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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
( X ) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended April 28, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
Commission File Number 0-1667
Bob Evans Farms, Inc.
(Exact name of registrant as specified in its charter)
Delaware 31-4421866
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3776 South High Street, Columbus, Ohio 43207
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 614-491-2225
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock with $.01 par value
(Title of class)
This Report contains 138 pages of which this is page 1. The
Index to Exhibits begins at page 54.
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( )
State the aggregate market value of the voting stock held by non-
affiliates of the registrant. The aggregate market value has
been computed by reference to the last quoted sale price of such
stock, as of June 16, 1995.
Total shares outstanding 42,373,041
Number of shares owned beneficially and/or of record
by directors and executive officers* 2,285,588
Number of shares held by persons other than directors
and executive officers 40,087,453
Last quoted sale price $20.50
Market value of shares held by persons other than
directors and executive officers $821,792,786
* For purposes of this computation, all executive officers and
directors are included, although not all are necessarily
"affiliates."
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest
practicable date.
42,373,041 shares of Common Stock with $.01 par value were
outstanding at June 16, 1995.
DOCUMENTS INCORPORATED BY REFERENCE
1. Annual Report to Stockholders for the Fiscal Year Ended
April 28, 1995 (in pertinent part, as indicated)
. . . . . . . . . PART II.
2. Proxy Statement dated July 3, 1995 for the Annual
Meeting of Stockholders to be held on August 14, 1995
(in pertinent part, as indicated)
. . . . . . . . . PART III.
PART I
Item 1. BUSINESS.
Bob Evans Farms, Inc. (the "Registrant") is a Delaware
corporation incorporated on November 4, 1985. It is the
successor by merger to Bob Evans Farms, Inc., an Ohio corporation
incorporated in 1957. BEF Holding Co. Inc. is a subsidiary of
the Registrant. Subsidiaries owned by BEF Holding Co. Inc.
include Bob Evans Farms, Inc., an Ohio corporation; Owens Country
Sausage, Inc. ("Owens"); Mrs. Giles Country Kitchens, Inc. ("Mrs.
Giles"); and Hickory Specialties, Inc. ("Hickory Specialties").
The Registrant, BEF Holding Co. Inc., Bob Evans Farms, Inc.,
Owens, Mrs. Giles and Hickory Specialties are collectively
referred to herein as the "Company."
The business of the Company is divided into two principal
industry segments: the food products segment and the restaurant
segment.
Food Products Segment Operations
Principal Products and Procurement Methods
The Company's traditional business in its food products segment
has been the production and distribution of approximately 30
varieties of fresh, smoked and fully-cooked pork sausage and ham
products under the brand names of Bob Evans Farms and Owens
Country Sausage. In recent years, the Company has begun to
expend more time and effort on both new product development and
sales of its pork sausage and ham products to institutional and
foodservice purchasers. In addition, the Company has begun to
explore the expansion of the products offered in its food
products segment through the acquisition of companies producing
food and food related products which complement the Company's
traditional sausage products. During the fiscal year ended April
30, 1993 (the "1993 fiscal year") sales of sausage products
contributed 79% of total revenues; sales of products by Mrs.
Giles contributed 10%; and sales of products by Hickory
Specialties contributed 11%. During the fiscal year ended April
29, 1994 (the "1994 fiscal year") sales of sausage products
contributed 77% of total revenues; sales of products by Mrs.
Giles contributed 11%; and sales of Hickory Specialties
contributed 12%. During the fiscal year ended April 28, 1995
(the "1995 fiscal year") sales of sausage products contributed
76% of total revenues; sales of products by Mrs. Giles
contributed 11%; and sales of Hickory Specialties contributed
13%.
During the last several years, the Company has expanded its
product line to include convenience items for meals and snacks
that are microwavable. These items include two varieties of
burritos, a variety of biscuit sandwiches, a Country Lite Sausage
for customers looking for products lower in fat, and Homestyle
Biscuits and Gravy. During the 1995 fiscal year, the Company
developed two new products, Bob Evans Farms Homestyle Chicken &
Noodles with Biscuits and maple links, a maple syrup-flavored
sausage product. All of these products are available throughout
the Bob Evans marketing territory.
The acquisition of Mrs. Giles in September 1991, has allowed the
Company to expand the products offered in its food products
segment to include fresh prepared salads. The prepared salads
are intended as convenience items for meals, and include deluxe
macaroni salad, Italian pasta salad, homestyle potato salad,
chunky chicken salad, classic cole slaw, pimento cheese spread,
and smokehouse baked beans. The refrigerated deli salads
manufactured by Mrs. Giles are distributed principally in the
southern and southeastern markets of the United States under the
brand names of Mrs. Giles and Mrs. Kinser's. In April, 1992, the
Company began the introduction of Bob Evans Harvest Salads, a
line of fresh, premium quality, prepared salads, and these salad
products are currently being marketed in most all of the Bob
Evans Farms marketing areas.
The acquisition of Hickory Specialties in March 1992, has allowed
the Company to expand into food and food related products which
complement its existing food products business. Hickory
Specialties produces premium quality charcoal, wood smoking
chips, natural smoke flavorings, gas grill ceramic briquettes and
grilling systems. Brand names of such products include Nature-
Glo, Old Hickory, Jack Daniels, Zesti Smoke, Wildfire, and
Woodstone. This past year Hickory Specialties introduced two new
products, Wildfire Gourmet Hickory Charcoal and Woodstone Gas
Grill Briquettes. As a result of increased charcoal sales, a new
charcoal manufacturing facility is currently under construction
at Summer Shade, Kentucky. This facility is expected to be
operational by October 1995. Hickory Specialties' products are
marketed nationwide, and the Company is exploring various
opportunities abroad, especially with respect to its liquid smoke
flavorings products.
During the 1995 fiscal year, the food products segment of the
Company continued to produce specialty items for its
institutional and foodservice customers. These products are made
to customer specifications, and include fresh sausage links and
patties, sausage gravy, and biscuit sandwiches. Although this
segment of the business does not command the higher pre-tax
margins that branded items do, it gives the Company the
opportunity to increase its volumes and profits. The Company is
also marketing its prepared salad products to institutional and
foodservice customers.
All of the Company's pork sausage and ham products are produced
in the Company's seven processing plants located in Xenia,
Bidwell, and Springfield, Ohio; Hillsdale, Michigan; Galva,
Illinois; and Richardson and Fort Worth, Texas. The Springfield,
Ohio plant is producing the products for sale to foodservice
distributors and also serves as a distribution point for Mrs.
Giles salad products and Owens Country Sausage products.
Live hogs are procured at terminal, local and country markets in
Ohio, Indiana, Illinois, Iowa, North Carolina, Kansas, Michigan,
Nebraska, South Dakota, Pennsylvania, Wisconsin, Minnesota, West
Virginia, Missouri and Oklahoma at daily prevailing market
prices. The Company does not contract in advance for the
purchase of live hogs. Live hogs procured in these markets are
purchased by an employee of the Company, who works with brokers
and buyers on a commission basis, at auction through competitive
bidding. Live hogs are then transported overnight directly from
the various markets in which they were purchased to six of the
Company's processing plants where they are slaughtered and
processed into various pork sausage products. These products, in
turn, are shipped daily from the plant facilities for
distribution to the Company's customers. The Company has
experienced no difficulty in procuring live hogs for its pork
sausage products and anticipates no future difficulty in that
regard.
All of the Company's prepared salad products are produced at the
Company's plant in Lynchburg, Virginia. Food items used in the
manufacture of the Company's salad products include potatoes,
cheese, eggs, macaroni and other pastas, fresh vegetables,
chicken, tuna and salad dressings. These items are purchased by
the Company directly from various suppliers. The Company
believes that there are a number of suppliers of the items used
in its salad products and that its sources of supply of these
items are adequate for its needs.
The Hickory Specialties charcoal products are produced at the
Company's plant in Crossville, Tennessee, and the Hickory
Specialties liquid smoke flavoring products are produced at the
Company's plants in Crossville, Tennessee; Greenville, Missouri;
and Summer Shade, Kentucky. The principal raw materials used by
the Company in the manufacture of the Hickory Specialties
products are sawdust and other related wood by-products. All are
available from a wide range of suppliers. The Company has
experienced no difficulty in obtaining raw materials for its
Hickory Specialties products and anticipates no future difficulty
in that regard.
Distribution Methods
The Company principally uses the direct store delivery system
(i.e., the Company's products are not warehoused, but are
delivered to grocery stores as described below) for the retail
distribution of the sausage, biscuit, and other products bearing
the Bob Evans Farms brand name, including Bob Evans Harvest
Salads. One hundred five driver-salesmen, employed by the
Company and driving Company-owned refrigerated trucks, deliver
the Company's products directly to more than 9,000 supermarkets
and independent retail groceries. The marketing territory for Bob
Evans Farms brand products as well as the Bob Evans Harvest
Salads includes Ohio, Michigan, Indiana, Illinois, Delaware and
the District of Columbia, as well as portions of Alabama, Iowa,
Kentucky, West Virginia, Pennsylvania, New Jersey, Maryland,
Virginia, New York, Tennessee, Missouri and Georgia. During the
1995 fiscal year, the Company tested an alternate distribution
method for its sausage products, and as a result, Bob Evans Farms
brand products are available through a distributor in the Greater
New York City area on a limited basis.
Products distributed under the Owens Country Sausage brand name
are distributed to retail customers in two ways:
(1) Company-owned transport trucks deliver directly to most
major supermarket chain warehouse distribution centers in
the Owens marketing area. Thereafter, the products are
shipped to individual retail outlets.
(2) Thirty-one driver-salesmen, driving Company-owned
refrigerated trucks, deliver products directly to
supermarkets and independent retail groceries.
Owens' marketing territory includes Texas, Arkansas, Oklahoma,
New Mexico, Louisiana, Arizona and portions of Mississippi and
Kansas. During the 1995 fiscal year, the Company expanded the
Owens' marketing territory to include Colorado and parts of
Nevada. Owens Country Sausage products are available in more
than 6,000 supermarkets and independent retail groceries.
