FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 24, 2003
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OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
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Commission file number 0-1667
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Bob Evans Farms, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 31-4421866
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(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
3776 South High Street Columbus, Ohio 43207
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(Address of principal executive offices)
(Zip Code)
(614) 491-2225
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(Registrant's telephone number, including area code)
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(Former name, former address and formal fiscal year,
if changed since last report)
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
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Indicate by check mark whether the registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act).
Yes X No
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As of the close of the period covered by this report, the registrant
had issued 42,638,118 common shares, of which 35,046,448 were outstanding.
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BOB EVANS FARMS, INC.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Jan. 24, 2003 April 26, 2002
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Unaudited Audited
------------- --------------
ASSETS
Current assets
Cash and equivalents $ 4,137 $ 7,934
Accounts receivable 12,936 11,629
Inventories 15,086 15,252
Deferred income taxes 8,871 8,871
Prepaid expenses 2,859 1,016
----------- -----------
TOTAL CURRENT ASSETS 43,889 44,702
Property, plant and equipment 1,021,697 971,843
Less accumulated depreciation 336,482 323,664
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NET PROPERTY, PLANT AND EQUIPMENT 685,215 648,179
Other assets
Deposits and other 2,871 3,037
Long-term investments 14,834 12,196
Deferred income taxes 12,292 12,292
Goodwill 1,567 1,567
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TOTAL OTHER ASSETS 31,564 29,092
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$ 760,668 $ 721,973
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Line of credit $ 6,150 $ 27,750
Current maturities of long-term debt 4,000 4,000
Accounts payable 9,216 10,741
Dividends payable 3,855 3,529
Federal and state income taxes 27,415 9,329
Accrued wages and related liabilities 18,413 19,804
Other accrued expenses 65,483 55,343
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TOTAL CURRENT LIABILITIES 134,532 130,496
Long-term liabilities
Deferred compensation 8,652 6,182
Deferred income taxes 31,597 31,597
Long-term debt 29,333 32,333
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TOTAL LONG-TERM LIABILITIES 69,582 70,112
Stockholders' equity
Common stock, $.01 par value; authorized 100,000,000
shares; issued 42,638,118 shares at Jan. 24, 2003,
and April 26, 2002 426 426
Preferred stock, authorized 1,200 shares; issued 120
shares at Jan. 24, 2003, and April 26, 2002 60 60
Capital in excess of par value 147,146 151,264
Retained earnings 544,301 498,522
Treasury stock, 7,591,670 shares at Jan. 24, 2003,
and 7,343,596 shares at April 26, 2002, at cost (135,379) (128,907)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 556,554 521,365
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$ 760,668 $ 721,973
=========== ===========
The accompanying notes are an integral part of the financial statements.
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
---------
(Dollars in thousands, except per share amounts)
Three Months Ended Nine Months Ended
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Jan. 24, 2003 Jan. 25, 2002 Jan. 24, 2003 Jan. 25, 2002
------------- ------------- ------------- -------------
NET SALES $ 271,252 $ 262,767 $ 825,874 $ 801,322
Cost of sales 74,199 73,930 218,369 228,508
Operating wage and fringe benefit expenses 93,930 89,758 286,864 272,213
Other operating expenses 40,504 37,864 122,877 117,744
Selling, general and administrative expenses 25,364 25,808 75,480 76,536
Depreciation and amortization expense 11,175 10,342 32,590 31,312
