EXHIBIT 99
FOR IMMEDIATE RELEASE Contact: Donald J. Radkoski (614) 492-4901
August 15, 2005 or Mary Cusick (614) 492-4920
BOB EVANS FARMS ANNOUNCES FIRST QUARTER FINANCIAL RESULTS
COLUMBUS, Ohio -- Bob Evans Farms, Inc. (Nasdaq: BOBE) today announced
financial results for the fiscal first quarter ended July 29, 2005.
Total net sales for the quarter were $395.6 million, a 23 percent
increase from $320.6 million in the corresponding period last year. The increase
is primarily attributable to the Mimi's Cafe acquisition in July 2004. Net
income for the quarter was $7.2 million, or $0.20 per share on a diluted basis,
compared with $14.2 million, or $0.40 per share, a year ago. The decline
reflects lower same-store sales and operating margins at Bob Evans Restaurants,
partially offset by improved results in the food products segment.
Same-store sales for the quarter decreased 1.9 percent at Bob Evans
Restaurants. Average menu prices were down 0.1 percent from a year ago. At
Mimi's Cafe, same-store sales increased 3.0 percent, with average menu prices up
2.3 percent. While the restaurant segment's total sales for the quarter rose 26
percent, mainly due to the Mimi's acquisition, its operating income was down 49
percent.
Larry C. Corbin, interim chief executive officer and president, said,
"Bob Evans' same-store sales remained soft in the first quarter, putting added
pressure on our expense ratios as we continued to incur increased costs related
to customer satisfaction initiatives. We have seen some improvement in sales and
profitability recently; in our July fiscal month, Bob Evans' same-store sales
declined less than 1 percent, and margins were higher than they had been earlier
in the quarter. However, we have a great deal of work still ahead of us to
restore profitability to acceptable levels."
During the first quarter, the company opened six new Bob Evans
Restaurants, which brings the total to 593. As previously announced, the company
is reducing the number of Bob Evans Restaurant openings to approximately 20 this
year, from 37 in fiscal 2005, as it focuses on improving results at existing
units. One Mimi's Cafe restaurant was opened in the quarter, and 14 new Mimi's
are expected to open in fiscal 2006, compared with 11 in fiscal 2005.
In the food products segment, results for the quarter benefited from
lower raw material costs in the company's sausage business. Hog costs averaged
$48.00 per hundredweight, compared with $52.00 a year ago. Pounds sold from
comparable products (principally sausage and refrigerated potatoes) increased 6
percent. The segment's total sales for the quarter were up 7 percent, and
operating income was $1.7 million, compared with an $833,000 operating loss in
last year's first quarter.
Corbin commented, "Food products sales in the first quarter again were
relatively strong, driven by continued growth in our refrigerated side dishes
such as mashed potatoes and macaroni and cheese. In addition, we are pleased to
note that hog costs have declined further in recent weeks, enhancing the
near-term margin outlook in our sausage business."
"Overall," Corbin concluded, "we are cautiously optimistic that the
company's earnings will gradually improve as fiscal 2006 unfolds. As the interim
CEO, I expect to make some tactical adjustments at Bob Evans Restaurants,
carefully balancing cost-reduction opportunities with customer satisfaction
initiatives. In addition, sales may benefit this fall as we refocus our
marketing and new-product efforts on breakfast, our historical strength. Looking
further ahead, as we go through the process of hiring a new CEO and reevaluating
all aspects of our business, we expect to identify additional opportunities to
improve the company's longer-term financial performance."
The company's balance sheet remained strong at the end of the first
quarter, with $273.8 million in total debt obligations, compared with $656.3
million in stockholders' equity.
On Aug. 9, 2005, 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 Sept. 1, 2005, to stockholders
of record at the close of business on Aug. 19, 2005.
Bob Evans Farms, Inc. owns and operates 594 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 (UNAUDITED)
(Thousands, except per share data)
Three Months Ended
------------------
July 29, 2005 July 30, 2004
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Net Sales
Restaurant Segment $ 341,032 $ 269,615
Food Products Segment 54,608 51,000
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Total $ 395,640 $ 320,615
Operating Income
Restaurant Segment $ 12,312 $ 23,917
Food Products Segment 1,689 (833)
--------- ---------
Total $ 14,001 $ 23,084
Net Interest Expense $ 2,969 $ 876
Income Before Income Taxes $ 11,032 $ 22,208
Provisions for Income Taxes $ 3,872 $ 7,972
Net Income $ 7,160 $ 14,236
Earnings Per Share
Basic $ 0.20 $ 0.40
Diluted $ 0.20 $ 0.40
Average Shares Outstanding
Basic 35,421 35,260
Diluted 35,645 35,671
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995 Statements in this report that are not historical facts are
forward-looking statements and are based on current expectations.
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 Changing business and/or economic conditions, including energy costs
o Competition in the restaurant and food products industries
o Ability to control restaurant operating costs, which are impacted by
market changes in the cost or availability of labor and food, minimum
wage and other employment laws, fuel and utility costs and general
inflation
o Changes in the cost or availability of acceptable new restaurant sites
o Adverse weather conditions in locations where the company operates its
restaurants
o Consumer acceptance of changes in menu, price, atmosphere and/or
service procedures
o Consumer acceptance of the company's restaurant concepts in new
geographic areas
o Changes in hog and other commodity costs.
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.
Additional discussion of these factors is included in the company's periodic
filings with the Securities and Exchange Commission. 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 that occur 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, Aug. 16, 2005, at 10 a.m. ET. To listen, call (888) 394-8033 (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, Aug. 16, 2005, immediately following the call by calling toll free
(877) 519-4471, pin code 6349326. The webcast version will also be archived on
the company's Web site.