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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended April 25, 2003
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from________________ to _________________
Commission File Number 0-1667
Bob Evans Farms, Inc.
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(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)
The Exhibit Index begins at page 30.
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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 the 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. ( )
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes (X) No ( )
State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last business day of the registrant's most recently completed second fiscal
quarter: $881,360,404 as of Oct. 25, 2002.
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date: 34,658,307 shares of the
registrant's common stock, $.01 par value per share, were outstanding at July
18, 2003.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the registrant's annual report to stockholders for
the fiscal year ended April 25, 2003, are incorporated by
reference into Part II of this Annual Report on Form 10-K.
2. Portions of the registrant's definitive proxy statement for
its annual meeting of stockholders to be held on Sept. 8,
2003, are incorporated by reference into Part III of this
Annual Report on Form 10-K.
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PART I
ITEM 1. BUSINESS.
Bob Evans Farms, Inc. was incorporated on Nov. 4, 1985, under the laws of the
State of Delaware. It is the successor by merger to Bob Evans Farms, Inc., an
Ohio corporation incorporated in 1957.
Bob Evans Farms, Inc. and its direct and indirect subsidiaries are collectively
referred to as the "company."
The company maintains an Internet Web site at www.bobevans.com (this uniform
resource locator, or URL, is an inactive textual reference only and is not
intended to incorporate the company's Web site into this Annual Report on Form
10-K). The company makes available free of charge on or through its Web site,
its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports
on Form 8-K and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as soon as reasonably practicable after the company
electronically files such material with, or furnishes it to, the Securities and
Exchange Commission (the "SEC").
The company's business is divided into two principal industry segments: the
ownership and operation of a chain of full-service, family restaurants located
in 22 states and the manufacture, distribution and sale of fresh and fully
cooked pork products and other complementary food products in 30 states.
RESTAURANT SEGMENT OPERATIONS
General
The company operates a total of 523 full-service, family restaurants under the
Bob Evans Restaurant, Bob Evans Restaurant & General Store and Owens Restaurant
names. The company experienced a same-store sales decrease of 1.4 percent in
fiscal 2003 as compared to a 3.2 percent increase during fiscal 2002 in its
restaurant segment.
All of the company's family restaurants feature a wide variety of homestyle menu
offerings designed to appeal to its diverse customer base, primarily families.
Breakfast entrees, including traditional items and unique specialty offerings,
are 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
most locations. Average guest checks for breakfast, lunch and dinner are $6.12,
$6.85 and $7.34, respectively, for an average of $6.75 for all day parts.
Approximately 65 percent 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 Saturday and Sunday account for approximately 39 percent of a
typical week's revenues.
The company's restaurants are supplied with food and other inventory items
(other than sausage products and related meat items) by five independent food
and non-food distributors twice a week. Sausage products and other Bob Evans
meat items are supplied by the company to each
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restaurant by the company's driver-salesmen, with the exception of the
restaurants located in Florida, Kansas, Massachusetts, Mississippi, New York,
North Carolina, South Carolina and Tennessee and parts of Kentucky, Michigan,
Missouri, Pennsylvania, Virginia and West Virginia, which are supplied by the
aforementioned food distributors.
The following table sets forth the number, type and location of restaurants
operated by the company as of the end of the 2003 fiscal year.
RESTAURANTS IN OPERATION AT APRIL 25, 2003
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General Total
Traditional Stores Owens Restaurants
- --------------------------------------------------------------------------
Delaware 5 5
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Florida 34 34
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Illinois 18 18
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Indiana 58 58
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Iowa 1 1
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Kansas 3 3
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Kentucky 19 19
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Maryland 22 22
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Massachusetts 1 1
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Michigan 49 49
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Mississippi 1 1
- --------------------------------------------------------------------------
Missouri 16 1 17
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New Jersey 3 3
- --------------------------------------------------------------------------
New York 13 13
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North Carolina 16 16
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Ohio 175 2 177
- --------------------------------------------------------------------------
Pennsylvania 30 1 31
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South Carolina 4 1 5
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Tennessee 3 1 4
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Texas 9 9
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Virginia 13 13
- --------------------------------------------------------------------------
West Virginia 23 1 24
- --------------------------------------------------------------------------
TOTAL 507 7 9 523
- --------------------------------------------------------------------------
During fiscal 2003, the company opened 29 new restaurants. The majority of these
new restaurants are located in the company's core markets, primarily in the
Midwest and East Coast.
From time to time, restaurants are evaluated and closed due to a changing
market, poor performance or a change in access or building safety. During fiscal
2003, one traditional Bob Evans Restaurant was closed in Columbus, Ohio, due to
the combination of a lease expiration and changing market conditions.
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The company has typically opened restaurants in areas where a strong consumer
awareness and acceptance of its sausage products have been established over the
years. It has deviated from this practice only in Florida, Massachusetts,
Mississippi, North Carolina and South Carolina, where the company's
driver-salesmen do not distribute Bob Evans Sausage for retail sale.
Also, during fiscal 2003, the company rebuilt eight restaurants and remodeled 62
restaurants to various degrees.
Seasonality
Certain restaurants located near major interstate highways generally experience
increased revenues during the summer travel season.
Restaurant Expansion
During fiscal 2004, the company plans to build and open approximately 35 new
restaurants, most of which will be constructed in the company's established
markets. Future restaurant growth will depend on the availability of sites at
prices that are projected to meet or exceed the company's desired returns, as
well as growth trends in consumer demand for mid-scale, family restaurants.
During fiscal 2004, the company plans to rebuild 10 restaurants and remodel 43
restaurants to various degrees, including major remodels and expansions to minor
equipment and decor updates. The restaurant remodel/rebuild plan, which requires
significant capital expenditures, demonstrates the company's commitment to
customer service and satisfaction. Restaurant capital expenditures for fiscal
2004 are estimated to be approximately $108 million compared to $97.1 million in
fiscal 2003.
Carryout Business
During fiscal 2003, carryout business in the company's restaurants accounted for
approximately 5.8 percent of the total revenues generated by the restaurant
segment. To increase carryout business and customer satisfaction, the company
continues to include Carry Home Kitchen, an enhanced carryout area, in all new
locations. Through dedicated staffing and facilities, Carry Home Kitchens not
only better serve carryout customers, but also increase eat-in dessert sales as
a result of the awareness generated by the added dessert case. The company's
restaurants do not have a drive-through service for carryout business. The
company plans to expand carryout business during fiscal 2004 by enhancing
marketing programs to increase consumer awareness and by launching a family-size
meal program in the fall of 2003.
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Retail Sales of Goods
The company offers retail gifts, food items and other novelties for sale on a
limited basis in its traditional restaurants' Corner Cupboard area and on a much
larger scale in its seven Bob Evans Restaurants & General Stores. The company
introduced retail Corner Cupboards in new restaurants, rebuilds and 27 existing
units during fiscal 2003. Given the success of this program, the company plans
to include Corner Cupboard retail areas during fiscal 2004 in all new and
rebuilt restaurants, as well as two existing restaurants, which will bring the
total to approximately 325 restaurants at year-end.
