Bob Evans Reports Fiscal 2015 First-Quarter Results

  • Q1 2015 net sales total $326.3 million, a decline of $3.1 million, or 0.9 percent, compared to prior year first-quarter results. GAAP net loss of $0.04 per diluted share compared to net income of $0.30 per diluted share in the prior year period. Adjusted net income of $0.10 per diluted share compared to $0.54 per diluted share in the prior year period
  • Q1 2015 same-store dinner sales in the Cincinnati Broasted Chicken® test market increased 3.6 percent as the platform reversed dinner sales trends. Broasted Chicken® platform now rolling out in the Dayton and Columbus, Ohio, markets
  • Bob Evans Express expects to open three new locations during Q2 2015; up to ten new locations expected for fiscal 2015
  • BEF Foods' operating income negatively impacted $6.7 million due primarily to a 39 percent increase in Q1 2015 sow costs relative to the prior year period. New refrigerated side dish product authorizations at the Company's largest customer along with new customer accounts expected to more than offset lost sales volume experienced in 2014 resulting from a supplier dispute
  • Company's $100 million share repurchase authorization increased to $150 million; extended through fiscal year 2016. Quarterly dividend of $0.31 per share payable on September 22, 2014, to stockholders of record at the close of business on September 8, 2014
  • Company reaffirms fiscal 2015 diluted EPS guidance range of $1.90 to $2.20

    NEW ALBANY, Ohio, Aug. 26, 2014 (GLOBE NEWSWIRE) -- Bob Evans Farms, Inc. (Nasdaq:BOBE) today announced its financial results for the fiscal 2015 first quarter ended Friday, July 25, 2014. On a GAAP basis, the Company reported a net loss of $1.0 million, or $0.04 per diluted share, compared with net income of $8.4 million, or $0.30 per diluted share, in the comparable period last year. On an adjusted basis (1), net income was $2.3 million, or $0.10 per diluted share, compared with net income of $15.2 million, or $0.54 per diluted share, in the comparable period last year.

    First-quarter fiscal 2015 commentary

    Chairman and Chief Executive Officer Steve Davis said, "Several years ago our Board and management team determined that comprehensive strategic investments in our businesses were necessary to meet the changing expectations of consumers. These investments required new processes, new skill sets, and difficult decisions along the way.  During the transformation process, the Company not only invested more than $800 million transforming its businesses, it also returned over $800 million to stockholders from fiscal year 2007 to fiscal year 2014 through share repurchases and dividends.

    "We are seeing early positive results as we begin leveraging our strategic investments. At Bob Evans Restaurants, the Farm Fresh Refresh remodeling program has set the stage for new off-premise layers such as carryout and catering, which grew 2.6 percent and 13.7 percent, respectively during the quarter. The remodeled restaurants also support menu innovations like our new Broasted Chicken ® platform which provides both on- and off-premise sales growth opportunities. Sustained success in the restaurant industry requires a strong asset and strong product offering. One without the other is ultimately a losing proposition. With the Farm Fresh Refresh Program complete, we now have the right asset in place. Along with this new asset, we have new menu offerings such as Sweet & Stacked Hotcakes at breakfast and Broasted Chicken ® at lunch and dinner that we expect to result in an improved sales trajectory. There is a symbiotic relationship between our remodeled restaurants, menu innovation, and new off-premise sales layers. In concert, we expect these items to reverse sales declines across the chain, and we are off to a great start in Cincinnati, the first market to benefit from the combination of the Farm Fresh Refresh program, enhanced off-premise capabilities, and the Broasted Chicken ® platform.

    "Cincinnati, our first market to receive the Broasted Chicken ® platform, reported an overall same-store sales increase of 0.4 percent during the first quarter, an increase of over 500 basis points relative to its same-store sales decline of 4.9 percent in the prior quarter as this new platform reverses dinner sales trends. This performance outpaced improvement in the balance of the chain by 331 basis points. The impact on off-premise sales in Cincinnati was even more impressive as off-premise same-store sales grew 13.0 percent compared to 1.1 percent for the balance of the chain.  Broasted Chicken ® accounted for 56 percent of Cincinnati's off-premise same-store sales increase during the quarter.

