BOBE
$66.00
Bob Evans Farms
($.28)
(.42%)
Earnings Details
4th Quarter April 2017
Thursday, June 15, 2017 7:00:25 AM
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Summary

Bob Evans Farms Reaffirms Below Estimates

Bob Evans Farms (BOBE) reported 4th Quarter April 2017 earnings of $0.61 per share on revenue of $99.9 million. on revenue of $318.1 million. Revenue fell 71.1% compared to the same quarter a year ago.

The company said it continues to expect fiscal 2018 GAAP earnings of $2.06 to $2.24 per share on revenue of $464.0 million to $476.0 million. The current consensus earnings estimate is $2.38 per share on revenue of $479.0 million for the year ending April 30, 2018.

Bob Evans Farms Inc is a full-service restaurant company that operates Bob Evans Restaurants. It is also a producer and distributor of pork sausage product and complementary home-style refrigerated side dishes and frozen food items.

Results
Reported Earnings
$0.61
Earnings Whisper
-
Consensus Estimate
Reported Revenue
$99.9 Mil
Revenue Estimate
$318.1 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Bob Evans Reports Fourth Quarter and Fiscal Year 2017 Results

Fourth quarter net sales from continuing operations* totals $99.9 million, an increase of 4.9 percent from 13 week comparable fiscal 2016 (excludes 53 week); consolidated GAAP net income of $5.39 per diluted share compared to $0.03 in the prior year and non-GAAP net income of $0.61 per diluted share, an increase of 27.1% from $0.48 in the prior year;

Fiscal year 2017 net sales from continuing operations totals $394.8 million, an increase of 3.8 percent from the 52 week comparable fiscal 2016 (excludes 53rd week); consolidated GAAP net income of $6.28 per diluted share compared to $1.13 in the prior year and non-GAAP net income of $2.38 per diluted share, an increase of 17.8% from $2.02 in the prior year;

Fourth quarter retail side-dish and sausage pounds sold increased 11.5 percent and 9.2 percent, respectively, when compared on a 13 week vs. 13 week basis. Q4 food service volume increased 5.7 percent, also on a 13 week vs. 13 week comparison;

On May 1, 2017, the Company completed the previously announced acquisition of Pineland Farms Potato Company;

On April 28, 2017, the Company completed the sale of the Bob Evans Restaurants segment and completed a new $300 million credit facility;

Company reiterates fiscal year 2018 guidance for net sales of $470 million at the midpoint of its range and EBITDA of $105 million at the midpoint of its range; and initiates guidance for diluted EPS of $2.06 to $2.24;

Quarterly dividend of $0.34 per share payable on June 26, 2017, to stockholders of record at the close of business on June 12, 2017. Special dividend of $7.50 per share is payable June 16, 2017. $100 million share repurchase authorization remains in place through December 31, 2017.

* On April 28, 2017, the Company completed the sale of Bob Evans Restaurants to Golden Gate Capital. As a result, the results of operations of Bob Evans Restaurants ("BER") have been reported as discontinued operations and all financial statement items for the current and prior periods reflect BER as a discontinued business. Adjusted, or non-GAAP, results presented herein include both continuing and discontinued operations and exclude certain items for comparability. Descriptions of measures excluding these items are provided in non-GAAP financial measures and reconciliations of such non-GAAP measures to the most comparable GAAP measure are provided in the tables at the end of this release.

Bob Evans Farms, Inc. (BOBE) today announced its financial results for the fiscal 2017 fourth quarter ended Friday, April 28, 2017. On a GAAP basis, the Company reported consolidated net income of $108.9 million, or $5.39 per diluted share, compared with net income of $0.6 million, or $0.03 per diluted share, in the corresponding period last year. Non-GAAP consolidated net income was $12.2 million, or $0.61 per diluted share, compared with non-GAAP net income of $9.5 million, or $0.48 per diluted share, in the corresponding period last year.

Net sales from continuing operations in the fourth quarter were $99.9 million, a decrease of $2.5 million, or 2.4 percent, compared to $102.4 million in the corresponding period last year. Excluding the impact of an extra week in the fourth quarter of fiscal 2016, net sales increased 4.9 percent. The fourth quarter of fiscal 2017 included 13 weeks compared to 14 weeks in fiscal 2016.

GAAP net income in the fourth quarter of $108.9 million consists of $6.8 million from continuing operations and $102.1 million from discontinued operations. GAAP net income in the prior year period of $0.6 million consisted of $5.9 million from continuing operations and a $5.3 million loss from discontinued operations. Non-GAAP net income in the fourth quarter of $12.2 million includes $11.7 million from continuing operations and $0.5 million from discontinued operations. Non-GAAP net income in the prior year period of $9.5 million included $6.5 million from continuing operations and $3.0 million from discontinued operations.