Competition
The company's restaurant segment is engaged in an intensely competitive
business. The company's restaurants compete for favorable expansion sites and
customers with both local and national family, casual and fast-food restaurant
chains, as well as with individual restaurant operators. The line continues to
blur between family and casual restaurants. In the strictest sense, Bob Evans
Restaurants continue to operate in the family-dining segment. However, with
attractive portions and lower price points, Bob Evans Restaurants are
increasingly challenging the company's casual dining competitors in terms of
food quality and value perceptions, and in fact, the company now classifies its
concept as "family casual." Competition in the restaurant industry lies in
price/value, menu variety, relevance and brand image. The company's restaurant
segment sales are not a significant factor in the overall restaurant business in
the company's market areas.
Labor and Fringe Benefit Expense
Labor and fringe benefit expense in the restaurant segment accounted for 39.2
percent of sales in fiscal 2003 as compared to 38.8 percent in fiscal 2002. The
increase in fiscal 2003 was primarily due to higher management wages. The
company benefited from reduced pressures in the labor market due to the
economy's softness, and the company expects a similar labor market during fiscal
2004. During fiscal 2002, labor expense declined from highs a few years ago as a
result of management initiatives including reduced overtime, better scheduling
and redirected benefit dollars.
Sources and Availability of Raw Materials
Menu mix in the restaurant segment is varied enough that raw materials
historically 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. Cost of sales accounted for approximately 23.9
percent of restaurant segment sales during fiscal 2003, in comparison with 24.8
percent during fiscal 2002. Restaurant segment food costs were impacted by menu
price increases, raw material prices and sales mix. The company anticipates that
food costs may increase in fiscal 2004 over fiscal 2003 levels.
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Marketing
The company spent approximately $33.5 million marketing the restaurant segment
during its 2003 fiscal year. Approximately 65 percent of the marketing dollars
were spent on television, radio, print and outdoor advertising to build and
maintain brand awareness. The remaining 35 percent of dollars were spent
primarily on in-store merchandising/menus, kids' marketing programs and
local-store marketing. The company typically limits the use of coupons to
certain outlying markets to encourage trial with new or infrequent customers.
The company expects marketing expense as a percent of sales for fiscal 2004 to
be consistent with fiscal 2003 levels.
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. Product development has been concentrated on unique homestyle
options, as well as quality enhancements to some of the company's best-selling
items to keep the menu fresh and relevant. The company's Breakfast Savors and
Lunch Savors programs, which are designed to drive weekday sales, continue to be
updated with new items to maintain their success. In the fall of 2003, the
company plans to introduce Dinner Sensations, a line of premium dinner entrees
featuring steak, salmon, pork chops and chicken. During fiscal 2003, a new
children's program was successfully introduced, which included new menu items,
as well as new entertaining educational activities provided by Weekly Reader and
later Scholastic, leading publishers of classroom periodicals for elementary and
secondary schools. Since the introduction of the new children's program, sales
of kids meals have increased 25 percent. Research and development expenses, to
date, have not been material.
Trademarks, Service Marks and Licenses
The company maintains various trademarks and service marks in connection with
its family restaurant operations, such as Bob Evans Carry Home Kitchen,
Breakfast Savors and Lunch Savors. These trademarks and service marks are
renewed periodically and the company believes that they adequately protect the
various products and services to which they relate. The operations of the
restaurant segment of the company are not dependent upon any patents, franchises
or concessions.
FOOD PRODUCTS SEGMENT OPERATIONS
Principal Products and Procurement Methods
The company's traditional business in its food products segment is the
production, distribution and sale of approximately 40 varieties of fresh, smoked
and fully cooked pork sausage and ham products under the brand names of Bob
Evans, Owens Country Sausage and Country Creek Farm. In addition to the
company's well-known meat offerings, the company also sells a number of other
complementary food items in the frozen and refrigerated areas of grocery stores.
During fiscal 2003, the company expanded its Bob Evans food products offerings
by introducing Wildfire Pulled Pork; Wildfire Beef Brisket; Sour Cream & Chives
Mashed Potatoes; Express Sausage Links; Ham and Potatoes Brunch Bowl; as well as
Owens Bacon, Egg & Cheese Taco
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Border Breakfasts and Large Cheeseburger Snackwiches. Several items in the Bob
Evans and Owens product lines, including Snackwiches, are microwaveable
convenience items for meals and snacks. New offerings are being well-received as
potato items now account for nearly 10 percent of the company's food products
volume and sales of Express fully cooked sausage links are sharply higher than
the original Brown 'n' Serve product that they replaced.
The company continues to devote time and effort on both new product development
and sales of its pork sausage and ham products to institutional and foodservice
purchasers. Specialty items for the company's institutional and foodservice
customers are made to their specifications and include sausage links and
patties, sausage gravy and biscuit sandwiches. Although foodservice sales do not
generate margins as high as sales of branded items, they provide the company
with incremental volume in its production plants. During fiscal 2003,
foodservice sales accounted for approximately 5 percent of the company's food
products gross sales compared to 6 percent in fiscal 2002. Foodservice sales are
expected to remain relatively constant in fiscal 2004.
Previously, the company produced and sold liquid-smoke flavorings through its
Hickory Specialties, Inc. subsidiary. In October 2001, the company sold Hickory
Specialties to sharpen the focus on the company's core strengths in the food and
restaurant businesses.
The following table depicts the percentage of the company's food products
segment revenues generated through sales of its Bob Evans, Owens Country Sausage
and Hickory Specialties products during the last three fiscal years.
Percentage of Food Products Segment Revenues
FISCAL YEAR ENDED
------------------------------------------------
APRIL 25, 2003 APRIL 26, 2002 APRIL 27, 2001
-------------- -------------- --------------
Sales of Bob Evans 78% 76% 71%
Products
Sales of Owens 22% 21% 24%
Country Sausage
Products
Sales of Hickory 0% 3% 5%
Specialties Products*
*On Oct. 5, 2001, the company sold Hickory Specialties, Inc. to an unrelated
third party.
The company's retail pork sausage products are produced in the company's six
processing plants located in Galva, Ill.; Hillsdale, Mich.; Bidwell, Springfield
and Xenia, Ohio; and Richardson, Texas. The Bidwell, Springfield, Hillsdale and
Richardson plants also manufacture the products sold to foodservice
distributors. In the fall of 2002, the company opened its first distribution
center near Springfield, Ohio. The distribution center serves as a hub for the
company's direct store distribution system.
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Snackwiches for both Bob Evans and Owens will be assembled at the new Owens
Country Sausage plant in Sulphur Springs, Texas, beginning in early 2004.
Purchased in June 2003, the 52,777 square-foot facility will allow the company
to increase production while expanding the variety of the convenience retail
products offered.
