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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 3, 2009 (June 2, 2009)
Bob Evans Farms, Inc.
 
(Exact name of registrant as specified in its charter)
         
Delaware   0-1667   31-4421866
 
(State or other jurisdiction
of incorporation) 		  (Commission
File Number) 		  (IRS Employer
Identification No.)
     
3776 South High Street, Columbus, Ohio   43207
 
(Address of principal executive offices)   (Zip Code)
(614) 491-2225
 
(Registrant’s telephone number, including area code)
Not Applicable
 
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
o       Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o       Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o       Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o       Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 

TABLE OF CONTENTS

Item 2.02. Results of Operations and Financial Condition .
Item 7.01. Regulation FD Disclosure .
Item 9.01. Financial Statements and Exhibits .
SIGNATURES
INDEX TO EXHIBITS
EX-99.1
EX-99.2
EX-99.3

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Item 2.02. Results of Operations and Financial Condition .
          On June 2, 2009, Bob Evans Farms, Inc. (the “Company”) issued a news release announcing financial results for the fourth fiscal quarter and fiscal year ended April 24, 2009. A copy of this news release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
          The Company also made available in conjunction with the news release additional quarterly financial information as of and for the fiscal quarter and fiscal year ended April 24, 2009. The additional quarterly information is furnished as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.
          The information in this Current Report on Form 8-K, including the information contained in Exhibit 99.1 and Exhibit 99.2, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liability of that Section, nor shall such information be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933 or the Exchange Act, except as otherwise explicitly stated in such filing.
Item 7.01. Regulation FD Disclosure .
          On June 3, 2009, the Company will host a meeting for analysts and investors to discuss its fiscal 2009 results and fiscal 2010 outlook. Presentations will begin at 1:00 p.m. and will conclude at approximately 5:00 p.m. (Eastern Time). The meeting will be available simultaneously as a conference call and webcast. Interested parties may:
  •   Listen to a simultaneous conference call beginning at 1:00 p.m. The dial-in number is (800) 690-3108, access code 94836898. The conference call replay will be available for 48 hours, beginning two hours after the call at (800) 642-1687, access code: 94836898.
 
  •   Listen to a simultaneous Web cast beginning at 1:00 p.m. at www.bobevans.com/investors. The archived webcast will also be available on the site.
          The presentation materials for the meeting are furnished as Exhibit 99.3 to this Current Report on Form 8-K and are incorporated herein by reference.
          The information in this Current Report on Form 8-K, including the information contained in Exhibit 99.3, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liability of that Section, nor shall such information be deemed to be incorporated by reference in any registration statement or other document filed under the Securities Act of 1933 or the Exchange Act, except as otherwise explicitly stated in such filing.

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Item 9.01. Financial Statements and Exhibits .
     (a) Financial Statements of Business Acquired — Not Applicable
     (b) Pro Forma Financial Information — Not applicable
     (c) Shell Company Transactions — Not Applicable
     (d) Exhibits:
     The following exhibits are included with this Current Report on Form 8-K:
     
Exhibit No.   Description
 
   
99.1
  News release issued by Bob Evans Farms, Inc. on June 2, 2009, announcing financial results for the fourth fiscal quarter and fiscal year ended April 24, 2009
 
   
99.2
  Additional quarterly financial information made available by Bob Evans Farms, Inc. in conjunction with the news release issued on June 2, 2009
 
   
99.3
  Presentation materials from the June 3, 2009, meeting hosted by the Company for analysts and investors to discuss its fiscal 2009 results and fiscal 2010 outlook

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SIGNATURES
          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
         
  BOB EVANS FARMS, INC.
  		 
Dated: June 3, 2009  By:   /s/Donald J. Radkoski    
    Donald J. Radkoski   
    Chief Financial Officer, Treasurer and Assistant Secretary   
 

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INDEX TO EXHIBITS
Current Report on Form 8-K
Dated June 3, 2009
     
Exhibit No.   Description
 
   
99.1
  News release issued by Bob Evans Farms, Inc. on June 2, 2009, announcing financial results for the fourth fiscal quarter and fiscal year ended April 24, 2009
 
   
99.2
  Additional quarterly financial information made available by Bob Evans Farms, Inc. in conjunction with the news release issued on June 2, 2009
 
   
99.3
  Presentation materials from the June 3, 2009, meeting hosted by the Company for analysts and investors to discuss its fiscal 2009 results and fiscal 2010 outlook

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Exhibit 99.1
CONFIDENTIAL DRAFT
BOB EVANS FARMS ANNOUNCES YEAR-END RESULTS;
BEATS REVISED FISCAL 2009 OPERATING INCOME GUIDANCE
COMPANY ISSUES FISCAL 2010 OUTLOOK
Company delivers solid fourth-quarter results with operating income up 15 percent and net income up 31 percent
Strong results driven by Bob Evans Restaurants
COLUMBUS, Ohio — June 2, 2009 — Bob Evans Farms, Inc. (NASDAQ: BOBE) today announced financial results for the 2009 fourth fiscal quarter and fiscal year ended Friday, April 24, 2009.
Fiscal 2009 commentary
Chairman and Chief Executive Officer Steve Davis said the Company overcame a multitude of challenges to deliver a solid year in fiscal 2009. “Excluding non-operating items, our fiscal 2009 operating income results far exceeded our latest guidance, due to very strong fourth-quarter results, especially at Bob Evans Restaurants,” Davis said. “The Bob Evans Restaurants division continues to post impressive results due to lower cost of sales and well-controlled labor costs, despite slightly negative same-store sales. Sales results at Mimi’s Cafe were disappointing in a difficult consumer environment. High sow costs continue to affect the food products segment, but our fourth-quarter numbers were solid, considering the challenges we faced.”
Fourth-quarter commentary
Davis said productivity improvements drove the Company’s solid performance in the fourth quarter of fiscal 2009. “We delivered very strong fourth-quarter results in our restaurant segment, due primarily to new labor management systems and effective supply chain management, which have reduced labor and food costs at our restaurants,” Davis said. “Our food products segment also posted solid results, despite substantively higher sow costs, which had a significant negative impact on our margins.”
Fourth-quarter consolidated results
The Company reported operating income of $31.0 million and net income of $21.1 million in the fourth quarter of fiscal 2009. In the fourth quarter of fiscal 2008, the Company reported operating income of $27.0 million and net income of $16.1 million. This improvement is due primarily to significantly lower food, labor and operating expenses in the restaurant segment and lower operating expenses in the food products segment. Significantly higher cost of sales in the food products segment partially offset these favorable variances.
Below is a line-by-line summary of the Company’s consolidated fiscal 2009 fourth-quarter income statement.

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•   Net sales — Net sales were $431.0 million for the fourth quarter of fiscal 2009, a 1.2 percent decrease compared to $436.4 million in the fourth quarter of fiscal 2008. This decrease is the result of same-store sales declines at Bob Evans Restaurants and Mimi’s Café, partly offset by sales increases in the food products segment.
•   Cost of sales — Cost of sales was $129.9 million, or 30.1 percent of net sales, in the fourth quarter of fiscal 2009, compared to $128.9 million, or 29.5 percent of net sales in the fourth quarter of fiscal 2008. The higher cost of sales is primarily the result of an 84 percent year-over-year increase in sow costs, which averaged $51.00 per hundredweight compared to $27.00 a year ago, partially offset by lower cost of sales in the restaurant segment. The higher cost of sales in the food products segment reduced operating income by approximately $5.6 million compared to a year ago.
•   Operating wages — Operating wages were $146.7 million, or 34.1 percent of net sales, in the fourth quarter of fiscal 2009, compared to $150.4 million, or 34.5 percent of net sales, in the fourth quarter of fiscal 2008. This improvement is primarily the result of labor-savings in the restaurant segment. This positive variance more than offset negative leverage due to same-store sales declines at both restaurant concepts.
•   Other operating expenses — Other operating expenses were $65.7 million, or 15.2 percent of net sales, in the fourth quarter of fiscal 2009, compared to $72.1 million, or 16.5 percent of net sales, in the fourth quarter of fiscal 2008. This improvement is due to lower advertising, preopening and utility expense in the restaurant segment and lower liability insurance, utility and repair expense in the food products segment.
•   SG&A — Selling, general and administrative expenses were $36.8 million, or 8.5 percent of net sales in the fourth quarter of fiscal 2009, compared to $38.3 million, or 8.8 percent of net sales, in the fourth quarter of fiscal 2008. This improvement is due primarily to favorable variances in workers’ compensation expense, performance-based incentive compensation and recruiting expense in the restaurant segment.
The reported fourth-quarter fiscal 2008 results include the positive impact of $0.7 million in pretax gains from the sale of real estate assets in the restaurant segment.
•   Net interest expense — The Company’s net interest expense was $2.8 million compared to $3.1 million in the fourth quarter of fiscal 2008.
•   Income taxes — The Company’s effective tax rate for the fourth quarter of fiscal 2009 was 25.3 percent. This compares to an effective tax rate of 32.8 percent in the fourth quarter of fiscal 2008. The lower tax rate is the result of lower pretax income for the full fiscal year in 2009 compared to 2008, as well as the favorable settlement of certain issues with taxing authorities.

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•   Diluted weighted-average shares outstanding — The Company’s diluted weighted-average share count was 30.7 million in the fourth quarter of fiscal 2009, compared to 31.0 million in the fourth quarter of fiscal 2008. The Company did not repurchase shares in the fourth quarter.
Fourth-quarter restaurant segment summary
The restaurant segment reported operating income of $26.6 million, or 7.5 percent of net sales, in the fourth quarter of fiscal 2009. The restaurant segment reported operating income of $18.4 million, or 5.1 percent of net sales, in the fourth quarter of fiscal 2008. This improvement is due primarily to significantly lower food labor and operating expenses. Below is a summary of the restaurant segment’s fourth-quarter 2009 income statement:
Net sales — The restaurant segment’s net sales decreased 1.8 percent compared to a year ago, from $361.1 million in the fourth quarter of fiscal 2008 to $354.5 million in the fourth quarter of fiscal 2009. Same-store sales at Bob Evans Restaurants were down 1.6 percent for the fourth quarter of fiscal 2009, with average menu prices up 3.2 percent. At Mimi’s Café, same-store sales decreased 7.1 percent for the fourth quarter of fiscal 2009, with average menu prices up 1.5 percent. See the table below for month-by-month same-store sales results.
In the fourth quarter of fiscal 2009, the Company opened three new Mimi’s Cafés and one new Bob Evans restaurant.
Cost of sales — The restaurant segment’s cost of sales decreased 100 basis points from 25.5 percent of net sales in the fourth quarter of fiscal 2008 to 24.5 percent in the fourth quarter of fiscal 2009. This improvement is due to moderating commodities costs, supply chain savings and mix shifts to higher-margin products.
Operating wages — The restaurant segment’s cost of labor decreased 40 basis points from 39.5 percent of net sales in the fourth quarter of fiscal 2008 to 39.1 percent in the fourth quarter of fiscal 2009 due to reductions in labor hours at both restaurant concepts. In the fourth quarter of fiscal 2009, the Company reduced total year-over-year labor more than 880,000 hours, including approximately 650,000 total hours at Bob Evans Restaurants and approximately 230,000 total hours at Mimi’s Café.
Other operating expenses — The restaurant segment’s other operating expenses decreased 110 basis points, from 18.7 percent of net sales in the fourth quarter of fiscal 2008 to 17.6 percent in the fourth quarter of fiscal 2009. This improvement is due to lower advertising, preopening and utility expenses.
SG&A — The restaurant segment’s selling, general and administrative expenses decreased 30 basis points, from 6.3 percent of net sales in the fourth quarter of fiscal 2008 to 6.0 percent in the fourth quarter of fiscal 2009. This improvement is due

