Bob Evans Farms, Inc.
BOB EVANS FARMS INC (Form: 8-K, Received: 08/30/2017 08:21:19)



 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
 

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

Date of Report (Date of earliest event reported): August 30, 2017 (August 30, 2017)
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 August 30, 2017, Bob Evans Farms, Inc., a Delaware corporation (the “Company”) issued a news release announcing financial results for the first quarter of fiscal year 2018 ended July 28, 2017. 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 August 30, 2017 announcing the financial results for the first quarter and fiscal year 2018 ended July 28, 2017.
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 hereunto duly authorized.
 
 
BOB EVANS FARMS, INC.
 
 
 
 
Date: August 30, 2017
 
By:
/s/ Mark E. Hood
 
 
 
Mark E. Hood, Chief Financial Officer and Chief Administrative Officer



BEFLOGOA15.JPG

BOB EVANS REPORTS FIRST QUARTER FY 2018 RESULTS AND RAISES GUIDANCE
    
First quarter net sales increase 27.1% to $109.3 million as compared to $85.9 million 1 in the comparable period in fiscal 2017; net sales increased 11.1% excluding Pineland net sales and sales to Bob Evans Restaurants (now 3 rd party);

First quarter retail side-dish and sausage pounds-sold increased 18.1 percent (excluding Pineland) and 13.0 percent, respectively, when compared to the comparable period last year;

GAAP net income of $0.35 per diluted share compared to $0.23 1 in the prior year. Non-GAAP net income of $0.37 per diluted share, an increase of 60.9% compared to $0.23 1 in the prior year;

Adjusted EBITDA increased 38.3% to $19.5 million as compared to $14.1 million 1 in the comparable period in fiscal 2017;

Company increases fiscal year 2018 guidance and now expects net sales of $480 million at the midpoint of its range, adjusted EBITDA of $107 million at the midpoint of its range, and non-GAAP diluted EPS of $2.10 to $2.30;

Quarterly dividend of $0.34 per share payable on September 18, 2017, to stockholders of record at the close of business on September 4, 2017.

1 All references to the prior year period refer to results from continuing operations for the first quarter of fiscal 2017

Descriptions of measures excluding special 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 - August 30, 2017 - Bob Evans Farms, Inc. (NASDAQ: BOBE) today announced its financial results for the fiscal 2018 first quarter ended Friday, July 28, 2017. On a GAAP basis, the Company reported net income of $7.0 million, or $0.35 per diluted share, compared with net income from continuing operations of $4.6 million, or $0.23 per diluted share, in the corresponding period last year. Non-GAAP net income was $7.4 million, or $0.37 per diluted share, compared with non-GAAP net income from continuing operations of $4.6 million, or $0.23 per diluted share, in the corresponding period last year.

First-quarter fiscal 2018 commentary
“We are very pleased with the strong start to the fiscal year, delivering significant volume growth in both refrigerated side dishes and sausage during the first quarter,” said President and Chief Executive Officer Mike Townsley. “We continued to grow household penetration of refrigerated sides and increased market share by 250 basis points from the year ago period. With the additional capacity and product capabilities provided through the acquisition of Pineland Farms

1


on May 1, 2017, we are well positioned to continue driving robust growth of our refrigerated sides portfolio. Despite a nearly 15 percent increase in sow costs driven by increased domestic and export demand for pork products that impacted sausage margins, we were able to deliver a 38.3% increase in adjusted EBITDA.”

First-quarter fiscal 2018 results
Net sales were $109.3 million, an increase of $23.3 million, or 27.1 percent, compared to $85.9 million in the corresponding period last year. The increase in net sales was partially driven by $8.6 million of sales from the Company's recently acquired Pineland business, as well as $5.2 million of sales to Bob Evans Restaurants (BER), which were eliminated in the prior year. Pounds sold for the first quarter increased 53.3 percent (14.6 percent excluding Pineland and BER), while average net selling price per pound declined 17.1 percent compared to the corresponding period last year (3.1 percent excluding Pineland and BER).  The decline in average net selling price reflects an increased mix of food service sales as a result of both the acquisition of Pineland Farms and the inclusion of sales to Bob Evans Restaurants that were eliminated in the prior year period. From a net sales perspective, an 18.1 percent increase in retail side-dish pounds sold (excluding Pineland), a 13.0 percent increase in sausage pounds sold, and a 327.2 percent increase in food service pounds sold (26.6 percent excluding Pineland and BER), partially offset by an 8.3 percent decrease in frozen product pounds sold and a 37.5 percent decrease in the other category, all compared to the comparable 13 week period in the prior year.

