FORM 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 27, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-1667
Bob Evans Farms, Inc.
(Exact name of registrant as specified in its charter)
Delaware 31-4421866
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3776 South High Street, Columbus, Ohio 43207
(Address of principal executive offices) (Zip Code)
(614) 491-2225
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ___
As of the close of the period covered by this report, the
registrant had issued 42,638,118 shares of Common Stock, $.01 par
value.
Page 1 of 4 Pages.
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Sales
Net sales for Bob Evans Farms, Inc. and Subsidiaries
increased 11.4% for the third quarter and 10.7% for the year-to-
date period ended January 27, 1995 as compared to the
corresponding periods a year ago.
Restaurant sales increased 14.1% for the three-month
period and 12.1% for the nine-month period ended January 27, 1995
compared to the corresponding periods a year ago. These
increases resulted from more restaurants in operation and
traditional same-store sales increases of 6.1% and 4.0% for the
three-month and nine-month periods, respectively. The average
menu price increase in both periods was approximately 3.0% for
our traditional restaurants (which includes all restaurants
except "small-town" Bob Evans Restaurants and Cantina del Rio's).
In the third quarter, the company opened nine additional
restaurants. Through three quarters, the company has opened a
total of 24 restaurants and closed five, bringing the total
number of restaurants operating at January 27, 1995 to 334, in
comparison to 303 a year ago.
Food products sales increased 5.7% for the third
quarter and 7.4% year-to-date as compared to the prior year.
These improvements were the result of an increase in the volume
of sausage products sold (approximately 5.0% for the quarter and
4.0% year-to-date, based on comparable sausage products). For
the quarter, Mrs. Giles' and Hickory Specialties' combined sales
were $10.7 million compared with $9.3 million a year ago. The
increase was mainly due to an increase in sales of charcoal
products.
Cost of Goods Sold
As a percentage of sales, the consolidated cost of
sales (cost of materials) decreased to 28.2% in the third quarter
of this year as compared to 30.8% last year. The year-to-date
decrease was to 29.9% this year from 31.5% last year.
Restaurant segment food cost improved in the third
quarter of fiscal 1995 to 26.7% of sales as compared to 27.5% in
the third quarter a year ago. The year-to-date food cost
percentage was 27.3% this fiscal year versus 27.4% in the
corresponding period of fiscal 1994. These changes were mostly
the result of various changes in product mix.
As a percentage of sales, the food products segment
recognized significant decreases in cost of sales from 37.9% to
31.6% in the third quarter and from 41.3% to 36.5% for the nine
months ended January 27, 1995. These decreases were the direct
result of lower live hog costs in both periods compared to a year
ago. For the quarter, the average cost per hundred-weight was
$24.00 compared to $36.50 per hundred-weight a year ago.
Operating Expenses
Consolidated operating expenses, as a percentage of
sales, increased from 41.9% to 43.0% for the quarter and from
41.8% to 42.3% year-to-date as compared to the corresponding
periods last year. These increases were due to slightly higher
labor costs in the restaurant segment as well as the fact that
the restaurant segment (which has operating costs of 51% to 54%
of sales) has continued to grow at a faster pace than the food
products segment (which has operating costs of 16% to 17% of
sales), resulting in an overall increase in the consolidated cost
of operations as a percentage of sales. The most significant
component of operating expense is labor and fringe benefit expense
which was $55.0 million for the third quarter of 1994 compared
with $48.1 million in 1993. This increase was mainly due to
there being more restaurants in operation.
Selling and Administrative Expenses
Consolidated selling, general and administrative
expenses represented 13.1% of sales for the quarter and 13.0% of
sales year-to-date in comparison to 12.2% and 12.5%, respec
tively, in the corresponding periods a year ago. The increases
were the result of higher labor costs associated with management
training programs in the restaurant segment to support the
increased new restaurant openings (for the third quarter,
management training expense in 1994 increased by nearly $800,000
over a year ago and on a year-to-date basis, such expense
increased by $2.3 million), as well as increased advertising
and promotional programs in the food products segment.
Net Income
Consolidated net income increased $1.7 million, or
13.9%, in the third quarter this year as compared to the corres
ponding quarter a year ago, and $4.8 million, or 13.2%, for the
year-to-date periods. Profit increases in the food products
segment were $1.0 million for the quarter and $3.1 million year-
to-date. The improvement was attributable to higher margins on
sausage products due to lower live hog costs as well as overall
increases in sausage product sales. The remaining increase ($0.7
million for the quarter and $1.7 million year-to-date) occurred
in the restaurant segment as the result of same-store sales
increases and more restaurants in operation.
Liquidity and Capital Resources
Cash generated from both the restaurant and food
products segments has been used as the main source of funds for
working capital requirements and capital expenditures. Bank
lines of credit have also been used for liquidity needs and
capital expansion at various times. The total bank lines of
credit available is $53.0 million, of which $16.8 million was
outstanding at January 27, 1995.
The company believes that funds needed for capital
expenditures and working capital during the remainder of fiscal
1995 will be generated both internally and from available bank
lines of credit. Longer-term financing alternatives will be
evaluated by the company, especially in the event of
acquisitions.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report on
Form 10-Q/A to be signed on its behalf by the undersigned
thereunto duly authorized.
BOB EVANS FARMS, INC.
Date: May 15, 1995 By: /s/ Donald J. Radkoski
Donald J. Radkoski, Group Vice
President - Finance Group and
Treasurer
