FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended April 26, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from _________________ to __________________
Commission File Number 0-1667
Bob Evans Farms, Inc.
(Exact name of registrant as specified in its charter)
Delaware 31-4421866
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3776 South High Street, Columbus, Ohio 43207
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 614-491-2225
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock with $.01 par value
(Title of class)
This Report contains 74 pages of which this is page 1. The Exhibit Index
begins at page 58.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes __X__ No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. ( X )
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. The aggregate market value has been computed by reference to
the last quoted sale price of such stock, as of July 12, 1996.
Total shares outstanding 42,235,163
Number of shares owned beneficially and/or
of record by directors and executive
officers* 1,829,565
Number of shares held by persons other than
directors and executive officers 40,405,598
Last quoted sale price $16.125
Market value of shares held by persons other
than directors and executive officers $651,540,267.75
*For purposes of this computation, all executive officers and directors are
included, although not all are necessarily "affiliates."
Indicate the number of shares outstanding of each of the registrant's classes
of common stock, as of the latest practicable date.
42,235,163 shares of Common Stock with $.01 par value were outstanding at July
12, 1996.
DOCUMENTS INCORPORATED BY REFERENCE
1. Annual Report to Stockholders for the Fiscal Year
Ended April 26, 1996 (in pertinent part, as indicated) ....PART II
2. Proxy Statement dated Aug. 2, 1996, for the Annual
Meeting of Stockholders to be held on Sept. 9, 1996
(in pertinent part, as indicated) ........................PART III
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PART I
Item 1. BUSINESS.
Bob Evans Farms, Inc. (the "Registrant") is a Delaware corporation
incorporated on Nov. 4, 1985. It is the successor by merger to Bob Evans
Farms, Inc., an Ohio corporation incorporated in 1957. BEF Holding Co., Inc.
is a subsidiary of the Registrant. The subsidiaries owned by BEF Holding
Co., Inc. include Bob Evans Farms, Inc., an Ohio corporation ("BEF Ohio");
Owens Country Sausage, Inc. ("Owens"); Mrs. Giles Country Kitchens, Inc.
("Mrs. Giles"); and Hickory Specialties, Inc. ("Hickory Specialties"). On
Oct. 16, 1995, BEF RE Holding Co., Inc. was formed as a wholly owned
subsidiary of BEF Ohio and BEF REIT, Inc. was formed as a majority-owned
subsidiary of BEF RE Holding Co., Inc. The Registrant; BEF Holding Co. Inc.;
BEF RE Holding Co., Inc.; BEF REIT, Inc.; BEF Ohio; Owens; Mrs. Giles; and
Hickory Specialties are collectively referred to herein as the "Company."
The business of the Company is divided into two principal industry segments:
the food products segment and the restaurant segment.
Food Products Segment Operations
Principal Products and Procurement Methods
The Company's traditional business in its food products segment has been the
production and distribution of approximately 30 varieties of fresh, smoked and
fully-cooked pork sausage and ham products under the brand names of Bob Evans
Farms and Owens Country Sausage. In recent years, the Company has begun to
expend more time and effort on both new product development and sales of its
pork sausage and ham products to institutional and foodservice purchasers. The
Company also established a frozen foods division to create new distribution
and marketing strategies for new frozen product lines. In addition, the
Company has been exploring the expansion of the products offered in its food
products segment through the acquisition of companies producing food and food
related products which complement the Company's traditional sausage products.
During the fiscal year ended April 29, 1994 (the "1994 fiscal year"), sales of
sausage products contributed 77% of total revenues; sales of products by Mrs.
Giles contributed 11%; and sales of Hickory Specialties contributed 12%.
During the fiscal year ended April 28, 1995 (the "1995 fiscal year"), sales of
sausage products contributed 76% of total revenues; sales of products by Mrs.
Giles contributed 11%; and sales of Hickory Specialties contributed 13%.
During the fiscal year ended April 26, 1996 (the "1996 fiscal year"), sales of
sausage products contributed 77% of total revenues; sales of products by Mrs.
Giles contributed 10%; and sales of Hickory Specialties contributed 13%.
-3-
During the last several years, the Company has expanded its product line in
the Bob Evans and Owens markets to include convenience items for meals and
snacks that are microwaveable. During the 1996 fiscal year, the Company
introduced Snackwiches, a convenience sandwich product; and beer bratwursts in
all Bob Evans markets. Also during the fiscal year, Skillets, a convenience
entree product; Special Seasonings flavored roll sausage; and sausage balls, a
fully cooked convenience product, were introduced in most Owens markets. In
the fall of 1995, the frozen foods division introduced frozen white dinner
rolls and buttermilk biscuits into the Cincinnati, Columbus and Toledo markets
with further testing expected.
Since 1991, the Company has offered fresh, prepared salads in its food
products segment. The refrigerated, deli salads are intended as convenience
items for meals, and include deluxe macaroni salad, Italian pasta salad,
homestyle potato salad, chunky chicken salad, classic cole slaw, pimento
cheese spread and smokehouse baked beans. During the 1996 fiscal year, New
Orleans-style gumbo, Louisiana-style rice creole and ruffled pasta and cheese
were introduced in all Mrs. Giles markets. The deli items manufactured by Mrs.