Gross profit increased 17.2 percent to $33.4 million in the first quarter of fiscal 2018 from $28.5 million in the first quarter of fiscal 2017. Gross profit margin decreased 260 basis points to 30.6 percent of net sales from 33.2 percent of net sales in the same period in the prior year. The decrease in gross profit margin was primarily driven by a higher mix of food service sales as a result of the acquisition of Pineland Farms and a 14.8 percent increase in average sow prices and a $1.6 million increase in trade spend as a result of higher volume when compared to the prior year.

Operating income increased to $11.1 million in the first quarter of 2018 from operating income from continuing operations of $8.3 million in the first quarter of fiscal 2017. Non-GAAP operating income was $11.8 million, compared to $8.3 million from continuing operations in the corresponding period last year, an improvement of $3.5 million or 42.5 percent.  The improvement was due primarily to the aforementioned increase in pounds sold and net sales; partially offset by higher production costs, increased freight expense resulting from increased pounds sold and a $0.9 million increase in amortization expense associated with the preliminary value of definite-lived intangible assets acquired as part of the Pineland Farms acquisition. 

Adjusted EBITDA increased 38.3 percent to $19.5 million in the first quarter of fiscal 2018 from $14.1 million in the first quarter of fiscal 2017. As a percentage of net sales, the adjusted EBITDA margin increased 140 basis points to 17.8 percent of net sales.

Net interest expense was $0.5 million in the first quarter, a decrease of $1. 0 million, compared to $1.5 million in the corresponding period last year. The decrease in interest costs was the result of lower average borrowings as compared to last year. The Company’s GAAP tax rate for the first quarter of fiscal 2018 was 33.6 percent compared to 32.5 percent in the prior year period. The change in tax rates as compared to the corresponding period last year was primarily driven by the yearly variances in the forecasted annual rate related to the domestic production activities deduction.


2


Net income increased 54.0 percent to $7.0 million or $0.35 per diluted share in the first quarter of fiscal 2018 from net income from continuing operations of $4.6 million or $0.23 per diluted share in the first quarter of fiscal 2017. Non-GAAP net income increased 62.5 percent to $7.4 million or $0.37 per diluted share in the first quarter of fiscal 2018 from net income from continuing operations of $4.6 million or $0.23 per diluted share in the first quarter of fiscal 2017.

Income Statement Reclassifications: Historically the cost of sales line in this Consolidated Statement of Net Income has primarily represented the cost of materials, and has excluded depreciation expense, which was presented separately. In the first quarter of fiscal 2018, the Company changed the presentation of its Consolidated Statements of Income. The changes were made to conform the Consolidated Statements of Net Income to how management views the business subsequent to the divestiture of Bob Evans Restaurants and to better align with presentation that is consistent with the Company’s industry peers. The primary change was to classify all production costs, including plant wages, depreciation and other plant operating costs, as costs of goods sold. The Company has also changed its income statement presentation to separately present advertising, selling and distribution costs, consistent with how management views the business. These changes had no impact on reported operating income or net income, and prior period amounts have been reclassified to conform to the current presentation.
 
First-quarter 2018 balance sheet highlights
The Company’s cash balance and outstanding debt at July 28, 2017 were $15.3 million and $92.6 million, respectively, compared to $210.9 million and $2.7 million on April 28, 2017. The increase in borrowings and decrease in cash balance were primarily the result of the acquisition of Pineland Farms, which was completed on May 1, 2017, and the payment of a $7.50 per share special dividend on June 16, 2017.

Fiscal year 2018 outlook
Chief Administrative and Chief Financial Officer Mark Hood said, “We are raising our fiscal 2018 Non-GAAP diluted earnings per share guidance from a range of $2.06 to $2.24 that we issued last quarter to a range of $2.10 to $2.30 per share. As well, we are raising our fiscal 2018 guidance ranges for net sales and adjusted EBITDA. We now expect net sales of $474 million to $486 million and adjusted EBITDA of $104 million to $110 million, respectively.”

Guidance Metric
FY ‘18
Net sales
$474 to $486 million
Adjusted EBITDA
$104 to $110 million
Non-GAAP diluted earnings per share
$2.10-$2.30
Sow cost (per hundredweight)
$48 to $52
Capital expenditures
$25 to $30 million
Net interest expense
$3.7 to $4.2 million
Tax rate
34.5% to 35.5%
Diluted weighted-average share count
approximately 20.3 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, Wednesday, August 30, 2017 to discuss its fiscal 2018 first quarter 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 70201194. 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,

3


access code 70201194.