GAAP diluted earnings per share in the fourth quarter of $5.39 consists of $0.33 from continuing operations and $5.06 from discontinued operations. GAAP diluted earnings per share of $0.03 for the prior-year period consisted of $0.30 from continuing operations and a loss of $0.27 from discontinued operations. Non-GAAP diluted earnings per share in the fourth quarter of $0.61 consists of $0.58 from continuing operations and $0.03 from discontinued operations. Non-GAAP diluted earnings per share of $0.48 for the prior-year period consisted of $0.32 from continuing operations and $0.16 from discontinued operations. The impact of the 53rd week on Q4 2016 and fiscal 2016 diluted earnings per share was $0.13.

Fourth-quarter fiscal 2017 commentary

President and Chief Executive Officer Mike Townsley said, "We closed the fiscal year with strong fourth quarter earnings, exceeding our full year guidance, and completed the strategic transactions that have reshaped Bob Evans into a higher growth and higher margin, pure-play packaged foods company. We are now focusing our attention on capitalizing on the growth opportunities in our refrigerated side-dish business while completing the integration of Pineland Farms Potato Company. The Pineland acquisition provides the added production capacity as well as the product and channel opportunities to support our growth."

"Fourth quarter net sales from continuing operations increased 4.9 percent as compared to the comparable 13 week period in the prior year, driven by the continuation of double digit growth in our high margin refrigerated side-dish business. With the sale of BER complete, we can strategically expand our food service sales effort, leveraging Pineland Farms’ strength in this large channel of distribution."

Fourth-quarter fiscal 2017 summary - continuing operations

Net sales from continuing operations were $99.9 million, a decrease of $2.5 million, or 2.4 percent, compared to $102.4 million in the corresponding period last year. Excluding the 14 week in the prior year period, net sales from continuing operations increased 4.9 percent. Pounds sold for the fourth quarter, adjusted for a 13 week vs. 13 week comparison, increased 7.0 percent while average net selling price per pound declined 2.3 percent compared to the corresponding period last year. The decline in average net selling price reflects an increased sales mix of lower-priced, although higher-margin, side-dish products relative to sausage, as well as reduced net sausage pricing. From a net sales perspective, an 11.5 percent increase in side-dish pounds sold, a 9.2 percent increase in sausage pounds sold, and a 11.5 percent increase in food service pounds sold were partially offset by a 5.1 percent increase in trade spending and a 17.0 percent decline in frozen product pounds sold, all compared to the comparable 13 week period in the prior year.

GAAP operating income from continuing operations was $9.5 million, compared to $10.3 million in the corresponding period last year. Non-GAAP operating income from continuing operations was $13.8 million, compared to $11.3 million in the corresponding period last year, an improvement of $2.5 million. The improvement was due primarily to the aforementioned increase in pounds sold and the favorable sales mix of higher-margin side-dish items; partially offset by higher production costs, and increased freight expense resulting from increased pounds sold. S,G&A expenses totaling $6.2 million, previously identified as "corporate and other" costs, are now included within continuing operations. Of these costs, $0.7 million represent costs primarily related to wages and benefits for terminated employees that will no longer be in the Company’s expense base in fiscal 2018.

Fourth-quarter fiscal 2017 summary - discontinued operations

Net sales from discontinued operations were $213.5 million, a decline of $29.7 million, or 12.2 percent, compared to net sales of $243.2 million in the corresponding period last year. The sales decline was primarily the result of a 3.9 percent decline in same store sales as well as closing 26 stores.

GAAP income before taxes from discontinued operations was $160.7 million, compared to GAAP loss before taxes from discontinued operations of $12.2 million last year. The increase primarily reflects a $155.7 million gain on the sale of BER. Non-GAAP income before taxes from discontinued operations was $3.1 million, compared to $2.3 million last year, an increase of $0.8 million.

Fourth-quarter fiscal 2017 net interest expense

GAAP net interest expense was $4.3 million in the fourth quarter, an increase of $1.7 million, compared to $2.6 million in the corresponding period last year. Non-GAAP net interest expense was $2.2 million in the fourth quarter, a decrease of $0.4 million, compared to $2.6 million in the corresponding period last year. Net interest expense on all revolving credit borrowings are included in continuing operations, while net interest expense related to the headquarters mortgage is included within discontinued operations.

Fourth-quarter fiscal 2017 taxes

The Company recognized a GAAP tax benefit for continuing operations of 28.6 percent for the fourth quarter of fiscal 2017, as compared to tax expense of 23.6 percent for the prior year period. On a non-GAAP basis, the Company recognized a tax benefit of 1.1 percent for the fourth quarter of fiscal 2017, as compared to tax expense of 25.8 percent for the prior year period. The change in the tax rate was driven primarily by the sale of the Bob Evans Restaurant business.

