,784 |
) |
|
(130,768 |
) |
Payments
of debt issuance costs |
— |
|
|
(1,705 |
) |
Purchase
of treasury stock |
— |
|
|
(60,564 |
) |
Proceeds
from share-based compensation |
— |
|
|
165 |
|
Cash paid
for taxes on share-based compensation |
(640 |
) |
|
(617 |
) |
Excess
tax benefits from share-based compensation |
(1,632 |
) |
|
104 |
|
Net cash provided
by (used in) financing activities |
16,492 |
|
|
(29,674 |
) |
Net decrease in cash and
equivalents |
(8,494 |
) |
|
(294 |
) |
Cash and equivalents at
the beginning of the period |
12,896 |
|
|
6,358 |
|
Cash and equivalents at
the end of the period |
$ |
4,402 |
|
|
$ |
6,064 |
|
|
|
|
|
|
|
|
|
Bob Evans Restaurants same-store sales analysis (18-month
core; 521 restaurants) |
|
|
Fiscal 2017 |
|
Fiscal 2016 |
|
Total |
|
Pricing / Mix |
|
Transactions |
|
Total |
|
Pricing / Mix |
|
Transactions |
May |
|
(2.8 |
)% |
|
|
1.2 |
% |
|
|
(4.0 |
)% |
|
|
(0.3 |
)% |
|
|
3.9 |
% |
|
|
(4.2 |
)% |
June |
|
(6.1 |
)% |
|
|
1.2 |
% |
|
|
(7.3 |
)% |
|
|
(0.9 |
)% |
|
|
4.4 |
% |
|
|
(5.3 |
)% |
July |
|
(4.1 |
)% |
|
|
1.1 |
% |
|
|
(5.2 |
)% |
|
|
0.3 |
% |
|
|
5.8 |
% |
|
|
(5.5 |
)% |
Q1 |
|
(4.3 |
)% |
|
|
1.2 |
% |
|
|
(5.5 |
)% |
|
|
(0.3 |
)% |
|
|
4.8 |
% |
|
|
(5.0 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
August |
|
|
|
|
|
|
|
(1.3 |
)% |
|
|
3.3 |
% |
|
|
(4.6 |
)% |
September |
|
|
|
|
|
|
|
(3.8 |
)% |
|
|
2.9 |
% |
|
|
(6.6 |
)% |
October |
|
|
|
|
|
|
|
(4.4 |
)% |
|
|
1.5 |
% |
|
|
(5.8 |
)% |
Q2 |
|
|
|
|
|
|
|
(3.2 |
)% |
|
|
2.5 |
% |
|
|
(5.7 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November |
|
|
|
|
|
|
|
(3.2 |
)% |
|
|
2.5 |
% |
|
|
(5.6 |
)% |
December |
|
|
|
|
|
|
|
(4.3 |
)% |
|
|
3.4 |
% |
|
|
(7.7 |
)% |
January |
|
|
|
|
|
|
|
(3.4 |
)% |
|
|
3.1 |
% |
|
|
(6.5 |
)% |
Q3 |
|
|
|
|
|
|
|
(3.6 |
)% |
|
|
2.9 |
% |
|
|
(6.5 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
February |
|
|
|
|
|
|
|
(1.1 |
)% |
|
|
0.9 |
% |
|
|
(2.0 |
)% |
March |
|
|
|
|
|
|
|
(2.3 |
)% |
|
|
2.2 |
% |
|
|
(4.5 |
)% |
April |
|
|
|
|
|
|
|
(4.9 |
)% |
|
|
1.4 |
% |
|
|
(6.3 |
)% |
Q4 |
|
|
|
|
|
|
|
(3.0 |
)% |
|
|
1.5 |
% |
|
|
(4.4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year |
|
(4.3 |
)% |
|
|
1.2 |
% |
|
|
(5.5 |
)% |
|
|
(2.5 |
)% |
|
|
2.9 |
% |
|
|
(5.4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Prior
year data presentation reflects Company's current same-store sales
methodology. |
|
Bob Evans Restaurants
same-store sales day part performance |
|
First-quarter Fiscal 2017
SSS% Day Part Performance - Total Chain |
Day
Part |
|
On-Premises |
|
Off-Premises |
|
Total |
Breakfast |
|
|
(2.0 |
)% |
|
|
5.8 |
% |
|
|
(1.2 |
)% |
Lunch |
|
|
(3.6 |
)% |
|
|
(3.8 |
)% |
|
|
(3.6 |
)% |
Dinner |
|
|
(8.6 |
)% |
|
|
(7.2 |
)% |
|
|
(8.4 |
)% |
Total |
|
|
(4.5 |
)% |
|
|
(3.2 |
)% |
|
|
(4.3 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bob
Evans Restaurants key restaurant sales data |
|
|
Bob Evans Restaurants |
Average annual store
sales ($) - FY16 |
$1.7 million |
|
|
|
Q1 FY2017 day part mix
(%): |
|
Breakfast |
34 |
% |
Lunch |
36 |
% |
Dinner |
30 |
% |
|
|
Q1 FY2017 dine-in check
average per guest ($): |
|
Breakfast |
$ |
9.51 |
|
Lunch |
$ |
9.93 |
|
Dinner |
$ |
10.09 |
|
|
|
Q1 FY2017 dine-in check
average per guest ($): |
$ |
9.82 |
|
Q1 FY2017 dine-in check
average per ticket ($): |
$ |
19.23 |
|
Q1 FY2017 carry-out
check average per ticket ($): |
$ |
16.59 |
|
BEF Foods total pounds sold, by category |
Fiscal
2017 |
|
|
|
|
|
|
|
|
|
|
Category |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
YTD |
Sides |
|
|
51.4 |
% |
|
|
|
|
|
|
|
|
51.4 |
% |
Sausage |
|
|
21.2 |
% |
|
|
|
|
|
|
|
|
21.2 |
% |
Food Service -
External |
|
|
11.6 |
% |
|
|
|
|
|
|
|
|
11.6 |
% |
Food Service -
Intersegment |
|
|
8.3 |
% |
|
|
|
|
|
|
|
|
8.3 |
% |
Frozen |
|
|
3.9 |
% |
|
|
|
|
|
|
|
|
3.9 |
% |
Other |
|
|
3.6 |
% |
|
|
|
|
|
|
|
|
3.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
Fiscal
2016 |
|
|
|
|
|
|
|
|
|
|
Category |
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
FY 2016 |
Sides |
|
|
49.6 |
% |
|
|
50.7 |
% |
|
|
50.9 |
% |
|
|
51.4 |
% |
|
|
50.7 |
% |
Sausage |
|
|
22.0 |
% |
|
|
22.3 |
% |
|
|
26.6 |
% |
|
|
21.7 |
% |
|
|
23.3 |
% |
Food Service -
External |
|
|
14.1 |
% |
|
|
12.5 |
% |
|
|
10.4 |
% |
|
|
11.4 |
% |
|
|
11.9 |
% |
Food Service -
Intersegment |
|
|
6.2 |
% |
|
|
6.6 |
% |
|
|
6.0 |
% |
|
|
8.1 |
% |
|
|
6.7 |
% |
Frozen |
|
|
4.6 |
% |
|
|
4.5 |
% |
|
|
3.1 |
% |
|
|
3.9 |
% |
|
|
4.0 |
% |
Other |
|
|
3.5 |
% |
|
|
3.4 |
% |
|
|
3.0 |
% |
|
|
3.5 |
% |
|
|
3.4 |
% |
Contact:
Scott C. Taggart
Vice President, Investor Relations
(614) 492-4954
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