    "The Broasted Chicken ® rollout continues as 11 of the 28 restaurants in the Dayton, Ohio, market, and 8 of the 49 restaurants in the Columbus, Ohio, market are now offering this exciting product. We expect to complete the Dayton rollout by mid-September, Columbus by early October, and all 192 restaurants in Ohio by early November."

    Davis continued, "At BEF Foods, our plant network has been simplified as we have reduced the number of production facilities we operate from nine in 2007 to four today. Furthermore, the four remaining plants have each benefitted from substantial capital investments to expand their capacity and efficiency. With significant recent product authorizations at our largest existing customer, as well as at new customer accounts, the plant capacity and anticipated efficiency gains are vitally important as we expect our refrigerated side dishes to have a strong holiday sales season this year. Although sow costs remain challenging, BEF Foods is now in a position to continue its diversification beyond sausage products as it grows refrigerated side dish sales and other products not impacted by sow costs, while also maximizing sausage product margins through a more efficient two-plant fresh sausage network, and more effective pricing and promotion strategies."     

    First-quarter fiscal 2015 Bob Evans Restaurants segment summary

    Bob Evans Restaurants' net sales were $240.2 million, a decrease of $4.4 million,or 1.8 percent, compared to net sales of $244.6 million in the corresponding period last year. Same-store sales declined 2.0 percent, below the national Knapp-Track™ family dining index decline of 1.6 percent during the same period. However, in Bob Evans Restaurants' top three Knapp-Track™ regions, which comprise 83 percent of the chain as measured by restaurant count, same-store sales results outperformed the regional Knapp-Track™ family dining index by 60 to 120 basis points.

    As shown in the data table below, the breakfast daypart returned to positive same-store sales during the quarter, reflecting the success of menu items such as Sweet and Stacked Hotcakes and more effective marketing. Lunch and dinner dayparts, while improved relative to the prior quarter, remain challenged as economic headwinds facing the Company's core Midwest consumers and advertising and promotional activity in its peer set remain at a high level.

    In contrast to the total chain, the Cincinnati Broasted Chicken ® test  market reported a lunch same-store sales decline of 0.4 percent, a dinner same-store sales increase of 3.6 percent, and an overall same-store sales increase of 0.4 percent.
     
    Same-Store Sales (SSS) Restaurants May June July 1Q FY '15
    557 -1.6 -2.0 -2.3 -2.0
     
    First-Quarter Fiscal 2015 SSS% Daypart Performance
    Daypart On-Premise Off-Premise Total
    Breakfast 0.1% 7.4% 0.7%
    Lunch -2.3% 0.3% -2.0%
    Dinner -5.6% 0.5% -4.7%
    Total -2.5% 1.9% -2.0%

    During the first quarter of fiscal 2015, Bob Evans Restaurants opened a new restaurant located in Lakewood, Ohio (Cleveland market).

    Bob Evans Restaurants' non-GAAP operating income was $5.5 million, compared to non-GAAP operating income of $16.0 million in the corresponding period last year. The primary drivers of the $10.5 million decline were:  a $4.7 million impact associated with discounted sales; $1.7 million of increased advertising expenses; $1.1 million of incremental depreciation; $1.1 million of costs related to strengthening the Company's internal processes and controls over financial reporting; $1.0 million of increased health care costs; and $0.8 million of increased repair and maintenance expenses.

    First-quarter fiscal 2015 BEF Foods segment summary

    BEF Foods' net sales were $86.2 million, an increase of 1.5 percent, compared to net sales of $84.9 million in the corresponding period last year. Adjusting for net sales in the prior year at the Company's Irvine, California, production facility (sold during the second quarter of fiscal 2014), net sales would have increased 5.0 percent. Increased sausage pricing was partially offset by a 6.1 percent decline in total pounds sold, including an 18.9 percent decline in sausage pounds sold, during the quarter. Adjusting for the volume of pounds sold in the prior year at the Company's Irvine, California, production facility (sold during the second quarter of fiscal 2014), volume would have been flat for the quarter. 

