EXHIBIT 99
FOR IMMEDIATE RELEASE
Contact: Donald J. Radkoski (614) 492-4901
June 5, 2006 or Tammy Roberts Myers (614) 492-4954
BOB EVANS FARMS ANNOUNCES FOURTH QUARTER AND FISCAL 2006 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 28, 2006.
Net sales for the fourth quarter were $397.3 million, a 4 percent
increase from $382.6 million in last year's fourth quarter. Net income was $20.5
million, or $0.56 per share on a diluted basis, compared with $5.5 million, or
$0.16 per share, a year ago. Excluding the impact of several special items
outlined in the financial table below, net income would have been $17.1 million,
or $0.47 per share, in the fourth quarter this year.
For the full year, net sales were approximately $1.6 billion, up 9
percent from fiscal 2005 (sales increased 5 percent when fiscal 2005 sales are
normalized for the Mimi's acquisition). Net income for the year was $54.8
million, or $1.52 per share, compared with $37.0 million, or $1.04 per share,
the previous year. Excluding the impact of special items, net income would have
been $48.1 million, or $1.34 per share, in fiscal 2006.
Chief Executive Officer Steve Davis said, "The company made significant
progress in the second half of fiscal 2006 in improving its financial
performance. This progress was achieved despite continued declines in same-store
sales at Bob Evans Restaurants, which remain our greatest challenge. We did
boost Bob Evans Restaurant margins nicely, without compromising customer
satisfaction. Using the fiscal 2006 results as a springboard, our team will work
diligently to further improve our financial performance as we are certainly not
satisfied with where we are today."
Overall sales for the quarter in the restaurant segment increased 3
percent, and reported operating income more than tripled. Same-store sales at
Bob Evans Restaurants were down 0.9 percent for the quarter, with average menu
prices up 2.8 percent. At Mimi's Cafe, same-store sales rose 1.1 percent, with
average menu prices up 2.4 percent. For the full year, the segment's total sales
increased 9 percent (4 percent when fiscal 2005 sales are normalized for the
Mimi's acquisition), and operating income rose 22 percent (11 percent excluding
special items).
Davis said, "Operating margins at Bob Evans Restaurants improved
sequentially again in the fourth quarter, continuing the upward trend following
our poor performance in the first quarter. Both food and labor costs for the
quarter were down significantly from a year ago. However, Bob Evans' average
unit sales and profitability remain well below historical levels. In fiscal
2007, we will intensify our focus on driving same-store sales, with some
innovative new products -- consistent with our branding -- and stronger
marketing programs. At Mimi's, we remain very pleased with the concept's sales
volume and consumer acceptance as we enter new regional markets across the
United States."
The company also announced today that same-store sales at Bob Evans Restaurants
for the fiscal 2007 month of May (the four weeks ended May 26) decreased 1.2
percent from the same period a year ago. Average menu prices for the fiscal
month were up approximately 3.1 percent. Mimi's Cafe same-store sales for the
fiscal 2007 month of May increased 0.3 percent from the same period a year ago.
Mimi's average menu prices for the month were up approximately 2.5 percent.
Same-store sales are calculated
using the 514 Bob Evans Restaurants and 81 Mimi's Cafes that were open at the
end of the month and for the full 12 months in both fiscal 2005 and 2006.
During fiscal 2006, the company opened 20 new Bob Evans Restaurants and
10 Mimi's Cafes, which brought their totals at year-end to 587 and 102,
respectively. The company closed 24 underperforming Bob Evans and Owens
Restaurants during the year, but expects the number of closings to be much lower
in fiscal 2007. While on track to open 14 to 16 Mimi's Cafes, the company is
evaluating growth of Bob Evans Restaurants for fiscal 2007 and may open fewer
than the 15 previously announced.
In the food products segment, results for the fourth quarter benefited
from continued strong sales momentum and reduced raw material costs in the
company's sausage business. Hog costs averaged $37.00 per hundredweight,
compared with $49.00 in last year's fourth quarter. Pounds sold from comparable
products (principally sausage and refrigerated potatoes) increased 11 percent,
with particularly strong growth in refrigerated side dishes. Overall, the
segment's sales for the quarter rose 10 percent, and operating income was up 42
percent excluding special items.