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

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.

Reconciliations of the Company’s projected adjusted diluted EPS and adjusted EBITDA for fiscal year 2018 and the most directly comparable GAAP financial measures are omitted from this release because the Company is unable to provide such reconciliations without unreasonable effort. In particular, in light of recent transactions referenced in this and prior releases, management is not able to calculate certain amounts necessary to provide corresponding forecasted financial measures calculated in accordance with GAAP and related reconciliations at this time as the Company cannot reliably forecast the timing and magnitude of certain costs associated with the acquisition of Pineland Farms Potato Company and other restructuring, impairment and acquisition and divestiture related costs that may occur, and the income tax effects of these items.

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 29, 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

4


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 .
 

Contact:
Scott Van Winkle
Managing Director, ICR
(617) 956-6736
scott.vanwinkle@icrinc.com



5



Bob Evans Farms, Inc.
Earnings Release Fact Sheet (unaudited)
First quarter Fiscal 2018 , Three months ended July 28, 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
 
July 28, 2017
 
July 29, 2016
 
July 28, 2017
 
July 29, 2016
 
July 28, 2017
 
July 29, 2016
Operating Income as Reported
 
 
 
 
 
 
 
 
 
 
 
Operating income
$
11,078

 
$
8,265

 
 
 
 
 
 
 
 
Net interest expense
460

 
1,487

 
 
 
 
 
 
 
 
Income from Continuing Operations Before Taxes
10,618

 
6,778

 
 
 
 
 
 
 
 
Provision for income taxes from continuing operations
3,569

 
2,202

 
 
 
 
 
 
 
 
Net Income from Continuing Operations as Reported
7,049

 
4,576

 
$
0.35

 
$
0.23

 
$
0.35

 
$
0.23

 
 
 
 
 
 
 
 
 
 
 
 
Income before taxes from discontinued operations

 
5,027

 
 
 
 
 
 
 
 
Provision for income taxes from discontinued operations

 
441

 
 
 
 
 
 
 
 
Income from Discontinued Operations as reported

 
4,586

 
$

 
$
0.23

 
$

 
$
0.23

 
 
 
 
 
 
 
 
 
 
 
 
Net Income as Reported
7,049

 
9,162

 
$
0.35

 
$
0.46

 
$
0.35

 
$
0.46

 
 
 
 
 
 
 
 
 
 
 
 
Adjustments to Continuing Operations
 
 
 
 
 
 
 
 
 
 
 
Severance/Restructuring
(291
)
 

 
 
 
 
 
 
 
 
Integration costs
557

 
 
 
 
 
 
 
 
 
 
Separation costs
434

 

 
 
 
 
 
 
 
 
Total Adjustments to Continuing Operations
700

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjustments to Discontinued Operations
 
 
 
 
 
 
 
 
 
 
 
Store closure costs

 
807

 
 
 
 
 
 
 
 
Litigation settlement costs

 
(278
)
 
 
 
 
 
 
 
 
Total Adjustments to Discontinued Operations

 
529

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP Operating Income from Continuing Operations
11,778

 
8,265

 
 
 
 
 
 
 
 
Non-GAAP net interest expense
460

 
1,487

 
 
 
 
 
 
 
 
Non-GAAP income from continuing operations before taxes
11,318

 
6,778

 
 
 
 
 
 
 
 
Adjustments to tax expense from continuing operations
315

 

 
 
 
 
 
 
 
 
Non-GAAP provision for income taxes from continuing operations
3,884

 
2,202

 
 
 
 
 
 
 
 
Non-GAAP Net Income from Continuing Operations
7,434

 
4,576

 
$
0.37

 
$
0.23

 
$
0.37

 
$
0.23

 

 

 
 
 
 
 
 
 
 
Non-GAAP Income from Discontinued Operations Before Taxes

 
5,556

 
 
 
 
 
 
 
 
Adjustments to tax expense from discontinued operations

 
141

 
 
 
 
 
 
 
 
Non-GAAP provision for income taxes from discontinued operations

 
582

 
 
 
 
 
 
 
 
Non-GAAP Net Income from Discontinued Operations

 
4,974

 
$

 
$
0.25

 
$

 
$
0.25

 

 

 
 
 
 
 
 
 
 