Fiscal-year 2017 summary - continuing operations

Net sales for the full year from continuing operations were $394.8 million, an increase of $7.2 million, or 1.9 percent, compared to $387.6 million in the prior year. Excluding the 53 week during fiscal 2016, net sales from continuing operations increased 3.8 percent. Pounds sold for fiscal 2017, on a 52 week vs. 52 week basis, increased 7.0 percent while average net selling price per pound declined 3.4 percent compared to the prior year. The decline in average net selling price reflects an increased sales mix of lower-priced, although higher-margin, side-dish products relative to sausage, as well as reduced net sausage pricing through increased trade spending. From a net sales perspective, a 12.7 percent increase in side-dish pounds sold, a 5.9 percent increase in sausage pounds sold, and a 1.6 percent increase in food service pounds sold were partially offset by a 12.0 percent increase in trade spending and an 11.9 percent decline in frozen product pounds sold, all compared to the comparable 52 week period in the prior year.

For fiscal year 2017, GAAP operating income from continuing operations was $30.1 million, compared to $33.1 million in the prior year. Non-GAAP operating income from continuing operations was $53.0 million, compared to $37.7 million in the prior year, an improvement of $15.3 million. The improvement was due primarily to the aforementioned increase in pounds sold and the favorable sales mix of higher-margin side-dish items, partially offset by a $4.9 million increase in trade spending net of lower sow costs, lower average net selling prices and higher production costs and increased freight expense resulting from increased pounds sold. S,G&A expenses totaling $23.4 million, previously identified as "corporate and other" costs, are now included within continuing operations. Of these costs, $6.4 million represent costs primarily related to wages and benefits for terminated employees that will no longer be in the Company’s expense base in fiscal 2018.

Fiscal-year 2017 summary - discontinued operations

For the fiscal year ended April 28, 2017, net sales from discontinued operations were $876.8 million, a decline of $74.4 million, or 7.8 percent, compared to net sales of $951.2 million in the prior year. The decline in sales was primarily the result of a 3.2 percent decrease in same store sales and 26 store closings.

For the fiscal year ended April 28, 2017, GAAP income before taxes from discontinued operations was $167.0 million, compared to GAAP income before taxes from discontinued operations of $2.8 million in the prior year. The increase primarily reflects a $150.2 million gain on the sale of BER. Non-GAAP income before taxes from discontinued operations was $17.3 million, compared to $28.2 million in the prior year, a decline of $10.9 million.

Fiscal-year 2017 net interest expense

GAAP net interest expense was $9.2 million for fiscal year 2017, a decrease of $1.2 million, compared to $10.4 million in the prior year. Non-GAAP net interest expense was $8.3 million for fiscal year 2017, a decrease of $1.6 million, compared to $9.9 million in the prior year. Net interest expense on all revolving credit borrowings are included in continuing operations, while net interest expense related to the headquarters mortgage is included within discontinued operations.

Fiscal-year 2017 taxes

The Company recognized GAAP tax expense for continuing operations of 18.5 percent for fiscal year 2017, as compared to 28.4 percent for the prior year. The change in the tax rate was driven primarily by officer’s life insurance and discrete items. On a non-GAAP basis, the tax rate was 25.9 percent for continuing operations. Discontinued operations are presented net of income tax expense or benefit.

Fiscal-year 2017 balance sheet highlights

The Company’s cash balance and outstanding debt at April 28, 2017 were $210.9 million and $2.7 million, respectively, compared to $12.9 million and $339.1 million at the end of the prior year. The decrease in borrowings and increase in cash balance were the result of proceeds associated with the sale of BER.

Fiscal year 2018 outlook

Chief Administrative and Chief Financial Officer Mark Hood said, "We are initiating fiscal 2018 GAAP diluted earnings per share guidance in a range of $2.06 to $2.24. Additionally, we are providing fiscal 2018 guidance ranges for both net sales and EBITDA that are consistent with the preliminary fiscal 2018 guidance of $470 million and $105 million, respectively, that we issued on January 24. 2017."

Guidance Metric
FY ’18
Net sales
$464 to $476 million
EBITDA
$102 to $108 million
GAAP diluted earnings per share
$2.06 to $2.24
Sow cost (per hundredweight)
$43 to $46
Capital expenditures
$25 to $30 million
Net interest expense
$3.8 to $4.3 million
GAAP tax rate
34.5% to 35.5%
Diluted weighted-average share count
approximately 20.4 million shares
Share repurchase authorization
$100 million

This outlook is subject to a number of factors beyond the Company’s control, including the risk factors discussed in the Company’s fiscal 2017 Annual Report on Form 10??’K and its other subsequent filings with the Securities and Exchange Commission.

Investor Conference Call

The Company will host a conference call today, Thursday, June 15, 2017 to discuss its fourth quarter and fiscal year 2017 results at 8:30 a.m. Eastern Time.

The call can be accessed live over the telephone by dialing (855) 468-0551, or for international callers (484) 756-4323, access code 5876489. A replay will be available shortly after the call and can be accessed by dialing (855) 859-2056, or for international callers (404) 537-3406, access code 5876489.

Interested parties may also listen to a simultaneous webcast available on the Company’s website at http://investors.bobevans.com/events.cfm. The webcast will be archived in the same location for approximately 90 days following the call.