Mrs. Giles salad products are distributed to more than 3,500
supermarkets and independent groceries in three ways: (1)
through direct store delivery by Company employees to customers
within the Bob Evans Farms marketing territory; (2) through food
brokers and distributors; and (3) through direct shipment to
customers. The marketing territory for Mrs. Giles salad products
includes Alabama, Florida, Georgia, Kentucky, Louisiana,
Maryland, North Carolina, Pennsylvania, South Carolina,
Tennessee, Texas and Virginia.
Hickory Specialties charcoal products are distributed nationwide
to retail customers, and its liquid smoke flavoring products are
distributed nationally and internationally to food products
manufacturers and pet food manufacturers, through brokers and
distributors and through direct shipment to customers.
Inventory Levels
All of the Company's sausage products and salad products are
highly perishable in nature and require proper refrigeration.
Shelf life of the sausage products ranges from 18 to 45 days; of
the Bob Evans Harvest Salads from 21 to 28 days; and of the Mrs.
Giles salad products from 15 to 45 days. Due to the highly
perishable nature and short shelf life of the Company's sausage
products, the Company's processing plants normally process only
enough product to fill existing orders. Due to the highly
perishable nature and short shelf life of the Company's salad
products, the Company's Lynchburg plant normally processes only
enough product to fill existing orders. Therefore, the Company
maintains minimal inventory levels of sausage products and of
salad products, because such products are generally manufactured
only to meet existing demand and are delivered to retail outlets
within a two- or three-day period after manufacture.
Hickory Specialties products are not perishable in nature.
Although such products are manufactured throughout the year, the
greatest amount of production of charcoal briquettes occurs in
the winter months in anticipation of the peak selling season for
charcoal from April through September.
Trademarks and Service Marks
The Company maintains various trademarks and service marks that
identify various Bob Evans Farms, Owens Country Sausage, Mrs.
Giles and Hickory Specialties products. The principal trademarks
used to identify the Mrs. Giles salad products are Mrs. Giles and
Mrs. Kinser's. The principal trademarks used to identify the
Hickory Specialties charcoal products are Old Hickory, Nature-
Glo, Jack Daniels, Wildfire, and Woodstone, and the principal
trademark used to identify the Hickory Specialties liquid smoke
flavoring products is ZestiSmoke. These trademarks and service
marks are renewed periodically and the Company believes that such
trademarks and service marks adequately protect the brand names
of the Company. The operations of the food products segment of
the Company are not dependent upon any patents, licenses,
franchises or concessions.
Competition and Seasonality
The sausage business is highly competitive. It is also seasonal
to the extent that more pounds of fresh sausage are typically
sold during the colder winter months from October through April.
The Company is currently promoting products for summer outdoor
grilling in an attempt to create more volume during the summer
months. The Company competes primarily on the basis of the price
and quality of its sausage products. The Company is in direct
competition with a large number and variety of producers and
wholesalers of similar products, including companies active both
locally and nationally, companies engaged in a general meat
packing business and companies in the same specialized field.
Many of such competitors have substantially greater financial
resources and higher volumes of total sales than the Company.
While the Company does not possess statistics which would enable
it to make an accurate statement of its percentage of total sales
of sausage in each of its market areas, the Company believes that
sales of its products constitute a significant portion of sales
of sausage of comparable price and quality in the majority of its
market areas.
The salad products business is highly competitive. It is also
seasonal to the extent that more salad products are typically
sold during the warmer spring and summer months from April
through September. The Company competes primarily on the basis
of the price and quality of its salad products. The Company is
in direct competition with a large number and variety of
producers and wholesalers of similar products, including
companies active both locally and nationally, companies engaged
in a general deli business and companies in the same specialized
field. Many of such competitors have substantially greater
financial resources and higher volumes of total sales than the
Company. While the Company does not possess statistics which
would enable it to make an accurate statement of its percentage
of total sales of salad products in each of its market areas, the
Company believes that sales of its products constitute a small
portion of sales of salad products of comparable price and
quality in the majority of its market areas.
The charcoal business is highly competitive. The charcoal
business is also seasonal to the extent that more charcoal
products are typically sold during the warmer spring and summer
months from April through September. The Company competes
primarily on the basis of the price and quality of its charcoal
products. The Company is in direct competition with a large
number and variety of producers and wholesalers of similar
products, including companies active both locally and nationally.
Many of such competitors have substantially greater financial
resources and higher volumes of total sales than the Company.
While the Company does not possess statistics which would enable
it to make an accurate statement of its percentage of total sales
of charcoal products in each of its market areas, the Company
believes that the sales of its products constitute a small
portion of sales of charcoal products of comparable price and
quality in the majority of its market areas.
The Company is aware of only one major competitor, Red Arrow
Products Co., Inc., in its liquid smoke flavoring business. The
Company believes that it produces approximately 70% of the liquid
smoke flavorings produced and sold in the United States and that
this competitor accounts for approximately 30% of the liquid
smoke flavorings produced and sold in the United States.
Advertising
During the 1995 fiscal year, the Company spent approximately
$9,859,000 for advertising of its sausage and salad products, and
approximately $1,426,000 for advertising of its charcoal and
liquid smoke flavoring products. Approximately 80% of this
amount was spent on television, radio and newspaper media. The
remaining 20% was spent for various promotional programs
throughout the year in an attempt to maintain and gain market
share for its products.
Dependence on a Single Customer
The Company's food products are sold through more than 15,000
retail grocery stores and are available through such stores to
approximately 50% of the population of the continental United
States. The Company's charcoal products are sold nationwide and
its liquid smoke flavoring products are sold nationally and
internationally. The Company is not dependent upon a single
customer or group of affiliated customers.
Sales on Credit; Aged Product
The Company typically allows seven to 30 day terms on the sales
of its salad and sausage products, and up to sixty days on its
charcoal products. The Company has not experienced any material
bad debt problems, nor has the return of aged product had a
material effect on the Company.
Sources and Availability of Raw Materials
The Company is dependent upon the availability of live hogs to
produce its pork sausage and ham products. However, the Company
has never experienced shortages in the number of hogs available
at prevailing market prices. The live hog market is highly
cyclical (both in terms of the number of hogs available and the
price therefor) and is dependent upon corn production, since corn
is the major food supply for hogs.
Food items used in the manufacture of the Company's salad
products include potatoes, cheese, eggs, macaroni and other
pastas, fresh vegetables, chicken, tuna fish and salad dressings.
These items are purchased by the Company directly from various
suppliers. The Company believes that there are a number of
suppliers of the items used in its salad products and that its
sources of supply of these items are adequate for its needs.
The principal raw materials used by the Company in the
manufacture of the Hickory Specialties products are sawdust and
other related wood by-products. All are available from a wide
range of suppliers. The Company has experienced no difficulty in
obtaining raw materials for the Hickory Specialties products and
anticipates no future difficulty.
Expansion of Distribution Area
New markets opened for the Company's sausage products during the
1995 fiscal year included the Greater New York City area for Bob
Evans Farms products and in Colorado and parts of Nevada for
Owens Country Sausage products. During fiscal year 1996, the
Company plans to test market Bob Evans Farms Sausage products in
parts of Wisconsin, as well as introduce a line of frozen
products in the Ohio marketing territories.
The Company has no current plans for further geographic expansion
of its distribution area for the Mrs. Giles salad products or the
charcoal and liquid smoke flavoring products produced by Hickory
Specialties in the 1996 fiscal year.
Profit Margins Related to Sausage Production
The Company's profit margins for the portion of the Company's
business relating to sausage production are normally more
favorable during periods of lower live hog costs. During the
1995 fiscal year, the Company experienced lower live hog costs
than in the previous year, and as a result, pre-tax margins
increased. The Company expects live hog costs to remain
relatively stable over the next 12 months.
Restaurant Segment Operations
General
At April 28, 1995, the Company owned and operated 340 family
restaurants in Ohio (125), Florida (28), Indiana (40), Michigan
(30), Illinois (13), Pennsylvania (22), Kentucky (11), West
Virginia (15), Missouri (10), Tennessee (4), Texas (13), Maryland
(6), Virginia (10), New York (8), South Carolina (1), Iowa (1),
New Jersey (1) and Delaware (2). All of the family restaurants
are operated as Bob Evans Restaurants, with the exception of the
13 located in Texas, which are operated as Owens Family
Restaurants, and eight Bob Evans Restaurant & General Stores,
which feature a combined restaurant and gift shop concept. There
is one Bob Evans Restaurant & General Store located in each of
the following states: Ohio, Pennsylvania, South Carolina,
Tennessee, Virginia, West Virginia, Florida and Missouri. During
the Company's 1995 fiscal year, 37 additional Bob Evans
Restaurants were opened. Of the 37 new restaurants opened,
twenty-five restaurants were the smaller version of the
traditional Bob Evans Restaurants known as "small-town" Bob Evans
Restaurants, designed to efficiently serve communities with
smaller population bases. The "small-town" restaurants serve the
regular Bob Evans menu and have seating for approximately 96
versus 200 in the newer Bob Evans Restaurants. As of April 28,
1995, the Company had a total of thirty-four "small-town"
restaurants located in Ohio (20), Indiana (12), New York (1), and
Delaware (1).
On May 2, 1994, four Bob Evans Restaurants were closed. Three of
these restaurants, located in Tampa, Florida; Morrow, Georgia;
and Chattanooga, Tennessee, were not meeting profit expectations.
The fourth restaurant, located in Sterling Heights, Michigan, was
acquired by the state government by eminent domain in order to
make room for a new highway. On August 15, 1994, a Bob Evans
Restaurant in Mattson, Illinois, was closed because of building
safety problems.
The Company has typically opened restaurants in areas where a
strong consumer awareness and acceptance for its sausage products
has been established over the years. It has deviated from this
practice only in Florida and South Carolina, where the Company
has 28 restaurants and one restaurant, respectively, but does not
have sausage distribution.