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primarily to a favorable year-over-year variance in workers’ compensation expense, a reduction in performance-based incentive compensation and lower recruiting expenses.
The restaurant segment’s reported fourth-quarter 2008 results include the impact of $0.7 million in pretax gains on the sale of assets.
Set forth in the table below are the fourth-quarter and full-year fiscal 2009 same-store sales results for Bob Evans Restaurants and Mimi’s Café.
                                                 
SAME-STORE SALES   SSS Restaurants   Feb.   March   April   4Q FY 2009   FY 2009
Bob Evans
    543       -1.5 %     -1.9 %     -1.6 %     -1.6 %     -0.3 %
Mimi’s Café
    102       -7.9 %     -7.2 %     -6.4 %     -7.1 %     -7.2 %
COMBINED
    645       -3.2 %     -3.3 %     -2.8 %     -3.1 %     -2.1 %
Fourth-quarter food products segment summary
Operating income for the food products segment was $4.4 million in the fourth quarter of fiscal 2009, a 48.4 percent decrease compared to $8.6 million in the fourth quarter of fiscal 2008. The operating income decline is due to an 84 percent year-over-year increase in sow costs, which averaged $51.00 per hundredweight compared to $27.00 a year ago. This translated to a $5.6 million increase in cost of goods for the food products segment, if cost of sales as a percentage of net sales had been the same as a year ago.
Below is a line-by-line summary of the food products segment’s fourth-quarter 2009 income statement:
Net sales — The food products segment’s net sales were $76.5 million in the fourth quarter of fiscal 2009, up 1.5 percent compared to $75.4 million in the fourth quarter of fiscal 2008. Pounds sold of comparable products were up 3 percent in the fourth quarter of fiscal 2009 compared to the fourth quarter of fiscal 2008.
Cost of sales — The food products segment’s cost of sales increased 740 basis points, from 48.9 percent of net sales in the fourth quarter fiscal 2008 to 56.3 percent in the fourth quarter of fiscal 2009 due to the increase in sow costs.
Operating wages — The food products segment’s cost of labor decreased 10 basis points, from 10.6 percent of net sales in the fourth quarter fiscal 2008 to 10.5 percent in the fourth quarter of fiscal 2009 due to leverage from sales increases.
Other operating expenses — The food products segment’s other operating expenses decreased 190 basis points, from 6.1 percent of net sales in the fourth quarter of fiscal 2008 to 4.2 percent in the fourth quarter of fiscal 2009. This improvement is primarily due to lower liability insurance, utility and repair expenses.

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SG&A — The food products segment’s selling, general and administrative expenses increased 20 basis points, from 20.3 percent of net sales in the fourth quarter of fiscal 2008 to 20.5 percent in the fourth quarter of fiscal 2009. The increase was due primarily to restructuring charges related to the Company’s conversion from a direct-store-delivery system to a warehouse distribution system.

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Fiscal 2009 highlights
The Company reported operating income of $28.4 million and a net loss of $5.1 million, or a loss of 17 cents per diluted share, for the fiscal 2009 full year. These results include the negative pretax impact of $75.3 million in net charges, including goodwill impairment and other charges for Mimi’s Café. For more detail on these items, please see “Full-year consolidated results” below.
In the fiscal 2008 full year, the Company reported operating income of $107.2 million and net income of $64.9 million, or $1.95 per diluted share.
Excluding the negative pretax impact of $75.3 million in net charges, the Company’s fiscal 2009 operating income of $28.4 million would have been approximately $103.7 million, which compares to adjusted operating income of approximately $102.1 million in fiscal 2008 (please see “Full-year consolidated results” for a reconciliation of adjusted operating income to reported operating income).
Fiscal 2009 consolidated results
The Company reported operating income of $28.4 million and a net loss of $5.1 million in fiscal 2009. These results include the negative impact of the following pretax charges:
•   A $0.7 million cash charge in the first quarter for a legal settlement. This charge affected the “SG&A” line of the restaurant segment’s income statement.
•   A $56.2 million noncash charge in the third quarter for the impairment of goodwill related to the acquisition of Mimi’s Café. This comprises part of the “Goodwill & other intangibles impairment” line of the restaurant segment’s income statement.
•   An $11.8 million noncash charge in the third quarter for the impairment of intangible assets (i.e., the Mimi’s Café trade name) related to the acquisition of Mimi’s Café. This comprises part of the “Goodwill & other intangibles impairment” line of the restaurant segment’s income statement.
•   A $6.4 million noncash fixed-asset impairment charge in the third quarter for six underperforming Mimi’s Café restaurants. This charge affected the “SG&A” line of the restaurant segment’s income statement.
•   A $0.8 million cash charge in the third quarter for severance payments and retirement costs. This charge affected the “SG&A” line of the restaurant segment’s income statement.
•   A $0.4 million noncash charge in the third quarter for unusable spare parts in the Company’s food products division. This charge affected the “Other operating expenses” line of the food products division’s income statement.
These pretax charges total $76.3 million.
Partly offsetting the negative impact of these charges in fiscal 2009 was the positive impact of $1.0 million in total pretax gains on the sale of real estate assets, including $0.7 million in the second quarter and $0.3 million in the third quarter. These gains benefited the “SG&A” line of the restaurant segment’s income statement.

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Excluding this negative total net pretax impact of $75.3 million, the Company’s fiscal 2009 operating income of $28.4 million would have been operating income of approximately $103.7 million. (See “Disclosure regarding non-GAAP financial measures” below.)
The Company’s tax provision in fiscal 2009 reflects the impact of the $56.2 million goodwill impairment charge, which is not tax deductible. Excluding the goodwill impairment charge, the Company estimates its effective tax rate would have been approximately 29.4 percent.
In fiscal 2008, the Company reported operating income of $107.2 million.
These results included the favorable impact of the following items:
•   Pretax income of $6.6 million in the third quarter related to the first-time recognition of gift-certificate and gift-card “breakage” (gift certificates and gift cards that consumers fail to redeem) at Bob Evans Restaurants, which benefited the “Net Sales” line of the restaurant segment’s income statement.
 
•   A total pretax gain of $2.9 million from the sale of real estate assets. This gain benefited the “SG&A” line of the restaurant segment’s income statement.
Fiscal 2008’s reported results also included the negative impact of the following items:
•   A pretax charge of $3.7 million in the third quarter related to nine underperforming Bob Evans Restaurants that the Company closed in February 2008. This charge affected the “SG&A” line of the restaurant segment’s income statement.
 
•   A pretax charge of $0.7 million in the third quarter to settle a dispute with a third party. This affected the “SG&A” line of the restaurant segment’s income statement.
Excluding these items, the Company’s reported fiscal 2008 operating income of $107.2 million would have been $102.1 million. This compares to adjusted operating income of $103.7 million in fiscal 2009, a 1.5 percent year-over-year increase.
A line-by-line summary of the Company’s fiscal 2009 consolidated income statement is below. Note that all fiscal 2008 results expressed as a percentage of net sales include the favorable impact of the $6.6 million benefit for gift-certificate and gift-card breakage at Bob Evans Restaurants.
•   Net sales — Net sales were $1.75 billion for fiscal 2009, a 0.8 percent increase compared to $1.74 billion in fiscal 2008. This increase is the result of sales increases in the food products segment and new restaurant openings at Mimi’s Café, partly offset by same-store sales declines at Bob Evans Restaurants and Mimi’s Café. Also affecting the comparison was the $6.6 million in pretax income related to the recognition of gift-certificate and gift-card “breakage” at Bob Evans Restaurants, which benefited the “Net Sales” line in last year’s third-quarter income statement.

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•   Cost of sales — Cost of sales was $537.1 million, or 30.7 percent of net sales, in fiscal 2009, compared to $517.4 million, or 29.8 percent of net sales in fiscal 2008. The higher cost of sales is primarily the result of a 29 percent year-over-year increase in sow costs, which averaged $45.00 per hundredweight compared to $35.00 a year ago, partially offset by lower cost of sales in the restaurant segment. The higher cost of sales in the food products segment reduced operating income by approximately $16.9 million compared to a year ago.
 
•   Operating wages — Operating wages were $597.8 million, or 34.1 percent of net sales, in fiscal 2009, compared to $604.2 million, or 34.8 percent of net sales, in fiscal 2008. This improvement is primarily the result of the positive leverage provided by food products segment sales increases and labor-savings in the restaurant segment that offset negative leverage due to same-store sales declines at Bob Evans Restaurants and Mimi’s Café.
 
•   Other operating expenses — Other operating expenses were $280.4 million, or 16.0 percent of net sales, in fiscal 2009, compared to $282.0 million, or 16.2 percent of net sales, in fiscal 2008. Other operating expenses benefited from lower advertising and preopening expenses in the restaurant segment and lower liability insurance costs in the food products segment.
 
•   SG&A — Selling, general and administrative expenses were $157.0 million, or 9.0 percent of net sales in fiscal 2009, compared to $149.1 million, or 8.6 percent of net sales, in fiscal 2008. The fiscal 2009 results include the negative impact of the following pretax charges:
  •   The $0.7 million cash charge for a legal settlement in the first quarter.
 
  •   The $6.4 million noncash fixed-asset impairment charge for six underperforming Mimi’s Café restaurants in the third quarter.
 
  •   The $0.8 million cash charge for severance payments and retirement costs in the third quarter.
Partly offsetting these charges in fiscal 2009 was the positive impact of a $1.0 million total pretax gain on the sale of real estate assets, including $0.7 million in the second quarter and $0.3 million in the third quarter.
The reported fiscal 2008 results include the impact of the items below, which had a positive impact on the “SG&A” line:
  •   A total pretax gain of $2.9 million from the sale of real estate assets, including $1.1 million in the first quarter, $1.0 million in the second quarter, $0.1 million in the third quarter, and $0.7 million in the fourth quarter.
Fiscal 2008’s reported results also included the negative impact of the following items, which had a negative impact on the “SG&A” line of the restaurant segment’s income statement:
  •   A pretax charge of $3.7 million in the third quarter related to nine underperforming Bob Evans Restaurants that the Company closed in

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      February 2008.
 
