| Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Description of Business: We produce and distribute a variety of complementary home-style, refrigerated side-dish convenience food items and pork sausage under the Bob Evans ®, Owens ® and Country Creek ® brand names. These food products are available throughout the United States at grocery retailers. We also manufacture and sell similar products to food-service accounts, including Bob Evans Restaurants and other restaurants. The revenue from sales to Bob Evans Restaurants were eliminated in consolidation. On January 24, 2017, we entered into an Asset and Membership Interest Purchase Agreement (the "BER Sale Agreement") with Bob Evans Restaurants, LLC (formerly BER Acquisition, LLC) a Delaware limited liability company formed by affiliates of Golden Gate Capital Opportunity Fund, L.P. ("the Buyer"). The Buyer completed the acquisition of the Company's Bob Evans Restaurants Business (the "Restaurants Business"), including our corporate headquarters, on April 28, 2017 (the "Restaurants Transaction"). For all periods presented in our Consolidated Statements of Net Income, all sales, costs, expenses, gains and income taxes attributable to our Restaurants Business as well as the Restaurants Transaction have been reported under the captions "Income from Discontinued Operations, Net of Income Taxes." Cash flows used in or provided by our Restaurants Business have been reported in the Consolidated Statements of Cash Flows under operating and investing activities. Refer to Note 2 - Discontinued Operations for additional information. Prior to the decision to sell our Restaurants Business, we had two reporting segments, Bob Evans Restaurants and BEF Foods. BEF Foods sells food products throughout the retail grocery and food service channels, including to Bob Evans Restaurants. Corporate and other costs related to shared services functions were not allocated to our reporting segments. As a result of the decision to sell our Restaurants Business, which is now classified as discontinued operations, we have one reporting segment. Revenues and costs related to our BEF Foods business, including indirect corporate overhead costs, are reported within results from continuing operations. All revenues and costs incurred directly in support of the Bob Evans Restaurants business are presented in results from discontinued operations. Prior year information has been adjusted to conform with the current presentation. Unless otherwise stated, the information disclosed in footnotes accompanying the financial statements refer to continuing operations. See Note 2 for additional information regarding results from discontinued operations. Principles of Consolidation: The consolidated financial statements include the accounts of Bob Evans and its subsidiaries. Intercompany accounts and transactions have been eliminated. Dollars are in thousands, except share and per share amounts. Use of Estimates: The preparation of financial statements in conformity with US GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. Actual results could differ from the estimates and assumptions used. Fiscal Year: Our fiscal year ends on the last Friday in April. References herein to fiscal 2017 , fiscal 2016 and fiscal 2015 refer to fiscal years ended April 28, 2017 , April 29, 2016 , and April 24, 2015 , respectively. Fiscal years 2017 and 2015 were 52 week periods, whereas fiscal year 2016 was a 53 week period. Revenue Recognition: Revenue is recognized when products are received by our customers. We engage in promotional (sales incentives or trade spend) programs in the form of "off-invoice" deductions, billbacks, cooperative advertising and coupons with our customers. Costs associated with these programs are classified as a reduction of gross sales in the period in which the sale occurs. Promotional spending for continuing operations, primarily comprised of off-invoice deductions and billbacks, was $ 84,748 , $79,302 , and $ 56,618 for fiscal years 2017 , 2016 and 2015 , respectively. Shipping and Handling costs: Expenditures related to shipping our BEF Foods products to our customers are expensed when incurred. Shipping and handling costs were $ 16,125 , $14,850 and $17,025 in fiscal years 2017 , 2016 and 2015 , respectively, and are recorded in the other operating expenses line of the Consolidated Statements of Net Income. Cash Equivalents: We consider all highly liquid instruments with a maturity of three months or less when purchased to be cash equivalents. We did not own any cash equivalents as of April 28, 2017 , or April 29, 2016 . Accounts Receivable: Accounts receivable represents amounts owed to us through our operating activities and are presented net of allowance for doubtful accounts and promotional incentives. Accounts receivable consist primarily of trade receivables from customer sales. We evaluate the collectability of our accounts receivable based on a combination of factors. In circumstances where we are aware of a specific customer’s inability to meet its