Bob Evans Farms, Inc.
Jun 15, 2017

Bob Evans Reports Fourth Quarter and Fiscal Year 2017 Results

* On April 28, 2017, the Company completed the sale of Bob Evans Restaurants to Golden Gate Capital.  As a result, the results of operations of Bob Evans Restaurants ("BER") have been reported as discontinued operations and all financial statement items for the current and prior periods reflect BER as a discontinued business.  Adjusted, or non-GAAP, results presented herein include both continuing and discontinued operations and exclude certain items for comparability.  Descriptions of measures excluding these items are provided in non-GAAP financial measures and reconciliations of such non-GAAP measures to the most comparable GAAP measure are provided in the tables at the end of this release.

NEW ALBANY, Ohio, June 15, 2017 (GLOBE NEWSWIRE) -- Bob Evans Farms, Inc. (NASDAQ:BOBE) today announced its financial results for the fiscal 2017 fourth quarter ended Friday, April 28, 2017.  On a GAAP basis, the Company reported consolidated net income of $108.9 million, or $5.39 per diluted share, compared with net income of $0.6 million, or $0.03 per diluted share, in the corresponding period last year.  Non-GAAP consolidated net income was $12.2 million, or $0.61 per diluted share, compared with non-GAAP net income of $9.5 million, or $0.48 per diluted share, in the corresponding period last year.

Fourth-quarter fiscal 2017 commentary
President and Chief Executive Officer Mike Townsley said, "We closed the fiscal year with strong fourth quarter earnings, exceeding our full year guidance, and completed the strategic transactions that have reshaped Bob Evans into a higher growth and higher margin, pure-play packaged foods company. We are now focusing our attention on capitalizing on the growth opportunities in our refrigerated side-dish business while completing the integration of Pineland Farms Potato Company. The Pineland acquisition provides the added production capacity as well as the product and channel opportunities to support our growth."

"Fourth quarter net sales from continuing operations increased 4.9 percent as compared to the comparable 13 week period in the prior year, driven by the continuation of double digit growth in our high margin refrigerated side-dish business. With the sale of BER complete, we can strategically expand our food service sales effort, leveraging Pineland Farms' strength in this large channel of distribution."

Fourth-quarter fiscal 2017 summary - continuing operations
Net sales from continuing operations were $99.9 million, a decrease of $2.5 million, or 2.4 percent, compared to $102.4 million in the corresponding period last year. Excluding the 14th week in the prior year period, net sales from continuing operations increased 4.9 percent. Pounds sold for the fourth quarter, adjusted for a 13 week vs. 13 week comparison, increased 7.0 percent while average net selling price per pound declined 2.3 percent compared to the corresponding period last year.  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. From a net sales perspective, an 11.5 percent increase in side-dish pounds sold, a 9.2 percent increase in sausage pounds sold, and a 11.5 percent increase in food service pounds sold were partially offset by a 5.1 percent increase in trade spending and a 17.0 percent decline in frozen product pounds sold, all compared to the comparable 13 week period in the prior year.

GAAP operating income from continuing operations was $9.5 million, compared to $10.3 million in the corresponding period last year.  Non-GAAP operating income from continuing operations was $13.8 million, compared to $11.3 million in the corresponding period last year, an improvement of $2.5 million.  The improvement was due primarily to the aforementioned increase in pounds sold and the favorable sales mix of higher-margin side-dish items; partially offset by higher production costs, and increased freight expense resulting from increased pounds sold.  S,G&A expenses totaling $6.2 million, previously identified as "corporate and other" costs, are now included within continuing operations.  Of these costs, $0.7 million represent costs primarily related to wages and benefits for terminated employees that will no longer be in the Company's expense base in fiscal 2018.

Fourth-quarter fiscal 2017 summary - discontinued operations
Net sales from discontinued operations were $213.5 million, a decline of $29.7 million, or 12.2 percent, compared to net sales of $243.2 million in the corresponding period last year. The sales decline was primarily the result of a 3.9 percent decline in same store sales as well as closing 26 stores.