EBITDA and other non-GAAP financial measures

We define EBITDA as earnings before interest, taxes, depreciation and amortization including stock compensation. Management uses EBITDA and the other non-GAAP measures included in this release as key metrics in the evaluation of underlying Company performance and in making financial, operating and planning decisions. The Company believes these measures are useful to investors because they increase transparency, assist investors in understanding the underlying performance of the Company and assist in the analysis of ongoing operating trends. We believe EBITDA is frequently used by analysts, investors and other interested parties in their evaluation of the Company’s performance as compared to our competitors, many of which present EBITDA measures when reporting their results. We believe the non-GAAP measures used in this release provide meaningful supplemental information regarding financial performance by excluding certain expenses and benefits that may not be indicative of core business operating results. We believe these non-GAAP measures, when viewed in conjunction with U.S. GAAP results and the accompanying reconciliations, enhance the comparability of results against prior periods and allow for greater transparency of financial results and business outlook. The presentation of EBITDA and other non-GAAP measures included in this release should not be considered as an alternative to net income, determined in accordance with U.S. GAAP, as an indicator of the Company’s operating performance, as an indicator of cash flows, or as a measure of liquidity. While EBITDA and our other non-GAAP measures are frequently used as measures of operations, they are not necessarily comparable to other similarly titled captions of other companies due to the potential inconsistencies in the method of calculation.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

Certain statements in this news release that are not historical facts are forward-looking statements. Forward-looking statements involve various important assumptions, risks and uncertainties. Actual results may differ materially from those predicted by the forward-looking statements because of various factors and possible events. Additional information about the factors and events that could cause actual results to differ materially from those predicted by the forward looking statements, along with certain other risks, uncertainties and assumptions related to the Company and its business, may be found in our Annual Report on Form 10-K for the fiscal year ended April 28, 2017, and in our other filings with the Securities and Exchange Commission. We note these factors for investors as contemplated by the Private Securities Litigation Reform Act of 1995. Predicting or identifying all such risk factors is impossible. Consequently, investors should not consider any such list to be a complete set of all potential risks and uncertainties. Forward-looking statements speak only as of the date on which they are made, and we undertake no obligation to update any forward-looking statement to reflect circumstances or events that occur after the date of the statement to reflect unanticipated events. All subsequent written and oral forward-looking statements attributable to us or any person acting on behalf of the Company are qualified by the cautionary statements in this section.

About Bob Evans Farms, Inc.

Bob Evans Farms, Inc. is a leading producer and distributor of refrigerated potato, pasta and vegetable-based side dishes, pork sausage, and a variety of refrigerated and frozen convenience food items under the Bob Evans and Owens brand names. For more information about Bob Evans Farms, Inc., visit www.bobevansgrocery.com.

BOBE-E

Source: Bob Evans Farms, Inc.