    For the remainder of the fiscal year, particularly during the third and fourth fiscal quarters, recent refrigerated side dish product authorizations at the Company's largest customer, along with new customer accounts, are expected to more than offset lost sales volume experienced in 2014 resulting from a supplier dispute. Continued improvements in plant production efficiencies and the absence of costs associated with the 2014 supplier dispute, are also expected to benefit the second half of fiscal 2015, relative to the prior year.

    BEF Foods' non-GAAP operating loss was $0.4 million, compared to non-GAAP operating income of $6.7 million in the corresponding period last year. The primary drivers of the $7.1 million decline were:  $6.7 million of increased sausage material costs, including sow and pork trim costs; $2.3 million of net plant inefficiencies; $2.2 million of increased freight, advertising and professional service fees including costs related to strengthening the Company's internal processes and controls over financial reporting; and $1.6 million of incremental depreciation, partially offset by $5.7 million of increased pricing, reduced trade spending and discounts.

    Net interest expense – The Company's non-GAAP net interest expense was $2.1 million in the first quarter of fiscal 2015, an increase of $1.6 million, compared to $0.5 million in the corresponding period last year. The year-over-year increase was due to funding of share repurchases and capital expenditures. The borrowing rate on the Company's outstanding debt was 1.91 percent at the end of the first quarter, compared to 1.45 percent at the end of the comparable prior year period.

    Taxes – The 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's effective income tax rate was 34.5 percent for the quarter, as compared to 31.1 percent for the corresponding period a year ago. The higher tax rate was driven by the net impact of the expiration of the Work Opportunity Tax Credit on December 31, 2013, the increased deduction for domestic production activities, and discrete items in the first quarter related to stock compensation and uncertain tax positions. For non-GAAP items the tax rate was 27.5 percent, reflecting the Company's estimate of the annual effective tax rate.

    Balance sheet highlights – The Company's cash balance and revolver borrowings at the end of the first quarter of fiscal 2015 were $3.6 million and $458.8 million, respectively. The Company was in compliance with its debt covenants at the end of the first quarter of fiscal 2015. The Company's leverage ratio as defined in its credit agreement was 3.69 at the end of the quarter.

    Fiscal year 2015 commentary and outlook

    "We are reaffirming our fiscal 2015 diluted EPS guidance range of $1.90 to $2.20. Given recent sow cost trends, we have raised second-quarter sow cost guidance to $90 to $95 per hundredweight from $80 to $90 per hundredweight, and raised our full fiscal year estimate to $87 per hundredweight from $85 per hundredweight. Additionally, we expect modest pressure on Bob Evans Restaurants' cost of sales. However, exclusion of activism costs and a lower anticipated effective tax rate are expected to offset these impacts," said Chief Financial Officer Mark Hood.
    Summary of performance drivers:  fiscal 2015 guidance versus fiscal 2014
          1Q (actual)   2Q   3Q   4Q  Full Year
    sss% 2015 (guidance) -2.0% flat to low single-digit high single-digit high single-digit 1.5% to 2.5%
    sss% 2014 (actual) -0.6% -1.9% -1.8% -4.1% -2.1%
    sow costs (per hundredweight) 2015 (guidance) $87.87 $90 to $95 $80 to $90 $80 to $90 $87
    sow costs (per hundredweight) 2014 (actual) $63.24 $77.33 $72.36 $78.47 $73.23
    estimated Broasted Chicken® rollout (% of restaurants) 6% 41% 51% 100%  
       
    Guidance Metric FY '15
    Consolidated net sales $1.38 to $1.40 billion
    Capital expenditures $85 to $90 million
    ERP implementation (included in S,G&A) $4 to $5 million
    Depreciation and amortization $83 to $87 million
    Net interest expense $8.5 to $10.5 million
    Tax rate 27 to 28 percent
    Diluted weighted-average share count 23.8 million shares
    Adjusted earnings per diluted share $1.90 to $2.20
       
    Bob Evans Restaurants:  
    Same-store sales 1.5 to 2.5 percent
    Operating margin 4.8 to 5.2 percent
       
    BEF Foods:  
    Net Sales $408 to $418 million
    Sow costs $87 per hundredweight
    Operating Margin 6.2 to 8.2 percent
     

    This outlook is subject to a number of factors beyond the Company's control, including the risk factors discussed in the Company's fiscal 2014 annual report on Form 10‑K and its other subsequent filings with the Securities and Exchange Commission. 

