EXHIBIT 99
FOR IMMEDIATE RELEASE Contact: Donald J. Radkoski (614) 492-4901
June 6, 2005 or Mary Cusick (614) 492-4920
BOB EVANS FARMS ANNOUNCES FOURTH QUARTER AND FISCAL 2005 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 29, 2005.
The quarter and fiscal year comprised 13 and 52 weeks, respectively, compared
with 14 and 53 weeks in the corresponding periods a year ago. The company
estimates that a year ago, 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.
Net sales for the fourth quarter were $382.6 million, a 22 percent
increase from $313.9 million in last year's fourth quarter. The increase is
attributable to the company's acquisition of Mimi's Cafe restaurants in July
2004. Net income for the quarter was $5.5 million, or $0.16 per share on a
diluted basis, compared with $19.3 million, or $0.54 per share, a year ago. For
the full year, net sales were approximately $1.5 billion, up 22 percent. Net
income for the year was $37.0 million, or $1.04 per share, compared with $72.0
million, or $2.03 per share, in fiscal 2004.
Lower net income for the quarter and the year primarily reflects the
impact of reduced same-store sales on operating margins at Bob Evans
Restaurants. In addition, results for both periods include approximately $0.05
per share in additional depreciation and amortization expense related to the
finalization of the Mimi's Cafe purchase price allocation.
In the restaurant segment, sales for the quarter increased 26 percent,
reflecting the addition of Mimi's. Same-store sales at Bob Evans Restaurants
were down 3.4 percent from a year ago, with average menu prices down 0.6
percent. At Mimi's Cafe, same-store sales for the quarter rose 5.1 percent, with
average menu prices up 2.6 percent. The segment's reported operating income for
the quarter was down 75 percent. This year's fourth quarter included additional
depreciation and amortization expense at Mimi's related to the finalization of
the Mimi's Cafe purchase price. For the full year, the restaurant segment's
sales rose 25 percent, and operating income declined 40 percent.
The company also announced today that same-store sales in "core" Bob
Evans Restaurants (494 stores which were open for the full 12 months in both
fiscal years 2004 and 2005) for the fiscal 2006 month of May (the four weeks
ended May 27) decreased 2.4 percent from the same period a year ago. Average
menu prices for the fiscal month were down approximately 1.5 percent. Mimi's
Cafe same-store sales in "core" restaurants (70 stores which were open for the
full 12 months in both fiscal years 2004 and 2005) for the equivalent fiscal
2006 month of May increased 4.8 percent from the same period a year ago. Average
menu prices for the month were up approximately 2.6 percent.
"Sales and profitability at Bob Evans Restaurants clearly remain under
pressure," said Stewart K. Owens, chairman of the board and chief executive
officer. "We believe this reflects the dynamics of our regional economy here in
the Midwest, where we operate a majority of our restaurants, as well as the
intensely competitive industry environment. Our older, core customer has not
been eating with us as
frequently and sales have not responded as much as we expected to our customer
satisfaction and value initiatives. These programs also have increased our food
and labor costs. We are continuing to pursue a variety of marketing and new
product strategies to address these challenges.
"On the other hand," Owens noted, "Mimi's Cafe continues to see strong
same-store sales, which were up 4.4 percent for the portion of the fiscal year
following the acquisition. New restaurants were successfully opened in a variety
of markets outside Mimi's core territory in the West and Southwest. We remain
excited about Mimi's future growth potential."
During fiscal 2005, the company opened 37 new Bob Evans Restaurants and
11 Mimi's Cafes, which brought their totals at year-end to 591 and 92,
respectively. Given the uncertain outlook for Bob Evans Restaurants, as well as
the capital expenditure requirements associated with the expansion of Mimi's
Cafe to 15 openings in fiscal 2006, the company plans to reduce to 20 the new
Bob Evans unit openings. In addition, remodeling and rebuilding programs for
existing Bob Evans units will be accelerated.
Sales and profitability in the food products segment improved in the
fourth quarter. The segment's reported sales rose 4 percent and operating income
increased 9 percent; excluding the extra week of operations a year ago, food
products operating income was up 23 percent. Also adjusted for the extra week,
pounds sold from comparable products (principally sausage and refrigerated
potatoes) increased 8 percent. Hog costs in the company's sausage business
averaged $49.00 per hundredweight for the quarter - a 14 percent increase from a
year ago, but much less than the 49 percent year-to-year increase in the third
quarter. For the full year, however, the segment's operating income was down 47
percent on an 8 percent sales increase.
Owens commented, "We are encouraged by the strong sales momentum in our
retail food business, which is being driven primarily by new products such as
refrigerated macaroni and cheese, mashed potatoes, and our new Bob Evans
prepared dinner entrees. In addition, it appears that hog cost comparisons in
our sausage business are finally flattening out, a welcome relief after two full
years of upward pressure."
Owens concluded, "In view of the uncertain situation at Bob Evans
Restaurants, we have decided to temporarily discontinue our practice of
providing specific earnings per share guidance. Directionally, however, we would
expect earnings to be down significantly again in the first quarter of fiscal
2006, with comparisons possibly improving later in the year."
Bob Evans Farms, Inc. owns and operates 589 full-service, family
restaurants in 20 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 93 Mimi's Cafe
casual restaurants located in 13 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
(Thousands, except per share data)
Three Months Ended Year Ended
------------------ ----------
Apr. 29, 2005 Apr. 30, 2004 Apr. 29, 2005 Apr. 30, 2004
------------- ------------- ------------- -------------
Net Sales
Restaurant Segment $ 324,311 $ 257,806 $1,230,301 $ 984,896
Food Products Segment 58,273 56,062 229,894 213,101
---------- ---------- ---------- ----------
Total $ 382,584 $ 313,868 $1,460,195 $1,197,997
Operating Income
Restaurant Segment $ 6,464 $ 25,564 $ 57,710 $ 95,878
Food Products Segment 5,055 4,656 9,196 17,423
---------- ---------- ---------- ----------
Total $ 11,519 $ 30,220 $ 66,906 $ 113,301
Net Interest Expense $ 2,897 $ 247 $ 9,234 $ 1,311
Income Before Income Taxes $ 8,622 $ 29,973 $ 57,672 $ 111,990
Provisions for Income Taxes $ 3,095 $ 10,675 $ 20,704 $ 39,955
Net Income $ 5,527 $ 19,298 $ 36,968 $ 72,035
Earnings Per Share
Basic $ 0.16 $ 0.55 $ 1.05 $ 2.07
Diluted $ 0.16 $ 0.54 $ 1.04 $ 2.03
Average Shares Outstanding
Basic 35,373 35,234 35,315 34,878
Diluted 35,610 35,856 35,644 35,513
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, June 7, 2005, 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, June 7, 2005,
immediately following the call by calling toll free (877) 519-4471, pin code
6135949. The webcast version will also be archived on the company's Web site.