Giles are distributed principally in the southern and southeastern markets of
the United States under the brand names of Mrs. Giles and Mrs. Kinser's. Bob
Evans Harvest Salads, a line of fresh, premium quality, prepared salads first
offered in 1992, are currently being marketed in more than half of the Bob
Evans Farms marketing areas.
With the acquisition of Hickory Specialties in March 1992, the Company
expanded into food-related products which complement its existing food
products business. Hickory Specialties produces premium quality charcoal, wood
smoking chips, natural smoke flavorings, gas grill ceramic briquettes and
grilling systems. Brand names of such products include Nature-Glo, Old
Hickory, Jack Daniels, Zesti Smoke, Wildfire and Woodstone. This past year,
Hickory Specialties introduced two new products, Wildfire Gourmet Hickory
Charcoal and Woodstone Gas Grill Briquettes. A new charcoal manufacturing
facility was completed in December 1995 and fully operational by April 1996 in
Summer Shade, Ky. Hickory Specialties' products are marketed nationwide, and
the Company is exploring various opportunities abroad, especially with respect
to its liquid smoke flavorings products.
During the 1996 fiscal year, the food products segment of the Company
continued to produce specialty items for its institutional and foodservice
customers. These products are made to customer specifications, and include
fresh sausage links and patties, sausage gravy, and biscuit sandwiches.
Although this segment of the business does not command the higher pre-tax
margins that branded items do, it gives the Company additional incremental
volume in the production plants. Foodservice volume accounts for less than 10
percent of the Company's total volume sold and is expected to remain in that
range in the 1997 fiscal year. The Company is also marketing its prepared
salad products to institutional and foodservice customers.
All of the Company's pork sausage and ham products are produced in the
Company's seven processing plants located in Xenia, Bidwell and Springfield,
Ohio; Hillsdale, Mich.; Galva, Ill.; and Richardson and Fort Worth, Texas. The
Springfield, Ohio, and Hillsdale, Mich., plant are producing the products for
sale to foodservice distributors.
-4-
Live hogs are procured from terminals; local and country markets; and
corporate farms in Ohio, Indiana, Illinois, Iowa, North Carolina, Kansas,
Michigan, Nebraska, South Dakota, Pennsylvania, Wisconsin, Minnesota, West
Virginia, Missouri, Oklahoma and Texas at daily prevailing market prices. The
Company does not contract in advance for the purchase of live hogs. Live hogs
procured in these markets are purchased by an employee of the Company. Live
hogs are then transported overnight directly from the various markets in which
they were purchased to five of the Company's processing plants where they are
slaughtered and processed into various pork sausage products. These products,
in turn, are shipped daily from the plant facilities for distribution to the
Company's customers. To date, the Company has experienced no difficulty in
procurring live hogs for its pork sausage products.
All of the Company's prepared salad products are produced at the Company's
plant in Lynchburg, Virginia. Food items used in the manufacture of the
Company's salad products include potatoes, cheese, eggs, macaroni and other
pastas, fresh vegetables, chicken, tuna and salad dressings. These items are
purchased by the Company directly from various suppliers. The Company believes
that there are a number of suppliers of the items used in its salad products
and that its sources of supply of these items are adequate for its needs.
The Hickory Specialties charcoal products are produced at the Company's plants
in Crossville, Tenn., and Summer Shade, Ky.; and the Hickory Specialties
liquid smoke flavoring products are produced at the Company's plants in
Crossville, Tenn.; Greenville, Mo.; and Summer Shade, Ky. The principal raw
materials used by the Company in the manufacture of the Hickory Specialties
products are sawdust and other related wood by-products. All are available
from a wide range of suppliers. The Company has experienced no difficulty in
obtaining raw materials for its Hickory Specialties products and anticipates
no future difficulty in that regard.
Distribution Methods
The Company uses two delivery methods for Bob Evans Farms Sausage:
(1) Primarily, the direct store delivery system (i.e., the Company's products
are not warehoused, but are delivered to grocery stores as described below) is
used for the retail distribution of the sausage, biscuit and other products
bearing the Bob Evans Farms brand name, including Bob Evans Harvest Salads.
One hundred eight driver-salesmen, employed by the Company and driving
Company-owned refrigerated trucks, deliver the Company's products directly to
more than 8,500 supermarkets and independent retail groceries.
(2) During the 1996 fiscal year, the Company continued to test alternate
distribution methods for its sausage products, and as a result, Bob Evans
Farms brand products are available through a warehouse in the Greater New York
City area and a distributor in Madison and Milwaukee, Wis., on a limited
basis. A warehouse is also used for the new frozen foods division established
during fiscal year 1996.
The marketing territory for Bob Evans Farms brand products as well as the Bob
Evans Harvest Salads includes Ohio, Michigan, Indiana, Illinois, Delaware and
-5-
the District of Columbia, as well as portions of Alabama, Iowa, Kentucky, West
Virginia, Pennsylvania, New Jersey, Maryland, Virginia, New York, Tennessee,
Missouri, Wisconsin and Georgia.
Products distributed under the Owens Country Sausage brand name are
distributed to retail customers in two ways:
(1) Company-owned transport trucks deliver directly to most major
supermarket chain warehouse distribution centers in the Owens marketing
area. Thereafter, the products are shipped to individual retail outlets.