    Investor Conference Call

    The Company will host a conference call to discuss its first-quarter fiscal 2015 results at 10 a.m. (ET) on Wednesday, August 27, 2014. The dial-in number is (855) 468-0551, access code 82786914. A replay will be available at (800) 585-8367, access code 82786914.

    A simultaneous webcast will be available at investors.bobevans.com/events.cfm. The archived webcast will also be available on the Web site.

    (1) Non-GAAP Financial Measures

    The 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 1995

    Certain 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 25, 2014, 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. 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 25, 2014), Bob Evans Restaurants owned and operated 562 family restaurants in 19 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.
    Bob Evans Farms, Inc.
    Earnings Release Fact Sheet (unaudited)
    Fiscal 2015 - Quarter 1
                 
    Note: amounts are in thousands, except per share amounts
                 
    First quarter Fiscal 2015, ended July 25, 2014, compared to the corresponding period a year ago:
                 
          Basic EPS Diluted EPS
      Three Months Ended Three Months Ended Three Months Ended
      July 25, 2014 July 26, 2013 July 25, 2014 July 26, 2013 July 25, 2014 July 26, 2013
    Operating Income (Loss) as Reported            
    Bob Evans Restaurants 1,715 6,482        
    BEF Foods (1,651) 5,517        
    Total operating income 64 11,999        
    Net interest expense (income) 1,616 (156)        
    (Loss) Income before income taxes (1,552) 12,155        
    (Benefit) Expense for income taxes (536) 3,779        
    Net (loss) income (1,016) 8,376 $(0.04) $0.30 $(0.04) $0.30
                 
    Adjustments            
    Bob Evans Restaurants            
    Impairments including from Assets Held for Sale 1,577 9,788        
    Severance/Restructuring 285 (135)        
    Loss (Gain) on Sale of Assets 105 (86)        
    Activism and Other 1,835 (46)        
      3,802 9,521        
                 
    BEF Foods            
    Impairments including from Assets Held for Sale        
    Severance/Restructuring 664 1,001        
    Loss on Sale of Assets 12 164        
    Activism and Other 554 23        
      1,230 1,188        
    Total adjustments            
    Impairments including from Assets Held for Sale 1,577 9,788        
    Severance/Restructuring 949 866        
    Loss on Sale of Assets 117 78        
    Activism and Other 2,389 (23)        
      5,032 10,709        
    Non-GAAP operating income (loss)            
    Bob Evans Restaurants 5,517 16,003        
    BEF Foods (421) 6,705        
    Total non-GAAP operating income 5,096 22,708        
                 
    Adjustments to net interest expense (income) 445 662        
    Non-GAAP net interest expense 2,061 506        
    Non-GAAP pre-tax income 3,035 22,202        
    Adjustments to income tax provision 1,259 3,215        
    Non-GAAP income tax provision 723 6,994        
    Non-GAAP net income 2,312 15,208 $0.10 $0.55 $0.10 $0.54
                 
    Shares Outstanding     23,535 27,560 23,677 27,917
         
      Consolidated Results Bob Evans Restaurants
      Three Months Ended Three Months Ended
      July 25, 2014 % of Sales July 26, 2013 % of Sales July 25, 2014 % of Sales July 26, 2013 % of Sales
                     
