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Form 8-K BOB EVANS FARMS INC For: Jun 14

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June 14, 2016 4:19 PM EDT


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): June 14, 2016 (June 14, 2016)

Bob Evans Farms, Inc.
(Exact name of registrant as specified in its charter)

Delaware
0-1667
31-4421866
(State or other jurisdiction of
incorporation or organization)
(Commission File No.)
(I.R.S. Employer
Identification No.)
8111 Smith’s Mill Road, New Albany, Ohio 43054
(Address of principal executive offices Zip Code)
(614) 491-2225
(Registrant’s telephone number, including area code)
Not applicable
(Former name, former address and formal fiscal year, if changed since last report)
_______________________________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):
¨    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2b)
¨    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c)









Item 2.02.    Results of Operations and Financial Condition.

On June 14, 2016, Bob Evans Farms, Inc., a Delaware corporation (the “Company”) issued a news release announcing financial results for the fourth quarter and fiscal year 2016 ended April 29, 2016. A copy of the news release and a fact sheet with additional financial information is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Within the news release the Company sets forth the reasons it believes that the presentation of the non-GAAP financial measures contained in the press release provide useful information to investors regarding the Company’s financial condition and results of operations. To the extent material, the exhibit also discloses the additional purposes, if any, for which the Company’s management uses these non-GAAP financial measures. A reconciliation of these non-GAAP financial measures with the most directly comparable GAAP financial measures is included in news release and fact sheet.

The information in this Form 8-K, including the information contained in Exhibit 99.1, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that Section, nor shall such information be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly set forth by specific reference in such filing.

Item 9.01.    Financial Statements and Exhibits.

(a) Financial Statements of Business Acquired - Not Applicable
(b) Pro Forma Financial Information - Not applicable
(c) Shell Company Transactions - Not Applicable
(d) Exhibits:

The following exhibits are included with this Current Report on Form 8‑K:

99.1
News release issued by Bob Evans Farms, Inc. on June 14, 2016 announcing the financial results for the fourth quarter and fiscal year 2016 ended April 29, 2016
Filed herewith












SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 
BOB EVANS FARMS, INC.
 
 
 
 
Date: June 14, 2016
 
By:
/s/ Mark E. Hood
 
 
 
Mark E. Hood, Chief Administrative and Chief Financial Officer




BOB EVANS REPORTS FISCAL 2016 FOURTH-QUARTER AND FULL-YEAR RESULTS; PROVIDES FISCAL YEAR 2017 OUTLOOK
    
▪
Q4 2016 net sales total $345.6 million; GAAP net income of $0.03 per diluted share and non-GAAP net income(1) of $0.48 per diluted share

▪
Fiscal year 2016 net sales total $1,338.8 million; GAAP net income of $1.13 per diluted share and non-GAAP net income of $2.02 per diluted share, a 24 percent increase compared to the prior year. On a 52-week basis, fiscal year 2016 non-GAAP net income of $1.89 per diluted share represents a 16 percent increase compared to the prior year

▪
BEF Foods reports 15 percent increase in fiscal fourth quarter pounds sold, resulting in 13 percent non-GAAP operating profit growth. Refrigerated side-dish manufacturing facility expansion nearly complete; production to come on-line this summer

▪
Bob Evans Restaurants’ Q4 2016 same-store sales declined 3 percent; in-line with expectations. Comprehensive menu redesign scheduled for late-summer system-wide launch; will highlight value and be more guest-friendly

▪
Company establishes fiscal year 2017 non-GAAP diluted EPS guidance range of $2.00 to $2.15, representing 10 percent year-over-year growth at the midpoint compared to fiscal 2016 52-week non-GAAP diluted EPS

▪
Quarterly dividend of $0.34 per share payable on June 20, 2016, to stockholders of record at the close of business on June 6, 2016

▪
Company completed $249 million of sale-leaseback transactions during fiscal 2016, generating estimated net proceeds of $214 million. Proceeds supported $172 million of share repurchases and $112 million of debt reduction during the year

NEW ALBANY, Ohio - June 14, 2016 - Bob Evans Farms, Inc. (NASDAQ: BOBE) today announced its financial results for the fiscal 2016 fourth quarter ended Friday, April 29, 2016. On a GAAP basis, the Company reported net income of $0.6 million, or $0.03 per diluted share, compared with net income of $5.6 million, or $0.24 per diluted share, last year. On a non-GAAP basis, net income was $9.5 million, or $0.48 per diluted share, compared with net income of $13.2 million, or $0.56 per diluted share, last year.

Fourth-quarter fiscal 2016 commentary
President and Chief Executive Officer Saed Mohseni said, “BEF Foods capped an excellent year with continued strong volume and profit growth. The expansion of our Lima, Ohio, refrigerated side-dish manufacturing facility is nearing completion and we expect its new production capacity

1

to be brought on-line later this summer; enabling us to meet peak holiday demand this fall and achieve continued distribution and sales growth in the years ahead.

“At Bob Evans Restaurants, fourth-quarter same-store sales were in-line with our expectations. During the quarter, we made progress redesigning our restaurant menu, improved core menu items, and focused on guest hospitality to ensure a better guest experience. The new menu, to be introduced late-August, will be more guest-friendly, preserving guest favorites at every daypart, while better highlighting value and providing each guest with more meal options and flexibility. In the interim, we introduced our summer bacon promotion late May with special bacon-themed items at every daypart including a Bacon Lover’s Omelet, Bacon Cheeseburger, Strawberry Bacon Salad, and a three-course Bacon-Topped Chicken Dinner.”

Mohseni continued, “At the corporate level, we completed our previously announced real estate monetization initiatives with completion of a $197 million sale-leaseback transaction of 143 restaurant properties. Along with the $52 million sale-leaseback of two BEF Foods production facilities earlier in the year, these transactions have helped support nearly $500 million of capital returned to shareholders through share repurchases and dividends during the last three years. With these significant financial transactions behind us, our focus in fiscal 2017 is to profitably grow both BEF Foods and Bob Evans Restaurants while continuing to improve the efficiency at all levels of our company from the restaurant and plant-level to the home office. We believe this will deliver sustainable long-term shareholder value as we fulfill the promise of our corporate mission: providing high-quality food with hospitality and integrity, whether in our restaurants or to our retailers.”

Fourth-quarter fiscal 2016 Bob Evans Restaurants segment summary
Bob Evans Restaurants’ net sales, excluding the 53rd week of fiscal 2016, were $226.5 million, a decline of $11.7 million, or 4.9 percent, compared to net sales of $238.2 million last year. Same-store sales declined 3.0 percent with the balance of the net sales decline due to net restaurant closures earlier in the year. Twenty-one restaurants were closed during the 53rd week of fiscal 2016 and no new restaurants opened during the fourth quarter. At the end of fiscal 2016, the Company operated 527 restaurants. As previously announced, we expect to close six additional leased restaurants during fiscal 2017.  

Same-Store Sales (SSS) Restaurants

February
4 weeks

March
4 weeks

April
5 weeks

4Q  FY ’16
13 weeks

FY ’16
52 weeks
540
-1.1%
-2.3%
-4.9%
-3.0%
-2.5%

Bob Evans Restaurants’ GAAP operating loss was $2.8 million, compared to GAAP operating income of $6.5 million last year.  Bob Evans Restaurants’ non-GAAP operating income was $11.6 million, compared to $16.7 million last year, a decline of $5.1 million. The decline in non-GAAP operating income was due to lower sales and investment in labor hours to support efforts to improve guest hospitality along with increased hourly wage rates as a result of minimum wage increases, partially offset by cost savings of $2.8 million. Operating income of $2.3 million was attributable to the 53rd week of fiscal 2016.

Fourth-quarter fiscal 2016 BEF Foods segment summary
BEF Foods’ net sales, excluding the 53rd week of fiscal 2016, were $95.3 million, an increase of $1.1 million, or 1.1 percent, compared to $94.2 million last year.  Pounds sold increased 7.1 percent while average net selling price per pound declined 5.5 percent compared to last year.