GAAP income before taxes from discontinued operations was $160.7 million, compared to GAAP loss before taxes from discontinued operations of $12.2 million last year.  The increase primarily reflects a $155.7 million gain on the sale of BER.  Non-GAAP income before taxes from discontinued operations was $3.1 million, compared to $2.3 million last year, an increase of $0.8 million.

Fourth-quarter fiscal 2017 net interest expense
GAAP net interest expense was $4.3 million in the fourth quarter, an increase of $1.7 million, compared to $2.6 million in the corresponding period last year.  Non-GAAP net interest expense was $2.2 million in the fourth quarter, a decrease of $0.4 million, compared to $2.6 million in the corresponding period last year.  Net interest expense on all revolving credit borrowings are included in continuing operations, while net interest expense related to the headquarters mortgage is included within discontinued operations.

Fourth-quarter fiscal 2017 taxes
The Company recognized a GAAP tax benefit for continuing operations of 28.6 percent for the fourth quarter of fiscal 2017, as compared to tax expense of 23.6 percent for the prior year period. On a non-GAAP basis, the Company recognized a tax benefit of 1.1 percent for the fourth quarter of fiscal 2017, as compared to tax expense of 25.8 percent for the prior year period. The change in the tax rate was driven primarily by the sale of the Bob Evans Restaurant business.

Fiscal-year 2017 summary - continuing operations
Net sales for the full year from continuing operations were $394.8 million, an increase of $7.2 million, or 1.9 percent, compared to $387.6 million in the prior year.  Excluding the 53rd week during fiscal 2016, net sales from continuing operations increased 3.8 percent.  Pounds sold for fiscal 2017, on a 52 week vs. 52 week basis, increased 7.0 percent while average net selling price per pound declined 3.4 percent compared to the prior year.  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 12.7 percent increase in side-dish pounds sold, a 5.9 percent increase in sausage pounds sold, and a 1.6 percent increase in food service pounds sold were partially offset by a 12.0 percent increase in trade spending and an 11.9 percent decline in frozen product pounds sold, all compared to the comparable 52 week period in the prior year.

For fiscal year 2017, GAAP operating income from continuing operations was $30.1 million, compared to $33.1 million in the prior year.  Non-GAAP operating income from continuing operations was $53.0 million, compared to $37.7 million in the prior year, an improvement of $15.3 million. The improvement was due primarily to the aforementioned increase in pounds sold and the favorable sales mix of higher-margin side-dish items, partially offset by a $4.9 million increase in trade spending net of lower sow costs, lower average net selling prices and higher production costs and increased freight expense resulting from increased pounds sold.  S,G&A expenses totaling $23.4 million, previously identified as "corporate and other" costs, are now included within continuing operations.  Of these costs, $6.4 million represent costs primarily related to wages and benefits for terminated employees that will no longer be in the Company's expense base in fiscal 2018.

Fiscal-year 2017 summary - discontinued operations
For the fiscal year ended April 28, 2017, net sales from discontinued operations were $876.8 million, a decline of $74.4 million, or 7.8 percent, compared to net sales of $951.2 million in the prior year. The decline in sales was primarily the result of a 3.2 percent decrease in same store sales and 26 store closings.

For the fiscal year ended April 28, 2017, GAAP income before taxes from discontinued operations was $167.0 million, compared to GAAP income before taxes from discontinued operations of $2.8 million in the prior year.  The increase primarily reflects a $150.2 million gain on the sale of BER.  Non-GAAP income before taxes from discontinued operations was $17.3 million, compared to $28.2 million in the prior year, a decline of $10.9 million.

Fiscal-year 2017 net interest expense
GAAP net interest expense was $9.2 million for fiscal year 2017, a decrease of $1.2 million, compared to $10.4 million in the prior year.  Non-GAAP net interest expense was $8.3 million for fiscal year 2017, a decrease of $1.6 million, compared to $9.9 million in the prior year.  Net interest expense on all revolving credit borrowings are included in continuing operations, while net interest expense related to the headquarters mortgage is included within discontinued operations.

Fiscal-year 2017 taxes
The Company recognized GAAP tax expense for continuing operations of 18.5 percent for fiscal year 2017, as compared to 28.4 percent for the prior year.  The change in the tax rate was driven primarily by officer's life insurance and discrete items.  On a non-GAAP basis, the tax rate was 25.9 percent for continuing operations.  Discontinued operations are presented net of income tax expense or benefit.