    Operating income as reported                
                     
    Net sales 326,341   329,449   240,151   244,551  
    Cost of sales 113,463 34.8% 106,641 32.4% 63,211 26.3% 62,653 25.6%
    Operating wage and fringe benefit expenses 104,228 31.9% 102,847 31.2% 94,639 39.4% 93,221 38.1%
    Other operating expenses 49,508 15.2% 48,847 14.8% 42,505 17.7% 41,313 16.9%
    Selling, general and administrative expenses 38,847 11.9% 33,276 10.1% 22,482 9.4% 18,082 7.4%
    Depreciation and amortization expense 19,973 6.1% 17,230 5.2% 15,341 6.4% 14,191 5.8%
    Impairment of assets held for sale 258 0.1% 8,609 2.6% 258 0.1% 8,609 —%
    Total as Reported 64 —% 11,999 3.6% 1,715 0.7% 6,482 2.7%
                     
    Adjustments                
                     
    Net sales        
    Cost of sales        
    Operating wage and fringe benefit expenses (14)     (14)    
    Other operating expenses (149)   107   (149)    
    Selling, general and administrative expenses (4,611)   (2,258)   (3,381)   (963)  
    Depreciation and amortization expense   51     51  
    Impairment of assets held for sale (258)   (8,609)   (258)   (8,609)  
    Total adjustments 5,032   10,709   3,802   9,521  
                     
    Non-GAAP operating income                
                     
    Net sales 326,341   329,449   240,151   244,551  
    Cost of sales 113,463 34.8% 106,641 32.4% 63,211 26.3% 62,653 25.6%
    Operating wage and fringe benefit expenses 104,214 31.9% 102,847 31.2% 94,625 39.4% 93,221 38.1%
    Other operating expenses 49,359 15.1% 48,954 14.9% 42,356 17.6% 41,313 16.9%
    Selling, general and administrative expenses 34,236 10.5% 31,018 9.4% 19,101 8.0% 17,119 7.0%
    Depreciation and amortization expense 19,973 6.1% 17,281 5.2% 15,341 6.4% 14,242 5.8%
    Impairment of assets held for sale —% —% —% —%
    Total non-GAAP operating income 5,096 1.6% 22,708 6.9% 5,517 2.3% 16,003 6.5%
       
      BEF Foods
      Three Months Ended
      July 25, 2014 % of Sales July 26, 2013 % of Sales
             
    Operating income as reported        
             
    Net sales 86,190   84,898  
    Cost of sales 50,252 58.3% 43,988 51.8%
    Operating wage and fringe benefit expenses 9,589 11.1% 9,626 11.3%
    Other operating expenses 7,003 8.1% 7,534 8.9%
    Selling, general and administrative expenses 16,365 19.0% 15,194 17.9%
    Depreciation and amortization expense 4,632 5.4% 3,039 3.6%
    Impairment of assets held for sale —% —%
    Total as Reported (1,651) (1.9)% 5,517 6.5%
             
    Adjustments        
             
    Net sales    
    Cost of sales    
    Operating wage and fringe benefit expenses    
    Other operating expenses   107  
    Selling, general and administrative expenses (1,230)   (1,295)  
    Depreciation and amortization expense    
    Impairment of assets held for sale    
    Total adjustments 1,230   1,188  
             
    Non-GAAP operating income        
             
    Net sales 86,190   84,898  
    Cost of sales 50,252 58.3% 43,988 51.8%
    Operating wage and fringe benefit expenses 9,589 11.1% 9,626 11.3%
    Other operating expenses 7,003 8.1% 7,641 9.0%
    Selling, general and administrative expenses 15,135 17.6% 13,899 16.4%
    Depreciation and amortization expense 4,632 5.4% 3,039 3.6%
    Impairment of assets held for sale —% —%
    Total non-GAAP operating income (421) (0.5)% 6,705 7.9%
       