Net (gain) on disposal of assets 0 0 0 (1,842)
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OPERATING INCOME 26,080 25,065 89,694 76,851
Net interest expense 342 435 1,337 2,605
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INCOME BEFORE INCOME TAXES 25,738 24,630 88,357 74,246
PROVISIONS FOR INCOME TAXES 9,005 8,374 30,922 24,110
--------- --------- --------- ---------
NET INCOME $ 16,733 $ 16,256 $ 57,435 $ 50,136
========= ========= ========= =========
EARNINGS PER SHARE - BASIC $ 0.48 $ 0.47 $ 1.62 $ 1.44
========= ========= ========= =========
EARNINGS PER SHARE - DILUTED $ 0.47 $ 0.46 $ 1.60 $ 1.42
========= ========= ========= =========
CASH DIVIDENDS PER SHARE $ 0.11 $ 0.10 $ 0.33 $ 0.29
========= ========= ========= =========
The accompanying notes are an integral part of the financial statements
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
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(Dollars in thousands)
Nine Months Ended
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Jan. 24, 2003 Jan. 25, 2002
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OPERATING ACTIVITIES:
Net income $ 57,435 $ 50,136
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 32,590 31,312
Loss (gain) on sale of assets 142 (1,804)
Loss on long-term investments 1,086 905
Deferred compensation 2,304 714
Compensation expense attributable to stock plans 1,170 1,167
Cash provided by (used for) current assets
and current liabilities:
Accounts receivable (1,307) (2,114)
Inventories 166 (159)
Prepaid expenses (1,843) 800
Accounts payable (1,525) (502)
Federal and state income taxes 18,086 7,861
Accrued wages and related liabilities (1,391) 2,000
Other accrued expenses 9,136 10,339
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NET CASH PROVIDED BY OPERATING ACTIVITIES 116,049 100,655
INVESTING ACTIVITIES:
Purchase of property, plant and equipment (70,401) (68,270)
Purchase of long-term investments (4,049) (1,904)
Proceeds from sale of property, plant and equipment 958 517
Cash proceeds from divestiture 0 16,276
Other 166 (215)
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NET CASH USED IN INVESTING ACTIVITIES (73,326) (53,596)
FINANCING ACTIVITIES:
Cash dividends paid (11,331) (9,735)
Line of credit (21,600) (29,585)
Purchase of treasury stock (16,672) (5,080)
Principal payments on long-term debt (3,000) (2,667)
Proceeds from issuance of treasury stock 6,083 7,125
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NET CASH USED IN FINANCING ACTIVITIES (46,520) (39,942)
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Increase (decrease) in cash and equivalents (3,797) 7,117
Cash and equivalents at the beginning of the period 7,934 1,787
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Cash and equivalents at the end of the period $ 4,137 $ 8,904
========= =========
The accompanying notes are an integral part of the financial statements.
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
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1. Unaudited Financial Statements
------------------------------
The accompanying unaudited financial statements are presented
in accordance with the requirements of Form 10-Q and, consequently, do
not include all of the disclosures normally required by generally
accepted accounting principles, or those normally made in the company's
Form 10-K filing. In the opinion of management, all adjustments
(consisting of normal recurring adjustments) considered necessary for a
fair presentation of the company's financial position and results of
operations have been included. The financial statements are not
necessarily indicative of the results of operations for a full fiscal
year. No significant changes have occurred in the disclosures made in
Form 10-K for the fiscal year ended April 26, 2002 (refer to Form 10-K
for a summary of significant accounting policies followed in the
preparation of the consolidated financial statements).
2. Earnings Per Share
------------------
Basic earnings per share computations are based on the
weighted-average number of shares of common stock outstanding during
the period presented. Diluted earnings per share calculations reflect
the assumed exercise and conversion of employee stock options.
