EXHIBIT 99
FOR IMMEDIATE RELEASE Contact: Donald J. Radkoski or
Nov. 10, 2003 Mary Cusick (614) 491-2225
BOB EVANS FARMS ANNOUNCES
SECOND QUARTER FINANCIAL RESULTS
COLUMBUS, Ohio -- Bob Evans Farms, Inc. (NASDAQ: BOBE) today announced
financial results for the fiscal second quarter and six months ended Oct. 24,
2003.
Total net sales for the quarter were $297.3 million, a 7 percent increase
from $277.6 million in the corresponding period a year ago. Net income was $17.9
million, or $0.51 per share on a diluted basis, compared with $20.1 million, or
$0.56 per share, in the second quarter last year. Earnings per share in the
year-earlier period were at a record level. For the first six months of fiscal
2004, consolidated net sales totaled $592.7 million, up 7 percent from last
year's first half. Net income for the six-month period was $37.1 million, or
$1.05 per share, compared with $40.7 million, or $1.13 per share, a year ago.
In the restaurant segment, total sales for the quarter were $246.4 million,
a 7 percent increase from a year ago. Same-store sales rose 1.4 percent, with
average menu prices up 2.5 percent. The segment's operating margin slipped 50
basis points from a year ago, reflecting modest sales growth, increased food
costs and a higher number of new restaurant openings in this year's second
quarter. Restaurant operating income of $24.6 million increased 1 percent from a
year ago.
Chairman of the Board and Chief Executive Officer Stewart K. Owens
commented, "While sales at Bob Evans Restaurants for the quarter were somewhat
below our expectations, we were encouraged by the improving trend in October.
Our same-store sales increase for the month was 2.2 percent overall and
strongest at the end of the month. Our four new `Dinner Sensations' entrees,
which were only available for the final
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six weeks of the quarter, have strengthened our dinner business but are adding
to food costs on a percentage basis, as we expected."
The company opened 11 new Bob Evans Restaurants during the quarter,
compared with four in the second quarter a year ago. Plans call for 15 new store
openings in the third quarter and six for the fourth quarter, compared with
eight and 17 in the corresponding quarters a year ago. On average, new
restaurant pre-opening expenses approximate $175,000 per location. The
incremental pre-opening expense during the second quarter amounted to
approximately $1.5 million due to the accelerated openings in the second and
third quarters.
While sales were relatively strong in the food products segment, its
operating margin was down significantly from a year ago, reflecting sharply
higher hog costs in the company's sausage business. Pounds sold from comparable
products (principally sausage and refrigerated potatoes) increased 4 percent for
the quarter, and the segment's total dollar sales of $50.9 million were up 10
percent. However, hog costs averaged $38.00 for the quarter, a 65 percent
increase from the $23.00 average cost a year ago. As a result, the segment's
operating income of $3.6 million was down 49 percent from last year's second
quarter.
Owens said, "Hog costs moderated a bit during the quarter, though they
remain much higher than year-ago levels and above our assumptions at the
beginning of the year. Overall, given recent indications of a gradual pick-up in
our restaurant business, we remain comfortable with our previous earnings per
share guidance of between $2.07 and $2.15 for fiscal 2004. Given our performance
year-to-date we expect to finish the year at the lower end of this range. Last
year's record year represented a 46 percent increase from the company's earnings
two years earlier. Despite challenging comparisons this year, we continue to
pursue our proven strategies of manageable expansion and operational excellence
in the family casual restaurant business, while further leveraging
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the Bob Evans brand through complementary `homestyle' food products for retail
distribution."
The company's balance sheet remained strong as of Oct. 24, 2003, with
stockholders' equity of $592.4 million, compared with $68.9 million in total
debt obligations.
On Nov. 4, 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 dividend is payable Dec. 1, 2003 to stockholders
of record at the close of business on Nov. 14, 2003.
Bob Evans Farms, Inc. owns and operates 537 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 Six Months Ended
Oct. 24, Oct. 25, Oct. 24, Oct. 25,
2003 2002 2003 2002
Net Sales
Restaurant Segment $246,383 $231,212 $493,931 $465,249
Food Products Segment 50,877 46,389 98,801 89,373
-------- -------- -------- --------
Total $297,260 $277,601 $592,732 $554,622
Operating Income
Restaurant Segment $24,643 $24,344 $52,420 $51,705
Food Products Segment 3,553 7,014 6,204 11,909
-------- -------- -------- --------
Total $28,196 $31,358 $58,624 $63,614
Income Before Income Taxes $27,838 $30,890 $57,770 $62,619
Net Income $17,900 $20,078 $37,146 $40,702
Earnings Per Share
Basic $0.52 $0.57 $1.07 $1.15
Diluted $0.51 $0.56 $1.05 $1.13
Average Shares Outstanding
Basic 34,688 35,458 34,630 35,448
Diluted 35,299 36,029 35,247 36,144
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,
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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,
Nov. 11, 2003, at 10 a.m. ET. To listen, call (800) 253-6872 (toll free) or
log-in to the webcast at www.bobevans.com and then click on "investors." The
call will be available for replay immediately following the call, Tuesday, Nov.
11, 2003, through 5 p.m. ET on Thursday, Nov. 13, 2003, by calling toll free
(877) 519-4471, pin code 4288618. The webcast version will also be archived on
the company's Web site through Tuesday, Nov. 25, 2003.
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