      Consolidated Results
      Three Months Ended
      July 25, 2014 % of sales July 26, 2013 % of sales
          (as adjusted) (as adjusted)
    Net sales $326,341   $329,449  
    Cost of sales 113,463 34.8% 106,641 32.4%
    Operating wage and fringe benefit expenses 104,228 31.9% 102,847 31.2%
    Other operating expenses 49,508 15.2% 48,847 14.8%
    Selling, general and administrative expenses 38,847 11.9% 33,276 10.1%
    Depreciation and amortization expense 19,973 6.1% 17,230 5.2%
    Impairment of assets held for sale 258 0.1% 8,609 2.6%
    Operating income 64 —% 11,999 3.6%
    Net interest expense (income) 1,616 0.5% (156) —%
    (Loss) income before income taxes (1,552) (0.5)% 12,155 3.7%
    (Benefit) provision for income taxes (536) (0.2)% 3,779 1.1%
    Net loss (income) $(1,016) (0.3)% $8,376 2.5%
             
    Earnings per share - Net (loss) income        
    Basic $(0.04)   $0.30  
    Diluted $(0.04)   $0.30  
             
    Cash dividends paid per share $0.310   $0.275  
             
    Weighted average shares outstanding        
    Basic 23,535   27,560  
    Dilutive Shares   357  
    Diluted 23,535   27,917  
             
    Shares outstanding at quarter end 23,589   27,499  
             
    The number of dilutive shares outstanding at July 25, 2014 that were not included in the computation of dilutive earnings per share, because to do so would have been antidilutive, were 142 shares for the three months ended July 25, 2014.
             
    Income taxes related to continuing operations, as a percentage of pre-tax (loss) income, were 34.5% vs 31.1%.
       
      Three Months Ended
      Bob Evans Restaurants BEF Foods
      July 25, 2014 July 26, 2013 July 25, 2014 July 26, 2013
                     
    Net sales $240,151   $244,551   $86,190   $84,898  
    Cost of sales 63,211 26.3% 62,653 25.6% 50,252 58.3% 43,988 51.8%
    Operating wage and fringe benefit expenses 94,639 39.4% 93,221 38.1% 9,589 11.1% 9,626 11.3%
    Other operating expenses 42,505 17.7% 41,313 16.9% 7,003 8.1% 7,534 8.9%
    Selling, general and administrative expenses 22,482 9.4% 18,082 7.4% 16,365 19.0% 15,194 17.9%
    Depreciation and amortization expense 15,341 6.4% 14,191 5.8% 4,632 5.4% 3,039 3.6%
    Impairment of assets held for sale 258 0.1% 8,609 3.5% —% —%
    Operating income (loss) $1,715 0.7% $6,482 2.7% $(1,651) (1.9)% $5,517 6.5%
     
    Consolidated Balance Sheets
         
      (in thousands)
      Unaudited  
      July 25, 2014 April 25, 2014
    Assets
    Current Assets    
    Cash and equivalents $3,625 $7,826
    Accounts receivable, net 28,846 30,688
    Inventories 23,455 25,243
    Deferred income taxes 18,656 18,656
    Federal and state income taxes 22,106 25,824
    Prepaid expenses 6,230 4,281
    Current assets held for sale 5,153 2,887
    Total Current Assets 108,071 115,405
    Property, Plant and Equipment 1,601,263 1,587,238
    Less accumulated depreciation 732,291 714,243
    Net Property, Plant and Equipment 868,972 872,995
    Other Assets    
    Deposits and other 4,821 3,442
    Long-term note receivable 16,798 16,243
    Long-term investments 32,930 31,972
    Goodwill 19,634 19,634
    Other intangible assets 3,231 3,270
    Long-term assets held for sale 2,600
    Total Other Assets 77,414 77,161
    Total Assets $1,054,457 $1,065,561
    Liabilities and Stockholders' Equity
    Current Liabilities    
    Credit facility borrowings $458,836 $458,898
    Current portion of long-term debt 369
    Accounts payable 28,640 29,064
    Accrued property, plant and equipment purchases 6,492 5,841
    Accrued non-income taxes 17,438 17,843
    Accrued wages and related liabilities 19,161 21,574
    Self-insurance 19,367 19,874
    Deferred revenue 11,736 12,967
    Other accrued expenses 29,991 33,024
    Total Current Liabilities 592,030 599,085
    Long-Term Liabilities    
    Deferred compensation 40,737 35,731
    Federal and state income taxes 4,856 4,959
    Deferred income taxes 32,829 32,829
    Deferred rent and other 6,522 6,534
    Long-term debt 3,404 835
    Total Long-Term Liabilities 88,348 80,888
    Stockholders' Equity    
    Common stock, $.01 par value; authorized 100,000 shares; issued 42,638 shares at July 25, 2014, and April 25, 2014 426 426
    Capital in excess of par value 221,598 225,562
    Retained earnings 841,222 849,619
    Treasury stock, 19,050 shares at July 25, 2014, and 19,175 shares at April 25, 2014, at cost (689,167) (690,019)
    Total Stockholders' Equity 374,079 385,588
    Total Liabilities and Stockholders' Equity $1,054,457 $1,065,561
     