(2) Thirty-one driver-salesmen, driving Company-owned refrigerated trucks,
deliver products directly to supermarkets and independent retail
groceries.
Owens' marketing territory includes Texas, Arkansas, Oklahoma, New Mexico,
Louisiana, Arizona, Colorado, Nevada and portions of Mississippi and Kansas.
Owens Country Sausage products are available in more than 5,000 supermarkets
and independent retail groceries.
Distribution to the Company's foodservice customers is accomplished through
frozen food brokers and distributors.
Mrs. Giles salad products are distributed to more than 4,500 supermarkets and
independent groceries in three ways:
(1) through direct store delivery by Company employees to customers within the
Bob Evans Farms marketing territory;
(2) through food brokers and distributors;
(3) through direct shipment to customers.
The marketing territory for Mrs. Giles salad products includes Alabama,
Florida, Georgia, Kentucky, Louisiana, Maryland, North Carolina, Pennsylvania,
South Carolina, Tennessee, Texas and Virginia.
Hickory Specialties charcoal products are distributed nationwide to retail
customers, and its liquid smoke flavoring products are distributed nationally
and internationally to food products manufacturers and pet food manufacturers,
through brokers and distributors and through direct shipment to customers.
-6-
Inventory Levels
All of the Company's sausage products and salad products are highly perishable
in nature and require proper refrigeration. Shelf life of the sausage products
ranges from 18 to 45 days; of the Bob Evans Harvest Salads from 21 to 28 days;
and of the Mrs. Giles salad products from 15 to 45 days. Due to the highly
perishable nature and short shelf life of the Company's sausage products, the
Company's processing plants normally process only enough product to fill
existing orders. Due to the highly perishable nature and short shelf life of
the Company's salad products, the Company's Lynchburg plant normally processes
only enough product to fill existing orders. Therefore, the Company maintains
minimal inventory levels of sausage products and of salad products, because
such products are generally manufactured only to meet existing demand and are
delivered to retail outlets within a three-day period after manufacture.
Hickory Specialties products are not perishable in nature. Although such
products are manufactured throughout the year, the greatest amount of
production of charcoal briquettes occurs in the winter months in anticipation
of the peak selling season for charcoal from April through September.
Trademarks and Service Marks
The Company maintains various trademarks and service marks that identify
various Bob Evans Farms, Owens Country Sausage, Mrs. Giles and Hickory
Specialties products. The principal trademarks used to identify the Mrs. Giles
salad products are Mrs. Giles and Mrs. Kinser's. The principal trademarks used
to identify the Hickory Specialties charcoal products are Old Hickory,
Nature-Glo, Jack Daniels, Wildfire and Woodstone, and the principal trademark
used to identify the Hickory Specialties liquid smoke flavoring products is
ZestiSmoke. These trademarks and service marks are renewed periodically and
the Company believes that such trademarks and service marks adequately protect
the brand names of the Company. The operations of the food products segment of
the Company are not dependent upon any patents, licenses, franchises or
concessions.
Competition and Seasonality
The sausage business is highly competitive. It is also seasonal to the extent
that more pounds of fresh sausage are typically sold during the colder winter
months from October through April. The Company continues to promote products
for summer outdoor grilling in an attempt to create more volume during the
summer months. The Company competes primarily on the basis of the price and
quality of its sausage products. The Company is in direct competition with a
large number and variety of producers and wholesalers of similar products,
including companies active both locally and nationally, companies engaged in a
general meat packing business and companies in the same specialized field.
Many of such competitors have substantially greater financial resources and
higher volumes of total sales than the Company. While the Company does not
possess statistics which would enable it to make an accurate statement of its
percentage of the total sales of sausage in each of its market areas, the
Company believes that sales of its products constitute a significant portion
of sales of sausage of comparable price and quality in the majority of its
market areas.
-7-
The salad products business is highly competitive. It is also seasonal to the
extent that more salad products are typically sold during the warmer spring
and summer months from April through September. The Company competes primarily
on the basis of the price and quality of its salad products. The Company is in
direct competition with a large number and variety of producers and
wholesalers of similar products, including companies active both locally and
nationally, companies engaged in a general deli business and companies in the
same specialized field. Many of such competitors have substantially greater
financial resources and higher volumes of total sales than the Company. While
the Company does not possess statistics which would enable it to make an
accurate statement of its percentage of the total sales of salad products in
each of its market areas, the Company believes that sales of its products
constitute a small portion of sales of salad products of comparable price and
quality in the majority of its market areas.
The charcoal business is highly competitive. The charcoal business is also
seasonal to the extent that more charcoal products are typically sold during
the warmer spring and summer months from April through September. The Company
competes primarily on the basis of the price and quality of its charcoal
products. The Company is in direct competition with a large number and variety
of producers and wholesalers of similar products, including companies active
both locally and nationally. Many of such competitors have substantially
greater financial resources and higher volumes of total sales than the
Company. While the Company does not possess statistics which would enable it
to make an accurate statement of its percentage of total sales of charcoal
products in each of its market areas, the Company believes that the sales of
its products constitute a small portion of sales of charcoal products of
comparable price and quality in the majority of its market areas.