The company procures live hogs at prevailing market prices from terminals, local
auctions, country markets and corporate and family farms in Illinois, Indiana,
Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Carolina, Ohio,
Oklahoma, Pennsylvania, South Dakota, West Virginia, Wisconsin, Texas and
Canada. Live hogs procured in these markets are purchased by an employee of the
company. Live hogs are then transported overnight directly from the various
markets and farms from which they were purchased to five 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 processing
plants for distribution to the company's customers. The company generally has
not experienced difficulty in procuring live hogs for its pork sausage products.
The company has not traditionally contracted in advance for the purchase of live
hogs, although it is currently negotiating contract pricing and may do so with
limited quantities in fiscal 2004.
Distribution Methods
Products distributed under the Bob Evans brand name are distributed to retail
customers in two ways:
(1) Primarily, the direct store delivery system is used for the retail
distribution of the sausage and other refrigerated products bearing the
Bob Evans brand name. Ninety driver-salesmen, driving company-owned
refrigerated trucks, deliver the company's products directly to
approximately 5,900 grocery stores.
(2) On a smaller scale, the company uses alternate distribution methods for
its refrigerated and frozen food products through warehouses and
distributors, which makes the products available to approximately 4,000
additional grocery stores. A nine-person sales team works directly for
the company and is supported by outside brokers and distributors.
The marketing territory for Bob Evans brand products includes Delaware, the
District of Columbia, Illinois, Indiana, Maryland, Michigan and Ohio as well as
portions of Alabama, Georgia, Kansas, Kentucky, Iowa, Missouri, New Jersey, New
York, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia, West
Virginia and Wisconsin.
Owens Country Sausage products are distributed to more than 5,500 retail
customers in two ways:
(1) Company-owned transport trucks deliver directly to most major
supermarket chain warehouse distribution centers in the Owens' market
areas. Thereafter, the products are shipped to individual grocery
stores.
(2) Thirteen driver-salesmen, driving company-owned refrigerated trucks,
and various broker networks deliver products to grocery stores.
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The marketing territory for Owens brand products includes Arizona, Arkansas,
Colorado, Louisiana, New Mexico, Oklahoma and Texas, and portions of Kansas,
Mississippi and Nevada.
Distribution to the company's foodservice customers is accomplished through food
brokers and distributors.
Inventory Levels
Most of the company's food products are highly perishable and require proper
refrigeration. Shelf life of the products ranges from 18 to 45 days for
refrigerated products. Due to the highly perishable nature and short shelf life
of the company's food products, the company's processing plants normally process
only enough product to fill existing orders. Therefore, the company maintains
minimal inventory levels because such products are generally manufactured only
to meet existing demand and are delivered to retail outlets within three days
after processing.
Trademarks and Service Marks
The company maintains various trademarks and service marks in connection with
its food products operations, such as Snackwiches, Brunch Bowls and Border
Breakfasts, that identify various Bob Evans and Owens Country Sausage products.
These trademarks and service marks are renewed periodically and the company
believes that they 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
The sausage business is highly competitive. The company competes primarily on
the basis of the price and quality of its sausage products. Bob Evans uses
high-quality ingredients to manufacture products that reflect the company's
homestyle image and heritage. The company is in direct competition with a large
number and variety of producers and wholesalers of similar products, including
local and national companies. Although many such competitors have substantially
greater financial resources and higher sales volumes, 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 core market areas.
Seasonality
More pounds of fresh sausage are typically sold during the colder months from
October through April. The company continues to promote products for outdoor
grilling in an attempt to create more volume during the summer months.
Marketing
During the 2003 fiscal year, the company spent approximately $10.1 million
marketing its food products under the Bob Evans and Owens brand names.
Approximately 80 percent of this
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amount was spent on broadcast media programs to build and maintain brand
awareness and the remaining 20 percent was spent on other promotional
activities.
Dependence on a Single Customer
Bob Evans and Owens products are available to more than 50 percent of the
population of the continental United States through more than 15,400 retail
grocery stores. The company's food products segment 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 food
products. The company has not experienced any significant bad debt problems, nor
has the return of aged product had a significant 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. Historically, the company has not experienced
shortages in the number of hogs available at prevailing market prices. The live
hog market is highly cyclical in terms of the number of hogs available and the
current market price. The live hog market is also dependent upon supply and
demand for pork products and corn production, since corn is the major food
supply for hogs.
Expansion of Distribution Area
While the company has no current plans to expand the overall distribution area
for its food products in fiscal 2004, an agreement with grocery warehouses is
expected to make the company's frozen products available in new areas.
Profit Margins Related to Sausage Production
Profit margins relating to sausage production are normally more favorable during
periods of lower live hog costs. During fiscal 2003, hog prices averaged $26.46
per hundredweight as compared to $37.84 per hundredweight during fiscal 2002.
The company believes live hog costs will increase during fiscal 2004 to near
fiscal 2002 levels.
GENERAL
Employees
The company employed 39,135 persons in the restaurant segment and 1,311 persons
in the food products segment as of April 25, 2003.
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Compliance with Environmental Protection Requirements
The company does not anticipate that compliance with federal, state and local
provisions which have been enacted or adopted to regulate the discharge of
materials into the environment, or which otherwise relate 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 information regarding revenues, operating profit
and identifiable assets of the company's restaurant segment and food products
segment for each of the last three fiscal years.
FISCAL YEAR ENDED
(Dollars in thousands)
April 25, April 26, April 27,
2003 2002 2001
--------- --------- ---------
Sales:
Restaurant Operations: $ 902,345 $ 870,257 $ 805,957
Intersegment Sales of
Food Products: $ 30,828 $ 30,814 $ 30,074
Food Products (excluding
intersegment sales): $ 188,992 $ 191,589 $ 201,551
Operating Income:
Restaurant Operations: $ 92,896 $ 85,009 $ 68,663
Food Products: $ 24,237 $ 18,854 $ 14,803
Identifiable Assets:
Restaurant Operations: $ 680,843 $ 626,318 $ 574,430
Food Products: $ 65,472 $ 60,713 $ 73,025
Cautionary Statement Regarding Forward-Looking Information
Certain statements contained in this Annual Report on Form 10-K which are not
statements of historical fact are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). In
addition, certain statements in future filings by the company with the SEC, in
press releases and in oral and written statements made by or with the approval
of the company which are not statements of historical fact constitute
forward-looking statements within the meaning of the Act. Examples of
forward-looking statements include statements of plans and objectives of the
company or its management or board of directors; statements regarding future
economic performance; and statements of assumptions underlying such statements.
Words such as "believes," "anticipates," "expects" and "intends" and similar
expressions are intended to, but are not the exclusive means of, identifying
those statements.
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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,
including, without limitation, changes in hog costs, the possibility of severe
weather conditions where the company operates its restaurants, the availability
and cost of acceptable new restaurant sites, shortages of restaurant labor,
acceptance of the company's restaurant concepts into new geographic areas, and
other risks disclosed from time to time in the company's securities filings and
press releases. There is also the risk that the company may incorrectly analyze
these risks or that the strategies developed by the company to address them will
be unsuccessful.
