EXHIBIT 99
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FOR IMMEDIATE RELEASE Contact: Donald J. Radkoski or
Aug. 11, 2003 Mary Cusick (614) 491-2225
BOB EVANS FARMS ANNOUNCES FIRST QUARTER FINANCIAL RESULTS
COLUMBUS, Ohio -- Bob Evans Farms, Inc. (NASDAQ: BOBE) today announced
financial results for the first fiscal quarter ended July 25, 2003.
Total net sales for the quarter were $295.5 million, a 7 percent increase
from $277.0 million in the comparable period last year. Net income was $19.2
million, or $0.55 per share on a diluted basis, compared with $20.6 million, or
$0.57 per share, a year ago. In the year-earlier period, earnings per share were
at record levels and up 33 percent from the previous year. In the fiscal 2004
period, results were affected by increased raw material costs in the food
products segment and lower-than-expected restaurant sales and profits.
Restaurant sales for the quarter totaled $247.5 million, up 6 percent from
a year ago. Same-store sales increased 1.0 percent, with average menu prices up
2.6 percent. The segment's operating income of $27.8 million increased 2 percent
from a year ago; the operating margin was 47 basis points lower, primarily
reflecting higher food and insurance costs.
"While we are pleased to have achieved our first year-over-year increase in
restaurant same-store sales since last year's first quarter, the gain was at the
low end of our expectations," said Stewart K. Owens, chairman of the board and
chief executive officer. "We have not seen as much improvement as we anticipated
in recent months, perhaps due to the continuing challenges to consumer
confidence as a result of soft labor markets, particularly in our core heartland
region. At Bob Evans Restaurants, our operating strategy has not changed - we
remain focused on the basics of providing high-quality homestyle food and
excellent customer service in a comfortable, family-oriented environment. We
are, however, intensifying our efforts to reduce costs and build on our record
of margin improvement in the restaurant segment over the last two years."
The company opened three new Bob Evans Restaurants during the first fiscal
quarter, bringing the total in operation to 524. Plans continue to call for
approximately 35 new restaurants for the full year, compared with 29 in fiscal
2003.
Profitability in the food products segment for the first fiscal quarter was
off significantly, primarily due to a sharp increase in hog costs in the
company's sausage business. Average hog costs for the quarter were $36.00,
compared with $26.00 a year ago. Promotional activity remained at relatively
aggressive levels throughout the quarter, which generated strong unit volume;
however, this further impacted the segment's profit margins. Pounds sold from
comparable products (principally sausage) increased 10 percent, and the
segment's total sales of $47.9 million were up 11 percent. However, the
segment's operating income for the quarter, $2.7 million, was nearly 46 percent
below the year-earlier level.
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Owens commented, "Hog costs rose more and faster than we expected during
the quarter, squeezing our margins at a time when we had planned increased
promotional activity. While we are adjusting our promotional programs going
forward, it seems clear that hog costs are likely to remain above our earlier
expectations through most of the current fiscal year.
"Accordingly - and also in light of the challenges we face in the
restaurant segment - we are revising our earnings per share guidance for fiscal
2004 to a range of $2.07 to $2.15, from $2.15 to $2.20 previously. Our new
outlook for an essentially flat year should be viewed in the context of the
company's very strong performance over the last two years, when diluted earnings
per share rose 46 percent overall. Notwithstanding the cyclicality in our
businesses and earnings comparisons in any single year, we remain committed to
steadily building the value of the Bob Evans brand for the benefit of our
stockholders."
As of July 25, 2003, the company's balance sheet remained strong, with
stockholders' equity of $577.6 million, compared with $75.3 million in total
debt obligations.
On Aug. 5, 2003, the Bob Evans Farms, Inc. board of directors declared a
quarterly cash dividend of 12 cents ($0.12) per share on the company's
outstanding common stock. The new dividend rate represents a 9 percent increase
from the company's previous quarterly rate of $0.11 per share. The dividend is
payable Sept. 2, 2003, to stockholders of record at the close of business on
Aug. 15, 2003.
Bob Evans Farms, Inc. owns and operates 524 full-service, family
restaurants in 22 states. Bob Evans Restaurants are primarily located in the
Midwest, mid-Atlantic and Southeast regions of the United States, while Owens
Restaurants operate in Texas. The company is also a leading producer and
distributor of pork sausage and a variety of complementary homestyle convenience
food items under the Bob Evans and Owens brand names. For more information about
Bob Evans Farms, Inc., visit the company's Web site at www.bobevans.com.
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CONSOLIDATED FINANCIAL RESULTS (UNAUDITED)
(Thousands, except per share data)
Three Months Ended
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July 25, 2003 July 26, 2002
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Net Sales
Restaurant Segment $247,548 $234,037
Food Products Segment 47,924 42,984
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Total $295,472 $277,021
Operating Income
Restaurant Segment $27,777 $27,361
Food Products Segment 2,651 4,895
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Total $30,428 $32,256
Income Before Income Taxes $29,932 $31,729
Net Income $19,246 $20,624
Earnings Per Share
Basic $0.56 $0.58
Diluted $0.55 $0.57
Average Shares Outstanding
Basic 34,572 35,438
Diluted 35,185 36,257
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 2004 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.
Company executives will discuss the results during a conference call
Tuesday, Aug. 12, 2003, at 10 a.m. EST. To listen, call (800) 475-2151 (toll
free) or log-in to the webcast at www.bobevans.com and then click on
"financials." The call will be available for replay immediately following the
call, Tuesday, Aug. 12, 2003, through 5
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p.m. EST on Thursday, Aug. 14, 2003, by calling toll free (877) 519-4471, pin
code 4094612. The webcast version will also be archived on the company's Web
site through Tuesday, Aug. 26, 2003.
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