FORM 10-Q
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 July 28, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
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 incorporation (I.R.S.
or organization) Employer
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)
(Former name, former address and formal 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 common shares.
<PAGE>
BOB EVANS FARMS, INC.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
(Dollars in Thousands)
July 28, 1995 April 28, 1995
Unaudited Audited
Current Assets
Cash and equivalents $ 11,858 10,451
Accounts receivable 14,366 15,570
Inventories 16,706 17,256
Deferred income taxes 6,162 6,162
Prepaid expenses 3,969 2,936
---------- ----------
Total Current Assets 53,061 52,375
Property, Plant, and Equipment, at cost 618,861 594,390
Less accumulated depreciation 183,729 177,542
---------- ----------
Net Property, Plant and 435,132 416,848
Equipment
Other Assets
Deposits and other 2,308 2,243
Long-term investments 3,842 2,303
Deferred income taxes 1,573 1,573
Cost in excess of net assets 10,881 11,016
acquired
Other intangible assets 1,664 1,743
---------- ----------
Total Other Assets 20,268 18,878
---------- ----------
$508,461 $488,101
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Line of credit $ 31,100 25,600
Accounts payable 8,141 7,325
Dividends payable 3,387 3,068
Federal and state income taxes 11,880 4,633
Accrued wages and related 9,220 13,691
liabilities
Other accrued expenses 31,071 31,253
---------- ----------
Total Current Liabilities 94,799 85,570
Long-Term Liabilities
Deferred income taxes 6,409 6,409
Notes payable (net of discount of
$564,000 at July 28, 1995
and $600,000 at April 28, 1995) 2,286 2,250
---------- ----------
8,695 8,659
Stockholders' Equity
Common stock, $.01 par value
Authorized: 100,000,000 shares;
issued 42,638,118 shares at
July 28, 1995,
and April 28, 1995 426 426
Capital in excess of par value 145,048 144,741
Retained earnings 263,970 252,961
---------- ----------
409,444 398,128
Less treasury stock: 301,303
shares at July 28, 1995 and
309,620 shares at April 28,
1995, at cost 4,477 4,256
---------- ----------
Total Stockholders' Equity 404,967 393,872
---------- ----------
$508,461 $488,101
========== ==========
The accompanying notes are an integral part of the financial statements.
<PAGE>
BOB EVANS FARMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
(Dollars in Thousands Except Net Income
Per Share and Cash Dividend Amounts)
Thirteen Weeks Ended
July 28, 1995 July 29, 1994
Net Sales $205,862 $197,939
Cost of sales 61,153 62,879
Operating wage and fringe benefit 61,431 57,671
expenses
Other operating expenses 28,344 25,220
Selling, general and administrative 25,280 24,859
expenses
Depreciation expense 6,442 5,954
---------- ----------
Operating profit 23,212 21,356
Net interest 46 45
---------- ----------
Income Before Income Taxes 23,258 21,401
Provisions for income taxes
Federal 7,262 6,692
State 1,599 1,526
---------- ----------
8,861 8,218
---------- ----------
Net Income $ 14,397 $ 13,183
========== ==========
Weighted average number of common 42,346,513 42,122,925
shares outstanding ========== ==========
Net income per common share based upon
the weighted average number of
common shares $.34 $.31
========== ==========
Cash dividend per common share $.0800 $.0725
========== ==========
<PAGE>
BOB EVANS FARMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
(Dollars in Thousands)
Thirteen Weeks Ended
July 28, 1995 July 29, 1994
Operating activities:
Net income $14,397 $13,183
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 6,656 6,167
Gain on sale of property and equipment (16) (3)
Compensation expense attributable to 241 209
stock plans
Cash provided by (used for) current
assets and current liabilities:
Accounts receivable 1,204 1,022
Inventories 550 2,154
Prepaid expenses (1,033) 385
Accounts payable 816 (4,123)
Federal and state income taxes 7,247 4,802
Accrued wages and related (4,338) (2,468)
liabilities
Other accrued expenses (182) 3,602
Net cash provided by 25,542 24,930
operating activities
Investing activities:
Purchase of property, plant and (24,777) (16,204)
equipment
Purchase of investments (1,539)
Proceeds from sale of property, plant 67 40
and equipment
Other (65) (112)
Net cash used in investing (26,314) (16,276)
activities
Financing activities:
Cash dividends paid (3,069) (2,841)
Draws (payments) on line of credit 5,500 (7,000)
Purchase of treasury stock (829)
Interest accrued on long-term notes 36
Distribution of treasury stock due to
the exercise of stock options and
employee bonuses 541 733
Net cash provided by (used
in) financing activities 2,179 (9,108)
Increase (decrease) in cash and 1,407 (454)
equivalents
Cash and equivalents at the beginning 10,451 8,098
of the period
Cash and equivalents at the end of the $11,858 $ 7,644
period
The accompanying notes are an integral part of the financial statements.
<PAGE>
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
1. Unaudited Financial Statements
The accompanying unaudited financial statements are
presented in accordance with the requirements of Form 10-Q
and, consequently, do not include all of the disclosures
normally required by generally accepted accounting
principles, or those normally made in the Company's Form
10-K filing. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. No
significant changes have occurred in the disclosures made in
Form 10-K for the fiscal year ended April 28, 1995 (refer to
Form 10-K for a summary of significant accounting policies
followed in the preparation of the consolidated financial
statements).