Bob Evans Farms, Inc.
Earnings Release Fact Sheet (unaudited)
Fourth quarter Fiscal 2017 compared to the corresponding period a year ago:
(in thousands, except per share amounts)
Basic EPS
Diluted EPS
Three Months Ended
Three Months Ended
Three Months Ended
April 28,
April 29,
April 28,
April 29,
April 28,
April 29,
2017
2016
2017
2016
2017
2016
Operating Income (Loss) as Reported
Operating Income from Continuing Operations
$
9,508
$
10,334
Net Interest Expense
4,254
2,571
Income Before Taxes from Continuing Operations
5,254
7,763
(Benefit) Provision for Income Taxes from Continuing Operations
(1,503
)
1,831
Net Income as Reported from Continuing Operations
6,757
5,932
$
0.34
$
0.30
$
0.33
$
0.30
Income (Loss) Before Taxes from Discontinued Operations
160,662
(12,242
)
Provision (Benefit) for Income Taxes from Discontinued Operations 58,552
(6,891
)
Income (Loss) from Discontinued Operations as Reported
102,110
(5,351
)
$
5.13
$
(0.27 )
$
5.06
$
(0.27 )
Net Income as Reported
108,867
581
$
5.47
$
0.03
$
5.39
$
0.03
Adjustments to Continuing Operations
Accelerated stock compensation
3,992
--
Legal and professional fees
646
--
Severance/Restructuring
(305
)
972
Write off of unamortized debt costs
2,005
--
Total Adjustments to Continuing Operations
6,338
972
Adjustments to Discontinued Operations
Gain on sale of restaurants
(155,698
)
--
Restaurant depreciation
(11,846
)
--
Accelerated stock compensation
6,513
--
Severance
2,464
193
Impairment
--
6,710
Sale leaseback
--
9,560
Litigation settlement
--
(3,344
)
Store closure costs
--
1,441
Write off of unamortized debt costs
973
--
Total Adjustments to Discontinued Operations
(157,594
)
14,560
Non-GAAP Operating Income from Continuing Operations
13,841
11,306
Non-GAAP Net Interest Expense
2,249
2,571
Non-GAAP
Income Before Taxes from Continuing Operations
11,592
8,735
Adjustments to Tax Expense from Continuing Operations
1,378
421
Non-GAAP Provision for Income Taxes from Continuing Operations
(125
)
2,252
Non-GAAP Net Income from Continuing Operations
11,717
6,483
$
0.59
$
0.33
$
0.58
$
0.32
Non-GAAP Income before taxes from Discontinued Operations
3,068
2,318
Adjustments to Tax Expense from Discontinued Operations
(55,985
)
6,161
Non-GAAP Provision for Income Taxes from Discontinued Operations
2,567
(730
)
Non-GAAP Net Income from Discontinued Operations
501
3,048
$
0.02
$
0.15
$
0.03
$
0.16
Non-GAAP Net Income
$
12,218
$
9,531
$
0.61
$
0.48
$
0.61
$
0.48
Weighted Average Shares Outstanding
19,896
19,854
20,188
19,995
Fourth quarter Fiscal 2017 compared to the corresponding period a year ago:
(in thousands)
Consolidated Results
Three Months Ended
Three Months Ended
April 28, 2017
% of Sales
April 29, 2016
% of Sales
Operating Income from Continuing Operations as Reported
Net Sales
$
99,923
$
102,394
Cost of sales
43,649
43.7
%
44,810
43.8
%
Operating wage and fringe benefit expenses
8,832
8.8
%
10,991
10.7
%
Other operating expenses
14,030
14.0
%
14,746
14.4
%
Selling, general and administrative expenses
17,064
17.2
%
16,436
16.0
%
Depreciation and amortization expense
6,840
6.8
%
5,077
5.0
%
Impairments
--
--
%
--
--
%
Total Operating Income as Reported
9,508
9.5
%
10,334
10.1
%
Non-GAAP Adjustments to Continuing Operations
Net Sales
--
--
Cost of sales
--
--
Operating wage and fringe benefit expenses
--
--
Other operating expenses
--
--
Selling, general and administrative expenses
(4,333
)
(972
)
Depreciation and amortization expense
--
--
Impairments
--
--
Total Adjustments
4,333
972
Non-GAAP Operating Income from Continuing Operations
Net Sales
99,923
102,394
Cost of sales
43,649
43.7
%
44,810
43.8
%
Operating wage and fringe benefit expenses
8,832
8.8
%
10,991
10.7
%
Other operating expenses
14,030
14.0
%
14,746
14.4
%
Selling, general and administrative expenses
12,731
12.8
%
15,464
15.1
%
Depreciation and amortization expense
6,840
6.8
%
5,077
5.0
%
Impairments
--
--
%
--
--
%
Total Non-GAAP Operating Income
$
13,841
13.9
%
$
11,306
11.0
%
Bob Evans Farms, Inc.
Earnings Release Fact Sheet (unaudited)
Fiscal 2017 compared to the corresponding period a year ago:
(in thousands, except per share amounts)
Basic EPS
Diluted EPS
Twelve Months Ended
Twelve Months Ended
Twelve Months Ended
April 28,
April 29,
April 28,
April 29,
April 28,
April 29,
2017
2016
2017
2016
2017
2016
Operating Income (Loss) as Reported
Operating Income
$
30,126
$
33,074
Net Interest Expense
9,216
10,427