  •   A pretax charge of $0.7 million in the third quarter to settle a dispute with a third party.
•   Net interest expense — The Company’s net interest expense was $12.3 million in fiscal 2009 compared to $11.0 million in fiscal 2008. The increase is due to higher debt levels to fund the Company’s share repurchase program.
 
•   Income taxes — The Company’s income tax provision for fiscal 2009 reflects the impact of the $56.2 million goodwill impairment charge, which is not tax deductible. Excluding the impact of the goodwill impairment charge, the Company estimates its effective tax rate in fiscal 2009 would have been approximately 29.4 percent. This compares to an effective tax rate of 32.6 percent in fiscal 2008.
 
•   Diluted weighted-average shares outstanding — The Company’s diluted weighted-average share count was 30.7 million in fiscal 2009, compared to 33.3 million in fiscal 2008. The Company repurchased 245,332 shares in fiscal 2009 but has temporarily suspended its share repurchase program.
Fiscal 2009 restaurant segment summary
The restaurant segment reported operating income of $12.8 million in fiscal 2009, or 0.9 percent of net sales, compared to $78.7 million, or 5.4 percent of net sales, in fiscal 2008. Impacting the restaurant segment’s fiscal 2009 operating margins were the following items:
•   The $0.7 million cash charge for a legal settlement in the first quarter.
 
•   The $56.2 million noncash charge in the third quarter for the impairment of goodwill related to the acquisition of Mimi’s Café.
 
•   The $11.8 million noncash charge in the third quarter for the impairment of intangible assets (i.e., the Mimi’s Café trade name) related to the acquisition of Mimi’s Cafe.
 
•   The $6.4 million noncash fixed-asset impairment charge in the third quarter for six underperforming Mimi’s Café restaurants.
 
•   The $0.8 million cash charge for severance and retirement costs in the third quarter.
 
•   The $1.0 million total gain on the sale of real estate assets, including $0.7 million in the second quarter and $0.3 million in the third quarter.
Impacting the restaurant segment’s fiscal 2008 reported operating margins were the following items:
•   The $6.6 million gift-certificate and gift-card breakage benefit in the third quarter at Bob Evans Restaurants.
 
•   The total pretax gain of $2.9 million from the sale of real estate assets.
 
•   The pretax charge of $3.7 million in the third quarter related to nine underperforming Bob Evans Restaurants that the Company closed in February 2008.
 
•   The pretax charge of $0.7 million in the third quarter to settle a third-party dispute.

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Below is a summary of the restaurant segment’s fiscal 2009 income statement. Please note that all fiscal 2008 results expressed as a percentage of net sales include the favorable impact of the $6.6 million benefit for gift-certificate and gift-card breakage at Bob Evans Restaurants.
Net sales — The restaurant segment’s net sales decreased 0.4 percent compared to a year ago, from $1.45 billion in fiscal 2008 to $1.44 billion in fiscal 2009. Same-store sales at Bob Evans Restaurants were down 0.3 percent for fiscal 2009, with average menu prices up 3.1 percent. At Mimi’s Café, same-store sales decreased 7.2 percent for fiscal 2009, with average menu prices up 2.4 percent.
The Company’s restaurant-development results for fiscal 2009 were as follows:
•   Mimi’s Café: 12 new restaurants and 10 reimaged restaurants
 
•   Bob Evans Restaurants: one new restaurant, four rebuilt restaurants and 25 reimaged restaurants
Cost of sales — The restaurant segment’s cost of sales decreased 40 basis points, from 25.5 percent of net sales in fiscal 2008 to 25.1 percent of net sales in fiscal 2009, due primarily to savings from effective supply chain management.
Operating wages — The restaurant segment’s cost of labor decreased 40 basis points, from 39.6 percent of net sales in fiscal 2008 to 39.2 percent in fiscal 2009, due to reductions in labor hours at both restaurant concepts. In fiscal 2009, the Company reduced year-over-year labor more than 2.8 million total hours, including approximately 1.8 million total hours at Bob Evans Restaurants and approximately 1.0 million total hours at Mimi’s Café.
Other operating expenses — The restaurant segment’s other operating expenses were 18.4 percent of net sales in fiscal 2009, flat compared to fiscal 2008. Lower advertising and preopening expenses offset higher utility and occupancy costs.
SG&A — The restaurant segment’s selling, general and administrative expenses were 6.6 percent of net sales in fiscal 2009 compared to 6.3 percent in fiscal 2008.
The fiscal 2009 results include the negative impact of the following pretax charges:
•   The $0.7 million cash charge for a legal settlement in the first quarter.
 
•   The $6.4 million noncash fixed-asset impairment charge for six underperforming Mimi’s Café restaurants in the third quarter.
 
•   The $0.8 million cash charge for severance payments and retirement costs in the third quarter.
Partly offsetting these charges in fiscal 2009 was the positive impact of a $1.0 million total pretax gain on the sale of real estate assets, including $0.7 million in the second quarter and $0.3 million in the third quarter.

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The reported fiscal 2008 results include the positive impact of the items below, which affected the “SG&A” line of the restaurant segment’s income statement:
•   A total pretax gain of $2.9 million from the sale of real estate assets, including $1.1 million in the first quarter, $1.0 million in the second quarter, $0.1 million in the third quarter, and $0.7 million in the fourth quarter.
Fiscal 2008’s reported results also included the negative impact of the following items, which affected the “SG&A” line of the restaurant segment’s income statement:
•   A pretax charge of $3.7 million in the third quarter related to nine underperforming Bob Evans Restaurants that the Company closed in February 2008.
 
•   A pretax charge of $0.7 million in the third quarter to settle a third-party dispute.
Fiscal 2009 food products segment summary
Operating income for the food products segment was $15.6 million in fiscal 2009, a 45.5 percent decrease compared to $28.6 million in fiscal 2008. The operating income decline is due to a 29 percent year-over-year increase in sow costs, which averaged $45.00 per hundredweight compared to $35.00 a year ago. This contributed to a $16.9 million increase in cost of goods for the food products segment, if cost of sales as a percentage of net sales had been the same as a year ago. Also affecting the food products segment’s operating income results was the $0.4 million noncash charge for unusable spare parts in the third quarter.
The Company has converted from a direct-store-delivery (DSD) system to a warehouse distribution system in approximately 95 percent of its markets, as a response to retailer needs. The conversion to a warehouse model in the food products segment has resulted in higher slotting fees and severance related to the elimination of certain DSD sales routes, but the Company believes it should result in a lower cost structure in the long term.
Net sales — The food products segment’s net sales were $311.4 million in fiscal 2009, up 6.7 percent compared to $292.0 million in fiscal 2008. Pounds sold of comparable products were up 6 percent in fiscal 2009 compared to fiscal 2008.
Cost of sales — The food products segment’s cost of sales in the food products segment increased 540 basis points from 51.0 percent of net sales in fiscal 2008 to 56.4 percent in fiscal 2009 due to the increase in sow costs.
Operating wages — The food products segment’s cost of labor decreased 10 basis points from 11.2 percent of net sales in fiscal 2008 to 11.1 percent in fiscal 2009 due to leverage from sales increases.
Other operating expenses — The food products segment’s other operating expenses decreased 50 basis points, from 5.4 percent of net sales in fiscal 2008 to 4.9 percent in fiscal 2009. This improvement is primarily due to lower liability insurance expenses.

11

 

SG&A — The food products segment’s selling, general and administrative expenses increased 10 basis points, from 19.9 percent of net sales in fiscal 2008 to 20.0 percent in fiscal 2009. The increase was due primarily to restructuring charges related to the Company’s conversion from a direct-store-delivery system to a warehouse distribution system, which more than offset lower advertising expense.
Fiscal year 2010 outlook and capital allocation strategy
The Company issued its estimate for reported fiscal 2010 operating income of approximately $110 million to $115 million (see “Disclosure regarding non-GAAP financial measures” below). The outlook for fiscal 2010 includes the impact of a 53 rd week, which the Company estimates will contribute an incremental $31 million in net sales and $5 million in operating income. This outlook also relies on a number of important assumptions, including same-store sales estimates and the risk factors discussed in the Company’s securities filings.
Particular assumptions include the following:
  •   Net sales — Consolidated year-over-year net sales increases of 1.5 to 2.0 percent. This includes:
  •   Bob Evans Restaurants — Flat net sales, with same-store sales in the negative 1.5 to 2.0 percent range. The Company does not expect to develop any new Bob Evans restaurants, but plans to rebuild two new restaurants and reimage 15 existing restaurants in fiscal 2010.
 
  •   Mimi’s Café — Net sales growth of 3 to 4 percent, with same-store sales in the negative 3.0 to 5.0 percent range. The Company expects to open two new Mimi’s Cafes and plans to reimage 15 existing Mimi’s in fiscal 2010.
 
  •   Food products — Overall sales growth of approximately 5 to 6 percent.
  •   Restaurant operating margins — The Company expects restaurant operating margins of approximately 6 to 8 percent. Included in this estimate are the following assumptions:
  •   Cost of sales — Continued improvements due to easing commodity prices, positive mix shifts and effective supply chain management.
 
  •   Operating wages — Continued pressure from minimum wage increases, mostly offset by continued labor efficiencies.
  •   Food products operating margins — The Company expects food products operating margins of approximately 4 to 5 percent. Included in this estimate are average sow costs of approximately $50 to $55 per hundredweight.
 
  •   Depreciation and amortization — Approximately $85 million for the 2010 fiscal year, compared to $81.9 million in fiscal 2009.
 
  •   Net interest expense of approximately $12 million to $13 million for the 2010

12

 

      fiscal year.
 
  •   An effective tax rate of approximately 33 percent for fiscal 2010.
 
  •   A diluted weighted-average share count of approximately 31 million for the 2010 fiscal year, compared to 30.7 million in fiscal 2009.
 
