EXHIBIT 99
FOR IMMEDIATE RELEASE Contact: Donald J. Radkoski (614) 492-4901
Nov. 15, 2004 or Mary Cusick (614) 492-4920
BOB EVANS FARMS ANNOUNCES SECOND QUARTER FINANCIAL RESULTS
AND UPDATES GUIDANCE
COLUMBUS, Ohio -- Bob Evans Farms, Inc. (NASDAQ: BOBE) today announced
financial results for the fiscal second quarter and six months ended Oct.
29, 2004.
Total net sales for the second quarter were $376.0 million, a 26
percent increase from $297.3 million in last year's second quarter. The
increase is primarily attributable to the acquisition of Mimi's Cafe
restaurants in July 2004. Net income for the quarter was $10.6 million, or
$0.30 per share on a diluted basis, compared with $17.9 million, or $0.51
per share, in the corresponding period a year ago. For the first six months
of fiscal 2005, net sales were $696.6 million, up 18 percent from a year
ago. Net income for the six-month period was $24.8 million, or $0.70 per
share, compared with $37.1 million, or $1.05 per share, in last year's
first half. The results reflect lower same-store sales at Bob Evans
Restaurants as well as reduced operating margins in both the restaurant and
food products segments.
"While second-quarter earnings came in at the high end of our
recently revised guidance range, these results are clearly disappointing,"
said Stewart K. Owens, chairman of the board and chief executive officer.
"Bob Evans Restaurants face a challenging situation, with continued soft
same-store sales and the related margin pressures one would expect -
compounded by the impact on food and labor costs of our recent initiatives
to enhance customers' value perceptions and overall satisfaction levels."
Same-store sales at Bob Evans Restaurants were down 4.2 percent
for the quarter. The company estimates that the hurricanes that struck
Florida hurt same-store sales, but the overall impact for the quarter was
less than one half of one percent. Average menu prices were up 2.2 percent
from a year ago. At Mimi's Cafe, same-store sales increased 4.4 percent,
with average menu prices up 3.9 percent. The restaurant segment's total
sales rose 30 percent, but operating income was 29 percent lower than a
year ago.
Owens commented, "We continue to believe the sales weakness at Bob
Evans Restaurants is due to economic pressures on our core customers, the
intensely competitive environment within the restaurant industry and our
geographic concentration in the Midwest. Our reduced operating margin for
the quarter reflected significant increases in food, labor and other
operating expenses as a percentage of sales. In addition, this was the
first full quarter in which Mimi's was included in our results. Mimi's
normally has lower margins than Bob Evans Restaurants."
In the food products segment, hog costs during the second quarter
averaged $50.00 per hundredweight, below the first-quarter average of
$52.00 but still up significantly from the $38.00 average for the second
quarter of fiscal 2004. On a positive note, pounds sold from comparable
products (principally sausage and refrigerated potatoes) increased 4
percent, even with a reduction in promotional spending. The segment's total
sales for the quarter rose 10 percent, and it returned to profitability
following the first quarter's slight operating loss. However, the segment's
operating income was down 49 percent from a year ago.
Owens said, "Hog costs continue to be high year over year, but we
anticipate that margins will improve somewhat in the second half of the
year due to an expected decline in hog costs for the third and fourth
quarters of fiscal 2005. In the restaurant segment, while we are moving
aggressively to identify potential new products and other strategies to
improve our performance, we are now assuming that same-store sales and
profitability will remain under pressure for the next two quarters. On that
basis, we estimate that our diluted earnings per share for fiscal 2005
could be in a range between $1.20 and $1.30."
Owens continued, "In light of the challenges at Bob Evans
Restaurants and the growth opportunities presented by Mimi's Cafe, we are
planning for a significant reduction in new Bob Evans Restaurant openings
in fiscal 2006. We still expect to open 39 new Bob Evans locations in the
current year, but will cut that number roughly in half in fiscal 2006. At
the same time, though, we will significantly accelerate our remodeling and
rebuilding programs for existing restaurants. We expect to increase the
number of Mimi's Cafe openings from 12 this year to approximately 15 next
year."
