Bob Evans To Restate Fiscal Third Quarter Results To Include An Additional Non-Cash Assets Held For Sale Impairment Charge Related To Mimi's Cafe Restatement will not impact non-GAAP earnings or net cash flows

COLUMBUS, Ohio, May 1, 2013 /PRNewswire/ -- Bob Evans Farms, Inc. (NASDAQ: BOBE) today announced it identified an error regarding the treatment of intercompany accounts in calculating the net book value of the Mimi's Cafe business segment assets held for sale as recorded by the Company in the third quarter of fiscal 2013.  The Company said the resulting non-cash assets held for sale impairment charge previously reported as $22.7 million is now revised to $68.4 million.  The Company became aware of the error as a result of a review it initiated while preparing closing entries of its accounting for the sale of Mimi's Cafe.

The charge will have no impact on non-GAAP earnings and does not affect the ongoing operations of the business.  Furthermore, it will not affect previously reported amounts of net cash flows, cash, or cash equivalents.  Restated and reported operating income, net income, and fully diluted earnings per share are provided below on both a GAAP and non-GAAP basis.  Please refer to the table at the end of this release for a reconciliation of non-GAAP measures to GAAP results.

Note:  Amounts are in thousands except per share amounts.

 


Three Months Ended


Nine Months Ended


Restated

January 25,
2013


Reported

January 25,
2013


Restated

January 25,
2013


Reported

January 25,
2013









Operating (loss) income

$(47,388)


$ (1,646)


$ (5,367)


$ 40,375

Operating income – 
     non-GAAP

 

24,538


 

24,538


 

75,885


 

75,885









Net (loss) income

$(55,236)


$ 5,527


$(29,886)


$30,877

Net income – non-
     GAAP

 

15,818


 

15,818


 

47,323


 

47,323









Fully diluted earnings 
     per share

 

$(1.97)


 

$0.20


 

$(1.06)


 

$1.09

Fully diluted earnings 
     per share – non-
     GAAP

 

 

$0.56


 

 

$0.56


 

 

$1.67


 

 

$1.67

 

The Company expects to file an amendment to its Quarterly Report on Form 10-Q for the three and nine months ended January 25, 2013, on or before May 15, 2013, to reflect the additional non-cash assets held for sale impairment charge.  The referenced financial statements should not be relied upon until the Company files its restated financial statements.

The decision to restate the Company's financial statements for the three and nine months ended January 25, 2013, was approved by the Audit Committee of the Board of Directors, based upon the recommendation of Company management.  Management and the Audit Committee have discussed these matters with the Company's independent registered public accounting firm, Ernst & Young LLP.

About Bob Evans Farms, Inc.
Bob Evans Farms, Inc. owns and operates full-service restaurants under the Bob Evans Restaurants brand name.  At the end of the third fiscal quarter (January 25, 2013), Bob Evans Restaurants owned and operated 565 family restaurants in 19 states, primarily in the Midwest, mid-Atlantic and Southeast regions of the United States. Bob Evans Farms, Inc., through its BEF Foods segment, is also a leading producer and distributor of refrigerated side dishes, pork sausage and a variety of complementary convenience food items under the Bob Evans and Owens brand names.  Note that effective on February 16, 2013, Mimi's Cafe is no longer owned by Bob Evans Farms, Inc.  For more information about Bob Evans Farms, Inc., visit www.bobevans.com.

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. We discuss these factors and events, along with certain other risks, uncertainties and assumptions, under the heading "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the fiscal year ended April 27, 2012, 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.

Set forth below is the Company's restatement of certain of its GAAP and non-GAAP financial measures included in its third quarter earnings release:

Note:  Amounts are in thousands except per share amounts.