    Consolidated Statements of Cash Flows (unaudited)
         
      (in thousands)
      Three Months Ended
      July 25, 2014 July 26, 2013
        (as adjusted)
    Operating activities:    
    Net (loss) income $(1,016) $8,376
    Adjustments to reconcile net (loss) income to net cash provided by operating activities:    
    Depreciation and amortization 19,973 17,230
    Impairment of assets held for sale 258 8,609
    Loss on disposal/impairment of held and used fixed assets 1,180 1,273
    (Gain) loss on long-term investments (958) 482
    Deferred compensation 1,062 (343)
    Compensation expense attributable to stock plans 850 1,630
    Accretion on long-term note receivable (445) (662)
    Amortization of deferred financing costs 147 65
    Cash provided by (used for) assets and liabilities:    
    Accounts receivable 1,842 (394)
    Inventories 1,788 (483)
    Prepaid expenses (1,949) (895)
    Accounts payable (423) 256
    Federal and state income taxes 3,615 18,562
    Accrued wages and related liabilities (2,413) (7,024)
    Self-insurance (507) 585
    Accrued non-income taxes (405) 1,558
    Deferred revenue (1,231) (1,113)
    Other assets and liabilities (2,055) 318
    Net cash provided by operating activities 19,313 48,030
    Investing activities:    
    Purchase of property, plant and equipment (16,702) (53,292)
    Proceeds from sale of property, plant and equipment 338 610
    Deposits and other (243) 165
    Net cash used in investing activities (16,607) (52,517)
    Financing activities:    
    Cash dividends paid (7,278) (7,547)
    Net (decrease) increase in credit facility (62) 13,244
    Proceeds from long-term debt 2,933
    Payments of debt issuance costs (1,279)
    Purchase of treasury stock (6,940)
    Proceeds from issuance of stock awards and treasury stock 197 3,454
    Cash paid for net shares settled (1,675) (2,116)
    Excess tax benefits from stock-based compensation 257 1,481
    Net cash (used in) provided by financing activities (6,907) 1,576
    Decrease in cash and equivalents (4,201) (2,911)
    Cash and equivalents at the beginning of the period 7,826 9,010
    Cash and equivalents at the end of the period $3,625 $6,099
     
    Bob Evans Restaurants openings and closings, by quarter
                     
    Future quarters represent estimates for fiscal 2015
                     
    Fiscal Year Beginning Total Q1 Q2 Q3 Q4 Full Year Closings Ending Total
    2015 561 1 5 2 8 569
    2014 560 1 1 1 1 4 3 561
    2013 565 2 2 7 560
    2012 563 2 2 4 2 565
    2011 569 2 2 8 563
     
    Bob Evans Restaurants same-store sales analysis (18-month core; 557 restaurants)
                       