The Company is aware of only one major competitor, Red Arrow Products Co.,
Inc., in its liquid smoke flavoring business. The Company believes that it
produces approximately 70% of the liquid smoke flavorings produced and sold in
the United States and that this competitor accounts for approximately 30% of
the liquid smoke flavorings produced and sold in the United States.
Advertising
During the 1996 fiscal year, the Company spent approximately $9,816,000 for
advertising of its sausage and salad products, and approximately $1,102,000
for advertising of its charcoal and liquid smoke flavoring products.
Approximately 81% of this amount was spent on television, radio and newspaper
media. The remaining 19% was spent for various promotional programs throughout
the year in an attempt to maintain and gain market share for its products.
Dependence on a Single Customer
The Company's food products are sold through more than 18,000 retail grocery
stores and are available through such stores to approximately 50% of the
population of the continental United States. The Company's charcoal products
are sold nationwide and its liquid smoke flavoring products are sold
nationally and internationally. The Company is not dependent upon a single
customer or group of affiliated customers.
-8-
Sales on Credit; Aged Product
The Company typically allows seven to 30 day terms on the sales of its salad
and sausage products, and up to sixty days on its charcoal products. The
Company has not experienced any material bad debt problems, nor has the return
of aged product had a material effect on the Company.
Sources and Availability of Raw Materials
The Company is dependent upon the availability of live hogs to produce its
pork sausage and ham products. However, the Company has never experienced
shortages in the number of hogs available at prevailing market prices. The
live hog market is highly cyclical (both in terms of the number of hogs
available and the price therefor) and is dependent upon corn production, since
corn is the major food supply for hogs.
Food items used in the manufacture of the Company's salad products include
potatoes, cheese, eggs, macaroni and other pastas, fresh vegetables, chicken,
tuna fish and salad dressings. These items are purchased by the Company
directly from various suppliers. The Company believes that there are a number
of suppliers of the items used in its salad products and that its sources of
supply of these items are adequate for its needs.
The principal raw materials used by the Company in the manufacture of the
Hickory Specialties products are sawdust and other related wood by-products.
All are available from a wide range of suppliers. The Company has experienced
no difficulty in obtaining raw materials for the Hickory Specialties products
and anticipates no future difficulty.
Expansion of Distribution Area
New markets opened for the Company's sausage products during the 1996 fiscal
year included Madison and Milwaukee, Wis., for Bob Evans Farms products.
During fiscal year 1997, the Company plans to test a line of frozen dinner
entrees in Ohio.
The Company has no current plans for further geographic expansion of its
distribution area for Owens Country Sausage, the Mrs. Giles salad products or
the charcoal and liquid smoke flavoring products produced by Hickory
Specialties in the 1997 fiscal year.
Profit Margins Related to Sausage Production
The Company's profit margins for the portion of the Company's business
relating to sausage production are normally more favorable during periods of
lower live hog costs. During the 1996 fiscal year, the Company experienced
more normalized live hog costs than the 1995 record-low hog costs. The Company
expects live hog costs to increase over the next 12 months.
Restaurant Segment Operations
General
The Company operates full-service, family restaurants under the Bob Evans
Restaurants, Bob Evans "small-town" Restaurants, Bob Evans Restaurant &
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General Stores and Owens Family Restaurants names. The "small-town"
restaurants were designed to efficiently serve communities with smaller
population bases. The "small-town" restaurants serve the regular Bob Evans
menu and have seating for approximately 98 versus 167 in the newer Bob Evans
Restaurants. The Restaurant & General Stores feature a combined restaurant and
gift shop.
All of the Company's family restaurants feature a wide variety of menu
offerings designed to appeal to its customers. Breakfast entree items are
featured and served all day. The restaurants are typically open from 6 a.m.
until 10 p.m. Sunday through Thursday, with extended closing hours on Friday
and Saturday for most locations. Approximately 61% of total revenues from
restaurant operations are generated from 6 a.m. to 4 p.m., with the balance
generated from 4 p.m. to closing. Sales on Saturday and Sunday account for
approximately 39% of a typical week's revenues.
In addition, the Company operates full-service Mexican restaurants under the
Cantina del Rio name. These restaurants feature authentic southwestern foods
served in a Mexican atmosphere and are open from 11 a.m. until 10 p.m. Sunday
through Thursday, and from 11 a.m. until 12:30 a.m. on Friday and Saturday.
Restaurants in Operation at April 26, 1996
================================================================================
Traditional "small-town" General Owens Cantina Total
Stores del Rio Restaurants
- --------------------------------------------------------------------------------
Delaware 2 1 3
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Florida 27 1 1 29
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Illinois 13 2 1 16
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Indiana 28 18 2 48
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Iowa 1 1
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Kentucky 12 1 13
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Maryland 8 8
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Michigan 31 3 1 35
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Minnesota 1 1
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Missouri 9 1 10
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New Jersey 1 1
- --------------------------------------------------------------------------------
New York 9 2 1 12
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Ohio 106 31 1 7 145
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Pennsylvania 21 1 22
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South Carolina 1 1
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Tennessee 3 1 1 5
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Texas 1 12 13
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Virginia 9 1 1 11
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West Virginia 15 1 16
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TOTAL 295 60 8 12 15 390
================================================================================
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During the Company's 1996 fiscal year, 37 additional restaurants were opened.