Three Months Ended

Nine Months Ended


Jan 25, 2013

Jan 27, 2012

Jan 25, 2013

Jan 27, 2012

Operating income as restated





  Bob Evans Restaurants

$ 17,638

$ 19,889

$ 55,449

$ 63,865

  Mimi's Cafe

88,615

3,222

80,259

(1,544)

  BEF Foods

(153,641)

7,147

(141,075)

16,762






    Total operating (loss) income

(47,388)

30,258

(5,367)

79,083

Adjustments





  Bob Evans Restaurants





      Impairment

2,371

-

3,598

2,806

      Severance/Restructuring

253

-

1,050

-

      (Gain) loss on sale of assets

(211)

-

(408)

(407)

      Extinguishment of interco debt

(527)

-

(527)

-






      Total Bob Evans Restaurants

1,886

-

3,713

2,399

      Adjustments





  Mimi's Cafe





      Impairment (1)

70,576

-

70,576

-

      Severance/Restructuring

1,121

-

1,740

287

      Occupancy costs

334

-

1,875

-

      Extinguishment of interco debt

(156,418)

-

(156,418)

-

      Depreciation and amortization

(3,924)

-

(3,924)

-






      Total Mimi's Cafe  Adjustments

(88,311)

-

(86,151)

287

  BEF Foods





      Impairment

-

-

-

87

      Severance/Restructuring

1,239

-

5,184

-

      Merger and acquisition costs

167

-

1,566

-

      (Gain) loss on sale of assets

-

-

(5)

(689)

      Extinguishment of interco debt

156,945

-

156,945

-






      Total BEF Foods Adjustments

158,351

-

163,690

(602)

Total adjustments





      Impairment

72,947

-

74,174

2,893

      Severance/Restructuring

2,613

-

7,974

287

      Merger and acquisition costs

167

-

1,566

-

      (Gain) loss on sale of assets

(211)

-

(413)

(1,096)

      Occupancy costs

334

-

1,875

-

      Depreciation and amortization

(3,924)

-

(3,924)

-







71,926

-

81,252

2,084

Adjusted operating income





  Bob Evans Restaurants

19,524

19,889

59,162

66,264

  Mimi's Cafe

304

3,222

(5,892)

(1,257)

  BEF Foods

4,710

7,147

22,615

16,160






    Total adjusted operating income

$ 24,538

$ 30,258

$ 75,885

$ 81,167

(1)       Includes assets held for sale impairment of $68.4 million.

 



Consolidated

Bob Evans Restaurants


Three Months Ended

Three Months Ended


Jan 25, 2013


% of Sales

Jan 27, 2012


% of Sales

Jan 25, 2013


% of Sales

Jan 27, 2012


% of Sales

Operating (loss) income
as restated


























Net sales

$ 434,440



$ 428,339



$ 245,494



$ 242,360



Cost of sales

134,771


31.0%

137,657


32.1%

59,561


24.3%

58,377


24.1%

Operating wages

137,327


31.6%

133,575


31.2%

92,115


37.5%

92,365


38.1%

Other operating

72,070


16.6%

69,906


16.3%

43,476


17.7%

44,604


18.4%

SG&A

50,407


11.6%

36,634


8.6%

19,271


7.8%

15,017


6.2%

Deprec and amort

18,844


4.3%

20,309


4.7%

13,433


5.5%

12,108


5.0%

Assets held for sale impairment

68,409


15.7%

-



-



-
















Total as restated

(47,388)


-10.9%

30,258


7.1%

17,638


7.2%

19,889


8.2%

Adjustments













Other operating

(334)



-



-



-



SG&A

(7,107)



-



(1,886)



-



Deprec and amort

3,924



-



-



-



Assets held for sale impairment

(68,409)



-



-



-
















Total adjustments

71,926



-



1,886



-
















Adjusted operating income


























Net sales

434,440



428,339



245,494



242,360



Cost of sales

134,771


31.0%

137,657


32.1%

59,561


24.3%

58,377


24.1%

Operating wages

137,327


31.6%

133,575


31.2%

92,115


37.5%

92,365


38.1%

Other operating

71,736


16.5%

69,906


16.3%

43,476


17.7%

44,604


18.4%

SG&A

43,300


10.0%

36,634


8.6%

17,385


7.1%

15,017


6.2%

Deprec and amort

22,768


5.2%

20,309


4.7%

13,433


5.5%

12,108


5.0%














Total adjusted operating income

24,538


5.6%

30,258


7.1%

19,524


8.0%

19,889


8.2%














Net interest expense as reported

7,451



1,879









Adjustments

(6,150)



