EXHIBIT 99
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FOR IMMEDIATE RELEASE Contact: Donald J. Radkoski or
Feb. 9, 2004 Mary Cusick (614) 491-2225
BOB EVANS FARMS ANNOUNCES
THIRD QUARTER FINANCIAL RESULTS
COLUMBUS, Ohio -- Bob Evans Farms, Inc. (NASDAQ: BOBE) today announced
financial results for the fiscal third quarter and nine months ended Jan. 23,
2004.
Total net sales for the quarter were $291.4 million, up 7 percent from
$271.3 million in last year's third quarter. Net income was $15.6 million, or
$0.44 per share on a diluted basis, compared with $16.7 million, or $0.47 per
share, a year ago. For the nine-month period, net sales totaled $884.1 million,
a 7 percent increase from the first nine months of fiscal 2003. Net income for
fiscal 2004 to date was $52.7 million, or $1.49 per share, compared with $57.4
million, or $1.60 per share in fiscal 2003.
Restaurant sales for the quarter totaled $233.2 million, up 7 percent
from last year's third quarter. Same-store sales increased 0.7 percent, with
average menu prices up 2.0 percent. Weather conditions were less favorable than
a year ago in the company's Midwestern and Northeastern markets, particularly
during December, which negatively impacted same-store sales. The segment's
operating income for the quarter was $17.9 million, 11 percent lower than a year
ago.
Chairman of the Board and Chief Executive Officer Stewart K. Owens
said, "Our restaurant sales growth remained sluggish during the third quarter,
which reflects challenging weather conditions as well as the continued restraint
we see in consumer spending in our core heartland markets. Lower-than-expected
sales and increased food costs contributed to the decline in the restaurant
segment's operating income. In addition, a shift in the timing of our new
restaurant openings resulted in an increase in pre-opening expenses which
negatively impacted operating income. We expect pre-opening expenses to be lower
than a year ago in our fourth fiscal quarter."
The company opened 12 new Bob Evans Restaurants during the third
quarter, compared with eight a year ago. That brought the total for the year to
date to 26, more than double the 12 new units opened in the first nine months of
fiscal 2003. Additionally, in the third quarter the company opened four rebuilt
Bob Evans Restaurants compared with two in the same period a year ago. Total
pre-opening expenses for the third quarter were approximately $1.5 million
higher than in last year's third quarter. The company currently expects to open
11 new restaurants in the fourth fiscal quarter, compared with 17 in the
corresponding period a year ago. For the current fiscal year, this would bring
the total number of new restaurants opened to 37 (two more than previously
reported), compared with 29 for fiscal 2003.
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In the food products segment, the company benefited from continued
solid sales growth and a decline in raw material costs from the second quarter
level. Pounds sold from comparable products (principally sausage and
refrigerated potatoes) increased 7 percent from a year ago. The segment's sales
of $58.2 million were up 9 percent. Hog costs in the company's sausage business
averaged $35.00 per hundredweight for the quarter, compared with $27.00 a year
ago, but below the second-quarter average of $38.00. The segment's operating
income was $6.6 million, a 9 percent increase from last year's third quarter, in
part as a result of reduced promotional activity.
"The performance of the food products segment exceeded our
expectations for the quarter," Owens noted. "Sales growth is benefiting from the
continued strength of our core sausage products, refrigerated potato products
and our reformulated Bob Evans Express fully cooked sausage links. On the
expense side, hog costs have been slightly lower than our original expectations,
although we expect them to trend slightly higher in the months ahead."
Owens concluded, "We continue to expect a stronger fourth quarter
earnings comparison with a year ago, reflecting the inclusion of an extra week
in the quarter, reduced restaurant pre-opening expenses and relatively strong
margins in the food products segment. Given our third quarter results, we are
now targeting earnings per share for the full year of approximately $2.05 on a
diluted basis, slightly below our previous guidance. This represents a modest
decrease from last year's record earnings of $2.10 per share - a respectable
performance in view of the challenges we have faced across our businesses. We
are continuing to build our regional market presence and the long-term value of
the Bob Evans brand through manageable, strategic expansion programs and our
ongoing focus on providing high-quality products and excellent customer
service."
As of Jan. 23, 2004, the company's balance sheet remained strong. Debt
obligations totaled $61.8 million, compared with stockholders' equity of $609.2
million.
On Feb. 3, 2004, 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 March 1, 2004, to stockholders
of record at the close of business on Feb. 13, 2004.
Bob Evans Farms, Inc. owns and operates 550 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 Nine Months Ended
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Jan. 23, 2004 Jan. 24, 2003 Jan. 23, 2004 Jan. 24, 2003
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Net Sales
Restaurant Segment $233,159 $218,016 $727,090 $683,265
Food Products Segment 58,238 53,236 157,039 142,609
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Total $291,397 $271,252 $884,129 $825,874
Operating Income
Restaurant Segment $ 17,894 $ 20,034 $ 70,314 $ 71,739
Food Products Segment 6,563 6,046 12,767 17,955
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Total $ 24,457 $ 26,080 $ 83,081 $ 89,694
Income Before Income Taxes $ 24,247 $ 25,738 $ 82,017 $ 88,357
Net Income $ 15,591 $ 16,733 $ 52,737 $ 57,435
Earnings Per Share
Basic $ 0.45 $ 0.48 $ 1.52 $ 1.62
Diluted $ 0.44 $ 0.47 $ 1.49 $ 1.60
Average Shares Outstanding
Basic 34,990 35,199 34,750 35,365
Diluted 35,672 35,724 35,387 36,007
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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 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.
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Company executives will discuss the results during a conference call
Tuesday, Feb. 10, 2004, 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, Feb. 10, 2004, through 5 p.m. ET on Thursday, Feb. 12, 2004, by
calling toll free (877) 519-4471, pin code 4473083. The webcast version will
also be archived on the company's Web site.
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