"Looking ahead," Davis concluded, "we believe the company remains
well-positioned across its businesses to capitalize on key consumer trends.
Americans increasingly are looking for ways to save time and money, and our
restaurants and retail products meet those needs with delicious homestyle food
at reasonable prices. We have a great base to build upon, with strong regional
market shares and excellent consumer awareness of our premium brands, so there
are plenty of growth opportunities. By growing sales profitably and improving
our returns on investment as we fine-tune our growth strategies, we fully expect
to build value for Bob Evans stockholders over time."
Bob Evans Farms, Inc. owns and operates 587 full-service, family
restaurants in 19 states primarily in the Midwest, mid-Atlantic and Southeast
regions of the United States. In addition, the company operates 103 Mimi's Cafe
casual restaurants located in 17 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)
<Table>
<Caption>
Three Months Ended Year Ended
--------------------------- ---------------------------
April 28, April 29, April 28, April 29,
2006 2005 2006 2005
-------- -------- ---------- ----------
Net Sales
Restaurant Segment $333,389 $324,311 $1,335,741 $1,230,301
Food Products Segment 63,949 58,273 249,078 229,894
-------- -------- ---------- ----------
Total $397,338 $382,584 $1,584,819 $1,460,195
Operating Income
Restaurant Segment $21,489 $6,464 $70,497 $57,710
Food Products Segment 3,667 5,055 14,860 9,196
-------- -------- ---------- ----------
Total $25,156 $11,519 $85,357 $66,906
Net Interest Expense $2,837 $2,897 $11,645 $9,234
Income Before Income Taxes $22,319 $8,622 $73,712 $57,672
Provisions for Income Taxes $1,835 $3,095 $18,938 $20,704
Net Income $20,484 $5,527 $54,774 $36,968
Earnings Per Share
Basic $0.57 $0.16 $1.53 $1.05
Diluted $0.56 $0.16 $1.52 $1.04
Average Shares Outstanding
Basic 35,950 35,373 35,691 35,315
Diluted 36,314 35,610 35,944 35,644
RECONCILIATION OF GAAP MEASURES TO NON-GAAP MEASURES (UNAUDITED)
Three Months Ended Year Ended
---------------------------- --------------------------
April 28, April 29, April 28, April 29,
2006 2005 2006 2005
------- ------- ------- -------
Operating income, GAAP $25,156 $11,519 $85,357 $66,906
Special items (1,769) 0 3,110 0
-------- ------- ------- -------
Operating income, non-GAAP $26,925 $11,519 $82,247 $66,906
Net income, GAAP $20,484 $5,527 $54,774 $36,968
Special items 3,395 0 6,680 0
-------- ------- ------- -------
Net income, non-GAAP $17,089 $5,527 $48,094 $36,968
Basic earnings per share, GAAP $0.57 $0.16 $1.53 $1.05
Basic earnings per share, non-GAAP $0.48 $0.16 $1.35 $1.05
Diluted earnings per share, GAAP $0.56 $0.16 $1.52 $1.04
Diluted earnings per share, non-GAAP $0.47 $0.16 $1.34 $1.04
Special items impacting operating income:
Gains on asset sales $2,603 $8,110
Charge for amortization of investments (a) (3,487) (3,487)
Charge for settlement of lawsuit (885) (885)
Charge for closing Owens Restaurants 0 (628)
-------- -------
($1,769) $3,110
Special items impacting net income:
After-tax effect of items listed above ($1,255) $2,030
Tax benefit of settlement with Ohio (b) 4,650 4,650
-------- -------
$3,395 $6,680
(a) Represents the charge associated with changing the estimated residual value
of investments in income tax credit limited partnerships.
(b) Represents the income tax benefit of a settlement agreement with the State
of Ohio related to corporate franchise tax audits of fiscal years 1998-2003.
Note: All items impacting operating income occurred in the restaurant segment
except for the amortization charge, which occurred in the food products segment.
Company executives will discuss the results during a conference call
Tuesday, June 6, 2006, at 10 a.m. ET. To listen, call (888) 394-8033 (conference
ID number 7440052) 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 6, 2006, immediately following the call by calling toll free (877)
519-4471, pin code 7440052. The webcast version will also be archived on the
company's Web site.
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.