2

The decline in average net selling price reflects an increased sales mix of lower-priced, although higher-margin, side-dish products relative to sausage, as well as reduced net sausage pricing through increased trade spending.  From a net sales perspective, a 13.7 percent increase in side-dish pounds sold, a 0.6 percent increase in sausage pounds sold, and a 3.7 percent increase in food service pounds sold were partially offset by a $4.0 million increase in trade spending (reduces net sales) and an 11.2 percent decline in frozen product pounds sold.

BEF Foods’ GAAP operating income was $20.6 million, compared to $15.3 million last year.  BEF Foods’ non-GAAP operating income was $20.6 million compared to $18.2 million last year, an improvement of $2.4 million.  The improvement in non-GAAP operating income was due primarily to increased sales, favorable sales mix, and $0.7 million of cost savings, partially offset by $3.9 million of increased net sow cost ($4.0 million of increased trade spending partially offset by $0.1 million of sow cost favorability) and increased incentive- and stock-based compensation. Operating income of $2.1 million was attributable to the 53rd week of fiscal 2016.

Fourth-quarter fiscal 2016 Corporate and Other summary
Corporate and Other GAAP operating costs were $19.3 million, compared to $20.9 million last year.  Corporate and Other non-GAAP operating costs were $18.1 million, compared to $17.1 million last year, an increase of $1.0 million due primarily to increased incentive- and stock-based compensation and the impact of the 53rd week of fiscal 2016, partially offset by $2.1 million of cost savings.

Fourth-quarter fiscal 2016 net interest expense - The borrowing rate on the Company’s outstanding debt was 2.44 percent at the end of the quarter, compared to 2.19 percent at the end of last year.

Fourth-quarter fiscal 2016 taxes - The Company recorded a GAAP tax benefit of $5.1 million for the fourth quarter of fiscal 2016, as compared to a tax benefit of $7.1 million last year. The effective income tax rate in the fourth quarter of fiscal 2016 was substantially different than the statutory rate due to the Company’s increased domestic production activities deduction as a result of increased taxable income and the utilization of tax credits. The effective tax rate in the fourth quarter of fiscal 2015 was substantially different than the statutory rate due to the impact of final fiscal year permanent items against lower than projected pretax earnings and the expiration of the statute of limitations on several uncertain tax position reserves. The non-GAAP tax rate was approximately 13.8 percent for the fourth quarter, reflecting the Company’s annual non-GAAP estimated tax rate, compared to 11.2 percent last year. The increase in the tax rate reduced fourth quarter diluted non-GAAP earnings per share by approximately $0.01.

Fiscal-year 2016 consolidated operating results
Consolidated GAAP operating income was $36.2 million, compared to $17.7 million last year.  Consolidated non-GAAP operating income was $66.2 million, compared to $53.5 million last year, a 24 percent improvement.  Consolidated GAAP net income of $24.2 million, or $1.13 per diluted share, compared with net income of $16.6 million, or $0.70 per diluted share last year, a 61 percent improvement. On a non-GAAP basis, net income was $43.4 million, or $2.02 per diluted share, a 24 percent increase compared with $1.63 per diluted share last year.

Fiscal-year 2016 Bob Evans Restaurants segment summary
Bob Evans Restaurants’ net sales, excluding the 53rd week of fiscal 2016, were $934.5 million, a decline of $35.4 million, or 3.7 percent, compared to net sales of $969.9 million last year. Same-store sales declined 2.5 percent during fiscal 2016 with the balance of the net sales decline due

3

to net restaurant closures. During fiscal 2016, Bob Evans opened one and closed 41 restaurants.

Bob Evans Restaurants’ GAAP operating income was $34.8 million, compared to GAAP operating income of $56.2 million last year. Bob Evans Restaurants’ non-GAAP operating income was $60.0 million compared to $70.9 million last year, a decline of $10.9 million. The decline in non-GAAP operating income was due primarily to lower sales and higher labor costs resulting from increased wage rates as well as increased labor hours to improve the guest experience, partially offset by cost savings of $9.0 million. Operating income of $2.3 million was attributable to the 53rd week of fiscal 2016.
 
Fiscal-year 2016 BEF Foods segment summary
BEF Foods’ net sales, excluding the 53rd week of fiscal 2016, were $380.5 million, an increase of $1.2 million, or 0.3 percent, compared to $379.3 million last year.  Pounds sold increased 5.8 percent while average net selling price per pound declined 5.2 percent compared to last year.  The decline in average net selling price reflects an increased sales mix of lower-priced (and higher margin) side-dish products relative to sausage, as well as reduced net sausage pricing through increased trade spending.  From a net sales perspective, a 15.2 percent increase in side-dish pounds sold and a 9.9 percent increase in sausage pounds sold were partially offset by a $21.5 million increase in trade spending (reduces net sales), a 21.7 percent decline in foodservice pounds sold, and an 8.4 percent reduction in frozen product pounds sold.  

BEF Foods’ GAAP operating income was $71.0 million, compared to $40.0 million last year.  BEF Foods’ non-GAAP operating income was $74.6 million compared to $43.8 million last year, an improvement of $30.8 million.  The improvement in non-GAAP operating income was due primarily to increased sales and favorable sales mix, $3.3 million of cost savings, and $2.6 million of favorable net sow cost ($24.1 million of sow cost favorability, partially offset by $21.5 million of increased trade spending), partially offset by increased incentive- and stock-based compensation. Operating income of $2.1 million was attributable to the 53rd week of fiscal 2016.

Fiscal-year 2016 Corporate and Other summary
Corporate and Other GAAP operating costs were $69.6 million, compared to $78.5 million last year.  Corporate and Other non-GAAP operating costs were $68.4 million, compared to $61.3 million last year, an increase of $7.2 million due primarily to increased incentive- and stock-based compensation, ERP support costs, depreciation and amortization expense related to ERP capital expenditures, and the impact of the 53rd week of fiscal 2016, partially offset by $7.8 million of cost savings.

Fiscal-year 2016 net interest expense - The borrowing rate on the Company’s outstanding debt was 2.44 percent at the end of fiscal 2016, compared to 2.19 percent at the end of fiscal 2015.

Fiscal-year 2016 taxes - The Company recorded a GAAP tax provision expense of $1.2 million (4.7 percent) for fiscal 2016, as compared to a tax benefit of $7.5 million (83 percent) in fiscal 2015. The effective income tax rate in fiscal 2016 and 2015 was substantially different than the statutory rate due to the Company’s domestic production activities deduction and the utilization of tax credits. The non-GAAP tax rate for fiscal 2016 was 22.4 percent, reflecting the impact of permanent items on income when adjusted for nonrecurring items, compared to 10.5 percent for

4

fiscal 2015. The increase in the tax rate reduced fiscal year 2016 diluted non-GAAP earnings per share by approximately $0.30.

Fiscal-year 2016 balance sheet highlights - The Company’s cash balance and outstanding debt at the end of the year were $12.9 million and $339.1 million, respectively, compared to $6.4 million and $451.1 million, last year. The Company was in compliance with its debt covenants at the end of the year. The decrease in borrowings was primarily the result of the use of proceeds from recent real estate monetization transactions and operating cash flow to reduce debt, partially offset by share repurchases, capital expenditures, and dividend payments. The Company’s leverage ratio as defined in its credit agreement was 2.44 at the end of the year. On a pro-forma basis, assuming the 2016 sale-leaseback transactions occurred at the beginning of the fiscal year, the Company’s year-end leverage ratio would have been 3.19, compared to 3.37 in the prior year.