Forward-looking statements speak only as of the date on which they are made, and
the company undertakes no obligation to update any forward-looking statement to
reflect circumstances or events after the date on which the statement is made to
reflect unanticipated events. All subsequent written and oral forward-looking
statements attributable to the company or any person acting on behalf of the
company are qualified by the cautionary statements in this section.
ITEM 2. PROPERTIES.
The company owns its principal executive offices located at 3776 S. High St.,
Columbus, Ohio. The company also owns a 937-acre farm located in Rio Grande,
Ohio, and a 30-acre farm located in Richardson, Texas. The two farm locations
support the company's heritage and image through educational and recreational
tourist activities.
Restaurant Segment
Of the 523 restaurants operated by the company, 462 are owned by the company and
61 are leased from unaffiliated persons. All lease agreements contain either
multiple renewal options or options to purchase.
Food Products Segment
The food products segment has six sausage-manufacturing plants located in Galva,
Ill.; Hillsdale, Mich.; Bidwell, Springfield, and Xenia, Ohio; and Richardson,
Texas; and a distribution center in Springfield, Ohio. All of these properties
including the new Sulphur Springs, Texas, plant are owned by the company. The
company believes that its manufacturing facilities have adequate capacity to
serve their intended purpose at this time and in the foreseeable future.
The company owns regional sales offices in Westland, Mich., and Tyler, Texas. In
addition, the company leases various other locations throughout its marketing
territory which serve as regional and divisional sales offices.
ITEM 3. LEGAL PROCEEDINGS.
There are no pending legal proceedings to which the company or any of its
subsidiaries is a party or to which any of their respective properties are
subject, except routine legal proceedings to which they are parties incident to
their respective businesses. None of such proceedings are considered by the
company to be material.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the executive officers of the company and certain
information with respect to each executive officer as of July 18, 2003. The
executive officers are appointed by and serve at the pleasure of the board of
directors.
Principal Occupations for Past Five Years and Other
Name Age Information
- ------------------ --- ------------------------------------------------------------
Scott D. Colwell 45 Senior Vice President of Marketing of the company since
2000; served as Vice President of Microllenium, Inc., an
information technology provider, January to April 2000; Vice
President of Marketing at the Friendly Ice Cream
Corporation, a family restaurant and ice cream manufacturing
company, from 1996 to 1999; 3 years as an officer of the
company.
Larry C. Corbin 61 Executive Vice President of Restaurant Operations since
1995; 29 years as an officer of the company.
Mary L. Cusick 47 Senior Vice President of Investor Relations and Corporate
Communications since 2000; Vice President of Corporate
Communications from 1990 to 2000; 13 years as an officer of
the company.
Joe L. Gillen 54 Senior Vice President of Restaurant Operations since 1993;
15 years as an officer of the company.
Randall L. Hicks 43 Senior Vice President of Restaurant Operations since 2003;
Vice President of Restaurant Operations from 1994 to 2003; 9
years as an officer of the company.
Rinzy J. Nocero 49 Senior Vice President of Restaurant Operations since 1993;
15 years as an officer of the company.
Stewart K. Owens 48 Chairman of the Board, Chief Executive Officer, President
and Chief Operating Officer since 2001; President, Chief
Executive Officer and Chief Operating Officer from 2000 to
2001; President and Chief Operating Officer from 1995 to
2000; 13 years as an officer of the company.
Donald J. Radkoski 48 Chief Financial Officer, Treasurer and Secretary since 2000;
Chief Financial Officer and Treasurer from 1994 to 2000; 15
years as an officer of the company.
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Tod P. Spornhauer 37 Senior Vice President of Finance, Controller, Assistant
Treasurer and Assistant Secretary since 2003; Vice President
of Finance and Controller from 1998 to 2003; 5 years as an
officer of the company.
Roger D. Williams 52 Executive Vice President of Food Products Division since
1997; 23 years as an officer of the company.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
In accordance with General Instruction G(2), the information called for in Item
201 (a) through (c) of Regulation S-K is incorporated herein by reference to
Note H, Quarterly Financial Data (Unaudited), located on page 24 of the
company's Annual Report to Stockholders for the fiscal year ended April 25,
2003, ("the company's 2003 Annual Report to Stockholders").
ITEM 6. SELECTED FINANCIAL DATA.
In accordance with General Instruction G(2), the financial information for
fiscal years 1999 through 2003 contained under the sub caption Consolidated
Financial Review, located on page 13 of the company's 2003 Annual Report to
Stockholders, 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
and Management's Discussion of Risk Factors, located on pages 27 through 30 of
the company's 2003 Annual Report to Stockholders, is incorporated herein by
reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As noted in Note A, Summary of Significant Accounting Policies, located on pages
18 through 20 of the company's 2003 Annual Report to Stockholders, the company
does not use derivative financial instruments for speculative purposes. The
company maintains its cash and cash equivalents in financial instruments with
maturities of three months or less when purchased.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements and the auditor's report thereon included on pages 14
through 26 of the company's 2003 Annual Report to Stockholders are incorporated
herein by reference.
15
The Quarterly Financial Data (Unaudited) included in Note H of the notes to
consolidated financial statements, located on page 24 of the company's 2003
Annual Report to Stockholders, is also incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
No response required.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
In accordance with General Instruction G(3), the information contained under the
captions "ELECTION OF DIRECTORS" and "SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE" in the company's definitive proxy statement relating to
the annual meeting of stockholders to be held on Sept. 8, 2003, 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 Company."
ITEM 11. EXECUTIVE COMPENSATION.
In accordance with General Instruction G(3), the information contained under the
captions "COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS" (including the
information appearing under the sub captions "SUMMARY COMPENSATION TABLE,"
"Grants of Options," "OPTION GRANTS IN LAST FISCAL YEAR," "Option Exercises and
Holdings," "AGGREGATE OPTION EXERCISES IN FISCAL 2003 AND FISCAL YEAR-END OPTION
VALUES," "Change in Control and Severance Arrangements" and "Compensation of
Directors") and "COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION" in
the company's definitive proxy statement relating to the annual meeting of
stockholders to be held on Sept. 8, 2003, is incorporated herein by reference.
Neither the report of the compensation committee of the company's board of
directors on executive compensation nor the performance graph included in the
company's definitive proxy statement for the annual meeting of stockholders to
be held on Sept. 8, 2003, shall be deemed to be incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.
In accordance with General Instruction G(3), the information called for in this
Item 12 regarding the security ownership of certain beneficial owners and
management is incorporated herein by reference to the information under the
caption "STOCK OWNERSHIP" in the company's definitive proxy statement relating
to the annual meeting of stockholders to be held on Sept. 8, 2003.
16
The information called for in this Item 12 regarding securities authorized for
issuance under equity compensation plans is included in the following section.