      Fiscal 2015 Fiscal 2014 Fiscal 2013
      Nominal Menu Real Nominal Menu Real Nominal Menu Real
    May (1.6) 1.5 (3.1) (0.9) 3.0 (3.9) 0.7 2.2 (1.5)
    June (2.0) 2.4 (4.4) 0.3 3.0 (2.7) (0.3) 1.9 (2.2)
    July (2.3) 1.6 (3.9) (1.0) 3.8 (4.8) 2.3 0.9 1.4
    Q1 (2.0) 1.8 (3.8) (0.6) 3.3 (3.9) 1.0 1.6 (0.6)
    August       (0.7) 4.2 (4.9) 1.5 0.9 0.6
    September       (2.0) 3.8 (5.8) (0.4) 1.4 (1.9)
    October       (2.9) 2.2 (5.0) 1.6 3.1 (1.5)
    Q2       (1.9) 3.3 (5.2) 1.0 1.9 (0.9)
    November       0.4 2.2 (1.8) 2.1 2.8 (0.7)
    December       (1.7) 2.2 (3.9) (0.5) 2.7 (3.2)
    January       (4.7) 2.2 (6.9) 3.1 2.7 0.4
    Q3       (1.8) 2.2 (3.9) 1.6 2.8 (1.2)
    February       (6.7) 1.9 (8.6) (4.0) 3.1 (7.1)
    March       (3.6) 1.5 (5.1) 3.6 3.5 0.1
    April       (2.7) 1.5 (4.2) 1.7 3.4 (1.7)
    Q4       (4.1) 1.6 (5.8) 0.5 3.4 (2.8)
                       
    Fiscal year (2.0) 1.8 (3.8) (2.1) 2.6 (4.7) 1.0 2.4 (1.4)
     
    Bob Evans Restaurants key restaurant sales data (core restaurants only)
       
      Bob Evans Restaurants
    Average annual store sales ($) - FY14 $1,706,000
    Q1 FY2015 day part mix (%):  
    Breakfast 34%
    Lunch 36%
    Dinner 30%
    Q1 FY2015 dine-in check average per guest ($):  
    Breakfast $8.84
    Lunch $9.36
    Dinner $9.46
    Q1 FY2015 dine-in check average per guest ($): $9.21
    Q1 FY2015 dine-in check average per ticket ($): $18.25
    Q1 FY2015 carry-out check average per ticket ($): $14.93
     
    BEF Foods historical sow cost review (average cost per hundredweight)
               
    Fiscal Year Q1 Q2 Q3 Q4 Average
    2015 $87.87       $87.87
    2014 $63.24 $77.33 $72.36 $78.47 $73.23
    2013 $54.19 $43.22 $58.72 $59.07 $53.87
    2012 $57.06 $67.82 $60.56 $60.41 $61.58
    2011 $59.52 $60.47 $51.16 $59.05 $57.17
               
    BEF Foods total pounds sold review
               
    Fiscal Year Q1 Q2 Q3 Q4 Average
    2015 (6.1)%       (6.1)%
    2014 13.0% 0.2% (11.1)% (6.9)% (2.4)%
    2013 7.2% 16.1% 13.1% 21.4% 14.6%
    2012 (2.7)% 3.1% 0.9% (1.3)% 0.1%
    2011 (1.1)% (14.7)% (7.9)% (4.6)% (7.1)%
               
    BEF Foods total pounds sold, by category
               
    Fiscal 2015          
               
    Category Q1 Q2 Q3 Q4  
    Sausage 19.3%        
    Sides 42.0%        
    Frozen 4.6%        
    Food Service 30.0%        
    Other 4.1%        
               
    Fiscal 2014          
               
    Category Q1 Q2 Q3 Q4  
    Sausage 22.3% 23.5% 29.5% 21.5%  
    Sides 39.4% 40.2% 40.7% 43.9%  
    Frozen 5.0% 5.1% 4.8% 4.8%  
    Food Service 29.7% 27.5% 21.5% 25.7%  
    Other 3.6% 3.7% 3.5% 4.1%  
     
    BEF Foods net sales review (dollars in thousands)
         
      Q1 2015 Q1 2014
    Gross sales $94,870 $95,254
    Less: promotions (8,406) (9,661)
    Less: returns and slotting (274) (695)
    Net sales $86,190 $84,898
    CONTACT: Scott C. Taggart         Vice President, Investor Relations         (614) 492-4954

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