Fiscal year 2017 outlook
Chief Administrative and Chief Financial Officer Mark Hood said, "Fiscal 2016 was notable for several important developments that position us well to achieve our fiscal 2017 non-GAAP diluted earnings per share guidance range of $2.00 to $2.15, of which the midpoint represents a 10 percent increase compared to fiscal 2016 52-week non-GAAP diluted earnings per share of $1.89. This guidance range does not include the impact of potential share repurchase activity during fiscal year 2017. We completed three real estate monetization transactions during fiscal 2016 that supported $172 million of share repurchases and more than $110 million of debt reduction. Furthermore, we made progress on cost reduction initiatives at all levels of the organization as we have eliminated approximately $30 million of annual costs. We also invested in projects to enable and support future profitable growth including continued implementation of our ERP system along with testing of our restaurant technology platform that will begin rolling out to our restaurants later this summer with system-wide implementation expected to be complete by the end of fiscal 2017.

“At Bob Evans Restaurants, we expect negative low-single digit to flat same-store sales for fiscal year 2017. Our guidance also incorporates incremental investments in restaurant labor hours and marketing - particularly during the first half of the year - to support our efforts in improving guest hospitality and to better communicate our value offerings at every daypart. BEF Foods’ net sales in fiscal 2017 are expected to be $400 to $420 million, with our refrigerated side-dish product line generating most of the growth. We anticipate incremental marketing expenditures at BEF Foods to support continued volume growth, particularly of our refrigerated side dishes. Additionally, there will be some labor inefficiencies as we build staffing for production startup of line four at our refrigerated side-dish facility.”

Hood continued, “Our fiscal 2017 capital expenditure budget of $75 to $80 million is comprised of the following: approximately $20 million for the restaurant technology platform, $12 million for the expansion of BEF Foods refrigerated side-dish facility, $35 million for maintenance and equipment upgrades in both Bob Evans Restaurants and BEF Foods, with the balance budgeted for IT expenditures and infrastructure, and opening of one new Bob Evans Restaurant.

“From a corporate perspective, we have $78.5 million remaining on our share repurchase authorization and we expect to execute additional repurchases during fiscal 2017 while maintaining a prudent leverage ratio. We anticipate a tax rate of approximately 24 to 25 percent during fiscal 2017.”


5

Guidance Metric
FY ‘17
Consolidated net sales
$1.28 to $1.33 billion
Bob Evans Restaurants same-store sales
negative low-single digit to flat
Bob Evans Restaurants commodity pricing
approximately flat
BEF Foods net sales
$400 to $420 million
BEF Foods sow cost (per hundredweight)
$52-$55
Capital expenditures
$75 to $80 million
Depreciation and amortization
$71 to $75 million
Net interest expense
$12 to $14 million
Tax rate
24% to 25%
Diluted weighted-average share count
approximately 20 million shares
Remaining share repurchase authorization
$78.5 million
GAAP diluted earnings per share
$1.95 to $2.12
Non-GAAP diluted earnings per share
$2.00 to $2.15
 
 
This outlook is subject to a number of factors beyond the Company’s control, including the risk factors discussed in the Company’s fiscal 2015 Annual Report on Form 10‑K and its other subsequent filings with the Securities and Exchange Commission.

Investor Conference Call
The Company will host a conference call to discuss its fourth-quarter fiscal 2016 results at 8:30 a.m. (ET) on Wednesday, June 15, 2016. The dial-in number is (855) 468-0551, access code 16240692. A replay will be available at (800) 585-8367, access code16240692.

A simultaneous webcast will be available at http://investors.bobevans.com/events.cfm. The archived webcast will also be available on the Web site.

(1)Non-GAAP Financial Measures
The Company uses non-GAAP financial measures to monitor and evaluate the ongoing performance of the Company. The Company believes the additional measures are useful to investors for financial analysis. Excluding these items reflects operating results that are more indicative of the Company’s ongoing operating performance and improve comparability to prior periods. However, non-GAAP measures are not in accordance with, nor are they a substitute for, GAAP measures. Reconciliations to the applicable GAAP financial measures are included in the attached schedules.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
Certain statements in this news release that are not historical facts are forward-looking 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. We discuss these factors and events, along with certain other risks, uncertainties and assumptions, under the heading “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended April 24, 2015, and in our other filings with the Securities and Exchange Commission. We note these factors for investors as contemplated by the Private Securities Litigation Reform Act of 1995. Predicting or identifying all such risk factors is impossible. Consequently, investors should not consider any such list to be a complete set of all potential risks and uncertainties. Any strategic transaction with respect to our restaurant real estate remains subject to closing conditions and there can be no assurance of such a closing. Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update any forward-looking statement to

6

reflect circumstances or events that occur after the date of the statement to reflect unanticipated events. All subsequent written and oral forward-looking statements attributable to us or any person acting on behalf of the Company are qualified by the cautionary statements in this section.

About Bob Evans Farms, Inc.
Bob Evans Farms, Inc. owns and operates full-service restaurants under the Bob Evans Restaurants brand name. At the end of the fourth fiscal quarter (April 29, 2016), Bob Evans Restaurants owned and operated 527 family restaurants in 18 states, primarily in the Midwest, mid-Atlantic and Southeast regions of the United States. Bob Evans Farms, Inc., through its BEF Foods segment, is also a leading producer and distributor of refrigerated side dishes, pork sausage and a variety of refrigerated and frozen convenience food items under the Bob Evans and Owens brand names. For more information about Bob Evans Farms, Inc., visit www.bobevans.com.

Contact:     
Scott C. Taggart

Vice President, Investor Relations
(614) 492-4954
BOBE-E
Source: Bob Evans Farms, Inc.


7


Bob Evans Farms, Inc.
Earnings Release Fact Sheet (unaudited)
Fourth quarter Fiscal 2016 compared to the corresponding period a year ago:
(in thousands, except per share amounts)
 
 
 
 
Basic EPS
 
Diluted EPS
 
14 weeks ended
 
13 weeks ended
 
14 weeks ended
 
13 weeks ended
 
14 weeks ended
 
13 weeks ended
 
April 29, 2016
 
April 24, 2015
 
April 29, 2016
 
April 24, 2015
 
April 29, 2016
 
April 24, 2015
Operating Income (Loss) as Reported
 
 
 
 
 
 
 
 
 
 
 
Bob Evans Restaurants
$
(2,794
)
 
$
6,531

 
 
 
 
 
 
 
 
BEF Foods
20,569

 
15,317

 
 
 
 
 
 
 
 
Corporate and Other
(19,310
)
 
(20,911
)
 
 
 
 
 
 
 
 
Operating Income
(1,535
)
 
937

 
 
 
 
 
 
 
 
Net interest expense
2,944

 
2,424

 
 
 
 
 
 
 
 
Income Before Income Taxes
(4,479
)
 
(1,487
)
 
 
 
 
 
 
 
 
Provision (benefit) for income taxes
(5,059
)
 
(7,097
)
 
 
 
 
 
 
 
 
Net Income as reported
580

 
5,610

 
$
0.03

 
$
0.24

 
$
0.03

 
$
0.24

 
 
 
 
 
 
 
 
 
 
 
 
Adjustments
 
 
 
 
 
 
 
 
 
 
 
Bob Evans Restaurants
 
 
 
 
 
 
 
 
 
 
 
Impairments
6,710

 
2,851

 
 
 
 
 
 
 
 
Severance/Restructuring
1,441

 
1,190

 
 
 
 
 
 
 
 
Loss on Sale of Assets
9,560

 
—

 
 
 
 
 
 
 
 
Activism, Strategic Initiatives and Other
—

 
78

 
 
 
 
 
 
 
 
Litigation Reserves
(3,344
)
 
6,000

 
 
 
 
 
 
 
 
 
14,367

 
10,119

 
 
 
 
 
 
 
 
BEF Foods
 
 
 
 
 
 
 
 
 
 
 
Impairments
—

 
2,761

—

 
 
 
 
 
 
 
Severance/Restructuring
—

 
153

 
 
 
 
 
 
 
 
 
—

 
2,914

 
 
 
 
 
 
 
 
Corporate and Other
 
 
 
 
 
 
 
 
 
 
 
Severance/Restructuring
1,165

 
2,177

 
 
 
 
 
 
 
 
Activism, Strategic Initiatives and Other
—

 
1,748

 
 
