Meat Industry INSIGHTS Newsletter

980840 Bob Evans Farms Announces Fiscal 1999 1st Quarter Results

August 18, 1998

Columbus, OH - Bob Evans Farms, Inc. announced a 36 percent increase in earnings per share for its first fiscal quarter ended July 24, 1998.

The results reflected strong volume growth and favorable raw material costs in the company's food products segment, and continued positive momentum in the restaurant segment's same-store sales. Total net sales for the 13-week period ended July 24, 1998, were $240.3 million, up 8 percent from $222.0 million a year ago. Net income, which benefited from improved profitability on both sides of the business, increased 36 percent to $14.1 million, or $O.34 per share (basic and diluted), from $10.4 million, or $0.25 per share, in the corresponding period last year.

In the restaurant segment, same-store sales increased for the seventh consecutive quarter, rising 5.6 percent from a year ago. A new seasonal menu featuring the company's “Wildfire” barbecue product line contributed to the sales gains, particularly at dinnertime. Overall, restaurant sales were up 9 percent for the quarter which contributed to a 13 percent increase in operating profits.

“We are pleased with the continued strength in our restaurant sales,” said Daniel E. Evans, chairman of the board and chief executive officer. “While the performance of our new Wildfire branded products has exceeded our expectations, sales at breakfast and lunch remained strong, primarily as a result of our ongoing focus on providing high-quality products and excellent customer service.”

On the food products side of the business, volume from comparable products (principally sausage) was up 1O percent from a year ago. The unusually large increase reflected a contribution of strong sales of Bob Evans' repositioned line of summer grilling sausages, including new packaging; increased promotional activity; and reduced wholesale and retail prices for the company's sausage products. With hog costs significantly lower ($32.00 per hundredweight compared with $51.00), the segment's operating profits were more than four times the year-ago level, on a 6 percent sales increase. Evans commented, “While all sausage producers are benefiting from current market conditions, we believe our high quality products, promotional programs and the repositioning of our grilling sausages have increased our market share, which should help us in the quarters to come.”

Evans concluded, “Although our primary focus is on sustaining the current momentum on both sides of our business, we continue to make progress with initiatives aimed at accelerating our growth rate over the longer term. The food products segment is looking forward to several promising product introductions this fall, and our plans for a faster pace of new restaurant openings in the second half of fiscal 1999 and beyond remain on track.”

On Aug. 10, 1998, the board of directors declared a quarterly cash dividend of eight cents ($0.08) per share on the company's outstanding common stock. The dividend is payable Sept. 1, 1998, to stockholders of record at the close of business on Aug. 14, 1998.

Bob Evans Farms, Inc. owns and operates 407 full-service, family restaurants in 20 states, principally in the midwestern, mid-Atlantic and southeastern United States, as well as Texas. The company also is a leading producer of pork sausage under the Bob Evans and Owens brand names. Other operations include Mrs. Giles Country Kitchens, a producer of fresh deli- salads, and Hickory Specialties, which manufactures charcoal and smoke- flavoring products.

This Article Compliments of...

Iotron Technology Inc.

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