Close

Bob Evans Farms (BOBE) Misses Q3 EPS by 10c; Cuts FY15 EPS Outlook

March 3, 2015 4:04 PM EST
Get Alerts BOBE Hot Sheet
Price: $77.01 --0%

Financial Fact:
Net Sales: 315.96M

Today's EPS Names:
BFRI, HCTI, IMPM, More
Join SI Premium – FREE

Bob Evans Farms (NASDAQ: BOBE) reported Q3 EPS of $0.60, $0.10 worse than the analyst estimate of $0.70. Revenue for the quarter came in at $367.2 million versus the consensus estimate of $358.83 million.

Bob Evans Restaurants' Q3 2015 same-store sales increased 3.8 percent

Strategic initiatives – interim update

Commenting on strategic initiatives the Board is addressing, Mary Kay Haben, Non-Executive Chair of the Board, said, "Last December, the Board of Directors concluded that the Company would benefit from new leadership and enhanced execution. In the wake of that leadership change, the Board and management are working together with a high sense of urgency to implement actions to enhance performance and create shareholder value. With these objectives in mind, the Finance Committee of the Board, with the assistance of independent advisors, was charged with conducting a comprehensive review of strategic alternatives. The Finance Committee unanimously reached several conclusions and advised the Board that:

1) Working with Lazard, it thoroughly reviewed the possibility of a separation of the BEF Foods business and concluded that a sale or spinoff of the segment, at this time, would not enhance shareholder value, and that continued focus on operations improvement would deliver greater benefits to our shareholders. Because the Company's tax basis in its BEF Foods business is low, a taxable sale would be accretive only if it occurred at an EBITDA multiple significantly in excess of recent valuations for which food businesses have traded. With input from its outside advisors, the Finance Committee also concluded the annual costs and lost synergies that would result from a tax-free spin-off would be significant. Additionally, the need to allocate the Company's debt between two smaller companies, and the one-time costs and significant management attention that would be required, make such a transaction not advisable at this time.

2) The Company has retained JP Morgan to work with the Finance Committee, in addition to Lazard, in reviewing the potential for real estate transactions or other changes to the Company's capital structure. Working with these advisors, the Finance Committee is continuing to evaluate various alternatives with respect to all, or a portion of, the Company's real estate assets, including a potential REIT spin-off, a sale-leaseback, and other real estate financing transactions; and

3) Working with Deloitte, the Company has reviewed its G&A and certain other cost structures and identified $35 million of potential annual cost savings, which it has already begun to implement and which it expects to realize over a three year time frame. The implementation costs to achieve these savings are expected to be approximately $4 million. Additionally, the Company is putting in place an enterprise-wide lean efficiency team to focus on other savings opportunities in addition to those identified to-date.

Bob Evans Farms sees FY2015 EPS of $1.40-$1.60, versus the consensus of $1.97.

For earnings history and earnings-related data on Bob Evans Farms (BOBE) click here.



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Earnings, Guidance, Hot Corp. News, Hot Earnings, Hot Guidance, Retail Sales, Spinoffs, Trader Talk, Trading Halts

Related Entities

JPMorgan, Lazard, Earnings