 
 
 
 
 
 
CEO Separation
—

 
(148
)
 
 
 
 
 
 
 
 
 
1,165

 
3,777

 
 
 
 
 
 
 
 
Total adjustments
 
 
 
 
 
 
 
 
 
 
 
Impairments
6,710

 
5,612

 
 
 
 
 
 
 
 
Severance/Restructuring
2,606

 
3,520

 
 
 
 
 
 
 
 
Loss on Sale of Assets
9,560

 
—

 
 
 
 
 
 
 
 
Activism, Strategic Initiatives and Other
—

 
1,826

 
 
 
 
 
 
 
 
CEO Separation
—

 
(148
)
 
 
 
 
 
 
 
 
Litigation Reserves
(3,344
)
 
6,000

 
 
 
 
 
 
 
 
 
15,532

 
16,810

 
 
 
 
 
 
 
 
Non-GAAP operating income (loss)
 
 
 
 
 
 
 
 
 
 
 
Bob Evans Restaurants
11,573

 
16,650

 
 
 
 
 
 
 
 
BEF Foods
20,569

 
18,231

 
 
 
 
 
 
 
 
Corporate and Other
(18,145
)
 
(17,134
)
 
 
 
 
 
 
 
 
Total non-GAAP operating income
13,997

 
17,747

 
 
 
 
 
 
 
 
Adjustments to net interest expense
—

 
485

 
 
 
 
 
 
 
 
Non-GAAP net interest expense
2,944

 
2,909

 
 
 
 
 
 
 
 
Non-GAAP Income Before Taxes
11,053

 
14,838

 
 
 
 
 
 
 
 
Adjustments to income tax provision
6,581

 
8,758

 
 
 
 
 
 
 
 
Non-GAAP Provision for Income Taxes
1,522

 
1,661

 
 
 
 
 
 
 
 
Non-GAAP Net Income
$
9,531

 
$
13,177

 
$
0.48

 
$
0.56

 
$
0.48

 
$
0.56

 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Shares Outstanding
 
 
 
 
19,854

 
23,506

 
19,995

 
23,664




8



Fourth quarter Fiscal 2016 compared to the corresponding period a year ago:
 
 
Consolidated Results
 
Bob Evans Restaurants
 
 
14 weeks ended
 
13 weeks ended
 
14 weeks ended
 
13 weeks ended
 
 
April 29, 2016
 
% of Sales
 
April 24, 2015
 
% of Sales
 
April 29, 2016
 
% of Sales
 
April 24, 2015
 
% of Sales
Operating income as reported
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
 
$
345,587

 
 
 
$
332,393

 
 
 
$
243,193

 

 
$
238,187

 

Cost of sales
 
107,974

 
31.2
 %
 
103,020

 
31.0
%
 
63,164

 
26.0
 %
 
62,167

 
26.1
%
Operating wage and fringe benefit expenses
 
111,261

 
32.2
 %
 
104,381

 
31.4
%
 
100,270

 
41.2
 %
 
93,882

 
39.4
%
Other operating expenses
 
60,652

 
17.6
 %
 
55,278

 
16.6
%
 
45,897

 
18.9
 %
 
42,341

 
17.8
%
Selling, general and administrative expenses
 
40,448

 
11.7
 %
 
42,942

 
12.9
%
 
16,172

 
6.6
 %
 
15,719

 
6.6
%
Depreciation and amortization expense
 
19,492

 
5.6
 %
 
20,223

 
6.1
%
 
13,189

 
5.4
 %
 
14,696

 
6.2
%
Impairments
 
7,295

 
2.1
 %
 
5,612

 
1.7
%
 
7,295

 
3.0
 %
 
2,851

 
1.2
%
Total as reported
 
(1,535
)
 
(0.4
)%
 
937

 
0.3
%
 
$
(2,794
)
 
(1.1
)%
 
6,531

 
2.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjustments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
 
—

 
 
 
—

 
 
 
—

 
 
 
—

 
 
Cost of sales
 
—

 
 
 
—

 
 
 
—

 
 
 
—

 
 
Operating wage and fringe benefit expenses
 
(1,135
)
 
 
 
(11
)
 
 
 
(1,135
)
 
 
 
(11
)
 
 
Other operating expenses
 
—

 
 
 
(66
)
 
 
 
—

 
 
 
(66
)
 
 
Selling, general and administrative expenses
 
(7,687
)
 
 
 
(11,121
)
 
 
 
(6,522
)
 
 
 
(7,191
)
 
 
Depreciation and amortization expense
 
—

 
 
 
—

 
 
 
—

 
 
 
—

 
 
Impairments
 
(6,710
)
 
 
 
(5,612
)
 
 
 
(6,710
)
 
 
 
(2,851
)
 
 
Total Adjustments
 
15,532

 
 
 
16,810

 
 
 
14,367

 
 
 
10,119

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP operating income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
 
345,587

 
 
 
332,393

 
 
 
243,193

 
 
 
238,187

 
 
Cost of sales
 
107,974

 
31.2
 %
 
103,020

 
31.0
%
 
63,164

 
26.0
 %
 
62,167

 
26.1
%
Operating wage and fringe benefit expenses
 
110,126

 
31.9
 %
 
104,370

 
31.4
%
 
99,135

 
40.8
 %
 
93,871

 
39.4
%
Other operating expenses
 
60,652

 
17.6
 %
 
55,212

 
16.6
%
 
45,897

 
18.9
 %
 
42,275

 
17.7
%
Selling, general and administrative expenses
 
32,761

 
9.4
 %
 
31,821

 
9.6
%
 
9,650

 
3.9
 %
 
8,528

 
3.6
%
Depreciation and amortization expense
 
19,492

 
5.6
 %
 
20,223

 
6.1
%
 
13,189

 
5.4
 %
 
14,696

 
6.2
%
Impairments
 
585

 
0.2
 %
 
—

 
—
%
 
585

 
0.2
 %
 
—

 
—
%
Total non-GAAP operating income
 
$
13,997

 
4.1
 %
 
$
17,747

 
5.3
%
 
$
11,573

 
4.8
 %
 
$
16,650

 
7.0
%


9


 
BEF Foods
 
Corporate and Other
 
14 weeks ended
 
13 weeks ended
 
14 weeks ended
 
13 weeks ended
 
April 29, 2016
 
% of Sales
 
April 24, 2015
 
% of Sales
 
April 29, 2016
 
April 24, 2015
Operating income (loss) as reported
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
$
102,394

 
 
 
$
94,206

 
 
 
$
—

 
$
—

Cost of sales
44,810

 
43.8
%
 
40,853

 
43.4
%
 
—

 
—

Operating wage and fringe benefit expenses
10,991

 
10.7
%
 
10,499

 
11.1
%
 
—

 
—

Other operating expenses
14,755

 
14.4
%
 
12,937

 
13.7
%
 
—

 
—

Selling, general and administrative expenses
7,451

 
7.3
%
 
7,659

 
8.2
%
 
16,825

 
19,564

Depreciation and amortization expense
3,818

 
3.7
%
 
4,180

 
4.4
%
 
2,485

 
1,347

Impairments
—

 
—
%
 
2,761

 
2.9
%
 
—

 
—

Total as Reported
20,569

 
20.1
%
 
15,317

 
16.3
%
 
(19,310
)
 
(20,911
)
 
 
 
 
 
 
 
 
 
 
 
 
Adjustments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
—

 
 
 
—

 
 
 
—

 
—

Cost of sales
—

 
 
 
—

 
 
 
—

 
—

Operating wage and fringe benefit expenses
—

 
 
 
—

 
 
 
—

 
—

Other operating expenses
—

 
 
 
—

 
 
 
—

 
—

Selling, general and administrative expenses
—

 
 
 
(153
)
 
 
 
(1,165
)
 
(3,777
)
Depreciation and amortization expense
—

 
 
 
—

 
 
 
—

 
—

Impairments
—

 
 
 
(2,761
)
 
 
 
—

 
—

Total adjustments
—

 
 