  •   Capital expenditures of about $60 to $65 million for the 2010 fiscal year.
The Company continues to expect substantively lower future capital expenditures for restaurant development in fiscal 2010 at both Bob Evans Restaurants and Mimi’s Café. Specifically, the Company expects to build no new Bob Evans Restaurants and two Mimi’s Cafés in fiscal 2010. The Company also reiterated that it has suspended its share repurchase program until at least the third quarter of fiscal 2010.
Disclosure regarding non-GAAP financial measures
Due to the significant impact of the goodwill impairment charge on the Company’s fiscal 2009 effective tax rate, as well as its resultant impact on comparability to the Company’s fiscal 2010 projections, the Company is providing its guidance for the 2010 fiscal year in terms of operating income rather than earnings per share. The Company reported its fiscal 2009 results in terms of adjusted operating income, rather than earnings per share for the reasons noted above. The Company uses operating income and adjusted operating income as a measure for comparing its performance to prior periods and competitors, and believes it is useful to investors because it provides investors and other interested parties a means to evaluate its performance relative to its past performance, without regard to unusual charges. Adjusted operating income is not a recognized term under GAAP.
The following are reconciliations of adjusted operating income to reported operating income for fiscal 2009 and fiscal 2008:
         
Fiscal 2009 reported operating income:
  $28.4 million
Fiscal 2009 3Q goodwill impairment:
  $56.2 million
Fiscal 2009 3Q trade name impairment:
  $11.8 million
Fiscal 2009 3Q fixed asset impairment:
  $6.4 million
Fiscal 2009 3Q severance and retirement:
  $0.8 million
Fiscal 2009 3Q unusable spare parts:
  $0.4 million
Fiscal 2009 1Q legal settlement:
  $0.7 million
Fiscal 2009 gains on real estate sales
  ($1.0 million)
 
Fiscal 2009 adjusted operating income:
  $103.7 million
 
       
Fiscal 2008 reported operating income:
  $107.2 million
Fiscal 2008 3Q breakage:
  ($6.6 million)
Fiscal 2008 3Q fixed asset impairment:
  $3.7 million
Fiscal 2008 3Q dispute settlement:
  $0.7 million
Fiscal 2008 gains on real estate sales:
  ($2.9 million)
 
Fiscal 2008 adjusted operating income:
  $102.1 million

13

 

Company to host conference call
The Company plans to host a meeting for analysts and investors to discuss its 2009 results and 2010 outlook on Wednesday, June 3 at its headquarters in Columbus, Ohio. The meeting will begin with lunch at noon and last until approximately 5 p.m. (ET). The meeting will be available simultaneously as a conference call and webcast. Those who have not already submitted an RSVP to attend the meeting in person may:
•   Listen to a simultaneous conference call beginning at 1:00 p.m. (ET). The dial-in number is (800) 690-3108, access code 94836898. The conference call replay will be available for 48 hours, beginning two hours after the call at (800) 642-1687, access code: 94836898.
 
•   Listen to a simultaneous webcast at www.bobevans.com/investors . The archived webcast will also be available on the Web site.
About Bob Evans Farms, Inc.
Bob Evans Farms, Inc. owns and operates full-service restaurants under the Bob Evans and Mimi’s Café brand names. At the end of the fourth fiscal quarter (April 24, 2009), Bob Evans owned and operated 570 family restaurants in 18 states, primarily in the Midwest, mid-Atlantic and Southeast regions of the United States, while Mimi’s Café owned and operated 144 casual restaurants located in 24 states, primarily in California and other western states. Bob Evans Farms, Inc. is also a leading producer and distributor of pork sausage and a variety of complementary homestyle convenience food items under the Bob Evans and Owens brand names. For more information about Bob Evans Farms, Inc., visit the company’s Web site at www.bobevans.com .
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Certain statements in this news release that are not historical facts are forward-looking statements. Forward-looking statements involve various important assumptions, risks and uncertainties. Actual results may differ materially from those predicted by the forward-looking statements because of various factors and possible events. We discuss these factors and events, along with certain other risks, uncertainties and assumptions, under the heading “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended April 25, 2008 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 on which the statement is made 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.
Contacts:
Donald J. Radkoski
Chief Financial Officer
(614) 492-4901
David D. Poplar
Vice President of Investor Relations
(614) 492-4954

14

 

Consolidated Financial Results (unaudited)
(Thousands, except per share data)
                                 
    Three Months Ended     Year Ended  
    Apr. 24, 2009     Apr. 25, 2008     Apr. 24, 2009     Apr. 25, 2008  
Net Sales
                               
Restaurant Segment
  $ 354,527     $ 361,077     $ 1,439,090     $ 1,445,034  
Food Products Segment
    76,470       75,368       311,422       291,992  
 
                       
Total
  $ 430,997     $ 436,445     $ 1,750,512     $ 1,737,026  
 
                               
Operating Income
                               
Restaurant Segment
  $ 26,555     $ 18,408     $ 12,796     $ 78,686  
Food Products Segment
    4,444       8,611       15,571       28,554  
 
                       
Total
  $ 30,999     $ 27,019     $ 28,367     $ 107,240  
 
                               
Net Interest Expense
  $ 2,791     $ 3,105     $ 12,306     $ 10,990  
 
                               
Income Before Income Taxes
  $ 28,208     $ 23,914     $ 16,061     $ 96,250  
 
                               
Provisions for Income Taxes
  $ 7,134     $ 7,850     $ 21,207     $ 31,374  
 
                               
Net Income
  $ 21,074     $ 16,064       ($5,146 )   $ 64,876  
 
                               
Earnings Per Share
                               
Basic
  $ 0.69     $ 0.52       ($0.17 )   $ 1.96  
Diluted
  $ 0.69     $ 0.52       ($0.17 )   $ 1.95  
 
                               
Average Shares Outstanding
                               
Basic
    30,704       30,791       30,744       33,065  
Diluted
    30,744       30,951       30,744       33,315  

15

Exhibit 99.2
Bob Evans Farms, Inc.
Earnings Release Fact Sheet (unaudited)
Fiscal 2009 — Quarter 4
Note: amounts are in thousands, except per share amounts
Fourth quarter (Q4), ended April 24, 2009, compared to the corresponding period a year ago:
                                                                 
    Consolidated Results     Restaurant     Food Products  
    Q4     % of     Q4     % of     Q4     Q4     Q4     Q4  
    2009     sales     2008     sales     2009     2008     2009     2008  
 
Net sales
  $ 430,997             $ 436,445             $ 354,527     $ 361,077     $ 76,470     $ 75,368  
Cost of sales
    129,851       30.1 %     128,878       29.5 %     24.5 %     25.5 %     56.3 %     48.9 %
Operating wages
    146,725       34.1 %     150,424       34.5 %     39.1 %     39.5 %     10.5 %     10.6 %
Other operating
    65,658       15.2 %     72,138       16.5 %     17.6 %     18.7 %     4.2 %     6.1 %
S,G, & A
    36,820       8.5 %     38,264       8.8 %     6.0 %     6.3 %     20.5 %     20.3 %
Depr. & amort.
    20,944       4.9 %     19,722       4.5 %     5.3 %     4.9 %     2.7 %     2.7 %
     
 
                                                               
Operating income
    30,999       7.2 %     27,019       6.2 %     7.5 %     5.1 %     5.8 %     11.4 %
 
                                                               
Interest
    2,791       0.7 %     3,105       0.7 %                                
                                     
 
                                                               
Pre-tax income
    28,208       6.5 %     23,914       5.5 %                                
 
                                                               
Income taxes
    7,134       1.6 %     7,850       1.8 %                                
                                     
 
                                                               
Net income
  $ 21,074       4.9 %   $ 16,064       3.7 %                                
 
                                                               
EPS — basic
  $ 0.69             $ 0.52                                          
EPS — diluted
  $ 0.69             $ 0.52                                          
 
                                                               
Dividends paid per share
  $ 0.16             $ 0.14                                          
 
                                                               
Weighted average shares outstanding:
                                                               
 
                                                               
Basic
    30,704               30,791                                          
Dilutive stock options
    40               160                                          
 
                                                           
 
                                                               
Diluted
    30,744               30,951                                          
 
                                                               
Shares outstanding at quarter end
    30,712               30,611                                          
  •   Income taxes, as a percentage of pre-tax income, were 25.3% vs. 32.8%
Fiscal 2009 — Quarter 4 p 1

 

 

Consolidated Q4 Review:
  •   Net sales decreased 1.2% ($431.0 million vs. $436.4 million).
 
  •   Operating income increased 14.7% ($31.0 million vs. $27.0 million).
 
  •   Pre-tax income increased 18.0% ($28.2 million vs. $23.9 million).
 
  •   Effective tax rate was 25.3% compared to 32.8%.
 
  •   Net income increased 31.2% ($21.1 million vs. $16.1 million).
 
  •   Diluted EPS was $0.69 vs. $0.52.
 
  •   The fourth quarter results of fiscal 2008 included the impact of the following:
  •   Consolidated and restaurant results included a net pre-tax gain of $0.7 million on asset disposals that is reflected in S,G&A.
  •   The company adopted SFAS 123(R), which requires the expensing of stock options, in the first quarter of FY07. The company significantly reduced the issuance of stock options and implemented a performance incentive plan which predominantly uses restricted stock as the award. The pre-tax expenses of adopting SFAS 123(R) and issuing awards under the plan are:
(amounts in thousands)
                                 
    Q4 FY 09     Q4 FY 08     Total FY 09     Total FY 08  
    Actual *     Actual *     Actual     Actual  
Stock options
  $ 101     $ 124     $ 1,238     $ 810  
New plan (excluding options)
    848       668       6,483       5,470  
Total
  $ 949     $ 792     $ 7,721     $ 6,280  
 
*   Expense is reflected in S, G & A: $749 and $597 in 2009 and 2008, respectively, in the restaurant segment and $200 and $195 in 2009 and 2008, respectively, in the food products segment.
Fiscal 2009 — Quarter 4 p 2

 

 

Restaurant Q4 Review:
  •   Overall restaurant sales decreased 1.8% ($354.5 million vs. $361.1 million).
 
  •   Nominal same-store sales decreased 1.6% at Bob Evans Restaurants and decreased 7.1% at Mimi’s.
 
  •   Operating income increased 44.3% ($26.6 million vs. $18.4 million).
 
  •   Operating margin was 7.5% compared to 5.1%.
 
  •   Restaurants in operation at quarter end were: 570 Bob Evans Restaurants and 144 Mimi’s. 571 Bob Evans Restaurants and 132 Mimi’s were in operation a year ago.
 
