EXHIBIT 99
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FOR IMMEDIATE RELEASE Contact: Donald J. Radkoski or
June 7, 2004 Mary Cusick (614) 491-2225
BOB EVANS FARMS ANNOUNCES FOURTH QUARTER
AND FISCAL 2004 FINANCIAL RESULTS; MAY SAME-STORE SALES
COLUMBUS, Ohio -- Bob Evans Farms, Inc. (NASDAQ: BOBE) today announced
financial results for the fiscal fourth quarter and year ended April 30, 2004.
The quarter and fiscal year comprised 14 and 53 weeks, respectively, one more
week than the corresponding periods in the prior year.
Total net sales for the quarter were $313.9 million, an 18 percent
increase from $265.5 million in last year's fourth quarter. Net income was $19.3
million, or $0.54 per share on a diluted basis, compared with $17.6 million, or
$0.50 per share, a year ago. For the full fiscal year, net sales were
approximately $1.2 billion, a 10 percent increase from fiscal 2003. Net income
for fiscal 2004 was $72.0 million, or $2.03 per share, down from last year's
record net income of $75.1 million, or $2.10 per share. The company estimates
that the extra week in the quarter and the year added $22.7 million to reported
net sales and approximately $5.0 million to operating income.
At Bob Evans Restaurants, same-store sales (excluding the extra week)
increased 1.6 percent for the quarter, and average menu prices were up 2.0
percent. Total restaurant sales for the quarter rose 18 percent from a year ago.
The segment's operating income was up 21 percent, benefiting significantly from
the additional week of operations. For the full year, restaurant sales increased
9 percent and the segment's operating income rose 3 percent.
The company also announced final same-store sales for the fiscal 2005
month of May (the four weeks ended May 28). Same-store sales in "core"
restaurants (484 stores which were open for the full 12 months in both fiscal
years 2003 and 2004) decreased 4.7 percent from the comparable period a year
ago. Menu prices for the month were up 2.4 percent.
The company opened 11 new Bob Evans Restaurants during the quarter,
which brings the total for the year to 37 - two more than its initial goal and a
significant increase from the 29 new restaurants opened in fiscal 2003. The
company also continued to invest in the existing restaurant base through its
ongoing remodeling and rebuilding programs. During fiscal 2004, 50 restaurants
were remodeled and 9 were completely rebuilt. The company currently plans to
open approximately 40 new restaurants in fiscal 2005.
Chairman of the Board and Chief Executive Officer Stewart K. Owens
said, "Restaurant sales and profits for the fourth quarter fell short of our
expectations. The results reflect continued sluggish sales - particularly in our
Midwestern `heartland' markets - as well as upward pressure on food costs across
a wide variety of commodities. As we recently announced, restaurant sales trends
for the first few weeks of our new fiscal year have been even more
disappointing. We are working hard to pinpoint the reasons for the softness, and
are evaluating a number of potential changes in our menu and marketing programs
for this summer."
Results in the food products segment were affected by a substantial
increase in raw material costs during the fourth quarter. Hog costs in the
company's sausage business averaged $43.00 per hundredweight for the fourth
quarter, compared with $30.00 a year ago and $35.00 in the third quarter. Pounds
sold from comparable products (principally sausage and refrigerated potatoes)
were relatively strong in the fourth quarter, rising 10 percent (excluding the
extra week). The segment's reported sales for the quarter were up 21 percent
from a year ago; however, operating income was down 26 percent, which reflects
the increased hog costs. For the full year, food products sales rose 13 percent,
while operating income declined 28 percent.
Owens continued, "In the food products segment, we are pleased with our
sales and market share trends for fiscal 2004, both in our core fresh sausage
operations and in our newer refrigerated potato business. The broad increase in
U.S. meat prices is a factor outside of our control. Although we believe hog
costs will be higher in fiscal 2005 than we originally expected, we are assuming
they will moderate later this year. We also are assuming that our restaurant
same-store sales will gradually improve, although we have lowered our margin
assumptions for that segment as well. Overall, we are now targeting diluted
earnings per share in a range between $1.80 and $2.00 for fiscal 2005."
The company's balance sheet remained strong at the end of fiscal 2004.
Total debt obligations as of April 30, 2004, were $63.0 million, compared with
stockholders' equity of $630.2 million.
As previously announced, on May 11, 2004, the Bob Evans Farms, Inc.
board of directors authorized the repurchase of up to 2 million shares of Bob
Evans Farms common stock during fiscal 2005. At the same meeting, the board
declared a quarterly cash dividend of 12 cents ($0.12) per share on the
company's outstanding common stock. The dividend was payable June 1, 2004, to
stockholders of record at the close of business on May 21, 2004.
Bob Evans Farms, Inc. owns and operates 559 full-service, family
restaurants in 21 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.
CONSOLIDATED FINANCIAL RESULTS
(Thousands, except per share data)
Three Months Ended Year Ended
------------------------------ -----------------------------
Apr. 30, Apr. 25, Apr. 30, Apr. 25,
-------- -------- -------- --------
2004 2003 2004 2003
---- ---- ---- ----
Net Sales
Restaurant Segment $257,806 $219,080 $ 984,896 $ 902,345
Food Products Segment 56,062 46,383 213,101 188,992
-------- -------- -------- --------
Total $313,868 $265,463 $1,197,997 $1,091,337
Operating Income
Restaurant Segment $ 25,564 $ 21,157 $ 95,878 $ 92,896
Food Products Segment 4,656 6,282 17,423 24,237
-------- -------- -------- --------
Total $ 30,220 $ 27,439 $ 113,301 $ 117,133
Income Before Income Taxes $ 29,973 $ 27,146 $ 111,990 $ 115,503
Net Income $ 19,298 $ 17,642 $ 72,035 $ 75,077
Earnings Per Share
Basic $ 0.55 $ 0.51 $ 2.07 $ 2.13
Diluted $ 0.54 $ 0.50 $ 2.03 $ 2.10
Average Shares Outstanding
Basic 35,234 34,719 34,878 35,203
Diluted 35,856 35,228 35,513 35,813
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 2005 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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