 
2,914

 
 
 
1,165

 
3,777

 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP operating income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
102,394

 
 
 
94,206

 
 
 
—

 
—

Cost of sales
44,810

 
43.8
%
 
40,853

 
43.4
%
 
—

 
—

Operating wage and fringe benefit expenses
10,991

 
10.7
%
 
10,499

 
11.1
%
 
—

 
—

Other operating expenses
14,755

 
14.4
%
 
12,937

 
13.7
%
 
—

 
—

Selling, general and administrative expenses
7,451

 
7.3
%
 
7,506

 
8.0
%
 
15,660

 
15,787

Depreciation and amortization expense
3,818

 
3.7
%
 
4,180

 
4.4
%
 
2,485

 
1,347

Impairments
—

 
—
%
 
—

 
—
%
 
—

 
—

Total non-GAAP operating income (loss)
$
20,569

 
20.1
%
 
$
18,231

 
19.4
%
 
$
(18,145
)
 
$
(17,134
)


























10


Bob Evans Farms, Inc.
Earnings Release Fact Sheet (unaudited)
Fiscal 2016 compared to the corresponding period a year ago:
(in thousands, except per share amounts)
 
 
 
 
Basic EPS
 
Diluted EPS
 
53 weeks ended
 
52 weeks ended
 
53 weeks ended
 
52 weeks ended
 
53 weeks ended
 
52 weeks ended
 
April 29, 2016
 
April 24, 2015
 
April 29, 2016
 
April 24, 2015
 
April 29, 2016
 
April 24, 2015
Operating Income (Loss) as Reported
 
 
 
 
 
 
 
 
 
 
 
Bob Evans Restaurants
$
34,793

 
$
56,239

 
 
 
 
 
 
 
 
BEF Foods
71,011

 
39,993

 
 
 
 
 
 
 
 
Corporate and Other
(69,583
)
 
(78,546
)
 
 
 
 
 
 
 
 
Operating Income
36,221

 
17,686

 
 
 
 
 
 
 
 
Net interest expense
10,800

 
8,649

 
 
 
 
 
 
 
 
Income Before Income Taxes
25,421

 
9,037

 
 
 
 
 
 
 
 
Provision (benefit) for income taxes
1,199

 
(7,516
)
 
 
 
 
 
 
 
 
Net Income as reported
24,222

 
16,553

 
$
1.14

 
$
0.70

 
$
1.13

 
$
0.70

Less Diluted EPS Impact of 53rd week
 
 
 
 
 
 
 
 
$
(0.13
)
 
 
Adjusted Diluted EPS Excluding 53rd week
 
 
 
 
 
 
 
 
$
1.00

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjustments
 
 
 
 
 
 
 
 
 
 
 
Bob Evans Restaurants
 
 
 
 
 
 
 
 
 
 
 
Impairments
6,710

 
6,174

 
 
 
 
 
 
 
 
Severance/Restructuring
1,760

 
2,070

 
 
 
 
 
 
 
 
Loss on Sale of Assets
9,560

 
—

 
 
 
 
 
 
 
 
Activism, Strategic Initiatives and Other
—

 
465

 
 
 
 
 
 
 
 
Litigation Reserves
7,156

 
6,000

 
 
 
 
 
 
 
 
 
25,186

 
14,709

 
 
 
 
 
 
 
 
BEF Foods
 
 
 
 
 
 
 
 
 
 
 
Impairments
—

 
2,761

 
 
 
 
 
 
 
 
Severance/Restructuring
—

 
1,008

 
 
 
 
 
 
 
 
Loss on Sale of Assets
3,606

 
—

 
 
 
 
 
 
 
 
Activism, Strategic Initiatives and Other
—

 
17

 
 
 
 
 
 
 
 
 
3,606

 
3,786

 
 
 
 
 
 
 
 
Corporate and Other
 
 
 
 
 
 
 
 
 
 
 
Severance/Restructuring
1,165

 
2,663

 
 
 
 
 
 
 
 
Loss on Sale of Assets
—

 
1,846

 
 
 
 
 
 
 
 
Activism, Strategic Initiatives and Other
—

 
9,091

 
 
 
 
 
 
 
 
CEO Separation
—

 
3,688

 
 
 
 
 
 
 
 
 
1,165

 
17,288

 
 
 
 
 
 
 
 
Total adjustments
 
 
 
 
 
 
 
 
 
 
 
Impairments
6,710

 
8,935

 
 
 
 
 
 
 
 
Severance/Restructuring
2,925

 
5,741

 
 
 
 
 
 
 
 
Loss on Sale of Assets
13,166

 
1,846

 
 
 
 
 
 
 
 
Activism, Strategic Initiatives and Other
—

 
9,573

 
 
 
 
 
 
 
 
CEO Separation
—

 
3,688

 
 
 
 
 
 
 
 
Litigation Reserves
7,156

 
6,000

 
 
 
 
 
 
 
 
 
29,957

 
35,783

 
 
 
 
 
 
 
 
Non-GAAP operating income (loss)
 
 
 
 
 
 
 
 
 
 
 
Bob Evans Restaurants
59,979

 
70,948

 
 
 
 
 
 
 
 
BEF Foods
74,617

 
43,779

 
 
 
 
 
 
 
 
Corporate and Other
(68,418
)
 
(61,258
)
 
 
 
 
 
 
 
 
Total non-GAAP operating income
66,178

 
53,469

 
 
 
 
 
 
 
 
Adjustments to net interest expense
(480
)
 
1,859

 
 
 
 
 
 
 
 
Non-GAAP net interest expense
10,320

 
10,508

 
 
 
 
 
 
 
 
Non-GAAP Income Before Taxes
55,858

 
42,961

 
 
 
 
 
 
 
 
Adjustments to income tax provision
11,293

 
12,046

 
 
 
 
 
 
 
 
Non-GAAP Provision for Income Taxes
12,492

 
4,530

 
 
 
 
 
 
 
 
Non-GAAP Net Income
$
43,366

 
$
38,431

 
$
2.03

 
$
1.64

 
$
2.02

 
$
1.63

Less Diluted EPS Impact of 53rd week
 
 
 
 
 
 
 
 
$
(0.13
)
 
 
Adjusted Diluted EPS Excluding 53rd week
 
 
 
 
 
 
 
 
$
1.89

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Shares Outstanding
 
 
 
 
21,336

 
23,489

 
21,494

 
23,649








11



Fiscal 2016 compared to the corresponding period a year ago:
 
Consolidated Results
 
Bob Evans Restaurants
 
53 weeks ended
 
52 weeks ended
 
53 weeks ended
 
52 weeks ended
 
April 29, 2016
 
% of Sales
 
April 24, 2015
 
% of Sales
 
April 29, 2016
 
% of Sales
 
April 24, 2015
 
% of Sales
Operating income as reported
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
$
1,338,827

 
 
 
$
1,349,190

 
 
 
951,212

 
 
 
$
969,877

 
 
Cost of sales
425,585

 
31.8
%
 
457,744

 
33.9
%
 
252,611

 
26.6
%
 
258,677

 
26.7
%
Operating wage and fringe benefit expenses
427,148

 
31.9
%
 
423,539

 
31.4
%
 
384,977

 
40.5
%
 
381,874

 
39.4
%
Other operating expenses
222,060

 
16.6
%
 
217,991

 
16.2
%
 
169,630

 
17.8
%
 
169,018

 
17.4
%
Selling, general and administrative expenses
139,822

 
10.5
%
 
143,295

 
10.6
%
 
46,984

 
4.8
%
 
40,733

 
4.2
%
Depreciation and amortization expense
79,607

 
5.9
%
 
80,074

 
5.9
%
 
53,833

 
5.7
%
 
57,236

 
5.9
%
Impairments
8,384

 
0.6
%
 
8,861

 
0.7
%
 
8,384

 
0.9
%
 
6,100

 
0.6
%
Total as reported
36,221

 
2.7
%
 
17,686

 
1.3
%
 
$
34,793

 
3.7
%
 
$
56,239

 
5.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjustments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
—