Non-GAAP Net Income
$
7,434

 
$
9,550

 
$
0.37

 
$
0.48

 
$
0.37

 
$
0.48

 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Shares Outstanding
 
 
 
 
20,162

 
19,792

 
20,218

 
19,964





6



First quarter Fiscal 2018 , Three months ended July 28, 2017 compared to the corresponding period a year ago:
(in thousands)
 
 
 
 
Three Months Ended
 
 
July 28, 2017
 
% of Sales
 
July 29, 2016
 
% of Sales
Operating Income from Continuing Operations, as reported
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
 
$
109,265

 
 
 
$
85,941

 
 
Cost of goods sold
 
75,851

 
69.4
%
 
57,420

 
66.8
%
Gross Margin
 
33,414

 
30.6
%
 
28,521

 
33.2
%
 
 
 
 
 
 
 
 
 
Advertising and marketing costs
 
3,063

 
2.8
%
 
3,239

 
3.8
%
Selling costs
 
4,447

 
4.1
%
 
3,713

 
4.3
%
Distribution costs
 
5,364

 
4.9
%
 
3,949

 
4.6
%
General and administrative costs
 
8,561

 
7.9
%
 
9,316

 
10.9
%
Amortization of intangible assets
 
901

 
0.8
%
 
39

 
%
Impairment, restructuring and other exit costs
 

 
%
 

 
%
Operating Income
 
11,078

 
10.1
%
 
8,265

 
9.6
%
 
 
 
 
 
 
 
 
 
Non-GAAP Adjustments to Continuing Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
General and administrative
 
(700
)
 
 
 

 
 
Total Adjustments
 
700

 
 
 

 
 
 
 
 
 
 
 
 
 
 
Non-GAAP Operating Income from Continuing Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
 
$
109,265

 
 
 
$
85,941

 
 
Cost of sales
 
75,851

 
69.4
%
 
57,420

 
66.8
%
Gross Margin
 
33,414

 
30.6
%
 
28,521

 
33.2
%
 
 
 
 
 
 
 
 
 
Advertising and marketing
 
3,063

 
2.8
%
 
3,239

 
3.8
%
Selling costs
 
4,447

 
4.1
%
 
3,713

 
4.3
%
Distribution costs
 
5,364

 
4.9
%
 
3,949

 
4.6
%
General and administrative
 
7,861

 
7.3
%
 
9,316

 
10.9
%
Amortization of intangible assets
 
901

 
0.8
%
 
39

 
%
Impairment, restructuring and other exit costs
 

 
%
 

 
%
Total non-GAAP operating income
 
$
11,778

 
10.8
%
 
$
8,265

 
9.6
%
 
 
 
 
 
 
 
 
 
Depreciation and amortization from Continuing Operations
 
7,446

 
 
 
5,136

 
 
Stock compensation expense from Continuing Operations
 
297

 
 
 
724

 
 
Adjusted EBITDA
 
$
19,521

 
 
 
$
14,125

 
 




7



Consolidated Statements of Net Income
 
Three Months Ended
 
July 28, 2017
 
July 29, 2016
Net Sales
$
109,265

 
$
85,941

Cost of goods sold
75,851

 
57,420

Gross Margin
33,414

 
28,521

Advertising and marketing costs
3,063

 
3,239

Selling costs
4,447

 
3,713

Distribution costs
5,364

 
3,949

General and administrative costs
8,561

 
9,316

Amortization of intangible assets
901

 
39

Impairment, restructuring and other exit costs

 

Operating Income
11,078

 
8,265

Net interest expense
460

 
1,487

Income from Continuing Operations Before Income Taxes
10,618

 
6,778

       Provision for income taxes
3,569

 
2,202

Income from Continuing Operations
7,049

 
4,576

Income from Discontinued Operations, net of Income Taxes

 
4,586

Net Income
$
7,049

 
$
9,162

 
 
 
 
Earnings Per Share — Income from Continuing Operations
 
 
 
Basic
$
0.35

 
$
0.23

Diluted
$
0.35

 
$
0.23

 
 
 
 
Earnings Per Share — Income from Discontinued Operations
 
 
 
Basic
$

 
$
0.23

Diluted
$

 
$
0.23

 
 
 
 
Earnings Per Share — Net Income
 
 
 
Basic
$
0.35

 
$
0.46

Diluted
$
0.35

 
$
0.46

 
 
 
 
Cash Dividends Paid Per Share
$
7.84

 
$
0.34

 
 
 
 
Weighted Average Shares Outstanding
 
 
 