All of the Company's family restaurants feature a wide variety of
menu offerings designed to appeal to its customers. Breakfast
entree items are featured and served all day. The restaurants
are typically open from 6 a.m. until 10 p.m. Sunday through
Thursday, with extended closing hours on Friday and Saturday for
certain locations. Approximately 60% of total revenues from
restaurant operations are generated from 6 a.m. to 4 p.m., with
the balance generated from 4 p.m. to closing. Sales on Friday,
Saturday and Sunday account for approximately 55% of a typical
week's revenues.
During the 1995 fiscal year, the Company opened seven additional
Cantina del Rio restaurants, bringing the total opened to
fourteen. These restaurants are located in Ohio (7), Indiana
(2), and one each in Minnesota, Florida, Virginia, Illinois and
Michigan. These restaurants feature authentic southwestern foods
served in a Mexican atmosphere and are open from 11 a.m. until 10
p.m. Sunday through Thursday, and from 11 a.m. until 12:30 a.m.
on Friday and Saturday.
Restaurants are supplied with food and inventory items (other
than sausage products, related meat items and certain salad
products) by three independent food distributors twice a week.
Sausage products, other related meat items and certain salad
products are supplied by the Company to each restaurant by the
Company's driver-salesmen, with the exception of the restaurants
located in Florida and South Carolina, which are supplied by
independent food distributors.
Seasonality
Revenues from restaurant operations as a percentage of total
revenues have been virtually the same, quarter by quarter, during
the last two fiscal years. However, certain locations, which are
near major interstate highways, experience increased revenues
during the summer tourist season. In addition, weather
conditions occasionally affect revenues to a small extent during
the winter months.
Competition
The restaurant segment is engaged in an intensely competitive
business. The Company's restaurants compete directly with both
local and national family restaurant and fast-food chains, as
well as with individual restaurant operators, for favorable sites
for expansion, as well as for customer acceptance. Sales of the
restaurant segment are not a significant factor in the overall
restaurant business in the Company's market areas.
Sources and Availability of Raw Materials
Menu mix in the restaurant segment is varied enough that raw
materials have been readily available; however, some food
products may be in short supply during certain seasons and raw
material prices often fluctuate according to availability. The
restaurant segment experienced a slight decrease in food costs
during the Company's 1995 fiscal year, and the Company does not
expect food costs to fluctuate to any significant degree during
its 1996 fiscal year.
Advertising
The Company spent approximately $21,551,000 in the restaurant
segment for advertising during its 1995 fiscal year. Eighty
percent of these advertising dollars was spent on television
media, with the remainder being spent for radio and newspaper
advertising. In addition to the "Five Under $5 Program" offered
Monday through Friday, the Company features Breakfast Breaks, a
variety of morning meals priced at $2.99 or less. These items
are designed to increase weekday breakfast business. The Company
has typically not used coupons, except in certain markets where
it is attempting to gain market share.
Carryout Business
Carryout business in the Company's restaurants presently accounts
for only 2% to 3% of the total revenues generated in the
restaurant segment. The Company's restaurants do not have a
drive-through or pick-up window for carryout business.
Research and Development
The Company is continuously testing new food items in its search
for new and improved menu offerings to appeal to its customer
base and to satisfy changing eating trends. In September, 1994,
the Company featured "Fall Favorites," which included items such
as beef tips and noodles, stuffed pork chops, country Dijon
chicken, apple berry topping for hotcakes, chocolate silk pie and
apple cobbler, and ran through January 1995. In March, 1995, the
Company introduced a "Five Under $5" program which included
chicken-n-noodles, spaghetti, Italian sausage, border scramble,
and chicken tenders, and the program ran through May 1995.
Research and development expenses, to date, have not been
material.
Restaurant Expansion
The Company plans to build and open approximately 40 new
restaurants during the 1996 fiscal year, including 14 Bob Evans
and Owens Family Restaurants, twenty-five of the "small-town" Bob
Evans Restaurants and one Cantina del Rio restaurant. Future
restaurant expansion will depend on the availability of sites, as
well as restaurant industry trends. The Company believes,
however, that it can continue with its planned expansion and is
actively seeking quality restaurant sites, not only in its
present market area, but in new market areas as well.
Trademarks, Service Marks and Licenses
The Company maintains various trademarks and service marks in
connection with its family restaurant operations. These
trademarks and service marks are renewed periodically and the
Company believes that such trademarks and service marks
adequately protect the various products and services to which
they relate. The Cantina del Rio Mexican style restaurants
require liquor licenses, since this casual theme dining concept
has a full service bar. The operations of the restaurant segment
of the Company are not dependent upon any patents, franchises or
concessions.
Employees
The Company had in its employment approximately 1,500 persons in
the food products segment and 26,800 persons in the restaurant
segment as of April 28, 1995.
Compliance with Environmental Protection Requirements
The Company does not anticipate that compliance with federal,
state and local provisions which have been enacted or adopted
regulating the discharge of materials into the environment, or
otherwise relating to the protection of the environment, will
have a material effect upon the capital expenditures, earnings or
the competitive position of the Company.
Sales, Operating Profit and Identifiable Assets
The following table sets forth for each of the Company's last
three fiscal years the amounts of revenue from intersegment sales
of its food products and the amounts of revenue from sales to
unaffiliated customers, operating profit and identifiable assets
attributable to each of the Company's industry segments:
FISCAL YEAR ENDED
April 28, April 29, April 30,
1995 1994 1993
Sales:
Intersegment Sales of
Food Products: $ 31,277,000 $ 30,902,000 $ 30,796,000
Food Products
(excluding
intersegment sales): 216,759,000 203,909,000 195,780,000
Restaurant Operations: 550,209,000 495,129,000 457,396,000
Operating Profit:
Food Products: 26,726,000 19,580,000 17,219,000
Restaurant Operations: 60,135,000 56,910,000 51,248,000
Identifiable Assets:
Food Products: 94,494,000 90,502,000 83,687,000
Restaurant Operations: 383,569,000 317,739,000 272,681,000
Item 2. PROPERTIES.
The materially important properties of the Company, in addition
to those described below, consist of its executive offices
located at 3776 South High Street, Columbus, Ohio, a 937-acre
farm located in Rio Grande, Ohio, and a 30-acre farm located in
Richardson, Texas. The two farm locations serve as visitor
centers, are tourist attractions and are open to the general
public.
Food Products Segment
The food products segment has seven sausage manufacturing plants:
three in Ohio; two in Texas; and one each in Michigan and
Illinois; one prepared salads manufacturing plant in Virginia;
one charcoal manufacturing plant in Tennessee; and three
manufacturing plants producing liquid smoke flavoring products
(one in Missouri, one in Tennessee (which also produces charcoal
products) and one in Kentucky). All of these properties are
owned in fee by the Company. The Company owns regional sales
offices in Westland, Michigan, and in Houston, San Antonio,
Lubbuck and Tyler, Texas. In addition, various other locations
are rented by the Company throughout its marketing territory
which serve as regional and divisional sales offices.
Restaurant Segment
Of the 354 restaurants operated by the Company, 310 are owned in
fee and 44 are leased from unaffiliated persons. All lease
agreements contain either multiple renewal options or options to
purchase. Seven of these leased properties have terms that will
expire through May 1, 2000. With respect to these seven leases,
the Company has the following options: four leases contain four
five-year renewal options; one lease contains six five-year
renewal options; one lease has no renewal options remaining (the
Company intends to negotiate a new lease agreement); and one
lease has three five-year renewal options.
Item 3. LEGAL PROCEEDINGS.
Not applicable.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
Executive Officers of the Registrant
The following table sets forth the executive officers of the
Registrant and certain information with respect to each executive
officer. Unless otherwise indicated, each person has held his or
her principal occupation for more than five years. The executive
officers are appointed by and serve at the pleasure of the Board
of Directors.
Name, Age and Period of
Service as an Officer of the Principal Occupations for
Registrant; Positions and Past Five Years and Other
Offices with the Registrant Information
Daniel E. Evans, age 58; Chairman of the Board, Chief
Chairman of the Board, Chief Executive Officer and
Executive Officer, Secretary Secretary of the Registrant.
and a Director of the Mr. Evans is the first
Registrant; 39 years as an cousin of J. Tim Evans, a
officer of the Registrant. director of the Registrant.
Donald J. Radkoski, age 40, Group Vice President -
Group Vice President - Finance Group since January
Finance Group, Treasurer, and 1994, Treasurer and Chief
Chief Financial Officer; Financial Officer since May
seven years as an officer of 1993, Senior Vice President
the Registrant. from May 1993 to December
1993, Vice President of
Finance and Assistant
Treasurer from 1989 to May
1993, and Assistant
Treasurer from 1988 to 1989,
of the Registrant.
Stewart K. Owens, age 40; Executive Vice President and
Executive Vice President, Chief Operating Officer
Chief Operating Officer and a since January 1994 and Group
Director of the Registrant; Vice President - Food
five years as an officer of Products Group from 1990 to
the Registrant. December 1993, of the
Registrant. President and
Chief Operating Officer of
Owens Country Sausage, Inc.,
a subsidiary of the
Registrant, since 1984.
Larry C. Corbin, age 53; Senior Group Vice President
Senior Group Vice President - - Restaurant Operations
Restaurant Operations Group Group since January 1994,
and a Director of the Group Vice President -
Registrant; 27 years as an Business Development from
officer of the Registrant. 1990 to December 1993,
Executive Vice President,
Operations and Development,
Restaurant Division, from
1988 to 1990, Senior Vice
President, Operations and
Development, Restaurant
Division, from 1987 to 1988,
and Senior Vice President,
Operations, Restaurant
Division, from 1974 to 1987,
of the Registrant.