The numerator in calculating both basic and diluted earnings
per share for each period is reported net income. The denominator is
based on the following weighted-average number of common shares
outstanding:
(in thousands)
Three Months Ended Nine Months Ended
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Jan. 24, 2003 Jan. 25, 2002 Jan. 24, 2003 Jan. 25, 2002
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Basic 35,199 34,788 35,365 34,784
Effect of dilutive
stock options 525 758 642 502
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Diluted 35,724 35,546 36,007 35,286
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3. Industry Segments
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The company's operations include restaurant operations and the
processing and sale of food and related products. The revenues from
these segments include both sales to unaffiliated customers and
intersegment sales, which are accounted for on a basis consistent with
sales to unaffiliated customers. Intersegment sales and other
intersegment transactions have been eliminated in the consolidated
financial statements. Information on the company's operating segments
is summarized as follows:
(in thousands)
Three Months Ended Nine Months Ended
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Jan. 24, 2003 Jan. 25, 2002 Jan. 24, 2003 Jan. 25, 2002
---------------------------------------------------------------------------------------------------------------
Sales
Restaurant Operations $218,016 $210,792 $683,265 $653,853
Food Products 60,967 59,558 166,174 170,916
-------- -------- -------- --------
278,983 270,350 849,439 824,769
Intersegment sales of food products (7,731) (7,583) (23,565) (23,447)
-------- -------- -------- --------
Total $271,252 $262,767 $825,874 $801,322
======== ======== ======== ========
Operating Income
Restaurant Operations $ 20,034 $ 17,803 $ 71,739 $ 62,717
Food Products 6,046 7,262 17,955 14,134
-------- -------- -------- --------
Total $ 26,080 $ 25,065 $ 89,694 $ 76,851
======== ======== ======== ========
4. Net gain on disposal of assets
------------------------------
In the second quarter of fiscal 2002, the company sold Hickory
Specialties, Inc., which produced and distributed smoke flavorings, for
$16.3 million in cash. The company realized a net gain on the
transaction of $3.3 million (before and after taxes). Through the first
six months in fiscal 2002, the company's results of operations included
net sales of $5.0 million and operating income of approximately zero
from the divested business.
In the second quarter of fiscal 2002, the company also
realized a loss of $1.5 million ($1.0 million after tax) on the
disposal of certain assets in the restaurant segment.
5. New Accounting Standards
------------------------
In June 2001, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards (SFAS) No. 142,
Goodwill and Other Intangible Assets, effective for fiscal years
beginning after December 15, 2001. Under this statement, goodwill and
intangible assets deemed to have indefinite lives will no longer be
amortized but will be subject to annual impairment tests in accordance
with the statement. Other intangible assets will continue to be
amortized over their useful lives.
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The company applied the new rules on accounting for goodwill
and other intangible assets beginning in the first quarter of fiscal
2003. Application of the nonamortization provisions of the statement
had a de minimus impact on pre-tax income. During the first quarter of
fiscal 2003, the company completed the required transition test for
impairment of goodwill and concluded that no impairment existed at
April 26, 2002.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
SALES
Consolidated net sales increased 3.2% to $271.3 million in the third
quarter of fiscal 2003 compared to the corresponding quarter last year. The
increase was comprised of sales increases in the restaurant segment and food
products segment of $7.2 million and $1.3 million, respectively. Restaurant
sales accounted for approximately 80% of consolidated sales in the quarter. For
the nine-month period ended January 24, 2003, consolidated net sales increased
$24.6 million, or 3.1%, compared to the previous year. During the second quarter
of fiscal 2002, the company sold Hickory Specialties, Inc. ("HSI"), which
produced and distributed smoke flavorings. Excluding HSI, consolidated net sales
increased $29.5 million, or 3.7%, for the nine-month period ended January 24,
2003.
The restaurant sales increase of $7.2 million in the third quarter
represented a 3.4% increase over the same quarter last year. The increase was
the result of more restaurants in operation (507 versus 481), which was
partially offset by a 1.7% decrease in same-store sales. The same-store sales
decrease included an average menu price increase of 3.1% in the third quarter.
The chart below summarizes the restaurant openings and closings during
the last seven quarters:
Beginning Opened Closed Ending
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Fiscal 2003
1st quarter 495 0 0 495
2nd quarter 495 4 0 499
3rd quarter 499 8 0 507
Fiscal 2002
1st quarter 469 1 0 470
2nd quarter 470 4 1 473
3rd quarter 473 8 0 481
4th quarter 481 14 0 495
The company expects to open approximately 17 additional restaurants in
fiscal 2003. One under-performing restaurant was closed in fiscal 2002; no
restaurants have been closed in fiscal 2003.