-









Adjusted net interest expense

1,301



1,879









(Loss) income before income taxes as restated

(54,839)



28,379









Adjustments

78,076



-









Adjusted income before income taxes

23,238



28,379









Provision for income taxes as restated

397



8,124









Income tax effect of adjustment

7,022



-









Adjusted provision for income taxes

7,419



8,124









Net (loss) income as restated

(55,236)



20,255









Adjustments to net (loss) income

71,054



-









Adjusted net income

15,818



20,255









Earnings per share













Basic as restated

$ (1.97)



$ 0.69









Adjustments

$ 2.54



$ 0.00









Adjusted basic

$ 0.57



$ 0.69






















Diluted as restated

$ (1.97)



$ 0.69









Adjustments

$ 2.53



$ 0.00









Adjusted diluted

$ 0.56



$ 0.69






















Average shares outstanding Basic

27,994



29,319









Average shares outstanding Diluted

28,136



29,415









 



Mimi's Cafe

BEF Foods


Three Months Ended

Three Months Ended


Jan 25,
2013


% of
Sales

Jan 27,
2012


% of
Sales

Jan 25,
2013


% of
Sales

Jan 27,
2012


% of

Sales

Operating income (loss)
as restated


























Net sales

$ 91,119



$ 94,948



$ 97,827



$ 91,031



Cost of sales

23,422


25.7%

25,829


27.2%

51,788


52.9%

53,450


58.7%

Operating wages

34,382


37.7%

34,073


35.9%

10,830


11.1%

7,137


7.8%

Other operating

20,854


22.9%

20,099


21.2%

7,740


7.9%

5,203


5.7%

SG&A

(146,438)


-160.7%

5,849


6.2%

177,575


181.5%

15,768


17.3%

Deprec and amort

1,875


2.1%

5,876


6.2%

3,536


3.6%

2,324


2.6%

Assets held for sale
impairment

68,409


75.1%

-



-



-



Total as restated

88,615


97.3%

3,222


3.4%

(153,641)


-157.1%

7,147


7.9%














Adjustments


























Other operating

(334)



-



-



-



SG&A

153,130



-



(158,351)



-



Deprec and amort

3,924



-



-



-



Assets held for sale
impairment

(68,409)



-



-



-
















Total adjustments

(88,311)



-



158,351



-
















Adjusted operating income


























Net sales

91,119



94,948



97,827



91,031



Cost of sales

23,422


25.7%

25,829


27.2%

51,788


52.9%

53,450


58.7%

Operating wages

34,382


37.7%

34,073


35.9%

10,830


11.1%

7,137


7.8%

Other operating

20,521


22.5%

20,099


21.2%

7,740


7.9%

5,203


5.7%

SG&A

6,693


7.3%

5,849


6.2%

19,224


19.7%

15,768


17.3%

Deprec and amort

5,798


6.4%

5,876


6.2%

3,536


3.6%

2,324


2.6%














Total adjusted operating income

304


0.3%

3,222


3.4%

4,710


4.8%

7,147


7.9%














 



Consolidated

Bob Evans Restaurants


Nine Months Ended

Nine Months Ended


Jan 25,
2013


% of Sales

Jan 27,
2012


% of Sales

Jan 25, 2013


% of Sales

Jan 27, 2012


% of Sales

Operating (loss) income
as restated













Net sales

$ 1,255,032



$ 1,240,885



$ 739,762



$ 728,949



Cost of sales

374,847


29.9%

384,586


31.0%

177,662


24.0%

173,079


23.7%

Operating wages

403,646


32.2%

399,422


32.2%

277,573


37.5%

277,386


38.1%

Other operating

217,288


17.3%

206,342


16.6%

133,787


18.1%

130,520


17.9%

SG&A

134,382


10.7%

110,525


8.9%

55,964


7.6%

47,685


6.5%

Deprec and amort

61,827


4.9%

60,927


4.9%

39,327


5.3%

36,415


5.0%

Assets held for sale impairment

68,409


5.5%

-



-



-
















Total as restated

(5,367)


-0.4%

79,083


6.4%

55,449


7.5%

63,865


8.8%

Adjustments













Other operating

(1,875)



-



-



-



SG&A

(14,892)