Of the 37 new restaurants opened, 10 were traditional Bob Evans Restaurants,
26 were "small-town" restaurants (one operating under Owens Family
Restaurants) and one was a Cantina del Rio. The majority of restaurants opened
during fiscal year 1996 were in the Company's existing market area.
From time to time, restaurants are evaluated and closed due to a changing
market, lack of profit, low performance, a change in access or building
safety. On Jan. 15, 1996, an Owens Family Restaurant was closed in Richardson,
Texas, due to a change in access which hindered performance.
The Company has typically opened restaurants in areas where a strong consumer
awareness and acceptance for its sausage products has been established over
the years. It has deviated from this practice only in Florida and South
Carolina, where the Company has 29 restaurants and one restaurant,
respectively, but does not have sausage distribution.
Restaurants are supplied with food and inventory items (other than sausage
products, related meat items and certain salad products) by four independent
food distributors twice a week. Sausage products, other related meat items and
certain salad products are supplied by the Company to each restaurant by the
Company's driver-salesmen, with the exception of the restaurants located in
Florida and South Carolina, which are supplied by independent food
distributors.
Seasonality
Revenues from restaurant operations as a percentage of total revenues have
been virtually the same, quarter by quarter, during the last two fiscal years.
However, certain locations, which are near major interstate highways,
experience increased revenues during the summer tourist season. In addition,
severe winter weather conditions during fiscal year 1996 had a negative impact
on sales.
Competition
The restaurant segment is engaged in an intensely competitive business. The
Company's restaurants compete directly with both local and national family
restaurant and fast-food chains, as well as with individual restaurant
operators, for favorable sites for expansion, as well as for customer
acceptance. Bob Evans restaurant segment sales are not a significant factor in
the overall restaurant business in the Company's market areas.
Sources and Availability of Raw Materials
Menu mix in the restaurant segment is varied enough that raw materials have
been readily available; however, some food products may be in short supply
during certain seasons and raw material prices often fluctuate according to
availability. The restaurant segment experienced a slight decrease in food
costs during the Company's 1996 fiscal year, and the Company does not expect
food costs to fluctuate to any significant degree during its 1997 fiscal year.
-11-
Advertising
The Company spent approximately $26,425,000 in the restaurant segment for
advertising during its 1996 fiscal year. Seventy percent of these advertising
dollars was spent on television media, with the remainder being spent for
radio and newspaper advertising. In addition to the Breakfast Breaks program
that features a variety of morning meals priced at $2.99 or less, LunchSavors,
lunch-sized portions at lower prices, were introduced. These items are
designed to increase weekday business. The Company has typically not used
coupons, except in certain markets where it is attempting to gain market
share.
Carryout Business
During fiscal year 1996, carryout business in the Company's restaurants
accounted for 2.9% of the total revenues generated in the restaurant segment.
The Company's restaurants do not have a drive-through or pick-up window for
carryout business.
Research and Development
The Company is continuously testing new food items in its search for new and
improved menu offerings to appeal to its customer base and to satisfy changing
eating trends. During fiscal year 1996, the Company continued to revise the
Breakfast Breaks menu which offers specially priced items on weekday mornings.
Because of this program's success, the Company introduced "LunchSavors" in the
spring of 1996 to drive weekday lunch business. This program features
lunch-sized portions of favorites such as chicken vegetable pasta and beef
tips and noodles for lower prices. Since March 1996, stir-fry has been
available on the menu in both chicken and vegetable varieties. Research and
development expenses, to date, have not been material.
Restaurant Expansion
The Company plans to build and open approximately 25 to 30 new restaurants
during the 1997 fiscal year, divided somewhat evenly between Bob Evans and
"small-town" Bob Evans Restaurants. Future restaurant expansion will depend on
the availability of sites, as well as restaurant industry trends. The Company
believes, however, that it can continue with its planned expansion and is
actively seeking quality restaurant sites, not only in its present market
area, but in new market areas as well.
Trademarks, Service Marks and Licenses
The Company maintains various trademarks and service marks in connection with
its family restaurant operations. These trademarks and service marks are
renewed periodically and the Company believes that such trademarks and service
marks adequately protect the various products and services to which they
relate. The Cantina del Rio Mexican style restaurants require liquor licenses,
since this casual theme dining concept includes a full service bar. The
operations of the restaurant segment of the Company are not dependent upon any
patents, franchises or concessions.
-12-
Employees
The Company had in its employment approximately 1,900 persons in the food
products segment and 26,800 persons in the restaurant segment as of April 26,
1996.
Compliance with Environmental Protection Requirements
The Company does not anticipate that compliance with federal, state and local
provisions which have been enacted or adopted regulating the discharge of
materials into the environment, or otherwise relating to the protection of the
environment, will have a material effect upon the capital expenditures,
earnings or the competitive position of the Company.
Sales, Operating Profit and Identifiable Assets
The following table sets forth, for each of the Company's last three fiscal
years, the amounts of revenue from intersegment sales of its food products and
the amounts of revenue from sales to unaffiliated customers, operating profit
and identifiable assets attributable to each of the Company's industry
segments:
FISCAL YEAR ENDED
---------------------------------------------------
April 26, April 28, April 29,
1996 1995 1994
--------- --------- ---------
Sales:
Intersegment Sales of
Food Products: $ 36,638,000 $ 31,277,000 $ 30,902,000
Food Products
(excluding
intersegment sales): 216,564,000 216,759,000 203,909,000
Restaurant Operations: 590,063,000 550,209,000 495,129,000
Operating Profit:
Food Products: 17,169,000 26,726,000 19,580,000
Restaurant Operations: 29,384,000 60,135,000 56,910,000
Identifiable Assets:
Food Products: 119,316,000 94,494,000 90,502,000
Restaurant Operations: 395,804,000 383,569,000 317,739,000
-13-
Item 2. PROPERTIES.