The food products segment experienced a sales increase of $1.3 million,
or 2.4%, in the third quarter of fiscal 2003 and a sales decrease of $4.9
million, or 3.3%, through nine months compared to the
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corresponding periods a year ago. Excluding HSI, the food products segment
experienced a sales increase of $0.1 million, or 0.1%, through nine months of
fiscal 2003 compared to the corresponding period a year ago. The sales increases
were reflective of an increase in the volume of products sold partially offset
by lower net prices charged by the company for its sausage products. The company
experienced a 4.6% increase in the volume of sausage products sold in the third
quarter of fiscal 2003 and a 5.4% increase through nine months compared to the
corresponding periods a year ago (calculated using the same products in both
periods and excluding new products). The company was able to lower the net
prices charged for sausage products in response to lower hog costs (discussed
below).
COST OF SALES
Consolidated cost of sales (cost of materials) was 27.4% of sales in
the company's third quarter and 26.4% of sales through nine months of fiscal
2003 compared to 28.1% and 28.5%, respectively, in the corresponding periods a
year ago.
In the restaurant segment, cost of sales (predominantly food cost) was
23.8% of sales in the third quarter and 24.0% of sales year-to-date, versus
24.9% in both corresponding periods last year. The company attributes this
improvement to menu price increases as well as favorable purchase prices on
certain ingredients and changes in product mix.
The food products segment cost of sales ratio was 41.9% of sales in the
third quarter and 38.2% of sales year-to-date, compared to 41.1% and 44.6%,
respectively, in the corresponding periods last year. Hog costs averaged $27.25
per hundredweight for the third quarter of fiscal 2003 compared to $32.48 per
hundredweight in the corresponding period last year. Although hog costs were
lower in the third quarter, the effect of lower net sales prices for the
company's food products outweighed the favorable hog costs, resulting in a
slight increase in the cost of sales ratio. The company attributes the
year-to-date decrease of cost of sales to lower hog costs, which averaged $25.35
per hundredweight this year compared to $39.83 in the corresponding period last
year - a 36.4% decrease.
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OPERATING WAGE AND FRINGE BENEFIT EXPENSES
Consolidated operating wage and fringe benefit expenses ("operating
wages") were 34.6% of sales in the third quarter of fiscal 2003 and 34.7%
year-to-date compared to 34.2% and 34.0%, respectively, for the corresponding
periods last year. The operating wage ratio increased in both the restaurant and
food products segments.
The restaurant segment experienced an increase in operating wages as a
percent of sales for both the quarter and nine-month periods in fiscal 2003.
Operating wages were 39.8% of sales in the third quarter of fiscal 2003 and
39.0% of sales year-to-date versus 39.5% and 38.7%, respectively, for the
corresponding periods last year. The increase was attributable to higher
management wages and health insurance expenses.
In the food products segment, operating wages were 13.3% of sales in
the third quarter of fiscal 2003 and 14.4% of sales year-to-date compared to
12.6% and 13.0%, respectively, for the corresponding periods last year.
Operating wage expense increased as a percentage of sales in the food products
segment primarily due to higher hourly wage related to the increase in volume of
sausage products produced as well as higher health insurance expense.
OTHER OPERATING EXPENSES
Over 93% of other operating expenses ("operating expenses") occurred
in the restaurant segment in the third quarter of both fiscal 2003 and fiscal
2002. The most significant components of operating expenses were advertising,
utilities, restaurant supplies, repair and maintenance, taxes (other than income
taxes) and credit card processing fees. Consolidated operating expenses were
14.9% of sales for both the third quarter and year-to-date in fiscal 2003 versus
14.4% and 14.7%, respectively, for the corresponding periods last year. The
increase was due mostly to higher taxes (other than income taxes), credit card
processing fees and repair and maintenance costs in fiscal 2003.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
As a percentage of sales, consolidated selling, general and
administrative expenses ("S, G & A expenses") were 9.4% in the third quarter and
9.1% year-to-date for fiscal 2003 in comparison to 9.8% and
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9.6%, respectively, for the corresponding periods last year. The most
significant components of S, G, & A expenses were wages, fringe benefits and
food products segment advertising expenses. The decrease as a percentage of
sales in the third quarter was due to less food products segment advertising
expenses and the improved leverage of S, G & A expenses. Excluding HSI, fiscal
2002 S, G & A expenses were 9.4% of sales year-to-date. HSI had higher S, G & A
expenses, comparatively, than the rest of the company.