Roger D. Williams, age 44; Senior Group Vice President
Senior Group Vice President - - Food Products/Marketing/
Food Products/Marketing/ Purchasing/Technical
Purchasing/Technical Services since
Services; 16 years as an January 1994, Group Vice
officer of the Registrant. President - Marketing &
Purchasing/ Technical
Services from 1990 to
December 1993, Senior Vice
President, Director of
Marketing, Restaurant
Division, from 1988 to 1990,
and Vice President, Director
of Marketing, Restaurant
Division, from 1980 to 1988,
of the Registrant.
Howard J. Berrey, age 53; Group Vice President - Real
Group Vice President - Real Estate/ Construction &
Estate/Construction & Engineering Group since
Engineering Group; 16 years 1990, Senior Vice President,
as an officer of the Director of Real Estate,
Registrant. Restaurant Division, from
1988 to 1990, and Vice
President, Director of Real
Estate, Restaurant Division,
from 1978 to 1988, of the
Registrant.
James B. Radebaugh, age 47; Group Vice President -
Group Vice President - Administration & Human
Administration & Human Resources Group since
Resources Group of the January 1994, Group Vice
Registrant; five years as an President - Corporate
officer of the Registrant. Development from August 1990
to December 1993, and Vice
President from April 1990
to August 1990, of the
Registrant.
Joseph B. Crace, age 40; Group Vice President-
Group Vice President - Specialty Products &
Specialty Products & Business Business Development Group
Development Group of the since January 1994, and Vice
Registrant; three years as an President from April 1992
officer of the Registrant. to December 1993, of the
Registrant. President since
1989, and Vice President
from 1978 to 1986, of
Hickory Specialties, Inc.,
a subsidiary of the
Registrant.
Mary L. Cusick, age 39; Vice Vice President - Corporate
President - Corporate Communications since 1990,
Communications since 1990; Director of Corporate
five years as an officer of Communications from 1981 to
the Registrant. 1990, and assistant director
of public relations since
1978, of the Registrant.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.
In accordance with General Instruction G(2), the information
contained under the subcaption "Stock Price Ranges and
Dividends," at page 10 of Registrant's Annual Report to
Stockholders for the fiscal year ended April 28, 1995, is
incorporated herein by reference.
Item 6. SELECTED FINANCIAL DATA.
In accordance with General Instruction G(2), the information for
the years 1986 through 1995 contained under the subcaption
"Comparative Highlights for Ten Years," at page 10 of the
Registrant's Annual Report to Stockholders for the fiscal year
ended April 28, 1995, is incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION.
In accordance with General Instruction G(2), the information
contained under the caption "Management's Discussion and Analysis
of Selected Financial Information," at pages 20 and 21 of the
Registrant's Annual Report to Stockholders for the fiscal year
ended April 28, 1995, is incorporated herein by reference.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements included on pages 12 through 19 and the
Auditor's report thereon included on Page 22 of the Registrant's
Annual Report to Stockholders for the fiscal year ended April 28,
1995, are incorporated herein by reference.
The "Quarterly Financial Data" included in Note G of the Notes to
Consolidated Financial Statements on page 18 of the Registrant's
Annual Report to Stockholders for the fiscal year ended April 28,
1995, is also incorporated herein by reference.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
Not applicable.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
In accordance with General Instruction G(3), the information
contained under the caption "ELECTION OF DIRECTORS" in the
Registrant's definitive Proxy Statement dated July 3, 1995, filed
with the Securities and Exchange Commission pursuant to
Regulation 14A promulgated under the Securities Exchange Act of
1934, is incorporated herein by reference. The information
regarding executive officers required by Item 401 of Regulation S-
K is included in Part I hereof under the caption "Executive
Officers of the Registrant." The Registrant is not required to
make any disclosure pursuant to Item 405 of Regulation S-K.
Item 11. EXECUTIVE COMPENSATION.
In accordance with General Instruction G(3), the information
contained under the captions "COMPENSATION OF EXECUTIVE OFFICERS
AND DIRECTORS" and "COMPENSATION COMMITTEE, STOCK OPTION
COMMITTEE AND COMPENSATION/STOCK OPTION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION" in the Registrant's Proxy Statement dated
July 3, 1995, filed with the Securities and Exchange Commission
pursuant to Regulation 14A promulgated under the Securities
Exchange Act of 1934, is incorporated herein by reference.
Neither the report of the Compensation Committee, the Stock
Option Committee, and the Compensation/Stock Option Committee of
the Registrant's Board of Directors on executive compensation nor
the performance graph included in the Registrant's Proxy
Statement dated July 3, 1995, shall be deemed to be incorporated
herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
In accordance with General Instruction G(3), the information
contained under the caption "VOTING SECURITIES AND PRINCIPAL
HOLDERS THEREOF" in the Registrant's definitive Proxy Statement
dated July 3, 1995, filed with the Securities and Exchange
Commission pursuant to Regulation 14A promulgated under the
Securities Exchange Act of 1934, is incorporated herein by
reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
In accordance with General Instruction G(3), the information
contained under the caption "ELECTION OF DIRECTORS" in the
Registrant's definitive Proxy Statement dated July 3, 1995, filed
with the Securities and Exchange Commission pursuant to
Regulation 14A promulgated under the Securities Exchange Act of
1934, is incorporated herein by reference.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K.
(a) Documents Filed as Part of this Report
1 & 2 Financial Statements and Financial Statement Schedules:
The response to this portion of Item 14 is
submitted as a separate section of this report.
3 Exhibits:
Exhibits filed with this Annual Report on Form 10-K are
attached hereto. For a list of such exhibits, see "Index to
Exhibits" at page 54. The following table provides certain
information concerning executive compensation plans and
arrangements required to be filed as exhibits to this Annual
Report on Form 10-K.
Executive Compensation Plans and Arrangements
Exhibit No. Description Location
10(a) Restated Bob Evans Farms, Page 58
Inc. and Affiliates 401K
Retirement Plan
(effective January 1,
1994, except as otherwise
provided
10(b) Bob Evans Farms, Inc. and Incorporated herein
Affiliates 401K by reference to
Retirement Plan Summary Plan Exhibit 4(e) to the
Description Registrant's Pre-
Effective Amendment
No. 1 to Form S-8
Registration State-
ment, filed
April 27, 1990
(Registration No.
33-34149)
10(c) Bob Evans Farms, Inc. and Incorporated herein
Affiliates 401K by reference to
Retirement Plan Trust Exhibit 4(f) to the
(effective May 1, 1990) Registrant's Pre-
Effective Amendment
No. 1 to Form S-8
Registration State-
ment, filed
April 27, 1990
(Registration No.
33-34149)
10(d) Bob Evans Farms, Inc. Incorporated herein
1985 Incentive Stock by reference to
Option Plan Exhibit 4(c) to the
Registrant's Regis-
tration Statement
on Form S-8, filed
September 12, 1985
(Registration No.
33-242)
10(e) Bob Evans Farms, Inc. Incorporated herein
1987 Incentive Stock by reference to
Option Plan Exhibit 4(a) to the
Registrant's Regis-
tration Statement
on Form S-8, filed
October 19, 1987
(Registration No.
33-17978)
10(f) Agreement, dated Incorporated
February 24, 1989, herein
between Daniel E. Evans by reference
and Bob Evans Farms, to Exhibit 10(g)
Inc.; and Schedule A to to the
Exhibit 10(h) Registrant's
identifying other Annual
substantially identical Report on Form
Agreements between 10-K
Bob Evans Farms, for the fiscal
Inc. and certain of the year
executive officers of Bob ended April 28,
Evans Farms, Inc. 1989
(File No. 0-1667);
and to Exhibit
10(h)
to the
Registrant's
Annual Report on
Form 10-K for the
fiscal year ended
April 29, 1994
(File No. 0-1667)
10(g) Bob Evans Farms, Inc. Incorporated
1989 Stock Option Plan herein
for Nonemployee by reference to
Directors Exhibit 4(d)
to the
Registrant's Regis-
tration Statement on
Form S-8, filed
August 23, 1989
(Registration No.
33-30665)
10(h) Bob Evans Farms, Inc. Incorporated
1991 Incentive Stock herein
Option Plan by reference to
Exhibit 4(d) to
the Registrant's Regis-
tration Statement
on Form S-8, filed
September 13, 1991
(Registration No.
33-42778)
10(i) Bob Evans Farms, Inc. Incorporated
Supplemental Executive herein
Retirement Plan by reference to
Exhibit 10(i)
to the
Registrant's
Annual
Report on Form
10-K
for the fiscal
year
ended April 24,
1992
(File No. 0-1667)
10(j) Bob Evans Farms, Inc. Incorporated
Nonqualified Stock Option herein
Plan by reference to
Exhibit 10(j) to
the Registrant's
Annual
Report on Form
10-K
for the fiscal
year
ended April 24,
1992
(File No. 0-1667)
10(k) Bob Evans Farms, Inc. Incorporated
Long Term Incentive Plan herein by
for Managers reference to
Exhibit 10(k) to
the Registrant's
Annual Report on
Form 10-K for the
fiscal year ended
April 30, 1993
(File No. 0-1667)
10(l) Bob Evans Farms, Inc. Incorporated
1994 Long Term Incentive herein by
Plan reference to
Exhibit 10(n)
to the
Registrant's
Annual
Report on Form
10-K for
the fiscal year
ended
April 29, 1994
(File No. 0-1667)
(b) Reports on Form 8-K
There were no Current Reports on Form 8-K filed during the
fiscal quarter ended April 28, 1995.
(c) Exhibits
See Item 14(a) (3) above.
(d) Financial Statement Schedules
The response to this portion of Item 14 is submitted as a
separate section of this Report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Bob Evans Farms, Inc.
July 21, 1995 By: /s/Donald J. Radkoski
Donald J. Radkoski
Group Vice President-Finance Group
and Treasurer (Chief
Financial Officer & Chief
Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the Registrant and in the capacities and on the
dates indicated.