The materially important properties of the Company, in addition to those
described below, consist of its executive offices located at 3776 South High
Street, Columbus, Ohio, a 937-acre farm located in Rio Grande, Ohio, and a
30-acre farm located in Richardson, Texas. The two farm locations serve as
visitor centers, are tourist attractions and are open to the general public.
Food Products Segment
The food products segment has seven sausage manufacturing plants: three in
Ohio; two in Texas; and one each in Michigan and Illinois; one prepared salads
manufacturing plant in Virginia; one charcoal/liquid smoke manufacturing plant
in each of Tennessee, Kentucky and Missouri. All of these properties are owned
in fee by the Company. The Company owns regional sales offices in Westland,
Mich., and in Houston, San Antonio, Lubbock and Tyler, Texas. In addition,
various other locations are rented by the Company throughout its marketing
territory which serve as regional and divisional sales offices.
Restaurant Segment
Of the 390 restaurants operated by the Company, 335 are owned in fee and 55
are leased from unaffiliated persons. All lease agreements contain either
multiple renewal options or options to purchase. Six of these leased
properties have terms that will expire through May 1, 2000. With respect to
these six leases, the Company has the following options: four leases contain
four five-year renewal options; one lease contains six five-year renewal
options; and one lease has three five-year renewal options.
Item 3. LEGAL PROCEEDINGS.
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
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Executive Officers of the Registrant
The following table sets forth the executive officers of the Registrant and
certain information with respect to each executive officer. Unless otherwise
indicated, each person has held his or her principal occupation for more than
five years. The executive officers are appointed by and serve at the pleasure
of the Board of Directors.
Name, Age and Period of Service as
an Officer of the Registrant; Principal Occupations for Past
Positions and Offices with the Five Years and Other Information
Registrant
- ------------------------------------- ------------------------------------
Daniel E. Evans, age 59; Chairman Chairman of the Board, Chief
of the Board, Chief Executive Executive Officer and Secretary of
Officer, Secretary and a Director the Registrant. Mr. Evans is the
of the Registrant; 40 years as an first cousin of J. Tim Evans, a
officer of the Registrant. director of the Registrant.
Donald J. Radkoski, age 41, Group Group Vice President - Finance
Vice President - Finance Group, Group since January 1994,
Treasurer and Chief Financial Treasurer and Chief Financial
Officer of the Registrant; eight Officer since May 1993, Senior
years as an officer of the Vice President from May 1993 to
Registrant. December 1993, Vice President of
Finance and Assistant Treasurer
from 1989 to May 1993, and
Assistant Treasurer from 1988 to
1989, of the Registrant.
Stewart K. Owens, age 41; President and Chief Operating
President, Chief Operating Officer Officer since 1995, Executive
and a Director of the Registrant; Vice President and Chief Operating
six years as an officer of the Officer from 1994 to 1995, and
Registrant. Group Vice President - Food
Products Group from 1990 to
December 1993, of the Registrant.
President and Chief Operating
Officer of Owens since 1984.
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Larry C. Corbin, age 54; Executive Executive Vice President -
Vice President - Restaurant Restaurant Operations since 1995,
Operations Group and a Director of Senior Group Vice President -
the Registrant; 28 years as an Restaurant Operations Group from
officer of the Registrant. 1994 to 1995, Group Vice President
- Business Development from 1990 to
December 1993, Executive Vice
President, Operations and
Development, Restaurant Division,
from 1988 to 1990, Senior Vice
President, Operations and
Development, Restaurant Division,
from 1987 to 1988, and Senior Vice
President, Operations, Restaurant
Division, from 1974 to 1987, of the
Registrant.
Roger D. Williams, age 45; Executive Vice President - Food
Executive Vice President - Food Products/Marketing/Purchasing/Technical
Products/Marketing/ Technical Services since 1995, Senior Group
Services Group of the Registrant; Vice President - Food
17 years as an officer of the Products/Marketing/
Registrant. Purchasing/Technical Services from
1994 to 1995, Group Vice President
- Marketing & Purchasing/ Technical
Services from 1990 to December
1993, Senior Vice President,
Director of Marketing, Restaurant
Division, from 1988 to 1990, and
Vice President, Director of
Marketing, Restaurant Division,
from 1980 to 1988, of the
Registrant.
Howard J. Berrey, age 54; Group Group Vice President - Real
Vice President - Real Estate/ Construction & Engineering
Estate/Construction & Engineering Group since 1990, Senior Vice
Group of the Registrant; President, Director of Real
17 years as an officer of the Estate, Restaurant Division, from
Registrant. 1988 to 1990, and Vice President,
Director of Real Estate, Restaurant
Division, from 1978 to 1988, of the
Registrant.