2. Reclassifications
Certain fiscal 1995 amounts have been reclassified to
conform with the fiscal 1996 classification.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
<PAGE>
Sales
Consolidated net sales for Bob Evans Farms, Inc.
increased $7.9 million, or 4.0%, for the first quarter ended
July 28, 1995 as compared to the corresponding quarter a
year ago. The increase was comprised of a $9.4 million
increase in the restaurant segment and a $1.5 million
decrease in the food products segment.
The $9.4 million (6.6%) sales increase in the
restaurant segment was due entirely to more restaurants in
operation: 361 restaurants at the end of this quarter
compared to 319 at the end of the first quarter last year.
During this quarter, the company opened a total of seven new
restaurants - three traditional restaurants and four "small-
town" restaurants. The increase in sales was partially
offset by a 1.7% decrease in same-store sales for core
restaurants (restaurants that have been open two full years)
in the first quarter. The average menu price increase in
the first quarter amounted to 3.9%.
The $1.5 million (2.8%) sales decrease in the food
products segment was due to slow sales of salad and charcoal
products, each of which experienced sales declines of $0.7
million. A higher volume of sausage products sold
(approximately 5%) combined with a decrease in prices
resulted in a slight increase in sausage product sales.
Cost of Sales
Consolidated cost of sales (representing cost of
materials only) improved from 31.8% of sales in the first
quarter of fiscal 1995 to 29.7% of sales in the first
quarter of fiscal 1996. In the restaurant segment, food
cost (cost of sales) was 26.5% of sales in the first quarter
versus 28.1% in last year's first quarter. This improvement
was due to changes in product mix. Food products segment
cost of sales was 39.0% of sales in this year's first
quarter compared to 41.7% of sales in the comparable quarter
a year ago. The improvement in the food products segment
was due entirely to lower hog costs, which averaged $32.00
per hundredweight in the first quarter of fiscal 1996 versus
$36.50 per hundredweight in the first quarter of fiscal 1995.
Operating Expenses
Consolidated operating wage and fringe benefit expenses
increased from 29.1% of sales in the first quarter of fiscal
1995 to 29.8% of sales in the first quarter of fiscal 1996.
In the restaurant segment, operating wage and fringe benefit
expenses represented 35.7% of sales for the first three
months of this year versus 35.4% for the comparable period a
year ago. In the food products segment, the comparison was
12.7% versus 12.4%.
The most significant components of other operating
expenses are restaurant advertising, utilities, repair and
maintenance, and miscellaneous supplies. Other operating
expenses, as a percent of sales, increased in the first
quarter of fiscal 1996 to 13.8% compared to 12.7% in the
first quarter a year ago. Nearly all of this increase
occurred in the restaurant segment due to an increase of $1.7
million, or 33.7%, in advertising expense in the first quarter
of this year versus the corresponding quarter last year.
Selling, General and Administrative Expenses
Consolidated selling, general and administrative
expenses represented 12.3% of sales in the quarter versus
12.6% of sales in the first quarter a year ago. The most
significant components of selling, general and administrative
expenses are wages and fringe benefits and food products
segment promotional expenses. There were no notable changes
in these components in the first quarter of fiscal 1996.
Net Income
Consolidated net income increased $1.2 million, or
9.2%, in the first quarter in comparison to the
corresponding period a year ago. Profit increased $0.9
million in the restaurant segment due to more restaurants in
operation. Pre-tax profit margin increased from 11.7% to
11.9% in the restaurant segment due to the fact that the
improved food cost was partially offset by the increase in
operating expenses, particularly advertising expense and
labor. Food products segment net income increased $0.3
million, or 10.0%, and pre-tax profit margin increased from
8.4% to 9.4%. The improvement in the food products segment
was due to lower live hog costs and increased volume of
sausage products sold. The improvement was somewhat
counteracted by a $1.0 million decrease in Hickory
Specialties' pre-tax profit due to a combination of its
sales shortfall and higher advertising expenses.
Liquidity and Capital Resources
Cash generated from both the restaurant and food
products segments has been used as the main source of
working capital and capital expenditure requirements. Bank
lines of credit were also used for liquidity needs and
capital expansion at various times. The total bank lines of
credit available is $63.0 million, of which $31.1 million
was outstanding at July 28, 1995.
The company believes that funds needed for capital
expenditures and working capital during the remainder of
fiscal 1996 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.
<PAGE>
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K
None
SIGNATURES
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.
Registrant
Daniel E. Evans
Chairman of the Board
(Chief Executive Officer)
Donald J. Radkoski
Group Vice President and Treasurer
(Chief Financial Officer)
September 11, 1995
Date
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONDENSED CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF
INCOME OF BOB EVANS FARMS, INC. AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FORM 10-Q FOR THE PERIOD ENDED JULY 28, 1995.
</LEGEND>
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<PERIOD-START> APR-29-1995
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<CASH> 11,858
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<RECEIVABLES> 14,366
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<PP&E> 618,861
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0
0
<OTHER-SE> 404,541
<TOTAL-LIABILITY-AND-EQUITY> 508,461
<SALES> 205,862
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