  •   Restaurant openings, by quarter:
Bob Evans Restaurants:
                                                                 
Fiscal Year   Beginning Total   Q1   Q2   Q3   Q4   Full Year   Closings   Ending Total
 
                                                               
2009
    571       0       0       0       1       1       2       570  
2008
    579       0       0       1       1       2       10       571  
2007
    587       4       1       3       2       10       18       579  
2006
    591       6       6       3       5       20       24       587  
2005
    558       11       12       10       4       37       4       591  
Mimi’s Cafes:
                                                                 
Fiscal Year   Beginning Total   Q1   Q2   Q3   Q4   Full Year   Closings   Ending Total
 
                                                               
2009
    132       3       4       2       3       12       0       144  
2008
    115       1       2       8       6       17       0       132  
2007
    102       2       1       3       7       13       0       115  
2006
    92       1       2       1       6       10       0       102  
2005
    81       0       3       4       4       11       0       92  
Consolidated Restaurants:
                                                                 
Fiscal Year   Beginning Total   Q1   Q2   Q3   Q4   Full Year   Closings   Ending Total
 
                                                               
2009
    703       3       4       2       4       13       2       714  
2008
    694       1       2       9       7       19       10       703  
2007
    689       6       2       6       9       23       18       694  
2006
    683       7       8       4       11       30       24       689  
2005
    639       11       15       14       8       48       4       683  
Fiscal 2009 — Quarter 4 p 3

 

 

  •   Rebuilt restaurant openings, by quarter:
                                         
Fiscal Year   Q1   Q2   Q3   Q4   Full Year
 
                                       
2009
    1       3       0       0       4  
2008
    2       2       1       3       8  
2007
    1       1       1       1       4  
2006
    6       4       3       1       14  
2005
    3       5       0       2       10  
  •   Bob Evans Restaurants same-store sales analysis (24-month core; 543 restaurants):
                                                                         
    Fiscal 2009   Fiscal 2008   Fiscal 2007
    Nominal   Menu   Real   Nominal   Menu   Real   Nominal   Menu   Real
 
                                                                       
May
    4.4       2.8       1.6       0.9       2.0       (1.1 )     (1.2 )     3.1       (4.3 )
June
    0.9       2.9       (2.0 )     4.0       2.6       1.4       (4.1 )     3.0       (7.1 )
July
    1.1       2.9       (1.8 )     4.4       2.6       1.8       (5.6 )     3.0       (8.6 )
 
                                                                       
Q1
    2.0       2.9       (0.9 )     3.2       2.4       0.8       (3.9 )     3.0       (6.9 )
 
                                                                       
August
    (0.6 )     2.9       (3.5 )     4.3       2.6       1.7       (4.2 )     3.0       (7.2 )
September
    0.1       2.9       (2.8 )     0.4       2.6       (2.2 )     5.0       2.4       2.6  
October
    (0.9 )     2.9       (3.8 )     (1.9 )     1.8       (3.7 )     3.0       2.4       0.6  
 
                                                                       
Q2
    (0.5 )     2.9       (3.4 )     0.7       2.3       (1.6 )     1.3       2.6       (1.3 )
 
                                                                       
November
    (3.1 )     3.5       (6.6 )     2.1       2.8       (0.7 )     0.6       1.9       (1.3 )
December
    3.8       3.2       0.6       1.1       3.2       (2.1 )     3.3       1.3       2.0  
January
    (5.7 )     3.0       (8.7 )     1.2       2.3       (1.1 )     2.4       2.3       0.1  
 
                                                                       
Q3
    (1.3 )     3.3       (4.6 )     1.5       2.8       (1.3 )     2.1       1.8       0.3  
 
                                                                       
February
    (1.5 )     3.2       (4.7 )     3.3       2.4       0.9       (0.7 )     2.4       (3.1 )
March
    (1.9 )     3.2       (5.1 )     0.1       2.4       (2.3 )     1.2       2.4       (1.2 )
April
    (1.6 )     3.2       (4.8 )     1.7       2.4       (0.7 )     2.1       1.9       0.2  
 
                                                                       
Q4
    (1.6 )     3.2       (4.8 )     1.7       2.4       (0.7 )     1.0       2.2       (1.2 )
 
                                                                       
Fiscal year
    (0.3 )     3.1       (3.4 )     1.8       2.5       (0.7 )     0.1       2.4       (2.3 )
Fiscal 2009 — Quarter 4 p 4

 

 

  •   Mimi’s Cafe same-store sales analysis (24-month core; 102 restaurants):
                                                                         
    Fiscal 2009   Fiscal 2008   Fiscal 2007
    Nominal   Menu   Real   Nominal   Menu   Real   Nominal   Menu   Real
 
                                                                       
May
    (5.0 )     2.6       (7.6 )     (0.4 )     4.0       (4.4 )     0.3       2.5       (2.2 )
June
    (6.0 )     2.7       (8.7 )     (0.1 )     4.0       (4.1 )     (1.0 )     2.5       (3.5 )
July
    (8.1 )     2.7       (10.8 )     (1.5 )     3.9       (5.4 )     1.9       2.6       (0.7 )
 
                                                                       
Q1
    (6.5 )     2.7       (9.2 )     (0.7 )     4.0       (4.7 )     0.4       2.5       (2.1 )
 
                                                                       
August
    (7.2 )     2.7       (9.9 )     (1.9 )     3.9       (5.8 )     0.5       2.6       (2.1 )
September
    (8.2 )     2.7       (10.9 )     (2.0 )     3.9       (5.9 )     3.3       2.4       0.9  
October
    (9.3 )     2.8       (12.1 )     (0.8 )     3.7       (4.5 )     2.2       2.7       (0.5 )
 
                                                                       
Q2
    (8.3 )     2.7       (11.0 )     (1.5 )     3.8       (5.3 )     2.0       2.6       (0.6 )
 
                                                                       
November
    (10.4 )     3.0       (13.4 )     (1.9 )     2.8       (4.7 )     2.2       2.9       (0.7 )
December
    (2.0 )     2.8       (4.8 )     (1.8 )     2.8       (4.6 )     2.7       3.4       (0.7 )
January
    (9.6 )     2.2       (11.8 )     (2.4 )     2.2       (4.6 )     2.8       4.7       (1.9 )
 
                                                                       
Q3
    (6.8 )     2.7       (9.5 )     (2.0 )     2.6       (4.6 )     2.6       3.6       (1.0 )
 
                                                                       
February
    (7.9 )     2.2       (10.1 )     (5.2 )     2.1       (7.3 )     2.6       4.6       (2.0 )
March
    (7.2 )     1.2       (8.4 )     (4.3 )     2.6       (6.9 )     (0.2 )     5.0       (5.2 )
April
    (6.4 )     1.2       (7.6 )     (6.0 )     2.6       (8.6 )     1.3       5.0       (3.7 )
 
                                                                       
Q4
    (7.1 )     1.5       (8.6 )     (5.3 )     2.4       (7.7 )     1.2       4.9       (3.7 )
 
                                                                       
Fiscal year
    (7.2 )     2.4       (9.6 )     (2.4 )     3.2       (5.6 )     1.6       3.4       (1.8 )
•   Key restaurant sales data (core restaurants only):
                 
    Bob Evans    
    Restaurants   Mimi’s
 
               
Average annual store sales ($) — FY09
  $ 1,779,000     $ 3,094,000  
 
               
Q4 FY09 day part mix (%):
               
Breakfast
    31 %     21 %
Lunch
    38 %     40 %
Dinner
    31 %     39 %
 
               
Q4 FY09 check average ($)
  $ 8.07     $ 10.79  
•   Quarterly restaurant sales by concept:
         
    Q4 2009  
Bob Evans Restaurants
  $ 248,209,000  
Mimi’s Cafes
    106,318,000  
 
     
 
       
Total
  $ 354,527,000  
Fiscal 2009 — Quarter 4 p 5

 

 

Food Products Q4 Review:
  •   Net sales increased 1.5% ($76.5 million vs. $75.4 million).
 
  •   Comparable pounds sold increased 3%.
 
  •   Operating income decreased 48.4% ($4.4 million vs. $8.6 million).
 
  •   Operating margin was 5.8% compared to 11.4%.
 
  •   Average sow cost increased 84% ($51.00 per cwt vs. $27.00 per cwt). Historical sow cost review (average cost per hundredweight):
                                         
Fiscal Year   Q1   Q2   Q3   Q4   Average
 
                                       
2009
  $ 29.00     $ 51.00     $ 49.00     $ 51.00     $ 45.00  
2008
  $ 42.00     $ 40.00     $ 31.00     $ 27.00     $ 35.00  
2007
  $ 37.00     $ 41.00     $ 39.00     $ 36.00     $ 38.00  
2006
  $ 48.00     $ 46.00     $ 43.00     $ 37.00     $ 43.00  
  •   Comparable pounds sold review (principally sausage products and refrigerated potatoes):
                                         
Fiscal Year   Q1   Q2   Q3   Q4   Average
 
                                       
2009
    13 %     11 %     (6 %)     3 %     6 %
2008
    4 %     2 %     8 %     5 %     5 %
2007
    13 %     11 %     4 %     5 %     8 %
2006
    6 %     10 %     12 %     11 %     10 %
  •   Net sales review (dollars in thousands):
                 
    Q4     Q4  
    2009     2008  
 
               
Gross sales
  $ 91,474     $ 91,422  
Less: promotions
    (14,252 )     (14,563 )
Less: returns and allowances
    (752 )     (1,491 )
 
           
Net sales
  $ 76,470     $ 75,368  
Fiscal 2009 — Quarter 4 p 6

 

 

Note: amounts are in thousands, except per share amounts
Year-to-date (YTD), ended April 24, 2009, compared to the corresponding period a year ago:
                                                                 
    Consolidated Results     Restaurant     Food Products  
    YTD     % of     YTD     % of     YTD     YTD     YTD     YTD  
    2009     sales     2008     sales     2009     2008     2009     2008  
 
                                                               
Net sales
  $ 1,750,512             $ 1,737,026             $ 1,439,090     $ 1,445,034     $ 311,422     $ 291,992  
 
                                                               
Cost of sales
    537,085       30.7 %     517,358       29.8 %     25.1 %     25.5 %     56.4 %     51.0 %
Operating wages
    597,806       34.1 %     604,198       34.8 %     39.2 %     39.6 %     11.1 %     11.2 %
Other operating
    280,393       16.0 %     282,029       16.2 %     18.4 %     18.4 %     4.9 %     5.4 %
S,G, & A
    156,965       9.0 %     149,070       8.6 %     6.6 %     6.3 %     20.0 %     19.9 %
Depr. & amort.
    81,934       4.7 %     77,131       4.4 %     5.1 %     4.8 %     2.6 %     2.7 %
Goodwill & other intangibles impairment
    67,962       3.9 %     0       0 %     4.7 %     0 %     0 %     0 %
     
 
                                                               
Operating income
    28,367       1.6 %     107,240       6.2 %     0.9 %     5.4 %     5.0 %     9.8 %
 
                                                               
Interest
    12,306       0.7 %     10,990       0.7 %                                
                                     
 
                                                               
Pre-tax income
    16,061       0.9 %     96,250       5.5 %                                
 
                                                               
Income taxes
    21,207       1.2 %     31,374       1.8 %                                
                                     
 
                                                               
Net income (loss)
  $ (5,146 )     (0.3 )%   $ 64,876       3.7 %                                
 
                                                               
EPS — basic
  $ (0.17 )           $ 1.96                                          
EPS — diluted
  $ (0.17 )           $ 1.95                                          
 
                                                               
Dividends paid per share
  $ 0.60             $ 0.56                                          
 
                                                               
Weighted average shares outstanding:
                                                               
 
                                                               
Basic
    30,744               33,065                                          
Dilutive stock options
    0               250                                          
 
                                                           
 
                                                               
Diluted
    30,744               33,315                                          
 
                                                               
Shares outstanding at quarter end
    30,712               30,611                                          
  •   Income taxes, as a percentage of pre-tax income, were 29.4% (excluding nondeductible goodwill impairment charge of $56,162) in fiscal 2009 vs. 32.6% in fiscal 2008
Fiscal 2009 — Quarter 4 p 7