James B. Radebaugh, age 48; Group Group Vice President -
Vice President - Administration & Administration & Human Resources
Human Resources Group of the Group since January 1994, Group
Registrant; six years as an Vice President - Corporate
officer of the Registrant. Development from August 1990 to
December 1993, and Vice President
from April 1990 to August 1990, of
the Registrant.
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Joseph B. Crace, age 41; Group Group Vice President-Specialty
Vice President - Specialty Products & Business Development
Products & Business Development Group since January 1994, and Vice
Group of the Registrant; four President from April 1992 to
years as an officer of the December 1993, of the Registrant.
Registrant. President since 1989, and Vice
President from 1978 to 1986, of
Hickory Specialties.
Mary L. Cusick, age 40; Vice Vice President - Corporate
President -Corporate Communications since 1990,
Communications since 1990; six Director of Corporate
years as an officer of the Communications from 1981 to 1990,
Registrant. of the Registrant.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
In accordance with General Instruction G(2), the information contained under
the subcaption "Stock Price Ranges and Dividends," at page 2 of Registrant's
Annual Report to Stockholders for the fiscal year ended April 26, 1996, is
incorporated herein by reference.
Item 6. SELECTED FINANCIAL DATA.
In accordance with General Instruction G(2), the information for the years
1987 through 1996 contained under the subcaption "Comparative Highlights for
Ten Years," at page 2 of the Registrant's Annual Report to Stockholders for
the fiscal year ended April 26, 1996, is incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION.
In accordance with General Instruction G(2), the information contained under
the caption "Management's Discussion and Analysis of Selected Financial
Information," at pages 14 and 15 of the Registrant's Annual Report to
Stockholders for the fiscal year ended April 26, 1996, is incorporated herein
by reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements included on pages 5 through 13 and the Auditor's
report thereon included on page 17 of the Registrant's Annual Report to
Stockholders for the fiscal year ended April 26, 1996, are incorporated herein
by reference.
The "Quarterly Financial Data" included in Note I of the Notes to Consolidated
Financial Statements on page 13 of the Registrant's Annual Report to
Stockholders for the fiscal year ended April 26, 1996, is also incorporated
herein by reference.
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Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
In accordance with General Instruction G(3), the information contained under
the caption "ELECTION OF DIRECTORS" in the Registrant's definitive Proxy
Statement dated Aug. 2, 1996, to be filed with the Securities and Exchange
Commission pursuant to Regulation 14A promulgated under the Securities
Exchange Act of 1934, is incorporated herein by reference. The information
regarding executive officers required by Item 401 of Regulation S-K is
included in Part I hereof under the caption "Executive Officers of the
Registrant." The Registrant is not required to make any disclosure pursuant to
Item 405 of Regulation S-K.
Item 11. EXECUTIVE COMPENSATION.
In accordance with General Instruction G(3), the information contained under
the captions "COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS" and
"COMPENSATION/STOCK OPTION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION" in
the Registrant's Proxy Statement dated Aug. 2, 1996, to be filed with the
Securities and Exchange Commission pursuant to Regulation 14A promulgated
under the Securities Exchange Act of 1934, is incorporated herein by
reference. Neither the report of the Compensation/Stock Option Committee of
the Registrant's Board of Directors on executive compensation nor the
performance graph included in the Registrant's Proxy Statement dated Aug. 2,
1996, shall be deemed to be incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
In accordance with General Instruction G(3), the information contained under
the caption "VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF" in the
Registrant's definitive Proxy Statement dated Aug. 2, 1996, to be filed with
the Securities and Exchange Commission pursuant to Regulation 14A promulgated
under the Securities Exchange Act of 1934, is incorporated herein by
reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
In accordance with General Instruction G(3), the information contained under
the caption "ELECTION OF DIRECTORS" in the Registrant's definitive Proxy
Statement dated Aug. 2, 1996, to be filed with the Securities and Exchange
Commission pursuant to Regulation 14A promulgated under the Securities
Exchange Act of 1934, is incorporated herein by reference.
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PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a) Documents Filed as Part of this Report
1 & 2 Financial Statements and Financial Statement Schedules:
The response to this portion of Item 14 is submitted as a separate
section of this report.
3 Exhibits:
Exhibits filed with this Annual Report on Form 10-K are attached hereto.
For a list of such exhibits, see "Index to Exhibits" at page 24. The following
table provides certain information concerning executive compensation plans and
arrangements required to be filed as exhibits to this Annual Report on Form
10-K.
Executive Compensation Plans and Arrangements
Exhibit No. Description Location
10(a) Restated Bob Evans Farms, Inc. and Incorporated herein
Affiliates 401K by reference to
Retirement Plan Exhibit 10(a) to the
(effective Jan. 1, 1994, Registrant's Annual
except as otherwise provided) Report on Form 10-K
for the fiscal year
ended April 28, 1995
(File No. 0-1667)
10 (b) Amendment No. 1 to the Page 62
Bob Evans Farms, Inc.
and Affiliates 401K
Retirement Plan
10(c) Bob Evans Farms, Inc. and Incorporated herein
Affiliates 401K by reference to
Retirement Plan Trust Exhibit 4(f) to the
(effective May 1, 1990) Registrant's Pre-
Effective Amendment
No. 1 to Form S-8
Registration State-
ment, filed
April 27, 1990
(Registration No.