 
 
 
—

 
 
 
—

 
 
 
—

 
 
Cost of sales
—

 
 
 
—

 
 
 
—

 
 
 
—

 
 
Operating wage and fringe benefit expenses
(1,135
)
 
 
 
(43
)
 
 
 
(1,135
)
 
 
 
(43
)
 
 
Other operating expenses
—

 
 
 
(708
)
 
 
 
—

 
 
 
(708
)
 
 
Selling, general and administrative expenses
(22,112
)
 
 
 
(26,171
)
 
 
 
(17,341
)
 
 
 
(7,858
)
 
 
Depreciation and amortization expense
—

 
 
 
—

 
 
 
—

 
 
 
—

 
 
Impairments
(6,710
)
 
 
 
(8,861
)
 
 
 
(6,710
)
 
 
 
(6,100
)
 
 
Total Adjustments
29,957

 
 
 
35,783

 
 
 
25,186

 
 
 
14,709

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP operating income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
1,338,827

 
 
 
1,349,190

 
 
 
951,212

 
 
 
969,877

 
 
Cost of sales
425,585

 
31.8
%
 
457,744

 
33.9
%
 
252,611

 
26.6
%
 
258,677

 
26.7
%
Operating wage and fringe benefit expenses
426,013

 
31.8
%
 
423,496

 
31.4
%
 
383,842

 
40.4
%
 
381,831

 
39.4
%
Other operating expenses
222,060

 
16.6
%
 
217,283

 
16.1
%
 
169,630

 
17.8
%
 
168,310

 
17.4
%
Selling, general and administrative expenses
117,710

 
8.9
%
 
117,124

 
8.7
%
 
29,643

 
3.0
%
 
32,875

 
3.3
%
Depreciation and amortization expense
79,607

 
5.9
%
 
80,074

 
5.9
%
 
53,833

 
5.7
%
 
57,236

 
5.9
%
Impairments
1,674

 
0.1
%
 
—

 
—
%
 
1,674

 
0.2
%
 
—

 
—
%
Total non-GAAP operating income
$
66,178

 
4.9
%
 
$
53,469

 
4.0
%
 
$
59,979

 
6.3
%
 
$
70,948

 
7.3
%










12


 
BEF Foods
 
Corporate and Other
 
53 weeks ended
 
52 weeks ended
 
53 weeks ended
 
52 weeks ended
 
April 29, 2016
 
% of Sales
 
April 24, 2015
 
% of Sales
 
April 29, 2016
 
April 24, 2015
Operating income (loss) as reported
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
$
387,615

 
 
 
$
379,313

 
 
 
$
—

 
$
—

Cost of sales
172,974

 
44.6
%
 
199,067

 
52.5
%
 
—

 
—

Operating wage and fringe benefit expenses
42,171

 
10.9
%
 
41,665

 
11.0
%
 
—

 
—

Other operating expenses
52,430

 
13.5
%
 
48,974

 
12.9
%
 
—

 
—

Selling, general and administrative expenses
32,805

 
8.5
%
 
29,712

 
7.9
%
 
60,033

 
72,849

Depreciation and amortization expense
16,224

 
4.2
%
 
17,141

 
4.5
%
 
9,550

 
5,697

Impairments
—

 
—
%
 
2,761

 
0.7
%
 
—

 
—

Total as Reported
$
71,011

 
18.3
%
 
$
39,993

 
10.5
%
 
$
(69,583
)
 
$
(78,546
)
 
 
 
 
 
 
 
 
 
 
 
 
Adjustments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
—

 
 
 
—

 
 
 
—

 
—

Cost of sales
—

 
 
 
—

 
 
 
—

 
—

Operating wage and fringe benefit expenses
—

 
 
 
—

 
 
 
—

 
—

Other operating expenses
—

 
 
 
—

 
 
 
—

 
—

Selling, general and administrative expenses
(3,606
)
 
 
 
(1,025
)
 
 
 
(1,165
)
 
(17,288
)
Depreciation and amortization expense
—

 
 
 
—

 
 
 
—

 
—

Impairments
—

 
 
 
(2,761
)
 
 
 
—

 
—

Total adjustments
3,606

 
 
 
3,786

 
 
 
1,165

 
17,288

 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP operating income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
387,615

 
 
 
379,313

 
 
 
—

 
—

Cost of sales
172,974

 
44.6
%
 
199,067

 
52.5
%
 
—

 
—

Operating wage and fringe benefit expenses
42,171

 
10.9
%
 
41,665

 
11.0
%
 
—

 
—

Other operating expenses
52,430

 
13.5
%
 
48,974

 
12.9
%
 
—

 
—

Selling, general and administrative expenses
29,199

 
7.5
%
 
28,687

 
7.6
%
 
58,868

 
55,561

Depreciation and amortization expense
16,224

 
4.2
%
 
17,141

 
4.5
%
 
9,550

 
5,697

Impairments
—

 
—
%
 
—

 
—
%
 
—

 
—

Total non-GAAP operating income (loss)
$
74,617

 
19.3
%
 
$
43,779

 
11.5
%
 
$
(68,418
)
 
$
(61,258
)


13


Consolidated Statements of Net Income
 
 
 
 
 
 
 
 
 
 
 
(in thousands, except per share amounts)
14 weeks ended
 
13 weeks ended
 
53 weeks ended
 
52 weeks ended
 
April 29, 2016
% of Sales
 
April 24, 2015
% of Sales
 
April 29, 2016
% of Sales
 
April 24, 2015
% of Sales
Net Sales
$
345,587

 
 
$
332,393

 
 
$
1,338,827

 
 
$
1,349,190

 
Cost of sales
107,974

31.2
 %
 
103,020

31.0
 %
 
425,585

31.8
%
 
457,744

33.9
 %
Operating wage and fringe benefit expenses
111,261

32.2
 %
 
104,381

31.4
 %
 
427,148

31.9
%
 
423,539

31.4
 %
Other operating expenses
60,652

17.6
 %
 
55,278

16.6
 %
 
222,060

16.6
%
 
217,991

16.2
 %
Selling, general and administrative expenses
40,448

11.7
 %
 
42,942

12.9
 %
 
139,822

10.5
%
 
143,295

10.6
 %
Depreciation and amortization expense
19,492

5.6
 %
 
20,223

6.1
 %
 
79,607

5.9
%
 
80,074

5.9
 %
Impairments
7,295

2.1
 %
 
5,612

1.7
 %
 
8,384

0.6
%
 
8,861

0.7
 %
Operating Income
(1,535
)
(0.4
)%
 
937

0.3
 %
 
36,221

2.7
%
 
17,686

1.3
 %
Net interest expense
2,944

0.9
 %
 
2,424

0.7
 %
 
10,800

0.8
%
 
8,649

0.6
 %
Income Before Income Taxes
(4,479
)
(1.3
)%
 
(1,487
)
(0.4
)%
 
25,421

1.9
%
 
9,037

0.7
 %
       Provision (Benefit) for income taxes
(5,059
)
(1.5
)%
 
(7,097
)
(2.1
)%
 
1,199

0.1
%
 
(7,516
)
(0.6
)%
Net Income
$
580

0.2
 %
 
$
5,610

1.7
 %
 
$
24,222

1.8
%
 
$
16,553

1.2
 %
 
 
 
 
 
 
 
 
 
 
 
 
Earnings Per Share — Net Income
 
 
 
 
 
 
 
 
 
 
 
Basic
$
0.03

 
 
$
0.24

 
 
$
1.14

 
 
$
0.70

 
Diluted
$
0.03

 
 
$
0.24

 
 
$
1.13

 
 
$
0.70

 
 
 
 
 
 
 
 
 
 
 
 
 
Cash Dividends Paid Per Share
$
0.34

 
 
$
0.31

 
 
$
1.30

 
 
$
1.24

 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Shares Outstanding
 
 
 
 
 
 
 
 
 
 
 