 

Balance Sheet Summary:
                 
(in thousands)   Apr. 24, 2009     April 25, 2008  
 
               
Cash and equivalents
  $ 13,606     $ 7,669  
Assets held for sale
    —       570  
Other current assets
    66,654       62,635  
Net property, plant and equipment
    1,002,692       999,011  
Goodwill and other intangible assets
    43,904       112,686  
Other non-current assets
    20,792       24,465  
 
           
Total assets
  $ 1,147,648     $ 1,207,036  
 
               
Current portion of long-term debt
  $ 26,904     $ 26,904  
Line of credit
    67,000       138,500  
Other current liabilities
    151,901       160,800  
Long-term debt
    176,192       133,096  
Other long-term liabilities
    127,945       135,111  
Stockholders’ equity
    597,706       612,625  
 
           
Total liabilities and equity
  $ 1,147,648     $ 1,207,036  
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Certain statements in this report that are not historical facts are forward-looking statements. Forward-looking statements involve various important assumptions, risks and uncertainties. Actual results may differ materially from those predicted by the forward-looking statements because of various factors and possible events. We discuss these factors and events, along with certain other risks, uncertainties and assumptions, under the heading “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the fiscal year ended April 25, 2008, 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 on which the statement is made 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.
Fiscal 2009 — Quarter 4 p 8

 

Exhibit 99.3
 
1 Analyst Day June 3, 2008

 

2 Dave Poplar Vice President Investor Relations

 

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 Certain statements in this presentation 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, including, without limitation: Negative publicity or litigation regarding allegations of food-related illness, Failure to achieve and maintain positive same-store sales, Changing business conditions, including energy costs, Overall macroeconomic conditions that may affect consumer spending, either nationwide or in one or more of the Company's major markets Competition in the restaurant and food products industries, Ability to control restaurant operating costs, which are impacted by market changes in the cost or availability of labor and food, minimum wage and other employment laws, fuel and utility costs, Changes in the cost or availability of acceptable new restaurant sites, Accurately assessing the value, future growth potential, strengths, weaknesses, contingent and other liabilities and potential profitability of Mimi's, Adverse weather conditions in locations where we operate our restaurants, Consumer acceptance of changes in menu offerings, price, atmosphere and/or service procedures, Consumer acceptance of our restaurant concepts in new geographic areas, and Changes in hog and other commodity costs. We also bear the risk of incorrectly analyzing these risks or developing strategies to address them that prove to be unsuccessful. Certain risks, uncertainties and assumptions are discussed under the heading "Risk Factors" in Item 1A of our Annual Report on Form 10- K for the fiscal year ended April 25, 2008. We note these factors for investors as contemplated by the Private Securities Litigation Reform Act of 1995. It is impossible to predict or identify all such risk factors. Consequently, you 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 on which the statement is made to reflect unanticipated events. Any further disclosures in our filings with the Securities and Exchange Commission should also be consulted. 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.

 

Analyst Day Agenda 1:00 p.m. Introduction Dave Poplar, Vice President of Investor Relations 1:15 p.m. Corporate Overview and Brand Builders Steve Davis, Chairman and CEO 1:45 p.m. FY 2009 Financials Tod Spornhauer, SVP of Finance & Controller 2:15 p.m. Bob Evans Restaurants Overview Randy Hicks, President / Chief Concept Officer Mary Cusick, SVP of Restaurant Marketing 2:45 p.m. Mimi's Cafe Overview Tim Pulido, President / Chief Concept Officer Herbert Billinger, EVP of Operations, Productivity and Integration 3:15 p.m. Break 3:30 p.m. Restaurant Division: One Best Way Harvey Brownlee, President / CRO 4:00 p.m. Food Products Overview Mike Townsley, President of Food Products 4:30 p.m. FY 2010 Guidance Don Radkoski, CFO 5:00 p.m. Q and A 5:30 p.m. Depart

 

5 FY 2010 Investor Relations and Strategic Planning Calendar EARNINGS RELEASES EARNINGS CONF. CALLS EQUITY CONF. ROAD SHOWS YEAR END ANALYST MTG JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN MAY Tues Aug 11 (1Q) Tues Nov 10 (2Q) Tues Feb 9 (3Q) Tues Jun 8 (4Q) Tues Jun 2 (4Q) Wed Jun 3 (4Q) Wed Aug 12 (1Q) Wed Nov 11 (2Q) Wed Feb 10 (3Q) Wed Jun 9 (4Q) Mon Sep 14 ANNUAL MEETING Jul 14-15 Oppenheimer (Boston) Sep 16-17 CL King (NY) Jan 10-11 Cowen (NY) Jun 18 Chicago Stephens TBD Mid-Atlantic TBD TBD West Coast TBD Wed Jun 3 YEAR END ANALYST MTG Wed Jun 8 2009 2010

 

6 Mary Cusick Senior Vice President, Bob Evans Restaurant Marketing Adam Baird Executive Chef, Mimi's Cafe Nancy Cowen Senior Director of Marketing, Food Products

 

7 Appetizers LUNCH MENU Blue Ribbon Apple Pie Fries Country Fair Cheese Bites Strawberry Supreme Pie Itsy Bitsy Sandwiches Wildfire(tm) Chicken Quesadilla Loaded Baked Potato Bites

 

8 Just Enough LUNCH MENU Chicken, Fruit & Baby Greens Salad Honey Dijon Salmon Mimi's Mousse Ensemble

 

9 Grilling Sausage LUNCH MENU Food Products

 

10 Steve Davis Chairman and Chief Executive Officer

 

11 BEST Brand Builders Company & Segment Overview

 

12 BOB EVANS FOOD PRODUCTS REGIONAL BRANDSwith NATIONAL POTENTIAL

 

13 "Our Way of Doing Business"

 

14 "Owning" Regional Brands with National Growth Potential FY 2006 - 2009 Restructure for Growth FY 2010 Test & Execute Growth Initiatives FY 2011 - 2013 Drive Growth Initiatives

 

15 Company Overview FY '09 net sales: $1.75 billion, up 0.8% Approximately 49,000 Employees NASDAQ (Ticker: BOBE) Market Cap = Approximately $800 million FY '09 Free Cash Flow (after Cap Ex): $55 million Total Debt-to-Total Cap Ratio at Year-end: 31% Full-service restaurant company with a complementary retail food and food service business

 

16 FY 2009 4th Quarter Summary New labor management systems, reduced labor and food costs in restaurant segment Food products segment posts solid results despite significantly higher sow costs Project BestWay productivity initiatives Bob Evans Restaurants Drives Solid 4Q Results Reported Operating Income $31 million, up 15% Reported Net Income $21 million, up 31% Increases occurred despite a 1.2% decrease in net sales

 

17 Restaurants

 

18 FY 2009 Segment Overview 82% of Company Net Sales 714 Company-owned Restaurants as of April 24, 2009 570 restaurants as of 4/24/09 Full-service family restaurants featuring a wide variety of menu items 144 restaurants as of 4/24/09 Full-service casual dining restaurants featuring high-quality food in an upbeat, sophisticated atmosphere RESTAURANT SEGMENT

 

19 Brand Positioning "The Home of Homestyle" Net Sales $1.0 billion, down 1.3% Average Annual Unit Sales $1.78 million Average Check $8.07 (4Q FY 2009) FY 2009 Overview RESTAURANT SEGMENT - BOB EVANS All Three Day Parts Served Breakfast Lunch Dinner 4th Qtr dayparts 31 38 31 20.4 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 Breakfast 31% Lunch 38% Dinner 31%

 

20 Geographic Concentration RESTAURANT SEGMENT - BOB EVANS 194 59 16 24 3 51 31 39 8 3 7 28 23 3 17 11 4 49 570 Restaurants 18 States As of 4/24/09 1/3 of restaurants located in Ohio

 

21 40% of first-time guests visit because of distinctive building RESTAURANT SEGMENT - MIMI'S CAFE FY 2009 Overview Net Sales $419 million, up 1.8% Average Annual Unit Sales $3.09 million Average Check $10.79 (4Q FY 2009) All Three Day Parts Served Breakfast Lunch Dinner 4th Qtr dayparts 21 40 39 20.4 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 Breakfast 21% Lunch 40% Dinner 39%

 

22 RESTAURANT SEGMENT - MIMI'S CAFE Geographic Concentration 3 3 2 2 2 1 3 4 5 1 11 2 2 1 2 11 1 8 4 12 57 5 1 144 Restaurants 24 States As of 4/24/09 40% of restaurants located in California 1

 

23 Gain greater focus on sales, the product pipeline and concept evolution (President and Chief Concept Officer) Achieve "One BEST Way" operations execution at both Bob Evans and Mimi's Cafe (President and Chief Operations Officer) Flawlessly execute our supply chain strategy Consolidate our concept evolution, facilities and construction teams Strategic Rationale Management Changes RESTAURANT SEGMENT

 

24 Harvey Brownlee President and Chief Restaurant Operations Officer Kathy North Senior Vice President Bob Evans Restaurants Operations Randy Hicks President and Chief Concept Officer Bob Evans Restaurants Tim Pulido President and Chief Concept Officer Mimi's Cafe Restaurants Sales & Operations Focus RESTAURANT SEGMENT - MANAGEMENT CHANGES John Wyatt Vice President Real Estate, Construction and Facilities Richard Hall Senior Vice President Supply Chain

 

25 National Restaurant "Footprint" RESTAURANT SEGMENT - SUPPLY CHAIN OPPORTUNITY As of 4/24/09 2 2 1 2 11 1 8 4 12 57 5 51 59 31 39 8 2 3 2 24 3 16 3 3 1 23 3 194 4 17 5 11 1 4 11 49 2 28 7 3 Mimi's Restaurants Bob Evans Restaurants Both Mimi's and Bob Evans Restaurants 1 1

 

26 Fragmented Distribution System RESTAURANT SEGMENT - SUPPLY CHAIN OPPORTUNITY A B C B & C A & B A & C A, B & C

 

27 RESTAURANT SEGMENT FY 2010 Objectives Regain sales momentum via new product innovation Improve operating margins via "one best way" systems and processes Improve guest satisfaction; reduce turnover Improve restaurant unit economics to grow brand penetration outside of core geographics Leverage entire enterprise to reduce supply chain cost and consolidate restaurant distribution

 

28 Food Products

 

29 Two Brands distinct geographic strengths FY 2009 Segment Overview FOOD PRODUCTS SEGMENT Net Sales: $311.4 million, up 6.7% 18% of Company Net Sales 40 varieties of premium sausage, bacon and ham products 50 refrigerated and frozen home-style convenience food items 7 processing plants Sold at retail locations in 50 states and Ontario

 

30 FY 2009 Retail Distribution FOOD PRODUCTS SEGMENT Bob Evans Bob Evans and Owens Bob Evans Limited Distribution Mashed potatoes (#1 selling SKU) sold in only 50% of U.S.