Fiscal-year 2017 balance sheet highlights
The Company's cash balance and outstanding debt at April 28, 2017 were $210.9 million and $2.7 million, respectively, compared to $12.9 million and $339.1 million at the end of the prior year.  The decrease in borrowings and increase in cash balance were the result of proceeds associated with the sale of BER.

Fiscal year 2018 outlook
Chief Administrative and Chief Financial Officer Mark Hood said, "We are initiating fiscal 2018 GAAP diluted earnings per share guidance in a range of $2.06 to $2.24.  Additionally, we are providing fiscal 2018 guidance ranges for both net sales and EBITDA that are consistent with the preliminary fiscal 2018 guidance of $470 million and $105 million, respectively, that we issued on January 24. 2017."

Guidance Metric    FY ‘18
Net sales     $464 to $476 million
EBITDA    $102 to $108 million
GAAP diluted earnings per share     $2.06 to $2.24
Sow cost (per hundredweight)    $43 to $46
Capital expenditures    $25 to $30 million
Net interest expense    $3.8 to $4.3 million
GAAP tax rate    34.5% to 35.5%
Diluted weighted-average share count    approximately 20.4 million shares
Share repurchase authorization    $100 million

This outlook is subject to a number of factors beyond the Company's control, including the risk factors discussed in the Company's fiscal 2017 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 today, Thursday, June 15, 2017 to discuss its fourth quarter and fiscal year 2017 results at 8:30 a.m. Eastern Time.

The call can be accessed live over the telephone by dialing (855) 468-0551, or for international callers (484) 756-4323, access code 5876489.  A replay will be available shortly after the call and can be accessed by dialing (855) 859-2056, or for international callers (404) 537-3406, access code 5876489.

Interested parties may also listen to a simultaneous webcast available on the Company's website at http://investors.bobevans.com/events.cfm.  The webcast will be archived in the same location for approximately 90 days following the call.

(1) EBITDA and other non-GAAP financial measures
We define EBITDA as earnings before interest, taxes, depreciation and amortization including stock compensation. Management uses EBITDA and the other non-GAAP measures included in this release as key metrics in the evaluation of underlying Company performance and in making financial, operating and planning decisions. The Company believes these measures are useful to investors because they increase transparency, assist investors in understanding the underlying performance of the Company and assist in the analysis of ongoing operating trends. We believe EBITDA is frequently used by analysts, investors and other interested parties in their evaluation of the Company's performance as compared to our competitors, many of which present EBITDA measures when reporting their results.  We believe the non-GAAP measures used in this release provide meaningful supplemental information regarding financial performance by excluding certain expenses and benefits that may not be indicative of core business operating results. We believe these non-GAAP measures, when viewed in conjunction with U.S. GAAP results and the accompanying reconciliations, enhance the comparability of results against prior periods and allow for greater transparency of financial results and business outlook. The presentation of EBITDA and other non-GAAP measures included in this release should not be considered as an alternative to net income, determined in accordance with U.S. GAAP, as an indicator of the Company's operating performance, as an indicator of cash flows, or as a measure of liquidity. While EBITDA and our other non-GAAP measures are frequently used as measures of operations, they are not necessarily comparable to other similarly titled captions of other companies due to the potential inconsistencies in the method of calculation.

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.  Additional information about the factors and events that could cause actual results to differ materially from those predicted by the forward looking statements, along with certain other risks, uncertainties and assumptions related to the Company and its business, may be found in our Annual Report on Form 10-K for the fiscal year ended April 28, 2017, 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.  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 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. is a leading producer and distributor of refrigerated potato, pasta and vegetable-based 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.bobevansgrocery.com.

BOBE-E

Source: Bob Evans Farms, Inc.