Signature Title Date
Chairman of the Board, July 21, 1995
/s/ Daniel E. Evans Chief Executive
Daniel E. Evans Officer and Secretary
Director July 21, 1995
/s/ Larry C. Corbin
Larry C. Corbin
Director July 21, 1995
/s/ J. Tim Evans
J. Tim Evans
Director July 21, 1995
/s/ Daniel A. Fronk
Daniel A. Fronk
Director July 21, 1995
/s/ Cheryl L. Krueger
Cheryl L. Krueger
Director July 21, 1995
/s/ G. Robert Lucas II
G. Robert Lucas II
Director July 21, 1995
/s/ Stewart K. Owens
Stewart K. Owens
Director July 21, 1995
/s/ Robert E. H. Rabold
Robert E. H. Rabold
Director July 21, 1995
/s/ Robert S. Wood
Robert S. Wood
Group Vice President- July 21, 1995
/s/ Donald J. Radkoski Finance Group and Treasurer
Donald J. Radkoski (Chief Financial Officer
& Chief Accounting Officer)
**************************
ANNUAL REPORT ON FORM 10-K
ITEM 14(a)(1) and (2) and ITEM 14(d)
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
FINANCIAL STATEMENT SCHEDULES
FISCAL YEAR ENDED APRIL 28, 1995
BOB EVANS FARMS, INC.
COLUMBUS, OHIO
FORM 10-K -- ITEMS 14(a)(1) and (2) and 14(d)
BOB EVANS FARMS, INC.
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements of Bob
Evans Farms, Inc. and subsidiaries, included in the Annual Report
of the Registrant to its stockholders for the fiscal year ended
April 28, 1995, are incorporated by reference in Item 8.
Balance Sheets -- April 28, 1995 and April 29, 1994
Statements of Income -- Years ended April 28, 1995,
April 29, 1994 and April 30, 1993
Statements of Stockholders' Equity -- Years
ended April 28, 1995, April 29, 1994 and April 30, 1993
Statements of Cash Flows -- Years ended April 28, 1995,
April 29, 1994 and April 30, 1993
Notes to Financial Statements -- April 28, 1995
All schedules for which provision is made in the
applicable accounting regulation of the Securities and Exchange
Commission are not required under the related instructions or are
inapplicable and, therefore, have been omitted.
Consolidated Financial Review
Bob Evans Farms, Inc. and Subsidiaries
Comparative Highlights for Ten Years
Income
Income Per Share Cash
Before Before Dividends
Long-Term Income Before Income Extraordinary Extraordinary Per
Year Total Assets Debt Net Sales Income Taxes Taxes Gain Gain Share
1995 $488,101,000 $2,250,000 $766,968,000 $86,869,000 $33,359,000 $53,510,000 $1.27 $.29
1994 413,875,000 - 699,038,000 76,514,000 28,332,000 48,182,000 1.15 .27
1993 363,075,000 - 653,176,000 68,540,000 25,478,000 43,062,000 1.03 .25
1992 325,538,000 1,200,000 556,304,000 62,409,000 23,080,000 39,329,000 .94 .21
1991 287,254,000 1,600,000 501,305,000 53,882,000 20,247,000 33,635,000 .81 .20
1990 260,643,000 2,000,000 454,339,000 44,046,000 16,301,000 27,745,000 .65 .19
1989 244,198,000 2,400,000 419,529,000 48,754,000 18,091,000 30,663,000 .71 .17
1988 219,448,000 2,800,000 395,061,000 48,343,000 19,014,000 29,329,000 .68 .17
1987 193,098,000 3,200,000 327,160,000 41,226,000 19,756,000 21,470,000 .52 .15
1986 149,493,000 - 262,682,000 36,608,000 16,033,000 20,575,000 .50 .12
Stock Price Ranges and Dividends
The common stock of the company is traded on the NASDAQ National
Market System and is identified by the symbol BOBE. The approximate
number of record holders of the company's common stock at May 26,
1995, was 29,479. The high and low closing bid quotations for the
company's common stock, as reported on NASDAQ, and cash dividends paid
thereon for each fiscal quarter (13 weeks) of the company's past two
fiscal years have been as follows:
Cash
Dividends
Fiscal Year High Low Per Share
1995
1st Quarter $22 $20 3/8 $.0725
2nd Quarter 21 5/8 19 5/8 .0725
3rd Quarter 22 3/16 19 1/2 .0725
4th Quarter 21 1/2 19 7/8 .0725
1994
1st Quarter $19 $16 7/8 $.0675
2nd Quarter 19 1/8 17 7/8 .0675
3rd Quarter 22 1/2 18 1/2 .0675
4th Quarter 23 1/4 19 7/8 .0675
Consolidated Balance Sheets
Bob Evans Farms, Inc. and Subsidiaries
Assets April 28, 1995 April 29, 1994
Current Assets
Cash and equivalents $ 10,451,000 $ 8,098,000
Trade accounts receivable 15,570,000 15,445,000
Inventories 17,256,000 15,799,000
Deferred income taxes 6,162,000 4,585,000
Prepaid expenses 2,936,000 3,514,000
Total Current Assets 52,375,000 47,441,000
Property, Plant and Equipment, at cost
Buildings 288,260,000 240,394,000
Machinery and equipment 146,255,000 124,759,000
Other 19,572,000 17,556,000
454,087,000 382,709,000
Less accumulated depreciation 177,542,000 160,061,000
276,545,000 222,648,000
Land 133,135,000 116,225,000
Construction in progress 7,168,000 10,897,000
Net Property, Plant and Equipment 416,848,000 349,770,000
Other Assets
Deposits and other 2,243,000 2,002,000
Long-term investments 2,303,000 -
Deferred income taxes 1,573,000 1,049,000
Cost in excess of net assets acquired 11,016,000 11,555,000
Other intangible assets 1,743,000 2,058,000
Total Other Assets 18,878,000 16,664,000
$488,101,000 $413,875,000
Liabilities and Stockholders' Equity
Current Liabilities
Line of credit $ 25,600,000 $ 9,500,000
Accounts payable 7,325,000 1,532,000
Dividends payable 3,068,000 2,839,000
Federal and state income taxes 4,633,000 6,231,000
Accrued wages and related liabilities 13,691,000 10,546,000
Other accrued expenses 31,253,000 28,904,000
Total Current Liabilities 85,570,000 59,552,000
Long-Term Liabilities
Deferred income taxes 6,409,000 5,495,000
Notes payable (net of discount of
$600,000) 2,250,000 -
Total Long-Term Liabilities 8,659,000 5,495,000
Stockholders' Equity
Common stock, $.01 par value
Authorized 100,000,000 shares;
issued 42,638,118 shares
in 1995 and 1994 426,000 426,000
Capital in excess of par value 144,741,000 144,782,000
Retained earnings 252,961,000 211,294,000
398,128,000 356,502,000
Less treasury stock: 309,620 shares
in 1995 and 575,890 shares
in 1994, at cost 4,256,000 7,674,000
Total Stockholders' Equity 393,872,000 348,828,000
$488,101,000 $413,875,000
Consolidated Statements
of Income
Bob Evans Farms, Inc. and Subsidiaries
Years Ended April 28, 1995,
April 29, 1994, and April 30, 1993 1995 1994 1993
Net sales $766,968,000 $699,038,000 $653,176,000
Cost of sales 229,256,000 221,558,000 207,106,000
Operating wage and fringe
benefit expenses 225,280,000 201,606,000 189,150,000
Other operating expenses 101,703,000 91,287,000 84,106,000
Selling, general and administrative
expenses 98,048,000 85,015,000 83,594,000
Depreciation expense 25,820,000 23,082,000 20,753,000
Operating Profit 86,861,000 76,490,000 68,467,000
Net interest 8,000 24,000 73,000
Income Before Income Taxes 86,869,000 76,514,000 68,540,000
Provisions for income taxes
Federal 27,316,000 23,060,000 20,862,000
State 6,043,000 5,272,000 4,616,000
33,359,000 28,332,000 25,478,000
Net Income $ 53,510,000 $ 48,182,000 $43,062,000
Net income per share $1.27 $1.15 $1.03
Consolidated Statements
of Stockholders' Equity
Bob Evans Farms, Inc. and Subsidiaries
Years Ended April 28, 1995, April 29, 1994,
and April 30, 1993
Capital Total
Common Stock in Excess Retained Treasury Stockholders'
Shares Par Value of Par Value Earnings Stock Equity
Balances at 4/24/92 42,638,118 $426,000 $143,027,000 $141,277,000 $(10,583,000) $274,147,000
Net income 43,062,000 43,062,000
Dividends declared of
$.25 per share (10,367,000) (10,367,000)
Purchase of treasury
stock (535,000) (535,000)
Tax benefit from disqualified
disposition of stock
options exercised 197,000 197,000
Compensation expense
attributable to stock
options granted 1,382,000 1,382,000
Distribution of treasury
stock due to exercise
of stock options and
payment of employee
bonuses (70,000) 1,484,000 1,414,000
Balances at 4/30/93 42,638,118 426,000 144,339,000 174,169,000 (9,634,000) 309,300,000
Net income 48,182,000 48,182,000
Dividends declared of
$.27 per share (11,351,000) (11,351,000)
Purchase of treasury
stock (116,000) (116,000)
Tax benefit from disqualified
disposition of stock
options exercised 294,000 294,000
Compensation expense
attributable to stock
options granted 500,000 500,000
Distribution of treasury
stock due to exercise
of stock options and
payment of employee
bonuses (57,000) 2,076,000 2,019,000
Balances at 4/29/94 42,638,118 426,000 144,782,000 211,294,000 (7,674,000) 348,828,000
Net income 53,510,000 53,510,000
Dividends declared of
$.29 per share (12,245,000) (12,245,000)
Tax benefit from disqualified
disposition of stock
options exercised 402,000 402,000
Compensation expense
attributable to stock
options granted 706,000 706,000
Compensation expense
attributable to stock
awards (203,000) 525,000 322,000
Distribution of treasury
stock due to exercise
of stock options and
payment of employee
bonuses (544,000) 2,893,000 2,349,000
Balances at 4/28/95 42,638,118 $426,000 $144,741,000 $252,961,000 $(4,256,000) $393,872,000
See Notes to Consolidated Financial Statements
Consolidated Statements
of Cash Flows
Bob Evans Farms, Inc. and Subsidiaries
Years Ended April 28, 1995,
April 29, 1994, and April 30, 1993 1995 1994 1993
Operating Activities:
Net income $53,510,000 $48,182,000 $43,062,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 26,674,000 23,937,000 21,632,000
Deferred income taxes (1,187,000) (2,061,000) (3,471,000)
Loss (gain) on sale of property and
equipment (115,000) (85,000) 191,000
Compensation expense attributable
to stock plans 1,080,000 822,000 1,382,000
Cash provided by (used for) current
assets and current liabilities:
Accounts receivable (125,000) (2,900,000) 436,000
Inventories (1,457,000) (985,000) (73,000)
Prepaid expenses 578,000 (143,000) (179,000)
Accounts payable 5,793,000 2,670,000 (2,436,000)
Federal and state income taxes (1,196,000) (1,143,000) 505,000
Accrued wages and related liabilities 3,093,000 345,000 4,000
Other accrued expenses 2,349,000 838,000 4,330,000
Net cash provided by operating
activities 88,997,000 69,477,000 65,383,000
Investing Activities:
Investment in Greenriver Charcoal, Inc. - - (3,046,000)
Purchase of property, plant and equipment (94,766,000) (72,910,000) (52,115,000)
Net proceeds from sale of short-term
investments - 1,947,000 7,217,000
Purchase of long-term investments (2,303,000) - -
Proceeds from sale of property, plant
and equipment 1,983,000 909,000 513,000
Other (241,000) 161,000 (380,000)
Net cash used in investing
activities (95,327,000) (69,893,000) (47,811,000)
Financing Activities:
Cash dividends paid (12,016,000) (11,130,000) (10,049,000)
Purchase of treasury stock - (116,000) (535,000)
Draws on line of credit 16,100,000 9,500,000 -
Proceeds from issuance of note payable 2,250,000 - -
Payments on long-term debt - - (1,600,000)
Distribution of treasury stock
due to the exercise of stock
options and employee bonuses 2,349,000 2,019,000 1,414,000
Net cash provided by (used in)
financing activities 8,683,000 273,000 (10,770,000)
Increase (decrease) in cash and equivalents 2,353,000 (143,000) 6,802,000
Cash and equivalents at the beginning
of the year 8,098,000 8,241,000 1,439,000
Cash and equivalents at the end
of the year $ 10,451,000 $ 8,098,000 $ 8,241,000
See Notes to Consolidated Financial Statements
Notes to Consolidated
Financial Statements
Bob Evans Farms, Inc. and Subsidiaries April 28, 1995
Note A -- Summary of Significant Accounting Policies
Principles of Consolidation: The consolidated financial statements
include the accounts of the company and its wholly-owned subsidiaries.