Basic
19,779

 
 
23,506

 
 
21,336

 
 
23,489

 
Dilutive shares
142

 
 
158

 
 
158

 
 
160

 
Diluted
19,921

 
 
23,664

 
 
21,494

 
 
23,649

 
 
 
 
 
 
 
 
 
 
 
 
 
Shares outstanding at quarter end
19,756

 
 
23,407

 
 
 
 
 
 
 





14


Consolidated Balance Sheets
(in thousands, except par value amounts)
April 29, 2016

April 24, 2015
Assets



Current Assets



Cash and equivalents
$
12,896


$
6,358

Accounts receivable, net
28,893


26,100

Inventories
24,997


24,620

Federal and state income taxes receivable
—


23,722

Prepaid expenses and other current assets
9,307


5,035

Current assets held for sale
31,644


22,243

Total Current Assets
107,737


108,078

Land
145,453

 
214,692

Buildings and improvements
585,218

 
839,148

Machinery and equipment
500,469

 
445,718

Construction in process
32,273

 
38,354

Total Property, Plant and Equipment
1,263,413


1,537,912

Less accumulated depreciation
665,777


732,697

Net Property, Plant and Equipment
597,636


805,215

Other Assets



Deposits and other
4,622


3,756

Notes receivable
20,886


18,544

Rabbi trust assets
20,662


32,302

Goodwill and other intangible assets
19,829


19,986

Deferred income tax assets
29,002


4,836

Long-term assets held for sale
—


26,263

Total Other Assets
95,001


105,687

Total Assets
$
800,374


$
1,018,980

Liabilities and Stockholders’ Equity



Current Liabilities



Current portion of long-term debt
$
3,419


$
409

Accounts payable
37,518


30,019

Accrued property, plant and equipment purchases
5,308


4,820

Accrued non-income taxes
15,696


14,951

Accrued wages and related liabilities
26,358


34,529

Self-insurance reserves
20,169


18,900

Deferred gift card revenue
14,147


13,714

Current taxes payable
9,473

 
—

Current reserve for uncertain tax provision
1,481


1,594

Other accrued expenses
31,988


34,156

Total Current Liabilities
165,557


153,092

Long-Term Liabilities



Deferred compensation
17,761


22,481

Reserve for uncertain tax positions
2,752


2,767

Deferred income tax liabilities
—


4,218

Deferred rent and other
5,851


5,755

Deferred gain on sale leaseback transactions
56,371

 
—

Credit facility borrowings and other long-term debt
335,638


450,676

Total Long-Term Liabilities
418,373


485,897

Stockholders’ Equity



Common stock, $.01 par value; authorized 100,000 shares; issued 42,638 shares at April 29, 2016, and April 24, 2015
426


426

Capital in excess of par value
244,304


235,958

Retained earnings
832,323


836,362

Treasury stock, 22,881 shares at April 29, 2016, and 19,231 shares at April 24, 2015, at cost
(860,609
)

(692,755
)
Total Stockholders’ Equity
216,444


379,991

Total Liabilities and Stockholders' Equity
$
800,374


$
1,018,980



15


Consolidated Statements of Cash Flows
 
53 weeks ended
 
52 weeks ended
(in thousands)
April 29, 2016

April 24, 2015
Operating activities:



Net income
$
24,222


$
16,553

Adjustments to reconcile net income to net cash provided by operating activities:





Depreciation and amortization
79,607


80,074

Impairments
8,384


6,100

Impairment of Intangible Assets
—


2,761

Loss on disposal of fixed assets
4,532


2,204

Loss (Gain) on rabbi trust assets
1,640


(742
)
(Gain) Loss on deferred compensation
(765
)

2,013

Share-based compensation
6,127


2,967

Accretion of non-current note receivable
(2,082
)

(1,859
)
Deferred income taxes
(28,384
)

(14,791
)
Amortization of deferred financing costs
2,188


1,099

Cash provided by (used for) assets and liabilities:
—




Accounts receivable
(2,793
)

4,588

Inventories
(377
)

623

Prepaid expenses and other current assets
483


(563
)
Accounts payable
7,499


955

Federal and state income taxes
33,067


1,504

Accrued wages and related liabilities
(3,101
)

11,005

Self-insurance
1,269


(974
)
Accrued non-income taxes
745


(2,892
)
Deferred revenue
433


747

Other assets and liabilities
(9,058
)

(8,267
)
Net cash provided by operating activities
123,636


103,105

Investing activities:





Purchase of property, plant and equipment
(65,694
)

(74,517
)
Proceeds from sale of property, plant and equipment
257,246


10,036

Proceeds from liquidation of rabbi trust assets
5,245


—

Deposits and other
(537
)

(135
)
Net cash used in investing activities
196,260


(64,616
)
Financing activities:





Cash dividends paid
(27,861
)

(29,056
)
Gross proceeds from credit facility borrowings and other long-term debt
672,349


579,895

Gross repayments of credit facility borrowings and other long-term debt
(783,339
)

(588,541
)
Payments of debt issuance costs
(3,555
)

(1,279
)
Purchase of treasury stock
(171,513
)

—

Proceeds from share-based compensation
214


534

Cash paid for taxes on share-based compensation
(1,314
)

(1,738
)
Excess tax benefits from share-based compensation
1,661


228

Net cash used in financing activities
(313,358
)

(39,957
)
Net cash provided by (used in) operations
6,538


(1,468
)
Cash and equivalents at the beginning of the period
6,358


7,826

Cash and equivalents at the end of the period
$
12,896


$
6,358


16


Summary of Operating Efficiency Savings Fiscal 2016 (dollars in millions)
 
Consolidated
 
Bob Evans Restaurants
 
BEF Foods
 
Corporate and Other
S,G&A
 
 
 
 
 
 
 
Wage-Related
$
10.1

 
$
4.3

 
$
1.2

 
$
4.6

Non Wage-Related
4.5

 
1.1

 
0.2

 
3.2

Total S,G&A
14.6

 
5.4

 
1.4

 
7.8

 
 
 
 
 
 
 
 
Non-S,G&A
 
 
 
 
 
 
 
Wage-Related
0.4

 
—

 
0.4

 
—

Non Wage-Related
5.1

 
3.6

 
1.5

 
—

Total Non-S,G&A
5.5

 
3.6

 
1.9

 
—

 
 
 
 
 
 
 
 
Year to date total
$
20.1

 
$
9.0

 
$
3.3

 
$
7.8




Bob Evans Restaurants openings and closings, by quarter
Fiscal Year
 
Beginning Total
 
Q1
 
Q2
 
Q3
 
Q4
 
Full Year
 
Closings
 
Ending Total*
2016
 
567

 
—

 
—

 
1

 
—

 
1

 
41

 
527

2015
 
561

 
1

 
—

 
2

 
4

 
7

 
1

 
567

2014
 
560

 
1

 
1

 
1

 
1

 
4

 
3

 
561

2013
 
565

 
2

 
—

 
—

 
—

 
2

 
7

 
560

2012
 
563

 
—

 
2

 
—

 
2

 
4

 
2

 
565



Bob Evans Same-Store Sales Day Part Performance
Fourth-quarter Fiscal 2016 SSS% Day Part Performance - Total Chain
Day Part
 
On-Premises
 
Off-Premises
 
Total
Breakfast
 
(0.1)%
 
7.1%
 
0.7%
Lunch
 
(3.1)%
 
(3.6)%
 
(3.2)%
Dinner
 
(7.1)%
 
(3.1)%
 
(6.2)%
Total
 
(3.3)%
 
(1.1)%
 
(3.0)%


Fiscal 2016 SSS% Day Part Performance - Total Chain
Day Part
 
On-Premises
 
Off-Premises
 
Total
Breakfast
 
(0.7)%
 
8.3%
 
0.2%
Lunch
 
(2.9)%
 
1.0%
 
(2.4)%
Dinner
 
(7.2)%
 
1.1%
 
(5.4)%
Total
 
(3.4)%
 
2.6%
 
(2.5)%


17


Bob Evans Restaurants same-store sales analysis (18-month core; 540 restaurants)
 