 

31 FY 2009 Objectives FOOD PRODUCTS SEGMENT Drive comparable pounds sold and new retail sales authorizations Optimize plant operating efficiencies and identify cost savings to offset higher sow prices Launch customer level and plant level balanced scorecards Achieve target returns on Sulphur Springs expansion (investment in ready-to-eat products) Build on FY 2008 & FY 2009 productivity initiatives

 

32 Tod Spornhauer Controller

 

33 4th Quarter and FY 2009 Financial Highlights

 

34 Restaurants FY '09 FY'08 % Reported $26.6 $18.4 Special Items --- 0.7 Excluding Special Items $26.6 $17.7 50.4% Operating Income 4th Quarter (dollars in millions)

 

35 Food Products FY '09 FY'08 % Reported $4.4 $8.6 Special Items --- --- Excluding Special Items $4.4 $8.6 (48.4)% Operating Income 4th Quarter (dollars in millions)

 

36 Consolidated FY '09 FY'08 % Reported $31.0 $27.0 Special Items --- 0.7 Excluding Special Items $31.0 $26.3 18.0% Operating Income 4th Quarter (dollars in millions)

 

37 Restaurants FY '09 FY'08 % Reported $12.8 $78.7 Special Items (74.8) 5.1 Excluding Special Items $87.6 $73.6 19.2% Operating Income FY 2009 (dollars in millions)

 

38 Food Products FY '09 FY'08 % Reported $15.6 $28.6 Special Items (0.4) --- Excluding Special Items $16.0 $28.6 (43.9)% Operating Income FY 2009 (dollars in millions)

 

39 Consolidated FY '09 FY'08 % Reported $28.4 $107.2 Special Items (75.3) 5.1 Excluding Special Items $103.7 $102.1 1.5% Operating Income FY 2009 (dollars in millions)

 

40 Bob Evans Same-store Sales (nominal) May FY '08 thru FY '09 M J J A S O N D J F M A M J J A S O N D J F M A BER SSS 0.9 4 4.4 4.3 0.4 -1.9 2.1 1.1 1.2 3.3 0.1 1.7 4.4 0.9 1.1 -0.6 0.1 -0.9 -3.1 3.8 -5.7 -1.5 -1.9 -1.6 '07 '08 '09

 

41 Mimi's Cafe Same-store Sales (nominal) May FY '08 thru FY '09 M J J A S O N D J F M A M J J A S O N D J F M A BER SSS -0.4 -0.1 -1.5 -1.9 -2 -0.8 -1.9 -1.8 -2.4 -5.2 -4.3 -6 -5 -6 -8.1 -7.2 -8.2 -9.3 -10.4 -2 -9.6 -7.9 -7.2 -6.4 '07 '08 '09

 

42 FY '09 FY '08 Bob Evans Restaurants $1,779,000 $1,784,000 Mimi's Cafe $3,094,000 $3,350,000 Average Unit Volumes

 

43 Food Products Comparable Pounds FY '06 thru FY '09 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FOOD 0.06 0.1 0.12 0.11 0.13 0.11 0.04 0.05 0.04 0.02 0.08 0.05 0.13 0.11 -0.06 0.03 '06 '07 '09 '08

 

44 FY 2009 Sow Cost Plan vs. Actual $20 $25 $30 $35 $40 $45 $50 $55 MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR FY '09 Quarterly Projections FY '09 Quarter Actual FY 2009 FY 2008 FY 2007 $33 $33 $31 $36 $27.99 $34.04 $24.91 $39.42 $57.79 $55.04 $43.00 $50.15 $54.13 $51.48 $50.72 $49.97 $28.69 $51.19 $49.08 $50.65

 

45 FY '09 FY '08 CHANGE 4th Quarter 56.3% 48.9% 7.4% Fiscal Year 56.4% 51.0% 5.4% Food Products Cost of Sales

 

46 Cash & Equivalents $13.7 million vs $7.7 million at April 25, 2008 Total Debt $270.1 million vs $298.5 million at April 25, 2008 Treasury Repurchase Q4 = 0 shares FY = 245,000 shares Effective Tax Rate Q4 = 25.3% FY = 29.4% Balance Sheet Comments April 24, 2009

 

47 4/24/09 1/23/09 10/27/08 7/25/08 4/25/08 Bank Line $ 67.0 $ 86.4 $102.7 $141.0 $138.5 Current Portion of Debt 26.9 26.9 26.9 26.9 26.9 Senior Notes 176.2 176.2 176.2 133.1 133.1 Total $270.1 $289.5 $305.8 $301.0 $298.5 Total Debt - Comparison (in millions)

 

48 Bank Lines of Credit April 24, 2009 (in millions) Total Line $165.0 Current O/S 67.0 Available $ 98.0

 

49 FY 2009 Summary Good results in a turbulent and challenging environment Economic recession and impact on our customers "Off-the-chart" sow costs and shift from DSD to warehouse Productivity initiatives started in FY '07 and '08 pay off in '09

 

50 Randy Hicks President and Chief Concept Officer Mary Cusick Senior Vice President of Marketing

 

51 FY '09 Review

 

52 Core Store Performance FY '09 Review Same Store Sales PCYA Q1 Q2 Q3 Q4 FY '09 SSS 0.02 -0.005 -0.013 -0.016 -0.003

 

53 Same Store Sales - May FY '08 - April FY '09 Family Style Participants: Bob Evans, Bakers Square, Cracker Barrel, Old Country Store, Denny's, Friendly's, Frisch's Big Boy, Marie Callander's, Perkins, Steak 'n Shake, Village Inn Sales Trac Weekly FY '09 Review -20% -15% -10% -5% 0% 5% 10% 15% 20% 25% MAY 2007 JUN JUL AUG SEP OCT NOV DEC JAN 2008 FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN 2009 FEB MAR APR BE Core Stores

 

54 Within our four walls: Execute consistently Suggestive Selling New Product Rallies Local Restaurant Marketing (LRM) Picture-Perfect Food Deliver the 5 Es Outside our four walls: Compelling messaging, precise targeting Consistent Operations Drives Sales FY '09 Review

 

55 Pricing Management Strategy FY '09 Review Item elasticity and historical volume/mix results for pricing Advanced Restaurant Tiering to optimize price-volume relationships Building a Margin Culture Proven products with value price point and acceptable margins Continuously innovate in range of price points ITEM ELASTICITY STUDIES

 

56 Major Marketing Programs FY '09 Review Holiday Deep Dish Dinners/ Gift Cards Winter BOBurritos Spring Caesar Salad add chicken $1 Summer I & II 30 Meals $5.99 or less Bob-B-Q Fall Knife & Fork Sandwiches

 

57 Systems / Processes / Disciplines Cost of Sales Outliers identified Action plans: coach and improve results POS system Order accuracy Automated prep list Theoretical food costs "Big Two" Food and Labor FY '09 Review

 

58 Improved cost of goods Savings realized from printing, bread, china and flatware Utilization of Springfield DC / BE Transportation Partnership with Summit Energy Negotiation with vendors Take advantage of the downturn in commodities Productivity Initiatives FY '09 Review Supply Chain Team Initiatives

 

59 Eliminated 1.8 million hours Labor management system Forecasting accuracy Scheduler Accurate matrix with labor efficiency Manage to peak business to increase throughput Target outliers Kitchen manager program Reduction in turnover Labor FY '09 Review

 

60 Employee Turnover (hourly) FY '09 Review FY '06 FY '07 FY '08 FY '09 Turnover 1.475 1.315 1.2 0.915

 

61 Built one new restaurant Rebuilt four restaurants Relocate, Replace, Homestyle Restyle, Retire Xenia, Ohio prototype opening August Development FY '09 Review

 

62 FY '10 Strategic Plan

 

63 INNOVATIONS FY 2010 Brand Experience Value Health Dinner Breakfast Lunch Carryout Add-ons Consistently Drive Sales Growth Innovative Marketing and Strategic Menu/Pricing Management Dayparts/Business Strategic Pillars Innovate and change the way people think about Bob Evans

 

64 Develop and implement a Talent Management System Increase relevance and contemporize brand Improve Pay and Benefits to Best in Class Recruit and staff effectively Deliver consistent and precise brand image at existing restaurants Assemble cost savings initiatives under Project Best Way Execute five major marketing programs Reduce Cost of Goods to Best in Class Design and implement Best in Class systems, processes and tools Develop new restaurants that meet ROI goals and support brand image, hospitality and efficiency Increase employee engagement Build dinner business with innovation and carryout Improve Direct Operating Expenses to Best in Class Encourage, engage and reward high performing team members Reduce capital investment in new restaurants Promote cultural development for restaurant employees (BEST Program) Grow breakfast by innovating around core Improve G&A to Best in Class Provide safe, wholesome food - key to brand protection and employee loyalty Improve energy efficiency and create goodwill by being environmentally friendly Be environmentally responsible Enhance add-on layers and build check with innovation Mitigate non-compliance risk in facilities Build lunch sales with lighter, healthier, lunch-portioned items STRATEGIC BUSINESS FRAMEWORK FY 2010

 

65 Develop and implement a Talent Management System Increase relevance and contemporize brand Improve Pay and Benefits to Best in Class Recruit and staff effectively Deliver consistent and precise brand image at existing restaurants Assemble cost savings initiatives under Project Best Way Execute five major marketing programs Reduce Cost of Goods to Best in Class Design and implement Best in Class systems, processes and tools Develop new restaurants that meet ROI goals and support brand image, hospitality and efficiency Increase employee engagement Build dinner business with innovation and carryout Improve Direct Operating Expenses to Best in Class Encourage, engage and reward high performing team members Reduce capital investment in new restaurants Promote cultural development for restaurant employees (BEST Program) Grow breakfast by innovating around core Improve G&A to Best in Class Provide safe, wholesome food - key to brand protection and employee loyalty Improve energy efficiency and create goodwill by being environmentally friendly Be environmentally responsible Enhance add-on layers and build check with innovation Mitigate non-compliance risk in facilities Build lunch sales with lighter, healthier, lunch-portioned items STRATEGIC BUSINESS FRAMEWORK FY 2010 Develop and implement a Talent Management System Assemble cost savings initiatives under Project Best Way Increase employee engagement Promote cultural development for restaurant employees (BEST Program) Be environmentally responsible

 