Intercompany accounts and transactions have been eliminated.
Fiscal Year: The company's fiscal year ends on the last Friday in
April. References herein to 1995, 1994, and 1993 refer to fiscal
years ended April 28, 1995; April 29, 1994; and April 30, 1993,
respectively. Fiscal 1993 was comprised of 53 weeks as compared to
1995 and 1994, which were both 52-week periods.
Cash and Equivalents: Cash and equivalents includes cash on hand
and deposits at financial institutions with maturities of less than
three months.
Investments: The company records investments at cost, which
approximates market.
Inventories: The company values inventories at the lower of first-
in, first-out cost or market. Inventory is composed of raw materials
and supplies ($11,880,000 in 1995, $10,530,000 in 1994) and finished
goods ($5,376,000 in 1995, $5,269,000 in 1994).
Property, Plant and Equipment: The company calculates depreciation
on the straight-line and declining-balance methods at rates adequate
to amortize costs over the estimated useful lives of buildings (15 to
25 years), machinery and equipment (3 to 10 years), and other (5 to 25
years). The straight-line depreciation method was adopted for all
property placed in service on or after April 30, 1994. Depreciation
on property placed in service prior to April 30, 1994, continues to be
calculated principally on accelerated methods. The company believes
the new method will more accurately reflect its financial results by
better matching costs of new property over the useful lives of the
assets. In addition, the new method more closely conforms with that
prevalent in the industry. The effect of the change on net income per
share for the year ended April 28, 1995, was de minimis.
Cost in Excess of Net Assets Acquired: The cost in excess of net
assets acquired (goodwill) is being amortized over 25 years using the
straight-line method. The company uses the cash flow method to assess
the recoverability of goodwill. Accumulated amortization at April 28,
1995, and April 29, 1994, was $2,459,000 and $1,920,000, respectively.
Pre-opening Expenses: Expenditures related to the opening of new
restaurants, other than those for capital assets, are charged to
expense when incurred.
Cost of Sales: Cost of sales represents food cost in the
restaurant segment and cost of materials in the food products segment.
Net Income Per Share: The company calculates net income per share
based upon the weighted average number of common shares outstanding
during the year. Weighted average number of common shares outstanding
for 1995, 1994 and 1993, were 42,179,000; 42,006,000; and 41,872,000
respectively. Outstanding stock options do not have a material
dilutive effect.
Reclassifications: Certain 1994 and 1993 amounts have been
reclassified to conform with the 1995 classification.
Notes to Consolidated
Financial Statements
Bob Evans Farms, Inc. and Subsidiaries April 28, 1995
Note B -- Income Taxes
Deferred income taxes reflect the net tax effect of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax
purposes. Significant components of the company's deferred tax
liability and assets as of April 28, 1995, and April 29, 1994, are as
follows:
April 28, 1995 April 29, 1994
Deferred tax liability:
Accelerated depreciation $6,409,000 $5,495,000
Deferred tax assets:
Self-insurance 4,303,000 2,844,000
Other taxes 605,000 1,144,000
Vacation pay 913,000 680,000
Stock compensation plans 1,281,000 815,000
Accrued bonus 244,000 -
Inventory and other 389,000 151,000
Total deferred tax assets 7,735,000 5,634,000
Net deferred tax asset $(1,326,000) $ (139,000)
Significant components of the provisions for income taxes are as
follows:
1995 1994 1993
Current:
Federal $29,563,000 $25,438,000 $24,386,000
State 6,484,000 5,462,000 4,320,000
Total Current 36,047,000 30,900,000 28,706,000
Deferred:
Federal (2,247,000) (2,378,000) (3,524,000)
State (441,000) (190,000) 296,000
Total Deferred (2,688,000) (2,568,000) (3,228,000)
$33,359,000 $28,332,000 $25,478,000
Notes to Consolidated
Financial Statements
Bob Evans Farms, Inc. and Subsidiaries April 28, 1995
The company's provisions for income taxes differ from the amounts
computed by applying the federal statutory rate due to the following:
1995 1994 1993
Tax at statutory rate $30,404,000 $26,780,000 $23,304,000
State income tax (net) 3,928,000 3,427,000 3,047,000
Other (973,000) (1,875,000) (873,000)
Provisions for income taxes $33,359,000 $28,332,000 $25,478,000
Taxes paid during 1995; 1994 and 1993 were $36,647,000; $31,643,000
and $28,595,000, respectively.
Note C -- Credit Arrangements
The company has arrangements with certain banks from which it may
borrow up to $63,000,000 on a short-term basis. The arrangements are
reviewed annually for renewal. At April 28, 1995, $25,600,000 was
outstanding under these arrangements. During 1995 and 1994,
respectively, the maximum amounts outstanding under these arrangements
were $25,600,000 and $9,500,000 and the average amounts outstanding
were $10,857,000 and $1,506,000 with weighted average interest rates
of 5.95% and 5.15%.
Total interest expense of $569,000; $78,000, and $85,000 incurred
in 1995; 1994 and 1993, respectively, was capitalized in connection
with the company's restaurant construction activities.
Note D -- Stockholders' Equity
The company has employee stock option plans adopted in 1985; 1987;
1991 and 1994; a non-employee directors stock option plan adopted in
1989; and a nonqualified stock option plan adopted in 1992, in
conjunction with a supplemental executive retirement plan. The 1992
plan provides that the option price shall be not less than 50% of the
fair market value of the stock at the date of grant; all other plans
provide that the option price shall be the fair market value of the
stock at the grant date. Options may be granted for a period of up to
10 years under the 1985; 1987; 1991 and 1994 plans, and until all
available shares reserved have been issued or until the board
determines that the plan shall terminate under the 1989 and 1992 plans.
Except for the 1992 plan under which options become exercisable after a
certain waiting period, options granted under the plans become
exercisable at the rate of 20% per year beginning at the date of grant.
The 1994 plan also provides for the granting of performance share
awards in the form of common shares if certain performance objectives
are met. As of April 28, 1995, options for 1,447,010 shares were
outstanding, and options for 626,274 shares were exercisable at prices
ranging from $8.63 to $21.25 per share.
During 1995; 1994 and 1993, options of 226,749; 151,726 and 101,528
shares, respectively, were exercised at prices ranging from $8.63 to
$20.19 per share. At April 28, 1995, 3,137,687 shares were reserved
for issuance under the plans.
Notes to Consolidated
Financial Statements
Bob Evans Farms, Inc. and Subsidiaries April 28, 1995
The company's supplemental executive retirement plan (SERP) provides
retirement benefits to certain key management employees of the company
and its subsidiaries. The purpose of the 1992 nonqualified stock
option plan discussed earlier is to fund benefit obligations of the
company that arise under the SERP. To the extent that benefits under
the SERP are satisfied by grants of stock options under the
nonqualified plan, the plan will operate as an incentive plan that
produces both risk and reward to participants based on future growth in
the market value of the company's common stock. Since the company
intends to fund its obligations under the SERP on a current basis by
granting stock options under the nonqualified plan, the company
anticipates that no long-term unfunded pension obligations will arise
under the SERP. Compensation expense attributable to stock options
granted in 1995 and 1994 pursuant to the 1992 plan was $706,000 and
$500,000, respectively.
