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Bob Evans Reports Fiscal 2014 Fourth-Quarter And Full-Year Results; Updates Fiscal Year 2015 Outlook

Stocks in this article: BOBE

Company reports 4Q 2014 and fiscal 2014 diluted GAAP EPS from continuing operations of $0.40 and $1.16, respectively, compared to $1.05 and $2.90 in the prior year; diluted non-GAAP EPS from continuing operations was $0.48 for the quarter and $1.68 for the full year, compared to $0.69 and $2.39 in the prior year

Key transformational investments were completed during fiscal 2014 despite adverse weather conditions, historically high sow costs, and a major supply disruption. Completion of the Farm Fresh Refresh restaurant remodel program, along with BEF Foods' plant optimization and expansion projects, positions the Company for long-term profitable growth

Company completed its fiscal 2014 $225 million share repurchase program in fiscal 2014. Company has returned more than $800 million to stockholders since 2007 through dividends and share repurchases

Quarterly dividend of $0.31 per share reflects a 12.7 percent increase over prior year period. Dividend paid on June 16, 2014, to stockholders of record at the close of business on June 2, 2014

Bob Evans Restaurants reports 4Q 2014 same-store sales of -4.1 percent; estimates adverse severe winter weather impact of approximately 3.4 percent. Fiscal 2014 full-year same-store sales were -2.1 percent, including an estimated adverse severe winter weather impact of 1.6 percent

Severe winter weather adversely impacted Bob Evans Restaurants' sales, cost of sales, operating wages and other operating expenses including utilities and snow removal, reducing 4Q 2014 diluted GAAP and diluted non-GAAP EPS by approximately $0.21 per diluted share compared to the prior year

At BEF Foods, higher than expected plant startup inefficiencies and the effect of continued high sausage material costs, including sow and trim costs, net of short-term offsets, reduced 4Q 2014 diluted GAAP and non-GAAP EPS by approximately $0.14 per diluted share compared to the prior year period

Costs associated with responses to an activist stockholder; supplemental tax and internal audit staff resources; strengthening the Company's internal processes and controls over financial reporting; and recruiting and relocation costs, net of short-term offsets, adversely impacted results, reducing 4Q 2014 diluted GAAP and non-GAAP EPS by approximately $0.04. For fiscal 2014, the Company incurred $3.0 million of costs associated with responses to an activist stockholder

The Company recognized a tax benefit in the fourth quarter of $6.9 million comprised of $5.7 million due to Section 199 deductions for domestic production activities resulting from BEF Foods' product sales and $1.2 million from state tax settlements. $3.0 million of the total tax benefit is reflected in discontinued operations. The Company will continue efforts to realize additional tax benefits and expects to generate annual tax benefits beginning in fiscal year 2015 of approximately $1.6 million related to Section 199 deductions for domestic production activities

Company's updated fiscal 2015 diluted EPS guidance range set at $1.90 to $2.20. Updated guidance assumes $85 per hundredweight sow costs and gradual improvement in Bob Evans Restaurants' sales trends

Costs associated with responses to an activist stockholder are estimated to be $5.5 million during fiscal 2015. Costs of supplemental tax and internal audit staff resources, and strengthening the Company's internal processes and controls over financial reporting are estimated to be $2.0 million during fiscal 2015

Bob Evans Restaurants expects to drive fiscal 2015 dine-in and off-premise sales by leveraging its new "Get in on Something Good!"™ advertising campaign, and further development of value-oriented sales layers, including Broasted Chicken ® which is expected to drive positive dinner same-store sales trends based on positive test market results

Bob Evans Restaurants to open up to eight new restaurants during fiscal 2015

Bob Evans Express finalizing details for four new units including two airport and two mall locations; expects to license up to ten locations during fiscal 2015

NEW ALBANY, Ohio, July 8, 2014 (GLOBE NEWSWIRE) -- Bob Evans Farms, Inc. (Nasdaq:BOBE) today announced its financial results for the fiscal 2014 fourth quarter ended Friday, April 25, 2014. Net income from continuing operations was $9.8 million, or $0.40 per diluted share, compared with net income from continuing operations of $29.6 million, or $1.05 per diluted share, in the comparable period last year. For the fourth quarter of 2014, non-GAAP net income from continuing operations was $11.8 million, or $0.48 per diluted share, compared with non-GAAP net income from continuing operations of $19.4 million, or $0.69 per diluted share, in the comparable period last year.

  3 months ended
in millions except per diluted share data 04/25/14 04/26/13
Net income from continuing operations  $ 9.8  $ 29.6
Adjustments for non-GAAP (net of taxes)    
Bob Evans Restaurants    
Impairments including from assets held for sale 0.2 0.6
Severance/Restructuring 0.4 1.2
Loss (gain) on sale of assets, Overhead allocation and other 0.7 (0.4)
BEF Foods    
Severance/Restructuring 0.8 0.7
Loss on sale of assets, Overhead allocation and other 0.1 2.5
Adjustments to net interest expense (0.3) 0.0
Adjustments to income tax provision (benefit) 0.0 (14.8)
     
Non-GAAP Income from continuing operations (a)  $ 11.8  $ 19.4
     
Earnings per diluted share - Net income from continuing operations  $ 0.40  $ 1.05
Non-GAAP Earnings per diluted share - Net income from continuing operations  $ 0.48  $ 0.69
     
Net income from discontinued operations  $ 3.2  $ 0.2
Adjustments for non-GAAP (net of taxes) 0.2 41.8
Adjustments to income tax benefit 0.0 (42.0)
     
Non-GAAP Net income from discontinued operations (a)  $ 3.4  $ -- 
Earnings per diluted share - Net income from discontinued operations  $ 0.13  $ 0.01
Non-GAAP Earnings per diluted share - Net income from discontinued operations  $ 0.14  $ --
     
Net income  $ 13.0  $ 29.8
Non-GAAP net income  $ 15.1  $ 19.4
Earnings per diluted share from net income  $ 0.53  $ 1.06
Non-GAAP Earnings per diluted share from net income  $ 0.61  $ 0.69
Weighted average diluted shares outstanding 24,641 28,184
 
(a)  Earnings adjusted for non-GAAP items is a financial measure not in accordance with generally accepted accounting principles (GAAP) and should not be considered a substitute for earnings as determined in accordance with accounting principles generally accepted in the United States. See below for further discussion of earnings adjusted for non-GAAP items.
     
Non-GAAP Tax Rate 31% 32%

Fiscal 2014 commentary

Chairman and Chief Executive Officer Steve Davis said, "Fiscal 2014 financial performance was negatively impacted by several challenges beyond the Company's control, including unusually severe and sustained winter weather, historically high sow costs, and BEF Foods' supplier disruption issues. However, by focusing on factors we can control, we continued transforming our businesses to remain relevant to our restaurant guests, food customers, and stockholders for years to come. 

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