financial obligations to us, we record a specific allowance for bad debts against amounts due to reduce the net recognized receivable to the amount we reasonably believe will be collected. In addition, we recognize allowances for bad debts based on the length of time receivables are past due with allowance percentages, based on our historical experiences, applied on a graduated scale relative to the age of the receivable amounts. If circumstances such as higher than expected bad debt experience or an unexpected material adverse change in a major customer’s ability to meet its financial obligations to us were to occur, the recoverability of amounts due to us could change by a material amount. We had allowances for doubtful accounts of $269 and $421 as of April 28, 2017 , and April 29, 2016 , respectively. Accounts receivable are reduced by $8,055 and $4,916 as of April 28, 2017 , and April 29, 2016 , respectively, related to promotional incentives that reduce what is owed to the Company from certain BEF Foods customers. Concentration of Credit Risk: We maintain cash depository accounts with major banks. Accounts receivable can be potentially exposed to a concentration of credit risk with customers or in particular industries. In fiscal 2017 sales to Wal-mart comprised approximately 20% of net sales from continuing operations while sales to Kroger comprised approximately 14% of net sales from continuing operations. Reserves for credit losses have historically been within our expectations. Notes Receivable: As a result of the sale of Mimi’s Café to Le Duff, we received a promissory note ("the Note") for $30,000 . The Note had an annual interest rate of 1.5% , a term of seven years and a full principal and interest payment date of February 2020. Partial prepayments were required prior to maturity if the buyer reached certain levels of EBITDA during specified periods. No partial prepayments were received on this Note. The Note was originally valued using a discounted cash flow model and we recognized accretion income of $1,133 , $ 2,082 and $1,859 in fiscal years 2017 , 2016 and 2015 , respectively. In the third quarter of fiscal 2017, we reached an agreement with Mimi's Café and settled the Note. We received a payment of $7,000 which settled all of Mimi's Café outstanding obligations of the Note. The settlement resulted in an impairment charge of $15,256 , which was recorded in the Impairments line of the Consolidated Statements of Net Income. Inventories: Our inventories are determined on an average cost method which approximates a first in, first out basis due to the perishable nature of our inventory. Inventory includes raw materials and supplies ($ 6,037 in fiscal 2017 and $ 5,911 in fiscal 2016 ) and finished goods ($ 11,173 in fiscal 2017 and $ 11,182 in fiscal 2016 ). Inventories associated with the Restaurants Business were transferred to the Buyer as part of the Restaurants Transaction. See Note 2 for additional information. Property, Plant and Equipment: Property, plant and equipment is recorded at cost less accumulated depreciation. The straight-line depreciation method is used for all capitalized assets. Depreciation is calculated at rates adequate to amortize costs over the estimated useful lives of buildings and improvements ( 5 to 25 years) and machinery and equipment ( 3 to 10 years). Improvements to leased properties are depreciated over the shorter of their useful lives or the initial lease terms. Total depreciation expense from continuing operations was $23,875 , $20,887 and $18,207 and in fiscal years 2017 , 2016 and 2015 , respectively. We capitalized internal labor costs of $605 , $1,557 and $2,118 in fiscal years 2017 , 2016 and 2015 , respectively, primarily associated with the first and second phases of our ERP implementation and other IT projects. The first phase of our ERP system was put in service in the first quarter of fiscal 2016 , and has an expected useful life of ten years . The second phase of our ERP system was put in service in the second quarter of fiscal year 2017 and also has an expected useful life of 10 years . We evaluate property, plant and equipment held and used in the business for impairment whenever events or changes circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. Impairment is determined by comparing the estimated fair value for the asset group to the carrying amount of its assets. If impairment exists, the amount of impairment is measured as the excess of the carrying amount over the estimated fair values of the assets. Assets associated with our Richardson, Texas, location totaling $3,334 are classified as Current Assets Held for Sale in the Consolidated Balance Sheet as of April 28, 2017 and April 29, 2016 . Goodwill and Other Intangible Assets: Goodwill and other intangible assets, which primarily represents the cost in excess of fair market value of net assets acquired, were $19,673 and $ 19,829 as of April 28, 2017 , and April 29, 2016 , respectively. The majority of our goodwill was acquired as part of our fiscal 2013 