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

May 01, 2013, 16:40 ET from Bob Evans Farms, Inc.

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.



RELATED LINKS

http://www.bobevans.com