Income Before Taxes from Continuing Operations
20,910
22,647
Provision for Income Taxes from Continuing Operations
3,874
6,439
Net Income as Reported from Continuing Operations
17,036
16,208
$
0.86
$
0.76
$
0.85
$
0.75
Income (Loss) Before Taxes from Discontinued Operations
166,952
2,774
Provision (Benefit) for Income Taxes from Discontinued Operations 57,521
(5,240
)
Income (Loss) from Discontinued Operations as Reported
109,431
8,014
$
5.51
$
0.38
$
5.43
$
0.38
Net Income as Reported
126,467
24,222
$
6.37
$
1.14
$
6.28
$
1.13
Adjustments to Continuing Operations
Accelerated stock compensation
4,467
--
Severance/Restructuring
1,948
972
Legal and professional fees
1,217
--
Sale leaseback (plants)
--
4,085
Impairment of note receivable
15,256
--
Write off of unamortized debt costs
2,005
--
Accretion income on note receivable
(1,133
)
--
Total Adjustments to Continuing Operations
23,760
5,057
Adjustments to Discontinued Operations
Gain on sale of restaurants, net of transaction costs
(150,167
)
--
Restaurant depreciation
(11,846
)
--
Accelerated stock compensation
6,855
--
Severance
3,964
512
Impairment
--
6,710
Sale leaseback (restaurants)
--
9,562
Litigation settlement
(278
)
7,155
Store closure costs
807
1,441
Write off of unamortized debt costs
973
--
Total Adjustments to Discontinued Operations
(149,692
)
25,380
Non-GAAP Operating Income from Continuing Operations
53,014
37,652
Non-GAAP Net Interest Expense
8,344
9,948
Non-GAAP
Income Before Taxes from Continuing Operations
44,670
27,704
Adjustments to Tax Expense from Continuing Operations
7,713
1,922
Non-GAAP Provision for Income Taxes from Continuing Operations
11,587
8,361
Non-GAAP Net Income from Continuing Operations
33,083
19,343
$
1.67
$
0.91
$
1.64
$
0.90
Non-GAAP Income before Taxes from Discontinued Operations
17,260
28,154
Adjustments to Tax Expense from Discontinued Operations
(55,125
)
9,371
Non-GAAP Provision for Income Taxes from Discontinued Operations
2,396
4,131
Non-GAAP Net Income from Discontinued Operations
14,864
24,023
$
0.75
$
1.12
$
0.74
$
1.12
Non-GAAP Net Income
$
47,947
$
43,366
$
2.42
$
2.03
$
2.38
$
2.02
Weighted Average Shares Outstanding
19,839
21,336
20,132
21,494
Fiscal 2017 compared to the corresponding period a year ago:
(in thousands)
Consolidated Results
Twelve Months Ended
April 28, 2017
% of Sales
April 29, 2016
% of Sales
Operating Income from Continuing Operations as Reported
Net Sales
$
394,842
$
387,616
Cost of sales
170,820
43.3
%
172,973
44.6
%
Operating wage and fringe benefit expenses
39,964
10.1
%
42,189
10.9
%
Other operating expenses
58,402
14.8
%
52,387
13.5
%
Selling, general and administrative expenses
56,243
14.2
%
65,949
17.1
%
Depreciation and amortization expense
24,031
6.1
%
21,044
5.4
%
Impairments
15,256
3.9
%
--
--
%
Total Operating Income as Reported
30,126
7.6
%
33,074
8.5
%
Non-GAAP Adjustments to Continuing Operations
Net Sales
--
--
Cost of sales
--
--
Operating wage and fringe benefit expenses
--
--
Other operating expenses
--
--
Selling, general and administrative expenses
(7,632
)
(4,577
)
Depreciation and amortization expense
--
--
Impairments
(15,256
)
--
Total Adjustments
22,888
4,577
Non-GAAP Operating Income from Continuing Operations
Net Sales
394,842
387,616
Cost of sales
170,820
43.3
%
172,973
44.6
%
Operating wage and fringe benefit expenses
39,964
10.1
%
42,189
10.9
%
Other operating expenses
58,402
14.8
%
52,387
13.5
%
Selling, general and administrative expenses
48,611
12.3
%
61,372
15.9
%
Depreciation and amortization expense
24,031
6.1
%
21,044
5.4
%
Impairments
--
--
%
--
--
%
Total Non-GAAP Operating Income
$
53,014
13.4
%
$
37,651
9.7
%
Consolidated Statements of Net Income
2017
2016
2015
Net Sales
$
394,842
$
387,616
$
379,313
Cost of sales
170,820
172,973
199,067
Operating wage and fringe benefit expenses
39,964
42,189
41,717
Other operating expenses
58,402
52,387
49,381
Selling, general and administrative expenses
56,243
65,949
73,380
Depreciation and amortization expense
24,031
21,044
18,364
Impairments
15,256
--
2,761
Operating Income (Loss)
30,126
33,074
(5,357
)
Net interest expense
9,216
10,427
8,649
Income (Loss) from Continuing Operations Before Income Taxes
20,910
22,647
(14,006
)
Provision (Benefit) for income taxes
3,874
6,439
(8,626
)
Income (Loss) from Continuing Operations
17,036
16,208
(5,380
)
Income from Discontinued Operations, Net of Income Taxes
109,431
8,014
