Bob Evans Farms 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%
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