Bob Evans Farms announced its financial results for the fiscal 2016 second quarter ended October 23, 2015. GAAP net income was $6.4 million, or $0.29 per diluted share.
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This compares with net income of $6 million, or $0.25 per diluted share, in the corresponding period last year. On an adjusted basis, non-GAAP net income was $9.2 million, or $0.41 per diluted share, compared with net income of $8.6 million, or $0.36 per diluted share, in the corresponding period last year.
Executive chairman Doug Benham said, "We recently relaunched a more profitable three-course dinner platform system-wide to address weakness at dinner; began rolling out further product enhancements to our breakfast menu, including a new coffee blend and improved hot cakes and omelets; and introduced Broasted Chicken Tenders in our restaurant locations where the Broasted Chicken platform has been rolled out (55% of system).
"All of these actions are designed to drive increased transactions and sales gains by elevating our food quality and guest experience.
"At the corporate level, we identified an additional $5 million of cost savings opportunities during the second quarter; bringing expected fiscal 2016 savings to nearly $20 million, equating to an annual savings rate of $28 million.
"We also completed a $51.6 million sale-leaseback transaction of two BEF Foods manufacturing facilities and are progressing with the previously announced initiatives to monetize our corporate headquarters and up to $200 million of restaurant properties.
"During the quarter, we also amended our credit facility to enable the sale-leaseback of the restaurant properties and eliminate the $150 million limit on fiscal 2016 share repurchases.
"We remain confident in the continued success of BEF Foods and our expectations for a turnaround of Bob Evans Restaurants. This confidence is reflected not only in our reaffirmation of fiscal 2016 earnings guidance, but by recent board approval of a $100 million increase in the Company's share repurchase authorization and a 9.7% increase in the quarterly dividend.
Chief administrative officer and chief financial officer Mark Hood said, "We posted strong operating results at BEF Foods for the fourth consecutive quarter.
"BEF Foods' non-GAAP operating income increased 176 percent to $17.6 million. This increase is a result of a 12.6 percent increase in retail pounds sold, with double-digit growth in both our refrigerated side dish and sausage categories, combined with lower sow costs net of trade ($3.4 million) and improved plant operating efficiencies.
"We are on track with our key initiatives in fiscal 2016, including ERP implementation in our plants and the expansion of our refrigerated side-dish manufacturing facility. We look forward to further leveraging the momentum we have created at BEF Foods.
"Bob Evans Restaurants remains in the early innings of its turnaround as we continue to focus on opportunities to drive profitable transaction growth. Our teams continue to better manage food, labor, and other operating costs.
"We believe continued evolution of our discounting practices and value positioning through an improved menu and new product news, along with a shift in marketing spend from broadcast media to local and digital media, will improve sales and profits." ■