acquisition of Kettle Creations. Additionally, as part of this acquisition we obtained a non-compete agreement with certain executives of the former company. The Kettle Creations non-compete agreement is amortized on a straight-line basis over its estimated economic life of five years. Goodwill and intangible assets with indefinite lives are not amortized, but rather are tested for impairment during the fourth quarter each year or on a more frequent basis when indicators of impairment exist. Goodwill and indefinite lived intangible asset impairment testing involves a comparison of the estimated fair value of reporting units to the respective carrying amount. If the estimated fair value exceeds the carrying amount, then no impairment exists. If the carrying amount exceeds the estimated fair value, then a second step is performed to determine the amount of impairment, if any. We perform our impairment test using a combination of income-based and market-based approaches. The income based approach indicates the fair value of an asset or business based on the cash flows it can be expected to generate over its remaining useful life. Under the market-based approach, fair value is determined by comparing our reporting units to similar businesses or guideline companies whose securities are actively traded in public markets. There have been no impairments to our goodwill in the current or prior years. Accrued Non-Income Taxes: Accrued non-income taxes primarily represent obligations for real estate and personal property taxes. Accrued non-income taxes were $3,353 and $890 at April 28, 2017 , and April 29, 2016 , respectively. Accrued non-income taxes associated with the Restaurants Business were conveyed to the Buyer as part of the Restaurants Transaction. See Note 2 - Discontinued Operations for additional information. Self-Insurance Reserves: We record estimates for certain health, workers’ compensation and general liability insurance costs that are self-insured programs. Self-insurance reserves include actuarial estimates of both claims filed, carried at their expected ultimate settlement value, and claims incurred but not yet reported. Our liability represents an estimate of the ultimate cost of claims incurred as of the fiscal year end balance sheet date. Self-insurance reserves were $10,692 and $11,288 at April 28, 2017 , and April 29, 2016 , respectively. Workers compensation reserves associated with the Restaurants Business were transferred to the Buyer as part of the Restaurants Transaction. See Note 2 for additional information. Other Accrued Expenses: Other accrued expenses consisted of the following: (in thousands) April 28, 2017 April 29, 2016 Legal and professional fees $ 10,807 $ 4,119 Accrued customer incentives 1,912 1,872 Accrued broker fees 945 957 Accrued advertising 515 727 Accrued utilities 492 449 Accrued interest 16 541 Other 3,218 4,949 Total other accrued expenses $ 17,905 $ 13,614 Advertising Costs: Media advertising is expensed at the time the media first airs. We expense all other advertising costs as incurred. Advertising expense from continuing operations was $ 9,006 , $ 6,658 and $ 3,607 in fiscal years 2017 , 2016 and 2015 , respectively. Advertising costs are classified in other operating expenses in the Consolidated Statements of Net Income. Cost of Sales: Cost of sales represents primarily the cost of materials. Cost of sales excludes depreciation expense, which is recorded in the depreciation and amortization expense line on the Consolidated Statements of Net Income. Comprehensive Income: Comprehensive income is the same as reported net income as we have no other comprehensive income. Earnings Per Share: Our basic earnings per share ("EPS") computation is based on the weighted-average number of shares of common stock outstanding during the period presented. Our diluted EPS calculation reflects the assumed vesting of restricted shares and market-based performance shares, the exercise and conversion of outstanding employee stock options and the settlement of share-based obligations recorded as liabilities on the Consolidated Balance Sheets (see Note 6 for more information), net of the impact of antidilutive shares. The numerator in calculating both basic and diluted EPS for each period is reported net income. The denominator is based on the following weighted-average shares outstanding: (in thousands) 2017 2016 2015 Basic 19,839 21,336 23,489 Dilutive shares 293 158 160 Diluted 20,132 21,494 23,649 In fiscal years 2017 , 2016 and 2015 , respectively, there were 215,889 , 207,538 and 124,766 shares of common stock excluded from the diluted earnings per share calculations because they were antidilutive. Dividends: In fiscal 2017 , we paid four quarterly dividends, each equal to $0.34 per share on our outstanding common stock. Individuals that hold awards for unvested and outstanding restricted stock units, market-based performance share units and outstanding deferred stock awards are entitled to receive dividend equivalent rights equal to the per-share cash dividends