Bob Evans Farms, Inc.
Earnings Release Fact Sheet (unaudited)
Fourth quarter Fiscal 2017 compared to the corresponding period a year ago:
 
(in thousands, except per share amounts)    Basic EPS Diluted EPS
 Three Months Ended Three Months Ended Three Months Ended
 April 28,
2017
 April 29,
2016
 April 28,
2017
 April 29,
2016
 April 28,
2017
 April 29,
2016
Operating Income (Loss) as Reported           
Operating Income from Continuing Operations$9,508  $10,334         
Net Interest Expense4,254  2,571         
Income Before Taxes from Continuing Operations5,254  7,763         
(Benefit) Provision for Income Taxes from Continuing Operations(1,503) 1,831         
Net Income as Reported from Continuing Operations6,757  5,932  $0.34  $0.30  $0.33  $0.30 
            
Income (Loss) Before Taxes from Discontinued Operations160,662  (12,242)        
Provision (Benefit) for Income Taxes from Discontinued Operations58,552  (6,891)        
Income (Loss) from Discontinued Operations as Reported102,110  (5,351) $5.13  $(0.27) $5.06  $(0.27)
            
Net Income as Reported108,867  581  $5.47  $0.03  $5.39  $0.03 
            
Adjustments to Continuing Operations            
Accelerated stock compensation3,992           
Legal and professional fees646           
Severance/Restructuring(305) 972          
Write off of unamortized debt costs2,005           
Total Adjustments to Continuing Operations6,338  972         
            
Adjustments to Discontinued Operations            
Gain on sale of restaurants(155,698)          
Restaurant depreciation(11,846)           
Accelerated stock compensation6,513           
Severance2,464  193         
Impairment  6,710         
Sale leaseback  9,560         
Litigation settlement  (3,344)        
Store closure costs  1,441         
Write off of unamortized debt costs973           
Total Adjustments to Discontinued Operations(157,594) 14,560         
            
Non-GAAP Operating Income from Continuing Operations13,841  11,306         
Non-GAAP Net Interest Expense2,249  2,571         
Non-GAAP  Income Before Taxes from Continuing Operations11,592  8,735         
Adjustments to Tax Expense from Continuing Operations1,378  421         
Non-GAAP Provision for Income Taxes from Continuing Operations(125) 2,252         
Non-GAAP Net Income from Continuing Operations11,717  6,483  $0.59  $0.33  $0.58  $0.32 
             
Non-GAAP Income before taxes from Discontinued Operations3,068  2,318          
Adjustments to Tax Expense from Discontinued Operations(55,985) 6,161         
Non-GAAP Provision for Income Taxes from Discontinued Operations2,567  (730)        
Non-GAAP Net Income from Discontinued Operations501  3,048  $0.02  $0.15  $0.03  $0.16 
            
Non-GAAP Net Income$12,218  $9,531  $0.61  $0.48  $0.61  $0.48 
            
Weighted Average Shares Outstanding    19,896  19,854  20,188  19,995 


Fourth quarter Fiscal 2017 compared to the corresponding period a year ago:
 
(in thousands) Consolidated Results
  Three Months Ended Three Months Ended
  April 28, 2017 % of Sales April 29, 2016 % of Sales
Operating Income from Continuing Operations as Reported        
         
Net Sales $99,923    $102,394   
Cost of sales 43,649  43.7% 44,810  43.8%
Operating wage and fringe benefit expenses 8,832  8.8%  10,991  10.7%
Other operating expenses 14,030  14.0% 14,746  14.4%
Selling, general and administrative expenses 17,064  17.2% 16,436  16.0%
Depreciation and amortization expense 6,840  6.8% 5,077   5.0%
Impairments   %    %
Total Operating Income as Reported 9,508  9.5% 10,334  10.1%
           
Non-GAAP Adjustments to Continuing Operations          
           
Net Sales           
Cost of sales           
Operating wage and fringe benefit expenses          
Other operating expenses          
Selling, general and administrative expenses (4,333)    (972)   
Depreciation and amortization expense          
Impairments          
Total Adjustments 4,333     972    
           
Non-GAAP Operating Income from Continuing Operations          
           
Net Sales  99,923     102,394    
Cost of sales 43,649  43.7% 44,810  43.8%
Operating wage and fringe benefit expenses 8,832  8.8% 10,991  10.7%
Other operating expenses 14,030  14.0% 14,746  14.4%
Selling, general and administrative expenses 12,731  12.8% 15,464  15.1%
Depreciation and amortization expense 6,840  6.8% 5,077  5.0%
Impairments   %   %
Total Non-GAAP Operating Income $13,841  13.9% $11,306  11.0%