EQUITY COMPENSATION PLAN INFORMATION
The company has several compensation plans under which it may issue equity
securities to its directors, officers and employees in exchange for goods or
services:
- - the Bob Evans Farms, Inc. First Amended and Restated 1992 Nonqualified
Stock Option Plan (the "1992 Stock Option Plan"),
- - the Bob Evans Farms, Inc. First Amended and Restated 1993 Long Term
Incentive Plan for Managers (the "1993 LTIP"),
- - the Bob Evans Farms, Inc. First Amended and Restated 1994 Long Term
Incentive Plan (the "1994 LTIP") and
- - the Bob Evans Farms, Inc. First Amended and Restated 1998 Stock Option and
Incentive Plan (the "1998 Stock Option Plan").
In addition, there are outstanding stock options that were issued under the Bob
Evans Farms, Inc. 1989 Stock Option Plan for Nonemployee Directors (the "1989
Stock Option Plan") and the Bob Evans Farms, Inc. 1991 Incentive Stock Option
Plan (the "1991 Stock Option Plan"). The company cannot grant additional awards
under the 1989 Stock Option Plan or the 1991 Stock Option Plan. Each of the
previously mentioned plans has been approved by the company's stockholders.
The following table shows, as of April 25, 2003, the number of common shares
issuable upon exercise of outstanding stock options, the weighted average
exercise price of those stock options and the number of common shares remaining
for future issuance under the plans, excluding shares issuable upon exercise of
outstanding stock options.
- ---------------------------------------------------------------------------------------------------------------------
(a) (b) (c)
- ---------------------------------------------------------------------------------------------------------------------
Number of securities
Number of securities remaining available for
to be issued upon Weighted-average future issuance under
exercise of exercise price of equity compensation plans
outstanding options, outstanding options, (excluding securities
Plan Category warrants and rights warrants and rights reflected in column (a))
- ---------------------------------------------------------------------------------------------------------------------
Equity compensation plans
approved by security holders 2,785,381(1) $19.83 2,588,917(2)
- ---------------------------------------------------------------------------------------------------------------------
Equity compensation plans not
approved by security holders N/A N/A N/A
- ---------------------------------------------------------------------------------------------------------------------
Total 2,785,381(1) $19.83 2,588,917(2)
- ---------------------------------------------------------------------------------------------------------------------
17
(1) Includes:
- 5,893 common shares issuable upon exercise of options granted under
the 1989 Stock Option Plan,
- 10,474 common shares issuable upon exercise of options granted under
the 1991 Stock Option Plan,
- 308,938 common shares issuable upon exercise of options granted under
the 1992 Stock Option Plan,
- 252,794 common shares issuable upon exercise of options granted under
the 1994 LTIP and
- 2,207,282 common shares issuable upon exercise of options granted
under the 1998 Stock Option Plan.
(2) Includes:
- 158,395 common shares remaining available for issuance under the 1992
Stock Option Plan,
- 198,419 common shares remaining available for issuance under the 1993
LTIP,
- 31,705 common shares remaining available for issuance under the 1994
LTIP and
- 2,200,398 common shares remaining available for issuance under the
1998 Stock Option Plan.
The 1993 LTIP authorizes the grant of performance awards if the company's
actual performance level (i.e., the amount by which the company's
consolidated net income for the fiscal year exceeds the company's
consolidated net income for the immediately preceding fiscal year) exceeds
a threshold performance level established by the compensation committee for
that fiscal year. Each performance award is equal to a percentage of the
participant's compensation, not in excess of 8 percent, determined through
a formula described in the 1993 LTIP. The dollar amount of each
participant's performance award is converted into a number of common shares
based on the fair market value of a common share as of the close of
business on the last day of the applicable fiscal year. If the participant
has not satisfied the vesting requirements described in the 1993 LTIP, the
common shares issued will be restricted and subject to forfeiture.
The 1994 LTIP authorizes the award of performance share awards in addition
to stock options. Performance share awards will be paid in cash, common
shares or a combination of cash and common shares if the company's
performance (or the performance of any subsidiary selected by the
compensation committee) meets certain goals established by the compensation
committee. In addition to establishing performance goals, the compensation
committee will determine the length of a performance period, the maximum
value of a performance share award and the minimum performance required
before a payment will be made. The 1994 LTIP does not allocate a specific
portion of the common shares available for issuance under the plan to the
award of stock options or performance share awards. As of April 25, 2003,
no performance share awards had been issued under the 1994 LTIP.
The 1998 Stock Option Plan authorizes the award of performance share awards
and restricted stock in addition to stock options. The performance share
awards authorized under the 1998 Stock Option Plan have the same terms as
the performance share awards described above with respect to the 1994 LTIP.
Awards of restricted stock consist of awards of common shares that may be
subject to forfeiture, restrictions on transfer and other specified
conditions as determined by the compensation committee. Participants are
not required to pay for the common shares covered by the restricted stock
award, except as otherwise provided by applicable law.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
In accordance with General Instruction G(3), the information contained under the
captions "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" and "COMPENSATION
18
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION" in the company's definitive
proxy statement relating to the annual meeting of stockholders to be held on
Sept. 8, 2003, is incorporated herein by reference.
ITEM 14. CONTROLS AND PROCEDURES
Within the 90-day period prior to the filing date of this report, the company,
under the supervision and with the participation of its management, including
its principal executive officer and principal financial officer, performed an
evaluation of the effectiveness of the design and operation of the company's
disclosure controls and procedures, as contemplated by Rule 13a-15 under the
Securities Exchange Act of 1934, as amended. Based on that evaluation, the
company's management, including its principal executive officer and principal
financial officer, concluded that such disclosure controls and procedures are
effective to ensure that material information relating to the company, including
its consolidated subsidiaries, is made known to them, particularly during the
period for which the periodic reports are being prepared.
No significant changes were made in the company's internal controls or in other
factors that could significantly affect these controls subsequent to the date of
the evaluation performed pursuant to Securities Exchange Act Rule 13a-15
referred to above.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a)(1) Financial Statements
For a list of all financial statements included with this Annual Report
on Form 10-K, see the "Index to Financial Statements" at page 29.
(a)(2) Financial Statement Schedules
All schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission are not required
under the related instructions or are inapplicable and, therefore, have
been omitted.
(a)(3) Exhibits
Exhibits filed with this Annual Report on Form 10-K are attached
hereto. For a list of such exhibits, see the "Index to Exhibits" at
page 30. 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.
19
Executive Compensation Plans and Arrangements
Exhibit
Number Description Location
- ------ ----------- --------
10(a) Change in Control Agreement, Incorporated herein by reference to
effective May 1, 2002, between Exhibit 10(a) of the company's Annual
Stewart K. Owens and Bob Evans Farms, Report on Form 10-K for its fiscal year
Inc. ended April 26, 2002.