paid on outstanding units. Dividend equivalent rights are forfeitable until the underlying share units from which they were derived vest. Share-based dividend equivalents are recorded as a reduction to retained earnings, with an offsetting increase to capital in excess of par value. Refer to table below: 2017 2016 Cash dividends paid to common stock holders $ 26,915 $ 27,861 Dividend Equivalent Rights 560 400 Total dividends $ 27,475 $ 28,261 Leases: In fiscal 2016, we entered into sale leaseback transactions for two of our production facilities. The transaction included 20 -year initial lease terms for each facility, with two 10 -year additional renewal periods exercisable at our option, 2% annual rent increases and payment and performance guaranties. A gain of $2,305 on the sale of our Lima, Ohio, facility was deferred and is being recognized on a straight-line basis over the initial term of the lease. Rent expense is recorded on a straight-line basis. Our straight-line rent calculation does not include an assumption of lease renewal periods. We record the difference between the amount charged to expense and the rent paid as deferred rent in the Consolidated Balance Sheets. Rent expense was $ 4,117 and $2,202 in fiscal years 2017 and 2016 , respectively. Refer to the following table for expected future minimum lease payments, which excludes the impact of any available renewal periods: (in thousands) 2018 2019 2020 2021 2022 Thereafter Future operating lease payments $ 3,586 $ 3,657 $ 3,731 $ 3,805 $ 3,881 $ 60,657 Income Taxes: We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. We record uncertain tax positions in accordance with the Income Taxes Topic of the Financial Accounting Standards Board ("FASB ") ASC 740 on the basis of a two-step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying Consolidated Statement of Net Income. Accrued interest and penalties are included within the related tax liability line in the Consolidated Balance Sheets. See Note 4 for additional information. Commitments and Contingencies: We occasionally use purchase commitment contracts to stabilize the potentially volatile pricing associated with certain commodity items. We are self-insured for most casualty losses and employee health care claims up to certain stop-loss limits per claim. We have accounted for liabilities for casualty losses, including both reported claims and incurred but not reported claims, based on information provided by independent actuaries. We have estimated our employee health care claims liability through a review of incurred and paid claims history. The Company retained liabilities for health insurance and general liability claims associated with the Restaurants Business that were incurred prior to the closing of the Restaurants Transaction. We do not believe that our calculation of casualty losses and employee health-care claims liabilities would change materially under different conditions and/or different methods. However, due to the inherent volatility of actuarially determined casualty losses and employee health care claims, it is reasonably possible that we could experience changes in estimated losses, which could be material to net income. We are from time to time involved in ordinary and routine litigation, typically involving claims from customers, employees and others related to operational issues common to the food manufacturing industry. Management believes that the ultimate outcome of these proceedings, individually or in the aggregate, will not have a material adverse effect on our financial position, cash flows or results of operations. See Note 8 for further information. As part of the Restaurants Transaction, the Company and BEF Foods, Inc. continue to guarantee certain payment and performance obligations associated with Bob Evans Restaurants leases associated with the sale leaseback transaction that occurred in the fourth quarter of fiscal 2016. See Note 2 for additional information. New Accounting Pronouncements : In the normal course of business, management evaluates all new accounting pronouncements issued by the FASB, the Securities and Exchange Commission (“SEC”), the Emerging Issues Task Force, the American Institute of Certified Public Accountants or any other authoritative accounting body to determine the potential impact they may have on the Company’s consolidated financial statements. The pronouncements below were either adopted by the Company in fiscal 2017 or will be effective for the Company in future years. In May 2014, the FASB and the International Accounting Standards Board ("IASB") issued new joint guidance surrounding revenue recognition. Under US GAAP, this guidance is being introduced to the ASC as Topic 606, Revenue from Contracts with Customers ("Topic 606"), by Accounting Standards Update No. 2014-09. The new standard supersedes a majority of existing revenue recognition guidance under US GAAP, and requires companies to recognize revenue when it transfers goods or services to a customer in an amount that reflects the consideration