21,933
Net Income
$
126,467
$
24,222
$
16,553
Earnings (Loss) Per Share - Income from Continuing Operations
Basic
$
0.86
$
0.76
$
(0.23
)
Diluted
$
0.85
$
0.75
$
(0.23
)
Earnings Per Share - Income from Discontinued Operations
Basic
$
5.51
$
0.38
$
0.93
Diluted
$
5.43
$
0.38
$
0.93
Earnings Per Share - Net Income
Basic
$
6.37
$
1.14
$
0.70
Diluted
$
6.28
$
1.13
$
0.70
Cash Dividends Paid Per Share
$
1.36
$
1.30
$
1.24
Weighted Average Shares Outstanding
Basic
19,839
21,336
23,489
Dilutive Shares
293
158
160
Diluted
20,132
21,494
23,649
Consolidated Balance Sheets
April 28, 2017
April 29, 2016
Assets
Current Assets
Cash and equivalents
$
210,886
$
11,609
Accounts receivable, net
28,071
24,613
Inventories
17,210
17,093
Federal and state income taxes receivable
2,895
--
Prepaid expenses and other current assets
6,833
5,716
Current assets held for sale
3,334
48,707
Total Current Assets
269,229
107,738
Land
291
330
Buildings and improvements
25,351
21,203
Machinery and equipment
214,366
176,611
Construction in process
4,546
20,959
Total Property, Plant and Equipment
244,554
219,103
Less accumulated depreciation
113,814
89,851
Net Property, Plant and Equipment
130,740
129,252
Other Assets
Deposits and other
2,118
3,841
Notes receivable
--
20,886
Rabbi trust assets
22,353
20,662
Goodwill and other intangible assets
19,673
19,829
Deferred income tax assets
5,131
29,002
Non-current assets held for sale
--
469,164
Total Other Assets
49,275
563,384
Total Assets
$
449,244
$
800,374
Liabilities and Stockholders’ Equity
Current Liabilities
Current portion of long-term debt
$
428
$
3,419
Accounts payable
13,424
15,841
Accrued property, plant and equipment purchases
1,283
4,024
Accrued non-income taxes
3,353
890
Accrued wages and related liabilities
16,404
16,370
Self-insurance reserves
10,692
11,288
Current taxes payable
27,954
9,473
Current reserve for uncertain tax positions
1,481
1,481
Other accrued expenses
17,905
13,614
Current liabilities held for sale
--
89,157
Total Current Liabilities
92,924
165,557
Non-Current Liabilities
Deferred compensation
17,277
17,761
Reserve for uncertain tax positions
1,795
2,752
Deferred income tax liabilities
50
--
Deferred rent and other
1,091
377
Deferred gain on sale leaseback transactions
2,192
2,432
Credit facility borrowings and other long-term debt
2,267
335,638
Non-current liabilities held for sale
--
59,413
Total Non-Current Liabilities
24,672
418,373
Stockholders’ Equity
Common stock, $.01 par value; authorized 100,000 shares; issued 42,638 shares at April 28, 2017, and April 29, 2016 426
426
Capital in excess of par value
260,619
244,304
Retained earnings
931,315
832,323
Treasury stock, 22,842 shares at April 28, 2017, and 22,881 shares at April 29, 2016, at cost
(860,712
)
(860,609
)
Total Stockholders’ Equity
331,648
216,444
Total Liabilities and Stockholders’ Equity
$
449,244
$
800,374
Consolidated Statements of Cash Flows
2017
2016
2015
Operating activities:
Net income
$
126,467
$
24,222
$
16,553
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
60,090
79,607
80,074
Impairments
15,256
8,384
8,861
(Gain) Loss on disposal of fixed assets
(168,859
)
4,532
2,204
(Gain) Loss on rabbi trust assets
(1,691
)
1,640
(742
)
Loss (Gain) on deferred compensation
2,514
(765
)
2,013
Share-based compensation
17,197
6,127
2,967
Accretion of non-current note receivable
(1,133
)
(2,082
)
(1,859
)
Deferred income taxes
23,921
(28,384
)
(14,791
)
Amortization of deferred financing costs
4,201
2,188
1,099
Cash provided by (used for) assets and liabilities:
Accounts receivable
(2,700
)
(2,793
)
4,588
Inventories
(751
)
(377
)
623
Prepaid expenses and other current assets
(1,377
)
483
(563
)
Accounts payable
(10,281
)
7,499
955
Federal and state income taxes
14,629
33,067
1,504
Accrued wages and related liabilities
(1,160
)
(3,101
)
11,005
Self-insurance
(1,474
)
1,269
(974
)
Accrued non-income taxes
(756
)
745
(2,892
)
Deferred revenue
(337
)
433
747
Other assets and liabilities
(198
)
(9,058
)
(8,267
)
Net cash provided by operating activities
73,558
123,636
103,105
Investing activities:
Purchase of property, plant and equipment
(65,768
)
(65,694
)
(74,517
)
Proceeds from sale of property, plant and equipment
557,061
257,246
10,036
Proceeds from liquidation of rabbi trust assets
--
5,245
--
Deposits and other
330
(537
)
(135
)
Net cash provided by (used in) investing activities
491,623
196,260
(64,616
)