(File No. 0-1667)
10(b) Change in Control Agreement, Incorporated herein by reference to
effective May 1, 2002, between Donald Exhibit 10(b) of the company's Annual
J. Radkoski and Bob Evans Farms, Inc. Report on Form 10-K for its fiscal year
ended April 26, 2002.
(File No. 0-1667)
10(c) Schedule A to Exhibit 10(b) Attached hereto.
identifying other substantially
identical agreements between Bob
Evans Farms, Inc. and certain
executive officers of Bob Evans
Farms, Inc.
10(d) Bob Evans Farms, Inc. 1989 Stock Incorporated herein by reference to
Option Plan for Nonemployee Directors Exhibit 4(d) to the company's
Registration Statement on Form S-8,
filed Aug. 23, 1989.
(Registration No. 33-30665)
10(e) Bob Evans Farms, Inc. 1991 Incentive Incorporated herein by reference to
Stock Option Plan Exhibit 4(d) to the company's
Registration Statement on Form S-8,
filed Sept. 13, 1991.
(Registration No. 33-42778)
10(f) Bob Evans Farms, Inc. 1992 Incorporated herein by reference to
Nonqualified Stock Option Plan Exhibit 10(j) to the company's Annual
(effective for options granted prior Report on Form 10-K for its fiscal year
to May 1, 2002) ended April 24, 1992.
(File No. 0-1667)
10(g) Bob Evans Farms, Inc. Long Term Incorporated herein by reference to
Incentive Plan for Managers Exhibit 10(k) to the company's Annual
(effective for performance awards Report on Form 10-K for its fiscal year
granted prior to May 1, 2002) ended April 30, 1993.
(File No. 0-1667)
10(h) Bob Evans Farms, Inc. 1994 Long Term Incorporated herein by reference to
Incentive Plan (effective for options Exhibit 10(n) to the company's Annual
and other awards granted prior to May Report on Form 10-K for its fiscal year
1, 2002) ended April 29, 1994.
(File No. 0-1667)
20
Exhibit
Number Description Location
- ------ ----------- --------
10(i) Bob Evans Farms, Inc. 1998 Incorporated herein by reference to
Supplemental Executive Retirement Exhibit 10(l) to the company's Annual
Plan (effective for awards granted Report on Form 10-K for its fiscal year
prior to May 1, 2002) ended April 24, 1998.
(File No. 0-1667)
10(j) Bob Evans Farms, Inc. 1998 Directors Incorporated herein by reference to
Compensation Plan (effective May 1, Exhibit 10(m) to the company's Annual
1998, through May 6, 2002) Report on Form 10-K for its fiscal year
ended April 24, 1998.
(File No. 0-1667)
10(k) Bob Evans Farms, Inc. 1998 Stock Incorporated herein by reference to
Option and Incentive Plan (effective Exhibit 4(f) to the company's
for options and other awards granted Registration Statement on Form S-8
prior to May 1, 2002) filed March 22, 1999.
(Registration No. 333-74829)
10(l) Bob Evans Farms, Inc. Dividend Incorporated herein by reference to the
Reinvestment and Stock Purchase Plan company's Registration Statement on
Form S-3 filed March 19, 1999.
(Registration No. 333-74739)
10(m) Bob Evans Farms, Inc. and Affiliates Incorporated herein by reference to
Executive Deferral Program Exhibit 10(k) to the company's Annual
(effective, as amended, through April Report on Form 10-K for its fiscal year
30, 2002) ended April 27, 2001.
(File No. 0-1667)
10(n) First Amendment to Bob Evans Farms, Incorporated herein by reference to
Inc. and Affiliates Executive Exhibit 10(l) to the company's Annual
Deferral Program Report on Form 10-K for its fiscal year
ended April 27, 2001.
(File No. 0-1667)
10(o) Bob Evans Farms, Inc. First Amended Incorporated herein by reference to
and Restated 1992 Nonqualified Stock Exhibit 10(o) of the company's Annual
Option Plan (effective for options Report on Form 10-K for its fiscal year
granted after May 1, 2002) ended April 26, 2002.
(File No. 0-1667)
10(p) Bob Evans Farms, Inc. First Amended Incorporated herein by reference to
and Restated 1993 Long Term Incentive Exhibit 10(p) of the company's Annual
Plan for Managers (effective for Report on Form 10-K for its fiscal year
performance awards granted after May ended April 26, 2002.
1, 2002) (File No. 0-1667)
10(q) Bob Evans Farms, Inc. First Amended Incorporated herein by reference to
and Restated 1994 Long Term Incentive Exhibit 10(q) of the company's Annual
Plan (effective for options and other Report on Form 10-K for its fiscal year
awards granted after May 1, 2002) ended April 26, 2002.
(File No. 0-1667)
21
Exhibit
Number Description Location
- ------ ----------- --------
10(r) Bob Evans Farms, Inc. and Affiliates Incorporated herein by reference to
2003 Second Amended and Restated Exhibit 10(r) of the company's Annual
Supplemental Executive Retirement Plan Report on Form 10-K for its fiscal year
(effective for awards granted after May ended April 26, 2002.
1, 2002) (File No. 0-1667)
10(s) Bob Evans Farms, Inc. First Amended Incorporated herein by reference to
and Restated 1998 Stock Option and Exhibit 10(s) of the company's Annual
Incentive Plan (effective for options Report on Form 10-K for its fiscal year
and other awards granted after May 1, ended April 26, 2002.
2002) (File No. 0-1667)
10(t) Bob Evans Farms, Inc. and Affiliates Incorporated herein by reference to
Second Amended and Restated Executive Exhibit 10(t) of the company's Annual
Deferral Program (effective May 1, 2002) Report on Form 10-K for its fiscal year
ended April 26, 2002.
(File No. 0-1667)
10(u) Bob Evans Farms, Inc. Compensation Incorporated herein by reference to
Program for Directors (effective May Exhibit 10(u) of the company's Annual
7, 2002, through May 4, 2003) Report on Form 10-K for its fiscal year
ended April 26, 2002.
(File No. 0-1667)
10(v) Bob Evans Farms, Inc. Compensation Attached hereto.
Program for Directors (effective May
5, 2003)
10(w) Bob Evans Farms, Inc. 2002 Incentive Attached hereto.
Growth Plan (effective Sept. 9, 2003)
(b) Reports on Form 8-K
The company filed no current reports on Form 8-K during the last
quarter of the period covered by this report.
(c) Exhibits
Exhibits filed with this Annual Report on Form 10-K are attached
hereto. For a list of such exhibits, see the "Index to Exhibits" at
page 30.
(d) Financial Statement Schedules
None.
22
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Bob Evans Farms, Inc.