Bob Evans Farms, Inc.
Earnings Release Fact Sheet (unaudited)
Fiscal 2017 compared to the corresponding period a year ago:
 
(in thousands, except per share amounts)    Basic EPS Diluted EPS
 Twelve Months Ended Twelve Months Ended Twelve Months Ended
 April 28,
2017
 April 29,
2016
 April 28,
2017
 April 29,
2016
 April 28,
2017
 April 29,
2016
Operating Income (Loss) as Reported           
Operating Income$30,126  $33,074         
Net Interest Expense9,216  10,427         
Income Before Taxes from Continuing Operations20,910  22,647         
Provision for Income Taxes from Continuing Operations3,874  6,439         
Net Income as Reported from Continuing Operations17,036  16,208  $0.86  $0.76  $0.85  $0.75 
            
Income (Loss) Before Taxes from Discontinued Operations166,952  2,774         
Provision (Benefit) for Income Taxes from Discontinued Operations57,521  (5,240)        
Income (Loss) from Discontinued Operations as Reported109,431  8,014  $5.51  $0.38  $5.43  $0.38 
            
Net Income as Reported126,467  24,222  $6.37  $1.14  $6.28  $1.13 
            
Adjustments to Continuing Operations           
Accelerated stock compensation4,467           
Severance/Restructuring1,948  972         
Legal and professional fees1,217           
Sale leaseback (plants)  4,085         
Impairment of note receivable15,256           
Write off of unamortized debt costs2,005           
Accretion income on note receivable(1,133)          
Total Adjustments to Continuing Operations23,760  5,057         
            
Adjustments to Discontinued Operations            
Gain on sale of restaurants, net of transaction costs(150,167)           
Restaurant depreciation(11,846)          
Accelerated stock compensation6,855           
Severance3,964  512          
Impairment  6,710         
Sale leaseback (restaurants)  9,562         
Litigation settlement(278) 7,155         
Store closure costs807  1,441         
Write off of unamortized debt costs973           
Total Adjustments to Discontinued Operations(149,692) 25,380         
            
Non-GAAP Operating Income from Continuing Operations53,014  37,652         
Non-GAAP Net Interest Expense8,344  9,948         
Non-GAAP  Income Before Taxes from Continuing Operations44,670  27,704         
Adjustments to Tax Expense from Continuing Operations7,713  1,922         
Non-GAAP Provision for Income Taxes from Continuing Operations11,587  8,361         
Non-GAAP Net Income from Continuing Operations33,083  19,343  $1.67  $0.91  $1.64  $0.90 
            
Non-GAAP Income before Taxes from Discontinued Operations17,260  28,154         
Adjustments to Tax Expense from Discontinued Operations(55,125) 9,371         
Non-GAAP Provision for Income Taxes from Discontinued Operations2,396  4,131         
Non-GAAP Net Income from Discontinued Operations14,864  24,023   $0.75  $1.12  $0.74  $1.12 
            
Non-GAAP Net Income$47,947  $43,366  $2.42  $2.03  $2.38  $2.02 
            
Weighted Average Shares Outstanding    19,839  21,336  20,132  21,494 


Fiscal 2017 compared to the corresponding period a year ago:
 
(in thousands)Consolidated Results
 Twelve Months Ended
 April 28, 2017 % of Sales April 29, 2016 % of Sales
Operating Income from Continuing Operations as Reported       
        
Net Sales$394,842    $387,616   
Cost of sales170,820  43.3% 172,973  44.6%
Operating wage and fringe benefit expenses39,964  10.1% 42,189  10.9%
Other operating expenses58,402  14.8% 52,387  13.5%
Selling, general and administrative expenses56,243  14.2% 65,949  17.1%
Depreciation and amortization expense24,031  6.1% 21,044  5.4%
Impairments15,256  3.9 %   %
Total Operating Income as Reported30,126  7.6% 33,074  8.5%
          
Non-GAAP Adjustments to Continuing Operations         
          
Net Sales         
Cost of sales          
Operating wage and fringe benefit expenses         
Other operating expenses         
Selling, general and administrative expenses(7,632)    (4,577)   
Depreciation and amortization expense          
Impairments(15,256)         
Total Adjustments22,888     4,577    
          