Financing activities:
Cash dividends paid
(26,915
)
(27,861
)
(29,056
)
Gross proceeds from credit facility borrowings and other long-term debt
413,268
672,349
579,895
Gross repayments of credit facility borrowings and other long-term debt
(750,668
)
(783,339
)
(588,541
)
Payments of debt issuance costs
(1,542
)
(3,555
)
(1,279
)
Purchase of treasury stock
--
(171,513
)
--
Proceeds from share-based compensation
518
214
534
Cash paid for taxes on share-based compensation
(1,353
)
(1,314
)
(1,738
)
Excess tax benefits from share-based compensation
(499
)
1,661
228
Net cash (used in) financing activities
(367,191
)
(313,358
)
(39,957
)
Net cash provided by (used in) operations
197,990
6,538
(1,468
)
Cash and equivalents at the beginning of the period
12,896
6,358
7,826
Cash and equivalents at the end of the period
$
210,886
$
12,896
$
6,358
Results from continuing and discontinued operations
(in thousands except earnings per share amounts)
Three Months Ended
Twelve Months Ended
GAAP Consolidated Results
April 28,
April 29,
% Change
April 28,
April 29,
% Change
2017
2016
2017
2016
Net Sales from Continuing Operations
$
99,923
$
102,394
(2.4
)%
$
394,842
$
387,616
1.9
%
Net Sales from Discontinued Operations
213,479
243,193
(12.2
)%
876,786
951,211
(7.8
)%
Total Net Sales
$
313,402
$
345,587
(9.3
)%
$
1,271,628
$
1,338,827
(5.0
)%
Operating Margin from Continuing Operations
9.5
%
10.1
%
(60 bps)
7.6
%
8.5
%
(90 bps)
Operating Margin from Discontinued Operations
2.8
%
(4.9
)%
770 bps
2.2
%
0.3
%
180 bps
Total Operating Margin
4.9
%
(0.4
)%
530 bps
3.9
%
2.7
%
120 bps
Diluted EPS from Continuing Operations
$
0.33
$
0.30
10.0
%
$
0.85
$
0.75
13.3
%
Diluted EPS from Discontinued Operations
$
5.06
$
(0.27
)
(1,974.1 )%
$
5.43
$
0.38
1,328.9 %
Diluted EPS
$
5.39
$
0.03
17,866.7 %
$
6.28
$
1.13
455.8
%
Non-GAAP Adjustments
Net Sales from Continuing Operations
$
--
$
--
--
%
$
--
$
--
--
%
Net Sales from Discontinued Operations
--
--
--
%
--
--
--
%
Total Net Sales
$
--
$
--
--
%
$
--
$
--
--
%
Operating Margin from Continuing Operations
4.3
%
0.9
%
340 bps
5.8
%
1.2
%
460 bps
Operating Margin from Discontinued Operations
(1.3
)%
6.0
%
(730 bps)
(0.1
)%
2.7
%
(280 bps)
Total Operating Margin
0.5
%
4.5
%
(400 bps)
1.8
%
2.2
%
(40 bps)
Diluted EPS from Continuing Operations
$
0.25
$
0.02
1,150.0
%
$
0.79
$
0.15
426.7
%
Diluted EPS from Discontinued Operations
$
(5.03
)
$
0.43
(1,269.8 )%
$
(4.69
)
$
0.74
(733.8
)%
Diluted EPS
$
(4.78
)
$
0.45
(1,162.2 )%
$
(3.90
)
$
0.89
(538.2
)%
Non-GAAP Consolidated Results
Net Sales from Continuing Operations
$
99,923
$
102,394
(2.4
)%
$
394,842
$
387,616
1.9
%
Net Sales from Discontinued Operations
213,479
243,193
(12.2
)%
876,786
951,211
(7.8
)%
Total Net Sales
$
313,402
$
345,587
(9.3
)%
$
1,271,628
$
1,338,827
(5.0
)%
Operating Margin from Continuing Operations
13.9
%
11.0
%
290 bps
13.4
%
9.7
%
370 bps
Operating Margin from Discontinued Operations
1.4
%
1.1
%
30 bps
2.1
%
3.0
%
(90 bps)
Total Operating Margin
5.4
%
4.1
%
130 bps
5.6
%
4.9
%
70 bps
Diluted EPS from Continuing Operations
$
0.58
$
0.32
81.3
%
$
1.64
$
0.90
82.2
%
Diluted EPS from Discontinued Operations
$
0.03
$
0.16
(81.3
)%
$
0.74
$
1.12
(33.9
)%
Diluted EPS
$
0.61
$
0.48
27.1
%
$
2.38
$
2.02
17.8
%
Net sales from continuing operations
Reconciliation of 52 vs 53 weeks
Three Months Ended
Twelve Months Ended
(in thousands)
April 28, 2017
April 29, 2016
April 28, 2017
April 29, 2016
Net Sales
$
99,923
$
102,394
$
394,842
$
387,616
53rd week
--
7,120
--
7,120
Adjusted Net Sales
$
99,923
$
95,274
$
394,842
$
380,496
Total pounds sold, by category
Fiscal 2017
Category
Q1
Q2
Q3
Q4
YTD
Sides
51.4 %
52.5 %
52.5 %
54.0 %
52.6 %
Sausage
21.2 %
21.9 %
24.9 %
22.3 %
22.7 %
Food Service - External
11.6 %
10.7 %
10.1 %
11.1 %
10.8 %
Food Service - Sales to discontinued operations
8.3
%
9.0
%
7.7
%
7.7
%
8.1
%
Frozen
3.9
%
3.4
%
2.7
%
3.0
%
3.2
%
Other
3.6
%
2.5
%
2.1
%
1.9
%
2.6
%
Fiscal 2016
Category
Q1
Q2
Q3
Q4
FY 2016
Sides
49.6 %
50.7 %
50.9 %
51.4 %
50.7 %
Sausage
22.0 %
22.3 %
26.6 %
21.7 %
23.3 %
Food Service - External
14.1 %
12.5 %
10.4 %
11.4 %
11.9 %
Food Service - Sales to discontinued operations
6.2
%
6.6
%
6.0
%
8.1
%
6.7
%
Frozen
4.6
%
4.5
%
3.1
%
3.9
%
4.0
%
Other
3.5
%
3.4
%
3.0
%
3.5
%
3.4
%
Contact:
Scott Van Winkle
Managing Director, ICR
(617) 956-6736
scott.vanwinkle@icrinc.com

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