July 22, 2003 By: /s/ Donald J. Radkoski
----------------------------------------
Donald J. Radkoski
Chief Financial Officer, Treasurer
and Secretary (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 company and in
the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Stewart K. Owens Chairman of the Board July 22, 2003
- ------------------------------------
Stewart K. Owens
* Director July 22, 2003
- ------------------------------------
Larry C. Corbin
* Director July 22, 2003
- ------------------------------------
Daniel E. Evans
* Director July 22, 2003
- ------------------------------------
Daniel A. Fronk
23
* Director July 22, 2003
- ------------------------------------
Michael J. Gasser
* Director July 22, 2003
- ------------------------------------
E.W. (Bill) Ingram III
* Director July 22, 2003
- ------------------------------------
Cheryl L. Krueger-Horn
* Director July 22, 2003
- ------------------------------------
G. Robert Lucas
* Director July 22, 2003
- ------------------------------------
Robert E.H. Rabold
/s/ Donald J. Radkoski Chief Financial Officer, July 22, 2003
- ------------------------------------ Treasurer and Secretary
Donald J. Radkoski (Chief Accounting Officer)
* By Donald J. Radkoski pursuant to Powers of Attorney executed by the directors
and executive officers listed above, which Powers of Attorney have been filed
with the Securities and Exchange Commission.
/s/ Donald J. Radkoski
- ------------------------------------
Donald J. Radkoski
Chief Financial Officer,
Treasurer and Secretary
24
CERTIFICATION
I, Stewart K. Owens, certify that:
1. I have reviewed this annual report on Form 10-K of Bob Evans
Farms, Inc.;
2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading with respect to the period covered by this
annual report;
3. Based on my knowledge, the financial statements and other
financial information included in this annual report, fairly
present in all material respects the financial condition,
results of operations and cash flows of the registrant as of,
and for, the periods presented in this annual report;
4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and have:
a. designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries,
is made known to us by others within those entities,
particularly during the period in which this annual
report is being prepared;
b. evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date
within 90 days prior to the filing of this annual
report (the "Evaluation Date"); and
c. presented in this annual report our conclusions about
the effectiveness of the disclosure controls and
procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
functions):
a. all significant deficiencies in the design or
operation of internal controls which could adversely
affect the registrant's ability to record, process,
summarize and report financial data and have
identified for the registrant's auditors any material
weaknesses in internal controls; and
b. any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and
25
6. The registrant's other certifying officer and I have indicated
in this annual report whether there were significant changes
in internal controls or in other factors that could
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
Dated: July 22, 2003 By: /s/ Stewart K. Owens
--------------------------------------
Stewart K. Owens
Chairman of the Board, Chief Executive
Officer, President and Chief Operating
Officer
26
CERTIFICATION
I, Donald J. Radkoski, certify that:
1. I have reviewed this annual report on Form 10-K of Bob Evans
Farms, Inc.;
2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light
of the circumstances under which such statements were made,
not misleading with respect to the period covered by this
annual report;
3. Based on my knowledge, the financial statements and other
financial information included in this annual report, fairly
present in all material respects the financial condition,
results of operations and cash flows of the registrant as of,
and for, the periods presented in this annual report;
4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and have:
a. designed such disclosure controls and procedures to
ensure that material information relating to the
registrant, including its consolidated subsidiaries,
is made known to us by others within those entities,
particularly during the period in which this annual
report is being prepared;
b. evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date
within 90 days prior to the filing of this annual
report (the "Evaluation Date"); and
c. presented in this annual report our conclusions about
the effectiveness of the disclosure controls and
procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of registrant's
board of directors (or persons performing the equivalent
functions):
a. all significant deficiencies in the design or
operation of internal controls which could adversely
affect the registrant's ability to record, process,
summarize and report financial data and have
identified for the registrant's auditors any material
weaknesses in internal controls; and
b. any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and
27
6. The registrant's other certifying officer and I have indicated
in this annual report whether there were significant changes
in internal controls or in other factors that could
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
Dated: July 22, 2003 By: /s/ Donald J. Radkoski
-------------------------------
Donald J. Radkoski
Chief Financial Officer, Treasurer
and Secretary
28
BOB EVANS FARMS, INC.
ANNUAL REPORT ON FORM 10-K
FOR FISCAL YEAR ENDED APRIL 25, 2003
INDEX TO FINANCIAL STATEMENTS
Page(s) in 2003
Annual Report to
Description Stockholders
----------- ------------
Consolidated Balance Sheets at April 25, 2003, and April 26, 2002 ........................ 14
Consolidated Statements of Income for the fiscal years ended April 25, 2003;
April 26, 2002; and April 27, 2001 ................................................ 15
Consolidated Statements of Stockholders' Equity for the fiscal years ended
April 25, 2003; April 26, 2002; and April 27, 2001 ................................ 16
Consolidated Statements of Cash Flows for the fiscal years ended April 25, 2003;
April 26, 2002; and April 27, 2001 ................................................ 17
Notes to Consolidated Financial Statements ............................................... 18 - 25
Report of Ernst & Young LLP, Independent Auditors ........................................ 26
29
BOB EVANS FARMS, INC.
ANNUAL REPORT ON FORM 10-K
FOR FISCAL YEAR ENDED APRIL 25, 2003
INDEX TO EXHIBITS
Exhibit
Number Description Location
- ------ ----------- --------
3(a) Certificate of Incorporation of the Incorporated herein by reference to
company (filed with the Delaware Exhibit 3 (a) to the company's Annual
Secretary of State on Nov. 4, 1985) 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 by reference to
Certificate of Incorporation of the Exhibit 3(b) to the company's Annual
company dated Aug. 26, 1987 (filed Report on Form 10-K for its fiscal year
with the Delaware Secretary of State ended April 28, 1989.
on Sept. 4, 1987) (File No. 0-1667)
3(c) Certificate of Adoption of Amendment Incorporated herein by reference to
to Certificate of Incorporation of Exhibit 3(c) to the company's Annual
the company dated Aug. 9, 1993 (filed Report on Form 10-K for its fiscal year
with the Delaware Secretary of State ended April 29, 1994.
on Aug. 10, 1993) (File No. 0-1667)
3(d) Restated Certificate of Incorporation Incorporated herein by reference to
of company reflecting amendments Exhibit 3(d) to the company's Annual
through Aug. 10, 1993. Note: filed Report on Form 10-K for its fiscal year
for purposes of SEC reporting ended April 29, 1994.
compliance only - this document has (File No. 0-1667)
not been filed with the Delaware
Secretary of State
3(e) Amended and Restated By-Laws of the Incorporated herein by reference to
company Exhibit 3(e) to the company's Annual
Report on Form 10-K for its fiscal year
ended April 28, 2000.
(File No. 0-1667)
4 Agreement to furnish instruments Incorporated herein by reference to
defining rights of holders of Exhibit 4 to the company's Annual
long-term debt Report on Form 10-K for its fiscal year
ended April 27, 2001.
(File No. 0-1667)
10(a) Change in Control Agreement, Incorporated herein by reference to
effective May 1, 2002, between Exhibit 10(a) of the company's Annual
Stewart K. Owens and Bob Evans Farms, Report on Form 10-K for its fiscal year
Inc. ended April 26, 2002.