Non-GAAP Operating Income from Continuing Operations         
          
Net Sales394,842     387,616     
Cost of sales170,820  43.3% 172,973  44.6%
Operating wage and fringe benefit expenses39,964  10.1% 42,189  10.9%
Other operating expenses58,402  14.8% 52,387  13.5%
Selling, general and administrative expenses48,611  12.3% 61,372  15.9%
Depreciation and amortization expense24,031  6.1% 21,044  5.4%
Impairments  %   %
Total Non-GAAP Operating Income$53,014  13.4% $37,651  9.7%


Consolidated Statements of Net Income
 
 2017 2016 2015
Net Sales$394,842  $387,616  $379,313 
Cost of sales170,820  172,973  199,067 
Operating wage and fringe benefit expenses39,964  42,189  41,717 
Other operating expenses58,402  52,387  49,381 
Selling, general and administrative expenses56,243  65,949  73,380 
Depreciation and amortization expense24,031  21,044  18,364 
Impairments15,256    2,761 
Operating Income (Loss) 30,126  33,074  (5,357)
Net interest expense9,216  10,427  8,649 
Income (Loss) from Continuing Operations Before Income Taxes20,910  22,647  (14,006 )
Provision (Benefit) for income taxes3,874  6,439  (8,626)
Income (Loss) from Continuing Operations17,036  16,208  (5,380)
Income from Discontinued Operations, Net of Income Taxes109,431  8,014  21,933 
Net Income$126,467  $24,222  $16,553 
      
Earnings (Loss) Per Share - Income from Continuing Operations     
Basic$0.86  $0.76   $(0.23)
Diluted$0.85  $0.75  $(0.23)
      
Earnings Per Share - Income from Discontinued Operations     
Basic$5.51  $0.38  $0.93 
Diluted$5.43  $0.38  $0.93 
      
Earnings Per Share - Net Income     
Basic$6.37  $1.14  $0.70 
Diluted$6.28  $1.13  $0.70 
      
Cash Dividends Paid Per Share$1.36  $1.30  $1.24 
      
Weighted Average Shares Outstanding     
Basic19,839  21,336  23,489 
Dilutive Shares293  158  160 
Diluted20,132  21,494  23,649  


Consolidated Balance Sheets
 
 April 28, 2017 April 29, 2016
Assets
Current Assets   
Cash and equivalents$210,886  $11,609 
Accounts receivable, net28,071  24,613 
Inventories17,210  17,093 
Federal and state income taxes receivable2,895   
Prepaid expenses and other current assets6,833  5,716 
Current assets held for sale3,334  48,707 
Total Current Assets269,229  107,738 
Land291  330 
Buildings and improvements25,351  21,203 
Machinery and equipment214,366  176,611 
Construction in process4,546  20,959 
Total Property, Plant and Equipment244,554  219,103 
Less accumulated depreciation113,814  89,851 
Net Property, Plant and Equipment130,740  129,252 
Other Assets   
Deposits and other2,118  3,841 
Notes receivable   20,886 
Rabbi trust assets22,353  20,662 
Goodwill and other intangible assets19,673  19,829 
Deferred income tax assets5,131  29,002 
Non-current assets held for sale  469,164 
Total Other Assets49,275  563,384 
Total Assets$449,244  $800,374 
Liabilities and Stockholders' Equity
Current Liabilities   
Current portion of long-term debt$428  $3,419 
Accounts payable13,424  15,841 
Accrued property, plant and equipment purchases1,283  4,024 
Accrued non-income taxes3,353  890 
Accrued wages and related liabilities16,404   16,370 
Self-insurance reserves10,692  11,288 
Current taxes payable27,954  9,473 
Current reserve for uncertain tax positions1,481  1,481 
Other accrued expenses17,905  13,614 
Current liabilities held for sale  89,157 
Total Current Liabilities92,924  165,557 
Non-Current Liabilities   
Deferred compensation17,277  17,761 
Reserve for uncertain tax positions1,795  2,752 
Deferred income tax liabilities50   
Deferred rent and other1,091  377 
Deferred gain on sale leaseback transactions2,192  2,432 
Credit facility borrowings and other long-term debt2,267  335,638 
Non-current liabilities held for sale  59,413 
Total Non-Current Liabilities24,672  418,373 
Stockholders' Equity   
Common stock, $.01 par value; authorized 100,000 shares; issued 42,638 shares at April 28, 2017, and April 29, 2016426  426 
Capital in excess of par value260,619  244,304 
Retained earnings931,315  832,323 
Treasury stock, 22,842 shares at April 28, 2017, and 22,881 shares at April 29, 2016, at cost(860,712) (860,609)
Total Stockholders' Equity331,648   216,444 
Total Liabilities and Stockholders' Equity$449,244  $800,374 