The company's long term incentive plan (LTIP) for managers, an
unfunded plan, provides for the award of up to an aggregate of 500,000
shares of the company's common stock to mid-level managers as incentive
compensation to attain growth in the net income of the company as well
as to help attract and retain management personnel. Shares awarded are
restricted until certain vesting requirements are met, at which time
all restricted shares are converted to unrestricted shares. LTIP
participants are entitled to cash dividends and to vote their
respective shares. Restrictions generally limit the sale, pledge or
transfer of the shares during a restricted period, not to exceed 12
years. In 1995, 40,286 shares were awarded as part of the LTIP.
Compensation expense attributable to the LTIP was $374,000 and $322,000
in 1995 and 1994, respectively.
Note E -- Profit Sharing Plan
The company has a profit sharing plan which covers substantially all
employees with at least one year of service. The annual contribution to
the plan is at the discretion of the company's board of directors. The
company's expenses related to contributions to the plan in 1995; 1994
and 1993 were $3,412,000; $3,104,000 and $2,484,000, respectively.
Note F -- Commitments and Contingencies
At April 28, 1995, the company had contractual commitments
approximating $15,946,000 for restaurant construction, plant equipment
additions and the purchases of land and inventory.
The company is from time to time involved in a number of claims and
litigation considered normal in the course of business. Various
lawsuits and assessments, among them employment discrimination,
product liability, workers' compensation claims and tax assessments,
are in litigation or pending litigation. While it is not feasible to
predict the outcome of these actions, in the opinion of the company,
these actions should not ultimately have a material adverse effect on
the financial position or results of operations of the company.
Notes to Consolidated
Financial Statements
Bob Evans Farms, Inc. and Subsidiaries April 28, 1995
Note G -- Quarterly Financial Data (Unaudited)
Net
Gross Net Income
Sales Profit Income Per Share
Fiscal Year 1995
First Quarter $197,939,000 $135,060,000 $13,183,000 $.31
Second Quarter 194,403,000 137,036,000 14,163,000 .34
Third Quarter 185,587,000 133,262,000 13,904,000 .33
Fourth Quarter 189,039,000 132,354,000 12,260,000 .29
Fiscal Year 1994
First Quarter $178,431,000 $121,246,000 $11,815,000 $.28
Second Quarter 177,038,000 121,386,000 12,409,000 .30
Third Quarter 166,625,000 115,253,000 12,204,000 .29
Fourth Quarter 176,944,000 119,595,000 11,754,000 .28
Fiscal Year 1993
First Quarter $159,410,000 $109,977,000 $10,411,000 $.25
Second Quarter 163,694,000 112,856,000 11,006,000 .26
Third Quarter 169,543,000 115,366,000 11,443,000 .27
Fourth Quarter 160,529,000 107,871,000 10,202,000 .25
Note: gross profit represents net sales less cost of sales (materials)
Notes to Consolidated
Financial Statements
Bob Evans Farms, Inc. and Subsidiaries April 28, 1995
Note H -- Industry Segments
The company's operations include restaurant operations and the
processing and sale of food and related products. The revenue from
these segments includes both sales to unaffiliated customers and
intersegment sales, which are accounted for on a basis consistent with
sales to unaffiliated customers. Intersegment sales and other
intersegment transactions have been eliminated in the financial
statements.
Operating profit represents earnings before interest and income
taxes. Identifiable assets by segment are those assets that are used
in the company's operations in each segment. General corporate assets
consist of investments and deferred income taxes.
Information on the company's industry segments is summarized as
follows:
1995 1994 1993
Sales
Restaurant operations $550,209,000 $495,129,000 $457,396,000
Food products 248,036,000 234,811,000 226,576,000
798,245,000 729,940,000 683,972,000
Intersegment sales of food
products (31,277,000) (30,902,000) (30,796,000)
Total $766,968,000 $699,038,000 $653,176,000
Operating Profit
Restaurant operations $ 60,135,000 $ 56,910,000 $ 51,248,000
Food products 26,726,000 19,580,000 17,219,000
Total $ 86,861,000 $ 76,490,000 $ 68,467,000
Depreciation and Amortization Expense
Restaurant operations $ 18,732,000 $ 16,216,000 $ 14,398,000
Food products 7,942,000 7,721,000 7,234,000
Total $ 26,674,000 $ 23,937,000 $ 21,632,000
Capital Expenditures
Restaurant operations $ 81,772,000 $ 62,576,000 $ 43,227,000
Food products 12,994,000 10,334,000 8,888,000
Total $ 94,766,000 $ 72,910,000 $ 52,115,000
Identifiable Assets
Restaurant operations $383,569,000 $317,739,000 $272,681,000
Food products 94,494,000 90,502,000 83,687,000
478,063,000 408,241,000 356,368,000
General corporate assets 10,038,000 5,634,000 6,707,000
Total $488,101,000 $413,875,000 $363,075,000
Auditor's Report
Bob Evans Farms, Inc. and Subsidiaries
Report of Ernst & Young LLP, Independent Auditors
Board of Directors
Bob Evans Farms, Inc.
Columbus, Ohio
We have audited the accompanying consolidated balance sheets of Bob
Evans Farms, Inc. and subsidiaries as of April 28, 1995, and April 29,
1994, and the related consolidated statements of income, stockholders'
equity, and cash flows for each of the three years in the period ended
April 28, 1995. These financial statements are the responsibility of
the company's management. Our responsibility is to express an opinion
on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position
of Bob Evans Farms, Inc. and subsidiaries at April 28, 1995, and April
29, 1994, and the consolidated results of their operations and their
cash flows for each of the three years in the period ended April 28,
1995, in conformity with generally accepted accounting principles.
As discussed in note A to the financial statements, in fiscal 1995 the
company changed its method for accounting for depreciation.
Columbus, Ohio
May 24, 1995
Management's Discussion and Analysis
of Selected Financial Information
Bob Evans Farms, Inc. and Subsidiaries
Sales
Total sales for Bob Evans Farms, Inc. and subsidiaries increased
10% in 1995 over 1994. This compares with a 7% increase in 1994 over
1993. Fiscal years 1995 and 1994 were comprised of 52 weeks whereas
in 1993 there were 53 weeks.
Restaurant segment sales accounted for 72% of total sales in 1995
compared with 71% of total sales in 1994. Sales increased 11% in 1995
over 1994 as compared to 8% in 1994 over 1993. Most of these
increases were due to more restaurants in operation. The company
opened 44 restaurants during 1995 that included: 12 traditional Bob
Evans Restaurants, 25 Bob Evans "small-town" Restaurants and seven
Cantina del Rios. This compares with 23 restaurants opened during
1994 consisting of 11 traditional Bob Evans Restaurants, eight Bob
Evans "small-town" Restaurants and four Cantina del Rios. The total
number of restaurants in operation at the end of the year was 354,
compared to 315 a year ago. Also affecting sales were increases in
same-store sales of traditional Bob Evans Restaurants (restaurants
opened for 12 full months in 1995 and 1994) of 3.4% in 1995 and 3.0%
in 1994.
A variety of new menu items were added in 1995 to help keep the
company's menu fresh and give customers an opportunity to try
something new. A number of programs were initiated from time to time
such as "weekday breakfast breaks" and "daily dinner specials." No
one single menu item or program had a material impact on sales
although the company believes without the combination of these
additional menu items and programs, same-store sales increases would
have been less than reported. For 1995 the traditional Bob Evans
Restaurant menu price increased 3.1% compared with 2.7% in 1994.
Food product sales accounted for 28% of total sales in 1995 and
29% of sales in 1994. Sales increased 6% in 1995 and 4% in 1994. The
increase this year was due to increased pounds of sausage products
sold (approximately a 5% increase in 1995 and 2% in 1994) and
increased sales from Mrs. Giles Country Kitchens and Hickory
Specialties with combined sales of $52.3 million in 1995 or 24% of
food products segment sales compared with $46.7 million or 23% of food
products segment sales in 1994. This increase was mainly due to
increased sales of charcoal products at Hickory Specialties. The food
products segment sales increase in 1994 was mainly due to higher
wholesale prices of sausage products over a year ago and improved
sales of Hickory Specialties' charcoal and liquid-smoke flavorings.
The benchmark retail price for a one-pound roll of sausage was $2.79
in 1995 and $2.84 in 1994.
New product introductions during 1995 included Bob Evans
Homestyle Chicken & Noodles and a maple-flavored sausage product,
Maple Links. New product introductions during 1994 included Bob Evans
Homestyle Sausage Gravy & Biscuits and Country Lite Sausage products.
New product introductions added additional volume but were not
significant compared with the total pounds sold in 1995 or 1994.
Cost of Sales
As a percentage of sales, the consolidated cost of sales (cost of
materials) was 29.9%, 31.7% and 31.7% in 1995, 1994 and 1993,
respectively. The restaurant segment cost of sales percentage was
27.0% in 1995 compared with 27.5% in 1994 and 1993. The decrease in
1995 was mainly due to various changes in product mix. The food
products segment cost of sales percentage decreased in 1995 to 37.1%
compared to 41.9% in 1994 and 41.3% in 1993. This decrease in 1995
was due to lower live hog costs which averaged $31.00 per
hundredweight in 1995 compared with $39.25 per hundredweight in 1994
and $37.33 per hundredweight in 1993.
Operating Expenses
Consolidated operating expenses were 42.6%, 41.9% and 41.8% in
1995, 1994 and 1993, respectively. The largest component of operating
expenses was labor and fringe benefit expense, which amounted to
$225.3 million in 1995 compared to $201.6 in 1994. Of this increase,
$22.2 million occurred in the restaurant segment due to more
restaurants in operation. As a percent of sales, other operating
expenses were 13.3%, 13.1% and 12.9% of sales in 1995, 1994 and 1993,
respectively.