Basic
20,162

 
19,792

Dilutive shares
56

 
172

Diluted
20,218

 
19,964



8



Consolidated Balance Sheets
 
Unaudited
July 28, 2017
 
April 28, 2017
Assets
Current Assets
 
 
 
Cash and equivalents
$
15,275

 
$
210,886

Accounts receivable, net
34,910

 
28,071

Inventories
22,170

 
17,210

Federal and state income taxes receivable
3,297

 
2,895

Prepaid expenses and other current assets
9,152

 
6,833

Current assets held for sale
3,334

 
3,334

Total Current Assets
88,138

 
269,229

Property, plant and equipment
290,780

 
244,554

Less accumulated depreciation
128,172

 
113,814

Net Property, Plant and Equipment
162,608

 
130,740

Other Assets

 

Deposits and other
1,970

 
2,118

Rabbi trust assets
22,724

 
22,353

Goodwill
101,299

 
19,634

Other intangible assets, net
34,629

 
39

Deferred income tax assets
5,291

 
5,131

Total Other Assets
165,913

 
49,275

Total Assets
$
416,659

 
$
449,244

Liabilities and Stockholders’ Equity
Current Liabilities
 
 
 
Current portion of long-term debt
$
425

 
$
428

Accounts payable
20,080

 
13,424

Accrued property, plant and equipment purchases
684

 
1,283

Accrued non-income taxes
1,678

 
3,353

Accrued wages and related liabilities
5,222

 
16,404

Self-insurance reserves
5,510

 
7,878

Current taxes payable
32,308

 
27,954

Current reserve for uncertain tax provision
1,481

 
1,481

Other accrued expenses
11,916

 
17,905

Total Current Liabilities
79,304

 
90,110

Non-Current Liabilities
 
 
 
Deferred compensation
18,621

 
17,277

Reserve for uncertain tax positions
1,810

 
1,795

Deferred income tax liabilities
17,868

 
50

Other non-current liabilities
29,656

 
6,097

Credit facility borrowings and other non-current debt
92,168

 
2,267

Total Non-Current Liabilities
160,123

 
27,486

Stockholders’ Equity
 
 
 
Common stock, $.01 par value; authorized 100,000 shares; issued 42,638 shares at July 28, 2017, and April 28, 2017
426

 
426

Capital in excess of par value
258,169

 
260,619

Retained earnings
780,208

 
931,315

Treasury stock, 22,707 shares at July 28, 2017, and 22,842 shares at April 28, 2017, at cost
(861,571
)
 
(860,712
)
Total Stockholders’ Equity
177,232

 
331,648

Total Liabilities and Stockholders' Equity
$
416,659

 
$
449,244



9



Consolidated Statements of Cash Flows
 
Three Months Ended
 
July 28, 2017
 
July 29, 2016
Operating activities:
 
 
 
Net income
$
7,049

 
$
9,162

 
 
 
 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
7,446

 
17,574

(Gain) Loss on disposal of fixed assets
(28
)
 
276

Gain on rabbi trust assets
(372
)
 
(281
)
Loss on deferred compensation
662

 
279

Share-based compensation
297

 
1,440

Accretion on long-term note receivable

 
(558
)
Deferred income taxes

 
184

Amortization of deferred financing costs
77

 
406

Cash provided by (used for) assets and liabilities:
 
 
 
Accounts receivable
(831
)
 
(1,130
)
Inventories
(1,744
)
 
(846
)
Prepaid expenses and other current assets
(1,550
)
 
(2,084
)
Accounts payable
4,432

 
81

Federal and state income taxes
3,260

 
(13,520
)
Accrued wages and related liabilities
(11,611
)
 
(10,156
)
Self-insurance
(2,825
)
 
(530
)
Accrued non-income taxes
(1,675
)
 
(1,263
)
Deferred revenue

 
(1,354
)
Other assets and liabilities
(6,606
)
 
(5,584
)
Net cash used in operating activities
(4,019
)
 
(7,904
)
Investing activities:
 
 
 
Acquisition of Pineland Farms Potato Company
(115,811
)
 

Purchase of property, plant and equipment
(3,887
)
 
(18,985
)
Proceeds from sale of property, plant and equipment
7

 
2,109

Deposits and other
85

 
(206
)
Net cash used in investing activities
(119,606
)
 
(17,082
)
Financing activities:
 
 
 
Cash dividends paid
(156,224
)
 
(6,724
)
Gross proceeds from credit facility borrowings and other long-term debt
90,000