Consolidated Statements of Cash Flows
 
 2017 2016 2015
Operating activities:     
Net income$126,467  $24,222  $16,553 
      
Adjustments to reconcile net income to net cash provided by operating activities:     
Depreciation and amortization60,090  79,607  80,074 
Impairments15,256  8,384  8,861 
(Gain) Loss on disposal of fixed assets(168,859) 4,532   2,204 
(Gain) Loss on rabbi trust assets(1,691) 1,640  (742)
Loss (Gain) on deferred compensation2,514  (765) 2,013 
Share-based compensation17,197  6,127   2,967 
Accretion of non-current note receivable(1,133) (2,082) (1,859)
Deferred income taxes23,921  (28,384) (14,791)
Amortization of deferred financing costs4,201  2,188  1,099 
Cash provided by (used for) assets and liabilities:     
Accounts receivable(2,700) (2,793) 4,588 
Inventories(751) (377) 623  
Prepaid expenses and other current assets(1,377) 483  (563)
Accounts payable(10,281) 7,499  955 
Federal and state income taxes14,629  33,067  1,504 
Accrued wages and related liabilities(1,160) (3,101) 11,005 
Self-insurance(1,474) 1,269  (974)
Accrued non-income taxes(756) 745  (2,892)
Deferred revenue(337) 433  747 
Other assets and liabilities(198) (9,058) (8,267)
Net cash provided by operating activities73,558  123,636  103,105 
Investing activities:     
Purchase of property, plant and equipment(65,768) (65,694) (74,517)
Proceeds from sale of property, plant and equipment557,061  257,246  10,036 
Proceeds from liquidation of rabbi trust assets  5,245   
Deposits and other330  (537) (135)
Net cash provided by (used in) investing activities491,623  196,260  (64,616)
Financing activities:     
Cash dividends paid(26,915) (27,861) (29,056)
Gross proceeds from credit facility borrowings and other long-term debt413,268  672,349  579,895 
Gross repayments of credit facility borrowings and other long-term debt(750,668) (783,339) (588,541)
Payments of debt issuance costs(1,542) (3,555) (1,279)
Purchase of treasury stock  (171,513)  
Proceeds from share-based compensation518  214  534 
Cash paid for taxes on share-based compensation(1,353) (1,314) (1,738)
Excess tax benefits from share-based compensation(499) 1,661  228 
Net cash (used in) financing activities(367,191) (313,358) (39,957)
Net cash provided by (used in) operations 197,990  6,538  (1,468)
Cash and equivalents at the beginning of the period12,896  6,358  7,826 
Cash and equivalents at the end of the period$210,886  $12,896  $6,358 


Results from continuing and discontinued operations
 
(in thousands except earnings per share amounts)          
  Three Months Ended Twelve Months Ended
GAAP Consolidated Results April 28,
2017
 April 29,
2016
 % Change April 28,
2017
 April 29,
2016
 % Change
Net Sales from Continuing Operations $99,923  $102,394  (2.4)% $394,842  $387,616  1.9%
Net Sales from Discontinued Operations 213,479  243,193   (12.2)% 876,786  951,211  (7.8)%
Total Net Sales $313,402  $345,587  (9.3)% $1,271,628  $1,338,827  (5.0)%
                       
Operating Margin from Continuing Operations 9.5% 10.1% (60 bps) 7.6% 8.5% (90 bps)
Operating Margin from Discontinued Operations 2.8% (4.9)% 770 bps 2.2% 0.3% 180 bps
Total Operating Margin 4.9% (0.4)% 530 bps 3.9% 2.7% 120 bps
                       