Selling, General and Administrative Expenses
As a percentage of sales, consolidated selling, general and
administrative expenses were 12.8%, 12.2% and 12.8% of sales in 1995,
1994 and 1993, respectively. The increase this year was mainly the
result of management training expenses needed to support increased
restaurant openings. The increased training expense in 1995 compared
to 1994 was approximately $2.8 million. Decreased advertising
expenditures resulted in most of the decrease from 1993 to 1994.
Taxes
The effective federal and state income tax rates were 38.4%,
37.0% and 37.2% in 1995, 1994 and 1993, respectively. The increase in
1995 was mostly attributable to increased state taxes. In fiscal year
1996, the effective tax rate is expected to be approximately 38.5%.
Net Income
Net income increased 11% in 1995 over 1994 and 12% in 1994 over
1993. The increase in 1995 was mainly attributable to strong margins
on sausage products due to lower live hog costs than in 1994. The
increase in the restaurant segment in 1995 was due to more restaurants
in operation. Additionally, the increase in the effective tax rate
affected both segments, and on a consolidated basis decreased current
year net income by more than $1.2 million. The increase in net income
in 1994 was due mainly to more restaurants in operation and improved
margins in sausage, charcoal and liquid smoke flavorings.
Liquidity and Capital Resources
Cash generated from both the restaurant and food products
segments has been used as the main source of funds for working capital
and capital expenditure requirements. Cash and equivalents
totaled $10.5 million at April 28, 1995, and $8.1 million at April 29,
1994. Dividends paid represented 22% of net income in 1995 and 23% of
net income in 1994.
Bank lines of credit were used for liquidity needs and capital
expansion during fiscal year 1995. At April 28, 1995, $25.6 million
was outstanding under such arrangements. The bank lines of credit
available were increased to $63 million during 1995 (compared to $53
million at the end of fiscal 1994) to meet liquidity and capital
resource requirements anticipated because of increased restaurant
expansion. The company believes that the funds needed for capital
expenditures and working capital during 1996 will be generated
internally and from available bank lines of credit. Longer-term
financing alternatives will be evaluated by the company, especially in
the event of acquisitions.
At April 28, 1995, the company had contractual commitments from
restaurant construction, plant equipment additions and land purchases
of approximately $15.9 million. Anticipated capital expenditures for
1996 are expected to approximate $90 million and depreciation and
amortization expenses are expected to approximate $29 million. The
company plans to build approximately 35 to 40 restaurants in fiscal
year 1996, as well as upgrade various properties, plants and equipment
in both segments.
Management's Outlook
Bob Evans Farms, Inc. and Subsidiaries
Management is unaware of any material events or uncertainties
that would cause the reported financial information not to be
indicative of future operating results.
Uncertainties for the new fiscal year include the cyclical nature
of the live hog market and its effect on the profitability in the food
products segment. It is anticipated that live hog costs for 1996 will
be in a range at or above 1995 fiscal year costs. Other uncertainties
in the food products segment are consumer acceptance of new products,
and the successful sale of products in any new markets opened. In the
restaurant segment, new restaurant expansion will depend
on availability of sites and weather conditions. Other uncertainties
in the restaurant segment are customer acceptance of new menu items,
new market expansion, unproven new restaurant concepts, possible
restaurant closings because of poor performance, ability to maintain
real growth in core stores and food safety issues. External factors
such as governmental initiatives, environmental compliance issues and
the economy impose various degrees of uncertainty on the company's
businesses.
Well-planned growth is an important part of the company's plans
in 1996. Restaurant segment plans call for the opening of
approximately 35 to 40 restaurants, which equates to a growth rate of
approximately 11%. Increased attention to operations is important in
order to increase customer satisfaction. New menu items and value
promotions such as the daily dinner specials and the weekday breakfast
breaks programs will continue in 1996 in an effort to increase
customer counts. Seasonal promotions and new menu items keep the menu
fresh and have been well accepted by customers.
Food products segment growth in 1996 is expected to come from new
product additions such as retail entree products (fresh and frozen)
and limited market expansion. The company plans to continue various
promotions designed to increase customer trial of existing products as
well as new product introductions.
Hickory Specialties successfully introduced two new products
last fiscal year: Wildfire Gourmet Hickory Charcoal and Woodstone Gas
Grill Briquettes. As a result of increased charcoal sales, a new
charcoal manufacturing facility is currently under construction at
Summer Shade, Ky. This facility is expected to be operational by
October 1995.
Expansion by acquisition in both the restaurant and food
products segments is a possibility. The timing, as well as the number
of acquisitions, is not known and will depend on market conditions as
well as satisfying various company criteria.
**************************************
BOB EVANS FARMS, INC.
ANNUAL REPORT ON FORM 10-K
FOR FISCAL YEAR ENDED APRIL 28, 1995
INDEX TO EXHIBITS
Exhibit
Number Description Location
3(a) Certificate of Incorporation Incorporated herein
of the Registrant by reference to
Exhibit 3(a) to the
Registrant's Annual
Report on Form 10-K
for its fiscal year
ended April 24, 1987
(File No. 0-1667)
3(b) Certificate of Amendment of Incorporated herein
Certificate of Incorporation by reference to
of the Registrant dated Exhibit 3(b) to the
August 26, 1987 Registrant's Annual
Report on Form 10-K
for its fiscal year
ended April 28, 1989
(File No. 0-1667)
3(c) Certificate of Adoption of Incorporated herein
Amendment to Certificate of by reference to
Incorporation of the Exhibit 3(c) to the
Registrant dated August 9, Registrant's Annual
1993 Report on Form 10-K
for its fiscal year
ended April 29, 1994
(File No. 0-1667)
3(d) Restated Certificate of Incorporated herein
Incorporation of Registrant by reference to
Exhibit 3(d) to the
Registrant's Annual
Report on Form 10-K
for its fiscal year
ended April 29, 1994
(File No. 0-1667)
3(e) By-Laws of the Registrant Incorporated herein
by reference to
Exhibit 3(c) to the
Registrant's Annual
Report on Form 10-K
for its fiscal year
ended April 24, 1987
(File No. 0-1667)
10(a) Restated Bob Evans Farms, Inc. Page 58
and Affiliates 401K Retirement
Plan (effective January 1,
1994, except as otherwise
provided)
10(b) Bob Evans Farms, Inc. and Page 111
Affiliates 401K Retirement
Plan Summary Plan Description
(effective January 1, 1995)
10(c) Bob Evans Farms, Inc. and Incorporated herein
Affiliates 401K Retirement by reference to
Plan Trust (effective May 1, Exhibit 4(f) to the
1990) Registrant's Pre-
Effective Amendment
No. 1 to Form S-8
Registration State
ment, filed
April 27, 1990
(Registration No. 33-
34149)
10(d) Bob Evans Farms, Inc. 1985 Incorporated herein
Incentive Stock Option Plan by reference to
Exhibit 4(c) to the
Registrant's Regis
tration Statement on
Form S-8, filed
September 12, 1985
(Registration No.
33-242)
10(e) Bob Evans Farms, Inc. 1987 Incorporated herein
Incentive Stock Option Plan by reference to
Exhibit 4(a) to the
Registrant's Regis
tration Statement on
Form S-8, filed
October 19, 1987
(Registration No. 33-
17978)
10(f) Agreement, dated February 24, Incorporated herein
1989, between Daniel E. Evans by reference to
and Bob Evans Farms, Inc.; and Exhibit 10(g) to the
Schedule A to Exhibit 10(h) Registrant's Annual
identifying other substan Report on Form 10-K
tially identical Agreements for its fiscal year
between Bob Evans Farms, Inc. ended April 28, 1989
and certain of the executive (File No. 0-1667);
officers of Bob Evans Farms, Page 92
Inc.
10(g) Bob Evans Farms, Inc. 1989 Incorporated herein
Stock Option Plan for Non- by reference to
employee Directors Exhibit 4(d) to the
Registrant's Regis
tration Statement on
Form S-8, filed
August 23, 1989
(Registration No. 33-
30665)
10(h) Bob Evans Farms, Inc. 1991 Incorporated herein
Incentive Stock Option Plan by reference to
Exhibit 4(d) to the
Registrant's Regis
tration Statement on
Form S-8, filed
September 13, 1991
(Registration
No. 33-42778)
10(i) Bob Evans Farms, Inc. Incorporated herein
Supplemental Executive by reference to
Retirement Plan Exhibit 10(i) to the
Registrant's Annual
Report on Form 10-K
for its fiscal year
ended April 24, 1992
(File No. 0-1667)
10(j) Bob Evans Farms, Inc. Incorporated herein
Nonqualified Stock Option Plan by reference to
Exhibit 10(j) to the
Registrant's Annual
Report on Form 10-K
for its fiscal year
ended April 24, 1992
(File No. 0-1667)
10(k) Bob Evans Farms, Inc. Long Incorporated herein
Term Incentive Plan for by reference to
Managers Exhibit 10(k) to the
Registrant's Annual
Report on Form 10-K
for its fiscal year
ended April 30, 1993
(File No. 0-1667)
10(l) Bob Evans Farms, Inc. 1994 Incorporated herein
Long Term Incentive Plan by reference to
Exhibit 10(n) to the
Registrant's Annual
Report on Form 10-K
for its fiscal year
ended April 29, 1994
(File No. 0-1667)
11 Computation of Earnings Per Page 136
Share
13 Registrant's Annual Report to Page 26
Stockholders for the fiscal
year ended April 28, 1995 (Not
deemed filed except for
portions thereof which are
specifically incorporated by
reference into this Annual
Report on Form 10-K)
21 Subsidiaries of the Registrant Incorporated herein
by reference to
Exhibit 21 to the
Registrant's Annual
Report on Form 10-K
for its fiscal year
ended April 30, 1993
(File No. 0-1667)
23 Consent of Ernst & Young, Page 137
certified public accountants
27 Financial Data Schedule Page 138