Restructuring costs pressure Bob Evans earnings

by Meat&Poultry Staff
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COLUMBUS, Ohio — The integration of Kettle Creations acquisition, the sale of Mimi’s Cafe, consolidation of production at a Texas facility, the sale of some facilities and other restructuring efforts caused Bob Evans Farms, Inc. to swing to a loss during fiscal 2013.

For the year ended April 26, the company suffered a loss of $2,862,000, which compared with net income of $72,850,000 during the previous year. Net sales were $1,588,941,000, down 4 percent from $1,647,428,000 during the previous year.

The company also faced $149.5 million in pre-tax costs in operating profit and $6.2 million in costs in interest expenses during the year.

Total non-GAAP operating income for the full year was $105,605,000, which compared with $111,753,000 in fiscal 2012.

“Results at Bob Evans Farms, Inc. for fiscal year 2013 reflect continued successful execution against our three strategic pillars: transformation of our core businesses to enable expansion; investment in high return on capital growth opportunities; and disciplined capital allocation to drive shareholder value,” said Steve Davis, chairman and CEO. “We believe the acceleration of the Farm Fresh Refresh remodeling program at Bob Evans Restaurants; the Kettle Creations acquisition and ongoing plant network optimization at BEF Foods; and the divestiture of the Mimi's Cafe restaurant chain have transformed our company with a significantly upgraded asset base and margin structure capable of driving profitable revenue growth in fiscal 2014 and beyond. During the past year, these transformational investments and events have given us the confidence to raise our long-term annual non-GAAP growth guidance to 8 to 12 percent.”

For the fourth quarter ended April 26, the company had income of $27,024,000, up 23 percent from $22,036,000 during the same quarter of the previous year. Net sales for the quarter were $333,909,000, down 18 percent from $406,544,000 during the same quarter of the previous year.

Davis said overall volume grew 21 percent in the fourth quarter, with refrigerated side dishes, food service, sausage, and frozen products growing 21 percent, 42 percent, 2 percent, and 23 percent, respectively.

“Excluding the impact of the Kettle Creations acquisition, overall volume grew 17 percent,” he said. “The vertical integration and expansion of our refrigerated side dish production capabilities as a result of the Kettle Creations acquisition, and the expansion of our Sulphur Springs, Texas, prepared foods plant, should allow us to drive the types of productivity gains we experienced with our fresh sausage production.”
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