Fiscal 2016
 
Fiscal 2015*
 
Fiscal 2014*
 
Total
 
Pricing / Mix
 
Transactions
 
Total
 
Pricing / Mix
 
Transactions
 
Total
 
Pricing / Mix
 
Transactions
May
(0.3)%
 
3.9%
 
(4.2)%
 
(1.9)%
 
1.3%
 
(3.1)%
 
(0.5)%
 
2.8%
 
(3.4)%
June
(0.9)%
 
4.4%
 
(5.3)%
 
(1.2)%
 
1.2%
 
(2.4)%
 
(0.4)%
 
2.8%
 
(3.1)%
July
0.3%
 
5.8%
 
(5.5)%
 
(2.7)%
 
0.9%
 
(3.6)%
 
(1.2)%
 
2.2%
 
(3.3)%
Q1
(0.3)%
 
4.8%
 
(5.0)%
 
(2.0)%
 
1.1%
 
(3.2)%
 
(0.7)%
 
2.6%
 
(3.2)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
August
(1.3)%
 
3.3%
 
(4.6)%
 
(2.4)%
 
2.0%
 
(4.4)%
 
(0.8)%
 
3.0%
 
(3.7)%
September
(3.8)%
 
2.9%
 
(6.6)%
 
1.7%
 
2.6%
 
(0.9)%
 
(2.2)%
 
2.6%
 
(4.8)%
October
(4.4)%
 
1.5%
 
(5.8)%
 
0.4%
 
2.5%
 
(2.1)%
 
(2.6)%
 
1.6%
 
(4.3)%
Q2
(3.2)%
 
2.5%
 
(5.7)%
 
(0.1)%
 
2.4%
 
(2.4)%
 
(1.9)%
 
2.3%
 
(4.2)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
November
(3.2)%
 
2.5%
 
(5.6)%
 
2.9%
 
2.8%
 
—%
 
1.7%
 
2.8%
 
(1.1)%
December
(4.3)%
 
3.4%
 
(7.7)%
 
3.9%
 
1.3%
 
2.6%
 
(3.5)%
 
2.8%
 
(6.3)%
January
(3.4)%
 
3.1%
 
(6.5)%
 
5.2%
 
2.3%
 
2.9%
 
(4.7)%
 
4.2%
 
(8.8)%
Q3
(3.6)%
 
2.9%
 
(6.5)%
 
3.8%
 
2.2%
 
1.6%
 
(1.7)%
 
3.3%
 
(5.0)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
February
(1.1)%
 
0.9%
 
(2.0)%
 
2.4%
 
3.1%
 
(0.6)%
 
(6.7)%
 
3.0%
 
(9.8)%
March
(2.3)%
 
2.2%
 
(4.5)%
 
0.9%
 
2.9%
 
(2.0)%
 
(4.1)%
 
2.1%
 
(6.3)%
April
(4.9)%
 
1.4%
 
(6.3)%
 
2.3%
 
4.0%
 
(1.7)%
 
(2.6)%
 
1.8%
 
(4.4)%
Q4
(3.0)%
 
1.5%
 
(4.4)%
 
2.1%
 
3.4%
 
(1.3)%
 
(4.3)%
 
2.3%
 
(6.6)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fiscal Year
(2.5)%
 
2.9%
 
(5.4)%
 
0.9%
 
2.3%
 
(1.4)%
 
(2.1)%
 
2.6%
 
(4.7)%
* Prior year data presentation reflects Company's current same store sales methodology.




Bob Evans Restaurants key restaurant sales data
 
Bob Evans Restaurants
Approximate annual store sales in fiscal 2016
$1.7 million
 
 
 
 
 
FY2016 day part mix (%):
Q4 2016
 
Fiscal 2016
Breakfast
32
%
 
32
%
Lunch
37
%
 
37
%
Dinner
31
%
 
31
%
 
 
 
 
FY2016 dine-in check average per guest ($):
Q4 2016
 
Fiscal 2016
Breakfast
$
9.47

 
$
9.35

Lunch
$
9.78

 
$
9.72

Dinner
$
9.84

 
$
9.78

 
 
 
 
 
Q4 2016
 
Fiscal 2016
FY2016 dine-in check average per guest ($):
$
9.69

 
$
9.61

FY2016 dine-in check average per ticket ($):
$
18.60

 
$
18.68

FY2016 carry-out check average per ticket ($):
$
15.75

 
$
15.17


18


BEF Foods historical sow cost review (average cost per hundredweight)
Fiscal Year
 
Q1
 
Q2
 
Q3
 
Q4
 
Average
2016
 
$38.75
 
$53.31
 
$41.53
 
$42.84
 
$44.31
2015
 
$87.87
 
$78.82
 
$67.79
 
$43.02
 
$69.41
2014
 
$63.24
 
$77.33
 
$72.36
 
$78.47
 
$73.23
2013
 
$54.19
 
$43.22
 
$58.73
 
$59.07
 
$53.87
2012
 
$57.06
 
$67.82
 
$60.56
 
$60.41
 
$61.58
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BEF Foods total pounds sold growth (inclusive of pounds sold to Bob Evans Restaurants)
Fiscal Year
 
Q1
 
Q2
 
Q3
 
Q4
 
Average
2016
 
0.4%
 
5.7%
 
9.4%
 
17.8%
 
8.6%
2015
 
(6.1)%
 
(4.5)%
 
5.5%
 
0.9%
 
(0.9)%
2014
 
13.0%
 
0.2%
 
(11.1)%
 
(6.9)%
 
(2.4)%
2013
 
7.2%
 
16.1%
 
13.1%
 
21.4%
 
14.6%
2012
 
(2.7)%
 
3.1%
 
0.9%
 
(1.3)%
 
0.1%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BEF Foods total pounds sold, by category
 
 
 
 
 
 
Fiscal 2016
 
 
 
 
 
 
 
 
 
 
Category
 
Q1
 
Q2
 
Q3
 
Q4
 
 
Sides
 
49.6%
 
50.7%
 
50.9%
 
51.4%
 
 
Sausage
 
22.0%
 
22.3%
 
26.6%
 
21.7%
 
 
Food Service - External
 
14.1%
 
12.5%
 
10.4%
 
11.4%
 
 
Food Service - Intersegment
 
6.2%
 
6.6%
 
6.0%
 
8.1%
 
 
Frozen
 
4.6%
 
4.5%
 
3.1%
 
3.9%
 
 
Other
 
3.5%
 
3.4%
 
3.0%
 
3.5%
 
 
 
 
 
 
 
 
 
 
 
 
 
Fiscal 2015
 
 
 
 
 
 
 
 
 
 
Category
 
Q1
 
Q2
 
Q3
 
Q4
 
 
Sides
 
42.5%
 
46.9%
 
48.0%
 
49.8%
 
 
Sausage
 
19.3%
 
20.5%
 
26.2%
 
23.7%
 
 
Food Service - External
 
24.0%
 
18.0%
 
12.8%
 
11.8%
 
 
Food Service - Intersegment
 
6.0%
 
6.0%
 
5.5%
 
5.8%
 
 
Frozen
 
4.6%
 
5.0%
 
4.1%
 
4.8%
 
 
Other
 
3.6%
 
3.6%
 
3.4%
 
4.1%
 
 














19





BEF Foods net sales review (dollars in thousands)
 
Q4 FY16
 
Q4 FY15
Gross sales
$
124,631

 
$
111,126

Less: promotions
20,700

 
15,542

Less: discounts
775

 
763

Less: returns and slotting
762

 
615

Net sales
$
102,394

 
$
94,206


 
YTD 2016
 
YTD 2015
Gross sales
$
466,918

 
$
435,930

Less: promotions
73,073

 
50,578

Less: discounts
3,305

 
3,441

Less: returns and slotting
2,925

 
2,598

Net sales
$
387,615

 
$
379,313



20

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