(File No. 0-1667)
30
Exhibit
Number Description Location
- ------ ----------- --------
10(b) Change in Control Agreement, Incorporated herein by reference to
effective May 1, 2002, between Donald Exhibit 10(b) of the company's Annual
J. Radkoski and Bob Evans Farms, Inc. Report on Form 10-K for its fiscal year
ended April 26, 2002.
(File No. 0-1667)
10(c) Schedule A to Exhibit 10(b) Attached hereto.
identifying other substantially
identical agreements between Bob
Evans Farms, Inc. and certain
executive officers of Bob Evans
Farms, Inc.
10(d) Bob Evans Farms, Inc. 1989 Stock Incorporated herein by reference to
Option Plan for Nonemployee Directors Exhibit 4(d) to the company's
Registration Statement on Form S-8,
filed Aug. 23, 1989.
(Registration No. 33-30665)
10(e) Bob Evans Farms, Inc. 1991 Incentive Incorporated herein by reference to
Stock Option Plan Exhibit 4(d) to the company's
Registration Statement on Form S-8,
filed Sept. 13, 1991.
(Registration No. 33-42778)
10(f) Bob Evans Farms, Inc. 1992 Incorporated herein by reference to
Nonqualified Stock Option Plan Exhibit 10(j) to the company's Annual
(effective for options granted prior Report on Form 10-K for its fiscal year
to May 1, 2002) ended April 24, 1992.
(File No. 0-1667)
10(g) Bob Evans Farms, Inc. Long Term Incorporated herein by reference to
Incentive Plan for Managers Exhibit 10(k) to the company's Annual
(effective for performance awards Report on Form 10-K for its fiscal year
granted prior to May 1, 2002) ended April 30, 1993.
(File No. 0-1667)
10(h) Bob Evans Farms, Inc. 1994 Long Term Incorporated herein by reference to
Incentive Plan (effective for options Exhibit 10(n) to the company's Annual
and other awards granted prior to May Report on Form 10-K for its fiscal year
1, 2002) ended April 29, 1994.
(File No. 0-1667)
10(i) Bob Evans Farms, Inc. 1998 Incorporated herein by reference to
Supplemental Executive Retirement Exhibit 10(l) to the company's Annual
Plan (effective for awards granted Report on Form 10-K for its fiscal year
prior to May 1, 2002) ended April 24, 1998.
(File No. 0-1667)
10(j) Bob Evans Farms, Inc. 1998 Directors Incorporated herein by reference to
Compensation Plan (effective May 1, Exhibit 10(m) to the company's Annual
1998, through May 6, 2002) Report on Form 10-K for its fiscal year
ended April 24, 1998.
(File No. 0-1667)
31
Exhibit
Number Description Location
- ------ ----------- --------
10(k) Bob Evans Farms, Inc. 1998 Stock Incorporated herein by reference to
Option and Incentive Plan (effective Exhibit 4(f) to the company's
for options and other awards granted Registration Statement on Form S-8
prior to May 1, 2002) filed March 22, 1999.
(Registration No. 333-74829)
10(l) Bob Evans Farms, Inc. Dividend Incorporated herein by reference to the
Reinvestment and Stock Purchase Plan company's Registration Statement on
Form S-3 filed March 19, 1999.
(Registration No. 333-74739)
10(m) Bob Evans Farms, Inc. and Affiliates Incorporated herein by reference to
Executive Deferral Program Exhibit 10(k) to the company's Annual
(effective, as amended, through April Report on Form 10-K for its fiscal year
30, 2002) ended April 27, 2001.
(File No. 0-1667)
10(n) First Amendment to Bob Evans Farms, Incorporated herein by reference to
Inc. and Affiliates Executive Exhibit 10(l) to the company's Annual
Deferral Program Report on Form 10-K for its fiscal year
ended April 27, 2001.
(File No. 0-1667)
10(o) Bob Evans Farms, Inc. First Amended Incorporated herein by reference to
and Restated 1992 Nonqualified Stock Exhibit 10(o) of the company's Annual
Option Plan (effective for options Report on Form 10-K for its fiscal year
granted after May 1, 2002) ended April 26, 2002.
(File No. 0-1667)
10(p) Bob Evans Farms, Inc. First Amended Incorporated herein by reference to
and Restated 1993 Long Term Incentive Exhibit 10(p) of the company's Annual
Plan for Managers (effective for Report on Form 10-K for its fiscal year
performance awards granted after May ended April 26, 2002.
1, 2002) (File No. 0-1667)
10(q) Bob Evans Farms, Inc. First Amended Incorporated herein by reference to
and Restated 1994 Long Term Incentive Exhibit 10(q) of the company's Annual
Plan (effective for options and other Report on Form 10-K for its fiscal year
awards granted after May 1, 2002) ended April 26, 2002.
(File No. 0-1667)
10(r) Bob Evans Farms, Inc. and Affiliates Incorporated herein by reference to
2003 Second Amended and Restated Exhibit 10(r) of the company's Annual
Supplemental Executive Retirement Plan Report on Form 10-K for its fiscal year
(effective for awards granted after May ended April 26, 2002.
1, 2002) (File No. 0-1667)
10(s) Bob Evans Farms, Inc. First Amended Incorporated herein by reference to
and Restated 1998 Stock Option and Exhibit 10(s) of the company's Annual
Incentive Plan (effective for options Report on Form 10-K for its fiscal year
and other awards granted after May 1, ended April 26, 2002.
2002) (File No. 0-1667)
32
Exhibit
Number Description Location
- ------ ----------- --------
10(t) Bob Evans Farms, Inc. and Affiliates Incorporated herein by reference to
Second Amended and Restated Executive Exhibit 10(t) of the company's Annual
Deferral Program (effective May 1, 2002) Report on Form 10-K for its fiscal year
ended April 26, 2002.
(File No. 0-1667)
10(u) Bob Evans Farms, Inc. Compensation Incorporated herein by reference to
Program for Directors (effective May Exhibit 10(u) of the company's Annual
7, 2002, through May 4, 2003) Report on Form 10-K for its fiscal year
ended April 26, 2002.
(File No. 0-1667)
10(v) Bob Evans Farms, Inc. Compensation Attached hereto.
Program for Directors (effective May 5,
2003)
10(w) Bob Evans Farms, Inc. 2002 Incentive Attached hereto.
Growth Plan (effective Sept. 9, 2002)
13 Company's Annual Report to Stockholders Attached hereto.
for the fiscal year ended April 25,
2003 (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 company Incorporated herein by reference to
Exhibit 21 of the company's Annual
Report on Form 10-K for its fiscal year
ended April 26, 2002.
(File No. 0-1667)
23 Consent of Ernst & Young, LLP Attached hereto.
24 Powers of Attorney of Directors and Attached hereto.
Executive Officers
99(a) Certification Pursuant to Title 18, Attached hereto.
United States Code, Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (Chief Executive Officer)
99(b) Certification Pursuant to Title 18, Attached hereto.
United States Code, Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 (Chief Financial Officer)
33