(2,084)



(3,713)



(2,399)



Deprec and amort

3,924



-



-



-



Assets held for sale impairment

(68,409)



-



-



-
















Total adjustments

81,252



2,084



3,713



2,399
















Adjusted operating income













Net sales

1,255,032



1,240,885



739,762



728,949



Cost of sales

374,847


29.9%

384,586


31.0%

177,662


24.0%

173,079


23.7%

Operating wages

403,646


32.2%

399,422


32.2%

277,573


37.5%

277,386


38.1%

Other operating

215,413


17.2%

206,342


16.6%

133,787


18.1%

130,520


17.9%

SG&A

119,490


9.5%

108,441


8.7%

52,251


7.1%

45,286


6.2%

Deprec and amort

65,750


5.2%

60,927


4.9%

39,327


5.3%

36,415


5.0%














Total adjusted operating income

75,885


6.0%

81,167


6.5%

59,162


8.0%

66,264


9.1%














Net interest expense as reported

10,980



5,975









Adjustments

(6,150)



-









Adjusted net interest expense

4,830



5,975









(Loss) income before income taxes as restated

(16,347)



73,108









Adjustments

87,402



2,084









Adjusted income before income taxes

71,055



75,192









Provision for income taxes as restated

13,539



22,294









Income tax effect of adjustment

10,192



711









Adjusted provision for income taxes

23,732



23,005









Net (loss) income as restated

(29,886)



50,814









 Adjustments to net (loss) income

77,209



1,373









 Adjusted net income

47,323



52,187









 Earnings per share













Basic as restated

$ (1.06)



$ 1.70









Adjustments

$ 2.74



$ 0.05









Adjusted basic

$ 1.68



$ 1.74









Diluted as restated

$ (1.06)



$ 1.69









Adjustments

$ 2.72



$ 0.05









Adjusted diluted

$ 1.67



$ 1.74









Average shares outstanding Basic

28,203



29,909









Average shares outstanding Diluted

28,345



29,999









 


Mimi's Cafe

BEF Foods


Nine Months Ended

Nine Months Ended


Jan 25,
2013


% of
Sales

Jan 27,
2012


% of
Sales

Jan 25,
2013


% of
Sales

Jan 27,
2012


% of
Sales

Operating income (loss)
as restated













Net sales

$ 258,715



$ 270,385



$ 256,555



$ 241,551



Cost of sales

67,680


26.2%

72,781


26.9%

129,506


50.5%

138,726


57.4%

Operating wages

98,621


38.1%

100,401


37.1%

27,452


10.7%

21,635


9.0%

Other operating

63,033


24.4%

61,865


22.9%

20,467


8.0%

13,957


5.8%

SG&A

(132,632)


-51.3%

19,220


7.1%

211,050


82.3%

43,620


18.1%

Deprec and amort

13,344


5.2%

17,661


6.5%

9,155


3.6%

6,851


2.8%

Assets held for sale impairment

68,409


26.4%

-



-



-
















Total as restated

80,259


31.0%

(1,544)


-0.6%

(141,075)


-55.0%

16,762


6.9%














Adjustments


























Other operating

(1,875)



-



-



-



SG&A

152,511



(287)



(163,690)



602



Deprec and amort

3,924



-



-



-



Assets held for sale impairment

(68,409)



-



-



-
















Total adjustments

(86,151)



287



163,690



(602)
















Adjusted operating income


























Net sales

258,715



270,385



256,555



241,551



Cost of sales

67,680


26.2%

72,781


26.9%

129,506


50.5%

138,726


57.4%

Operating wages

98,621


38.1%

100,401


37.1%

27,452


10.7%

21,635


9.0%

Other operating

61,159


23.6%

61,865


22.9%

20,467


8.0%

13,957


5.8%

SG&A

19,879


7.7%

18,933


7.0%

47,360


18.5%

44,222


18.3%

Deprec and amort

17,268


6.7%

17,661


6.5%

9,155


3.6%

6,851


2.8%














Total adjusted operating (loss)
income

(5,892)


-2.3%

(1,257)


-0.5%

22,615


8.8%

16,160


6.7%

 

SOURCE Bob Evans Farms, Inc.



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