TAXES
Excluding the impact of the sale of HSI, the effective federal and
state income tax rates were 35.0% in fiscal 2003 versus 34.0% in fiscal 2002.
The company anticipates the effective tax rate for fiscal 2003 to remain at
approximately 35.0%.
LIQUIDITY AND CAPITAL RESOURCES
Cash generated from both the restaurant and food products segments has
been used as the main source of funds for working capital and capital
expenditure requirements. Bank lines of credit were also used for liquidity
needs, capital expansion and repurchases of company stock at various times. Bank
lines of credit available total $70 million, of which $6.2 million was
outstanding at January 24, 2003.
The company believes that the funds needed for capital expenditures,
working capital and company stock repurchases during the remainder of fiscal
2003 will be generated both internally and from available bank lines of credit.
Financing alternatives will continue to be evaluated by the company as
warranted.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The company's significant and critical accounting policies and
estimates can be found in the Notes to Consolidated Financial Statements
contained in the company's Annual Report on Form 10-K for the fiscal year ended
April 26, 2002 (Note A).
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SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The statements contained in this report which are not historical fact are
"forward-looking statements" that involve various important assumptions, risks,
uncertainties and other factors which could cause the company's actual results
for fiscal 2003 and beyond to differ materially from those expressed in such
forward-looking statements. These important factors include, without limitation,
changes in hog costs, the possibility of severe weather conditions where the
company operates its restaurants, the availability and cost of acceptable new
restaurant sites, shortages of restaurant labor, acceptance of the company's
restaurant concepts into new geographic areas as well as other risks previously
disclosed in the company's securities filings and press releases.
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ITEM 4. CONROLS AND PROCEDURES
Within the 90 day period prior to the filing date of this report, the
company, under the supervision and with the participation of its management,
including its principal executive officer and principal financial officer,
performed an evaluation of the effectiveness of the design and operation of the
company's disclosure controls and procedures, as contemplated by Rule 13a-15
under the Securities Exchange Act of 1934, as amended. Based on that evaluation,
the company's management, including its principal executive officer and
principal financial officer, concluded that such disclosure controls and
procedures are effective to ensure that material information relating to the
company, including its consolidated subsidiaries, is made known to them,
particularly during the period for which the periodic reports are being
prepared.
No significant changes were made in the company's internal controls or
in other factors that could significantly affect these controls subsequent to
the date of the evaluation performed pursuant to Securities Exchange Act Rule
13a-15 referred to above.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are no pending legal proceedings involving the company other than
routine litigation incidental to its business. In the opinion of the
company's management, these proceedings should not, individually or in
the aggregate, have a material adverse effect on the company's results
of operations or financial condition.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. Not Applicable
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not Applicable
ITEM 5. OTHER INFORMATION. Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits (filed herewith):
Exhibit No. Description
------------ -----------------------------------
99(a) Certification Pursuant to Title 18, United
States Code, Section 1350, as adopted
pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (Chief Executive
Officer)
99(b) Certification Pursuant to Title 18, United
States Code, Section 1350, as adopted
pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (Chief Financial
Officer)
(b) Reports on Form 8-K:
No Current Reports on Form 8-K were filed during the
fiscal quarter ended January 24, 2003.
-14-
SIGNATURES
Pursuant to the requirements 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.
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Registrant
By: /s/ Stewart K. Owens
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Stewart K. Owens
Chairman and Chief Executive Officer
(Principal Executive Officer)
By: /s/ Donald J. Radkoski
-------------------------------------------
Donald J. Radkoski
Chief Financial Officer
(Principal Financial Officer)
March 7, 2003
- ---------------------------------
Date
CERTIFICATIONS
I, Stewart K. Owens, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Bob Evans Farms,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
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b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
March 7, 2003 /s/ Stewart K. Owens
------------------------------------
Stewart K. Owens
Chairman and Chief Executive Officer
I, Donald J. Radkoski, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Bob Evans Farms,
Inc.;
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
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a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function):
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
March 7, 2003 /s/ Donald J. Radkoski
-----------------------
Donald J. Radkoski
Chief Financial Officer
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