On Nov. 9, 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 Dec. 1, 2004,
to stockholders of record at the close of business on Nov. 19, 2004.
Bob Evans Farms, Inc. owns and operates 580 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. In addition, the company operates 85
Mimi's Cafe casual restaurants located in 12 states, primarily in
California and other western states. Bob Evans Farms, Inc. 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 (UNAUDITED)
(Thousands, except per share data)
Three Months Ended Six Months Ended
------------------ ----------------
Oct. 29, 2004 Oct. 24, 2003 Oct. 29, 2004 Oct. 24, 2003
------------- ------------- ------------- -------------
Net Sales
Restaurant Segment $320,170 $246,383 $589,785 $493,931
Food Products Segment 55,850 50,877 106,850 98,801
-------- -------- -------- --------
Total $376,020 $297,260 $696,635 $592,732
Operating Income
Restaurant Segment $ 17,380 $ 24,643 $ 41,297 $ 52,420
Food Products Segment 1,804 3,553 971 6,204
-------- -------- -------- --------
Total $ 19,184 $ 28,196 $ 42,268 $ 58,624
Net Interest Expense $ 2,695 $ 358 $ 3,571 $ 854
Income Before Income Taxes $ 16,489 $ 27,838 $ 38,697 $ 57,770
Provisions for Income Taxes $ 5,920 $ 9,938 $ 13,892 $ 20,624
Net Income $ 10,569 $ 17,900 $ 24,805 $ 37,146
Earnings Per Share
Basic $ 0.30 $ 0.52 $ 0.70 $ 1.07
Diluted $ 0.30 $ 0.51 $ 0.70 $ 1.05
Average Shares Outstanding
Basic 35,302 34,688 35,281 34,630
Diluted 35,654 35,299 35,658 35,247
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The statements contained in this report which are not statements of historical
fact are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Act"). In addition, certain
statements in future filings by the company with the Securities and Exchange
Commission, in press releases and in oral and written statements made by or with
the approval of the company which are not statements of historical fact
constitute forward-looking statements within the meaning of the Act. Examples of
forward-looking statements include statements of plans and objectives of the
company or its management or board of directors; statements regarding future
economic performance; and statements of assumptions underlying such statements.
Words such as "plan," "believes," "anticipates," "expects" and "intends" and
similar expressions are intended to, but are not the exclusive means of,
identifying those statements.
Forward-looking statements involve various important assumptions, risks and
uncertainties. Actual results may differ materially from those predicted by the
forward-looking statements because of various factors and possible events,
including, without limitation:
o Changes in hog costs
o The possibility of severe weather conditions where the company
operates its restaurants
o The availability and cost of acceptable new restaurant sites
o Shortages of restaurant labor
o Acceptance of the company's restaurant concepts into new geographic
areas
o Accurately assessing the value, future growth potential, strengths,
weaknesses, contingent and other liabilities and potential
profitability of Mimi's Cafe
o Unanticipated changes in business and economic conditions affecting
Mimi's Cafe
o Other risks disclosed from time to time in the company's securities
filings and press releases
There is also the risk that the company may incorrectly analyze these risks or
that the strategies developed by the company to address them will be
unsuccessful.
Forward-looking statements speak only as of the date on which they are made, and
the company undertakes no obligation to update any forward-looking statement to
reflect circumstances or events after the date on which the statement is made to
reflect unanticipated events. All subsequent written and oral forward-looking
statements attributable to the company or any person acting on behalf of the
company are qualified by the cautionary statements in this section.
Company executives will discuss the results during a conference call
Tuesday, Nov. 16, 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 for 48 hours, beginning
Tuesday, Nov. 16, 2004, immediately following the call by calling toll free
(877) 519-4471, pin code 5385544. The webcast version will also be archived on
the company's Web site.