33-34149)
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10(d) Bob Evans Farms, Inc. Incorporated herein
1987 Incentive Stock by reference to
Option Plan Exhibit 4(a) to the
Registrant's Regis-
tration Statement on
Form S-8, filed
Oct. 19, 1987
(Registration No.
33-17978)
10(e) Agreement, dated Incorporated herein by
Feb. 24, 1989, reference to Exhibit
between Daniel E. Evans 10(g) to the Registrant's
and Bob Evans Farms, Annual Report on Form
Inc.; and Schedule A to 10-K for its fiscal year
Exhibit 10(e) identifying ended April 28, 1989
other substantially identical (File No. 0-1667);
Agreements between Bob Evans Page 68
Farms, Inc. and certain of the
executive officers of Bob Evans
Farms, Inc.
10(f) Bob Evans Farms, Inc. Incorporated herein
1989 Stock Option Plan by reference to
for Nonemployee Exhibit 4(d) to the
Directors Registrant's Regis-
tration Statement on
Form S-8, filed
Aug. 23, 1989
(Registration No.
33-30665)
10(g) Bob Evans Farms, Inc. Incorporated herein
1991 Incentive Stock by reference to
Option Plan Exhibit 4(d) to the
Registrant's Regis-
tration Statement on
Form S-8, filed
Sept. 13, 1991
(Registration No.
33-42778)
10(h) Bob Evans Farms, Inc. Incorporated herein
Supplemental Executive by reference to
Retirement Plan Exhibit 10(i) to the
Registrant's Annual
Report on Form 10-K
for the fiscal year
ended April 24, 1992
(File No. 0-1667)
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10(i) Bob Evans Farms, Inc. Incorporated herein
Nonqualified Stock Option by reference to
Plan Exhibit 10(j) to the
Registrant's Annual
Report on Form 10-K
for the fiscal year
ended April 24, 1992
(File No. 0-1667)
10(j) Bob Evans Farms, Inc. Incorporated herein
Long Term Incentive Plan by reference to
for Managers Exhibit 10(k) to the
Registrant's Annual
Report on Form 10-K
for the fiscal year
ended April 30, 1993
(File No. 0-1667)
10(k) Bob Evans Farms, Inc. Incorporated herein
1994 Long Term Incentive by reference to
Plan Exhibit 10(n) to the
Registrant's Annual
Report on Form 10-K
for
the fiscal year
ended April 29, 1994
(File No. 0-1667)
(b) Reports on Form 8-K
There were no Current Reports on Form 8-K filed during the fiscal quarter
ended April 26, 1996.
(c) Exhibits
See Item 14(a) (3) above.
(d) Financial Statement Schedules
The response to this portion of Item 14 is submitted as a separate
section of this Report.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Bob Evans Farms, Inc.
July 23, 1996 By: /s/ Donald J. Radkoski
__________________________________
Donald J. Radkoski
Group Vice President-Finance Group
and Treasurer (Chief
Financial Officer & Chief
Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
_________________ _____________ __________
/s/ Daniel E. Evans Chairman of the Board, July 23, 1996
Daniel E. Evans Chief Executive
Officer and Secretary
/s/ Larry C. Corbin Director July 23, 1996
Larry C. Corbin
/s/ J. Tim Evans Director July 23, 1996
J. Tim Evans
/s/ Daniel A. Fronk Director July 23, 1996
Daniel A. Fronk
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/s/ Cheryl L. Krueger Director July 23, 1996
Cheryl L. Krueger
/s/ _____________________ Director July 23, 1996
G. Robert Lucas II
/s/ Stewart K. Owens Director July 23, 1996
Stewart K. Owens
/s/ Robert E.H. Rabold Director July 23, 1996
Robert E. H. Rabold
/s/ _____________________ Director July 23, 1996
Robert S. Wood
/s/ Donald J. Radkoski Group Vice President- July 23, 1996
Donald J. Radkoski Finance Group and Treasurer
(Chief Financial Officer
& Chief Accounting Officer)
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ANNUAL REPORT ON FORM 10-K
ITEM 14(a)(1) and (2) and ITEM 14(d)
LIST OF FINANCIAL STATEMENTS
FISCAL YEAR ENDED APRIL 26, 1996
BOB EVANS FARMS, INC.
COLUMBUS, OHIO
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FORM 10-K -- ITEM 14 (a) (1) AND (2)
BOB EVANS FARMS, INC.
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements of Bob Evans Farms, Inc. and
subsidiaries, included in the Annual Report of the Registrant to its
stockholders for the fiscal year ended April 26, 1996, are incorporated by
reference in Item 8:
Consolidated Balance Sheets -- April 26, 1996 and April 28, 1995
Consolidated Statements Of Income -- Years ended April 26, 1996,
April 28, 1995 and April 29, 1994
Consolidated Statements Of Stockholders' Equity -- Years ended
April 26, 1996, April 28, 1995, and April 29, 1994
Consolidated Statements Of Cash Flows -- Years ended April 26,
1996, April 28, 1995, and April 29, 1994
Notes To Consolidated Financial Statements -- April 26, 1996
All schedules for which provision is made in the applicable accounting
regulation of the Securities and Exchange Commission are not required under
the related instructions or are inapplicable and, therefore, have been
omitted.
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