Diluted EPS from Continuing Operations $0.33  $0.30  10.0% $0.85  $0.75  13.3%
Diluted EPS from Discontinued Operations $5.06  $(0.27) (1,974.1)% $5.43  $0.38  1,328.9%
Diluted EPS $5.39  $0.03  17,866.7% $6.28  $1.13  455.8%
                       
Non-GAAP Adjustments                      
Net Sales from Continuing Operations $  $  % $  $  %
Net Sales from Discontinued Operations     %     %
Total Net Sales $  $  % $  $  %
                       
Operating Margin from Continuing Operations 4.3% 0.9% 340 bps 5.8% 1.2% 460 bps
Operating Margin from Discontinued Operations (1.3)% 6.0% (730 bps) (0.1)% 2.7% (280 bps)
Total Operating Margin 0.5% 4.5% (400 bps) 1.8% 2.2% (40 bps)
                        
Diluted EPS from Continuing Operations $0.25  $0.02  1,150.0% $0.79  $0.15  426.7%
Diluted EPS from Discontinued Operations $(5.03) $0.43  (1,269.8)% $(4.69) $0.74   (733.8)%
Diluted EPS $(4.78) $0.45  (1,162.2)% $ (3.90) $0.89  (538.2)%
                       
Non-GAAP Consolidated Results                      
Net Sales from Continuing Operations $99,923  $102,394  (2.4)% $394,842  $387,616  1.9%
Net Sales from Discontinued Operations 213,479  243,193  (12.2)% 876,786  951,211  (7.8)%
Total Net Sales $313,402  $345,587  (9.3)% $1,271,628  $1,338,827  (5.0)%
                        
Operating Margin from Continuing Operations 13.9% 11.0%  290 bps 13.4% 9.7% 370 bps
Operating Margin from Discontinued Operations 1.4% 1.1% 30 bps 2.1% 3.0%  (90 bps)
Total Operating Margin 5.4% 4.1% 130 bps 5.6% 4.9% 70 bps
                       
Diluted EPS from Continuing Operations $0.58  $0.32  81.3% $1.64  $0.90  82.2%
Diluted EPS from Discontinued Operations $0.03  $0.16  (81.3)% $0.74  $1.12  (33.9)%
Diluted EPS $0.61  $0.48  27.1% $2.38  $2.02  17.8%


Net sales from continuing operations        
Reconciliation of 52 vs 53 weeks        
  Three Months Ended Twelve Months Ended
(in thousands) April 28, 2017  April 29, 2016 April 28, 2017 April 29, 2016
Net Sales $99,923  $102,394 $394,842 $387,616
53rd week    7,120    7,120
Adjusted Net Sales $99,923 $95,274 $394,842 $380,496


Total pounds sold, by category      
Fiscal 2017          
Category  Q1 Q2 Q3 Q4 YTD
Sides 51.4% 52.5% 52.5% 54.0% 52.6%
Sausage 21.2% 21.9% 24.9% 22.3% 22.7%
Food Service - External 11.6%  10.7% 10.1% 11.1% 10.8%
Food Service - Sales to discontinued operations 8.3% 9.0% 7.7% 7.7% 8.1%
Frozen 3.9% 3.4%  2.7% 3.0% 3.2%
Other 3.6% 2.5% 2.1% 1.9% 2.6%
           
Fiscal 2016          
Category Q1 Q2 Q3 Q4 FY 2016
Sides 49.6% 50.7% 50.9% 51.4% 50.7%
Sausage 22.0% 22.3% 26.6% 21.7% 23.3%
Food Service - External 14.1% 12.5% 10.4% 11.4% 11.9%
Food Service - Sales to discontinued operations 6.2% 6.6% 6.0% 8.1% 6.7%
Frozen 4.6% 4.5% 3.1% 3.9% 4.0%
Other 3.5% 3.4% 3.0% 3.5% 3.4%

 

Contact:

Scott Van Winkle

Managing Director, ICR

(617) 956-6736

scott.vanwinkle@icrinc.com

Source: Bob Evans Farms, Inc.

News Provided by Acquire Media