990839 Bob Evans Announces First Quarter ResultsAugust 19, 1999Columbus, OH - Bob Evans Farms, Inc. announced record financial results for its first fiscal quarter ended July 30, 1999. Earnings per share increased 12%, to $0.38 from $0.34 a year ago, reflecting continued strong same-store sales and improved profitability in the restaurant segment, as well as substantial stock repurchases. Net sales for the quarter were $243.8 million, compared with $240.3 million a year earlier, while net income rose 7%, to $15.1 million from $14.1 million. Comparisons were affected by the absence in the latest period of two food products businesses which were divested in the fourth quarter of fiscal 1999. The restaurant segment achieved its 11th consecutive quarterly same-store sales increase, a 4.9% gain. The performance benefited from the addition of several new items to Bob Evans' popular Wildfire barbecue product line. The segment's overall sales rose 9%, while operating income increased 11%; margins improved slightly despite continued upward pressure on labor-related costs. Daniel E. Evans, chairman of the board and chief executive officer, commented, "By sharpening our focus on the basics of high-quality homestyle food and excellent customer service, we have significantly strengthened our same- store sales over the last two years. To sustain and build on this momentum, in fiscal 2000 we are increasing our investment in new restaurants, as well as our restaurant remodeling and rebuilding programs, and are significantly expanding programs aimed at enhancing our carryout and merchandise sales." Quarterly comparisons in the food products segment reflect the April 1999 divestitures of Hickory Specialties' charcoal manufacturing operations and Mrs. Giles Country Kitchens, a producer of deli-style salads. These two seasonal businesses generated combined sales of $15.6 million and operating income of approximately $0.5 million in the first quarter of fiscal 1999, their strongest performance of the year. Excluding the divested operations, the segment's sales for the quarter increased 7%, while operating profits were off 6%. Live hog costs were up slightly from a year ago ($33.00 per hundredweight compared with $32.00). In addition, promotional activity was maintained at a relatively high level, partly in support of Bob Evans' expanded line of summer grilling sausages. While the related expenses affected profitability, the company gained market share. Unit volume from comparable products (principally sausage) was up 10% for the quarter, and grilling sausage volumes grew at a significantly faster pace. "Having exceeded our volume objectives for the quarter, we expect to moderate our promotional outlays in the months ahead," Evans said. "The short- term outlook for hog costs also has improved recently, which should further bolster our profitability in the food products segment. Overall, we are pleased with the company's financial performance in the first quarter, although there is always room for improvement. The premium Bob Evans brand, bridging complementary markets in the restaurant and food industries, has never been stronger, and provides us with many attractive long-term growth opportunities." During the quarter, the company repurchased 955,050 Bob Evans common shares, reducing the total outstanding to approximately 39.5 million shares. The balance sheet remained very strong; as of July 30, 1999, stockholders' equity was $463 million, compared with total debt of $37 million. On Aug. 5, 1999, the board of directors declared a quarterly cash dividend of nine cents ($0.09) per share on the company's outstanding common stock. The dividend is payable Sept. 1, 1999, to stockholders of record at the close of business on Aug. 13, 1999. Bob Evans Farms, Inc. currently owns and operates 424 full-service, family restaurants principally in the East North Central, mid-Atlantic and Southern United States. The company is also a leading producer of pork sausage under the Bob Evans and Owens Country Sausage brand names.
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