to which a company expects to be entitled. Companies may need to use more judgment and make more estimates while recognizing revenue, which could result in additional disclosures to the financial statements. Topic 606 allows for either a "full retrospective" adoption or a "modified retrospective" adoption. The standard will become effective for us in fiscal 2019. We are in the process of implementing the new standard, focusing on promotional arrangements with customers. We do not believe the implementation will be material to our current or historical financial statements. We are in the process of developing additional controls to ensure proper oversight of new customer relationships and promotional activity, as well as to ensure we meet all of the disclosure requirements associated with the new standard. We have not yet concluded which transition method we will elect, but anticipate we will use the modified retrospective approach. In August 2014, the FASB issued Accounting Standards Update ("ASU") No. 2014-15, Presentation of Financial Statements - Going Concern to provide guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern. The guidance requires management to assess whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity's ability to continue as a going concern within one year after the date that the financial statements are issued. When management identifies such conditions or events, a footnote disclosure is required to disclose their nature, as well as management's plans to alleviate the substantial doubt to continue as a going concern. The standard became effective for our fiscal year end 2017 and did not have an impact on the consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory. ASU 2015-11 simplifies the subsequent measurement of inventory by replacing today's lower of cost or market test with a lower of cost or net realizable test, which is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The standard will become effective for us in fiscal 2018. We do not expect this update to have a material impact on the consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases. This guidance requires companies to put most leases on their balance sheets but recognize expenses on their income statements in a manner similar to today’s accounting. The new standard also will result in enhanced quantitative and qualitative disclosures, including significant judgments made by management, to provide greater insight into the extent of revenue and expense recognized and expected to be recognized from existing leases. The standard requires modified retrospective adoption and will become effective beginning in fiscal 2020, with early adoption permitted. We are currently evaluating this standard, including the timing of adoption and the related impact on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Compensation Accounting. ASU 2016-09 requires that excess tax benefits are recorded on the income statement as opposed to additional paid-in-capital, and treated as an operating activity on the statement of cash flows. ASU 2016-09 also allows companies to make an accounting policy election to either estimate the number of awards that are expected to vest (current U.S. GAAP) or account for forfeitures when they occur. ASU 2016-09 further requires cash paid by an employer when directly withholding shares for tax-withholding purposes to be classified as a financing activity on the statement of cash flows. The standard will become effective for us in fiscal 2018. We are currently evaluating the impact this standard will have on our consolidated financial statements. In June 2016, FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses. ASU 2016-13 introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale (AFS) debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The standard will become effective for us in our fiscal 2021. We do not expect this standard to have a material impact on the consolidated financial statements. In August 2016, FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The guidance is to be applied using a retrospective transition method to each period presented. This standard will become effective for us in our fiscal 2019. We are currently evaluating the impact this standard will have on our consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment." ASU 2017-04 simplifies the accounting for goodwill impairments by eliminating Step 2 from the goodwill impairment test. Under the previous guidance an impairment of goodwill exists when the carrying amount of goodwill exceeds its implied fair value, whereas under the new guidance a goodwill impairment loss would be recognized if the carrying amount of the reporting unit exceeds its fair value, limited to the total amount of goodwill allocated to that reporting unit. The ASU is effective for annual and any interim impairment tests for periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are currently evaluating the impact this standard will have on our consolidated financial statements. |