 
97,272

Gross repayments of credit facility borrowings and other long-term debt
(102
)
 
(71,784
)
Cash paid for taxes on share-based compensation
(5,660
)
 
(640
)
Excess tax benefits from share-based compensation

 
(1,632
)
Net cash (used in) provided by financing activities
(71,986
)
 
16,492

Net cash used in operations
(195,611
)
 
(8,494
)
Cash and equivalents at the beginning of the period
210,886

 
12,896

Cash and equivalents at the end of the period
$
15,275

 
$
4,402


10



BEF Foods total pounds sold, by category
 
 
 
 
 
 
Fiscal 2018
 
 
 
 
 
 
 
 
 
 
Category
 
Q1
 
Q2
 
Q3
 
Q4
 
YTD
Sides
 
43.5%
 
 
 
 
 
 
 
43.5%
Sausage
 
17.1%
 
 
 
 
 
 
 
17.1%
Food Service
 
35.3%
 
 
 

 
 
 
35.3%
Frozen
 
2.6%
 
 
 
 
 
 
 
2.6%
Other
 
1.5%
 
 
 
 
 
 
 
1.5%
 
 
 
 
 
 
 
 
 
 
 
Fiscal 2017
 
 
 
 
 
 
 
 
 
 
Category
 
Q1
 
Q2
 
Q3
 
Q4
 
FY 2017
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%


11




Income Statement Reclassification - Quarterly Fiscal 2017 and Full Year Fiscal 2016
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
 
July 29, 2016

 
October 28, 2016
 
January 27, 2017
 
April 28, 2017
 
April 28, 2017
 
April 29, 2016
Operating Income as Reported
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
 
$
85,941

 
$
96,158

 
$
112,820

 
$
99,923

 
$
394,842

 
$
387,616

Cost of sales
 
57,419

 
62,881

 
72,983

 
64,617

 
257,900

 
259,410

Gross Margin
 
28,522

 
33,277

 
39,837

 
35,306

 
136,942

 
128,206

 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Advertising and marketing costs
 
3,239

 
3,543

 
2,626

 
1,906

 
11,314

 
8,990

Selling costs
 
3,714

 
4,099

 
4,640

 
3,844

 
16,297

 
16,484

Distribution costs
 
3,949

 
4,674

 
5,115

 
5,004

 
18,742

 
17,523

General and administrative costs
 
9,316

 
9,521

 
7,910

 
10,672

 
37,418

 
47,400

Amortization of intangible assets
 
39

 
39

 
39

 
39

 
157

 
157

Impairment, restructuring and other exit costs
 

 
16,169

 
2,386

 
4,333

 
22,888

 
4,578

Total operating expenses
 
20,257

 
38,045

 
22,716

 
25,798

 
106,816

 
95,132

Operating Income
 
$
8,265

 
$
(4,768
)
 
$
17,121

 
$
9,508

 
$
30,126

 
$
33,074

 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP Adjustments
 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Impairment, restructuring and other exit costs
 

 
(16,169
)
 
(2,386
)
 
(4,333
)
 
(22,888
)
 
(4,578
)
Total Adjustments
 

 
(16,169
)
 
(2,386
)
 
(4,333
)
 
(22,888
)
 
(4,578
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP Operating Income
 
 
 
 
 
 
 
 
 
 
 
 
Net Sales
 
$
85,941

 
$
96,158

 
$
112,820

 
$
99,923

 
$
394,842

 
$
387,616

Cost of sales
 
57,419

 
62,881

 
72,983

 
64,617

 
257,900

 
259,410

Gross Margin
 
28,522

 
33,277

 
39,837

 
35,306

 
136,942

 
128,206

 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
Advertising and marketing costs
 
3,239

 
3,543

 
2,626

 
1,906

 
11,314

 
8,990

Selling costs
 
3,714

 
4,099

 
4,640

 
3,844

 
16,297

 
16,484

Distribution Costs
 
3,949

 
4,674

 
5,115

 
5,004

 
18,742

 
17,523

General and administrative costs
 
9,316

 
9,521

 
7,910

 
10,672

 
37,418

 
47,400

Amortization of intangible assets
 
39

 
39

 
39

 
39

 
157

 
157

Impairment, restructuring and other exit costs
 

 

 

 

 

 

Total operating expenses
 
20,257

 
21,876

 
20,330

 
21,465

 
83,928

 
90,554

Non-GAAP operating income
 
$
8,265

 
$
11,401

 
$
19,507

 
$
13,841

 
$
53,014

 
$
37,652



12