66 Develop and implement a Talent Management System Increase relevance and contemporize brand Improve Pay and Benefits to Best in Class Recruit and staff effectively Deliver consistent and precise brand image at existing restaurants Assemble cost savings initiatives under Project Best Way Execute five major marketing programs Reduce Cost of Goods to Best in Class Design and implement Best in Class systems, processes and tools Develop new restaurants that meet ROI goals and support brand image, hospitality and efficiency Increase employee engagement Build dinner business with innovation and carryout Improve Direct Operating Expenses to Best in Class Encourage, engage and reward high performing team members Reduce capital investment in new restaurants Promote cultural development for restaurant employees (BEST Program) Grow breakfast by innovating around core Improve G&A to Best in Class Provide safe, wholesome food - key to brand protection and employee loyalty Improve energy efficiency and create goodwill by being environmentally friendly Be environmentally responsible Enhance add-on layers and build check with innovation Mitigate non-compliance risk in facilities Build lunch sales with lighter, healthier, lunch-portioned items STRATEGIC BUSINESS FRAMEWORK FY 2010 Increase relevance and contemporize brand Execute five major marketing programs Build dinner business with innovation and carryout Grow breakfast by innovating around core Enhance add-on layers and build check with innovation Build lunch sales with lighter, healthier, lunch-portioned items

 

67 Develop and implement a Talent Management System Increase relevance and contemporize brand Improve Pay and Benefits to Best in Class Recruit and staff effectively Deliver consistent and precise brand image at existing restaurants Assemble cost savings initiatives under Project Best Way Execute five major marketing programs Reduce Cost of Goods to Best in Class Design and implement Best in Class systems, processes and tools Develop new restaurants that meet ROI goals and support brand image, hospitality and efficiency Increase employee engagement Build dinner business with innovation and carryout Improve Direct Operating Expenses to Best in Class Encourage, engage and reward high performing team members Reduce capital investment in new restaurants Promote cultural development for restaurant employees (BEST Program) Grow breakfast by innovating around core Improve G&A to Best in Class Provide safe, wholesome food - key to brand protection and employee loyalty Improve energy efficiency and create goodwill by being environmentally friendly Be environmentally responsible Enhance add-on layers and build check with innovation Mitigate non-compliance risk in facilities Build lunch sales with lighter, healthier, lunch-portioned items STRATEGIC BUSINESS FRAMEWORK FY 2010 Improve Pay and Benefits to Best in Class Reduce Cost of Goods to Best in Class Improve Direct Operating Expenses to Best in Class Improve G&A to Best in Class

 

68 Develop and implement a Talent Management System Increase relevance and contemporize brand Improve Pay and Benefits to Best in Class Recruit and staff effectively Deliver consistent and precise brand image at existing restaurants Assemble cost savings initiatives under Project Best Way Execute five major marketing programs Reduce Cost of Goods to Best in Class Design and implement Best in Class systems, processes and tools Develop new restaurants that meet ROI goals and support brand image, hospitality and efficiency Increase employee engagement Build dinner business with innovation and carryout Improve Direct Operating Expenses to Best in Class Encourage, engage and reward high performing team members Reduce capital investment in new restaurants Promote cultural development for restaurant employees (BEST Program) Grow breakfast by innovating around core Improve G&A to Best in Class Provide safe, wholesome food - key to brand protection and employee loyalty Improve energy efficiency and create goodwill by being environmentally friendly Be environmentally responsible Enhance add-on layers and build check with innovation Mitigate non-compliance risk in facilities Build lunch sales with lighter, healthier, lunch-portioned items STRATEGIC BUSINESS FRAMEWORK FY 2010 Recruit and staff effectively Design and implement Best in Class systems, processes and tools Encourage, engage and reward high performing team members Provide safe, wholesome food - key to brand protection and employee loyalty

 

69 Develop and implement a Talent Management System Increase relevance and contemporize brand Improve Pay and Benefits to Best in Class Recruit and staff effectively Deliver consistent and precise brand image at existing restaurants Assemble cost savings initiatives under Project Best Way Execute five major marketing programs Reduce Cost of Goods to Best in Class Design and implement Best in Class systems, processes and tools Develop new restaurants that meet ROI goals and support brand image, hospitality and efficiency Increase employee engagement Build dinner business with innovation and carryout Improve Direct Operating Expenses to Best in Class Encourage, engage and reward high performing team members Reduce capital investment in new restaurants Promote cultural development for restaurant employees (BEST Program) Grow breakfast by innovating around core Improve G&A to Best in Class Provide safe, wholesome food - key to brand protection and employee loyalty Improve energy efficiency and create goodwill by being environmentally friendly Be environmentally responsible Enhance add-on layers and build check with innovation Mitigate non-compliance risk in facilities Build lunch sales with lighter, healthier, lunch-portioned items STRATEGIC BUSINESS FRAMEWORK FY 2010 Deliver consistent and precise brand image at existing restaurants Develop new restaurants that meet ROI goals and support brand image, hospitality and efficiency Reduce capital investment in new restaurants Improve energy efficiency and create goodwill by being environmentally friendly Mitigate non-compliance risk in facilities

 

70 TV & Radio: 30 Meals Everyday at $5.99 or less In-restaurant POP: NEW Homestyle Appetizers starting at $3.99 Bob-B-Q from $5.99 to $11.99 NEW Bob-B-Q Family Meal Deal at $10.99 Focus: Bob Evans All-Star Values FY 2010 Advertising Summary

 

71 FY 2010 In Store NEW Appetizers starting at $3.99 Bob-B-Q starting at $5.99 NEW Bob-B-Q Family Meal Deal TV & Radio 30 Meals at $5.99 or less Bob-B-Q Chicken, NEW Caesar Salad, BOBurito Carryout Tag Digital 30 Meals, NEW Appetizers, Bob-B-Q, Instant Win Game LSM/PR 30 Meals, NEW Appetizers, Bob-B-Q Family Meal Deal SUMMER Marketing Calendar At Bob Evans, you get Unbelievable Food at an Unbeatable Value "Homestyle Meals, Everyday Deals. That's Bob Evans."

 

72 30 Meals for $5.99 or Less "Big Deal" (30 sec. TV) "Deflation" (60 sec. Radio) "Financial Advisor" (60 sec. Radio) FY 2010 Summer Advertising

 

73 New online ordering platform Continue social media efforts Mobile-friendly store locator within BobEvans.com Increase BE-mail database ("mobile join" test) Targeted microsites and online banners FY 2010 Digital Marketing

 

74 REVITALIZE OUR PERFORMANCE RE-ENERGIZE OUR PEOPLE RECOGNIZE OUR POTENTIAL Vision Differentiated, relevant and contemporary Bob Evans dining experience Expected Outcome Growth and positive performance while meeting or exceeding ROIC goals FY 2010 Development

 

75 Imperatives FY 2010 Drive same store sales Value and innovation Deployment and alignment of resources Continue margin excellence Supply chain savings Labor management system Fix top customer concerns Deliver Homestyle Restyle design and remodel to meet ROIC goals Identify future development DMAs and sites that will deliver on ROI goals What does this mean for Bob Evans Restaurants?

 

76

 

77 Tim Pulido President and Chief Concept Officer Herbert Billinger EVP of Operations, Productivity and Integration

 

78 FY '09 Review FY '10 Strategic Plan

 

79 Three Major Forces Impacting Business Joint Bob Evans/Mimi's Cafe team tackles concept transformation FY '09 Review MACRO-ECONOMIC - Subprime housing meltdown - Severe recession INDUSTRY - Casual Dining over-built and un-differentiated BRAND - High cost structure/no marketing - Culture resistant to change

 

80 Re-engineer Cost Structure Drive P&L improvements Focus on prime costs/Keep eye on the Guest Re-invest one point back into Marketing Re-vitalize Concept Rebuild guest traffic and frequency Renovate legacy stores Define "Cafe of the Future" and growth Business Transformation Vision FY '09 Review

 

81 Improve Margins AND Improve Guest Satisfaction vs. Competition The Power of AND in 4Q FY '09 Review Source: Mind Share Mimi's Cafe Scores Mimi's Cafe Scores Mimi's Cafe Scores Gap vs. Best in Class Gap vs. Best in Class Gap vs. Best in Class AUG-OCT 2008 MARCH 2009 APRIL 2009 MARCH 2009 APRIL 2009 CHANGE Guest Loyalty Index 74.5 76.1 77.2 -2.9 -2.2 0.7 Speed of Service 49.0 55.3 57.3 -15.7 -12.3 3.4 Food Quality 59.0 64.4 66.3 -7.6 -4.2 3.4

 

82 *Source: Knapp Trac May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr National* 0.006 -0.019 -0.039 -0.037 -0.041 -0.065 -0.059 -0.089 -0.041 -0.04 -0.048 -0.053 California* 0.001 -0.03 -0.048 -0.04 -0.056 -0.078 -0.087 -0.113 -0.062 -0.088 -0.077 -0.081 Florida* -0.052 -0.045 -0.067 -0.064 -0.065 -0.098 -0.1092 -0.11 -0.064 -0.052 -0.07 -0.08 Mimi's Cafe -0.05 -0.06 -0.081 -0.072 -0.082 -0.093 -0.104 -0.02 -0.096 -0.079 -0.072 -0.064 Trends Improving, But Still Challenging FY '09 Review Casual Dining Comp Sales Casual Dining -5% Sub prime -8% Mimi's Cafe -7%

 

83 Just Enough Two Prong Strategy FY '09 Review Anchor / Tiered Price Points $5.99 Breakfast $7.99 - $8.99 Lunch $8.99 - $11.49 Dinner Fixed Menus $12.99 Three Course Meal (add drink for $1.00)

 

84 Just Enough Becomes Biggest Category FY '09 Review Units per Restaurant Including Fixed Price Menu 6/25 '08 7/9 7/23 8/6 8/20 9/3 9/17 10/1 10/15 10/29 11/12 11/26 12/10 12/24 1/7 '09 1/21 2/4 2/18 3/4 3/18 4/1 4/15 JE Lunch JE Dinner JE Breakfast 0 200 400 600 800 1000

 

85 Just Enough In-store Merchandising FY '09 Review Utilize Best Brand Builder Checklist to Achieve Flawless Execution Banner A-Frame Chalkboard Menu Insert Stanchion Posters Bounce- backs

 

86 Just Enough Fixed Three Course Menus FY '09 Review BIG HIT IN 2009

 

87 FY '09 Review 4,348 fans 215,271 members 1,480/store avg Digital Marketing & Social Networking Take Off in 4th Qtr 2009 Silver Communicator Award Winner

 

88 FY 2010 Brand Re-launch Extreme Makeover: Cafe Edition

 

89 INNOVATIONS FY 2010 Brand Experience/ Ops Owns Sales Value Fresh & Healthy Breakfast Lunch Dinner Beverages To Go Reenergize Sales Growth Innovative Marketing Day parts & Strategic Menu Margineering Strategic Pillars Innovate and Reinvigorate Mimi's Cafe Brand Relaunch Marketing Plan Cafe of the Future Remodel Expansion 215,000 Members Facebook 3,445 fans JE $5.99 - $7.49 JE $5.99 - $9.29 JE $8.99 - $11.49 20% 40% 40% 30th Birthday On-line Ordering/Party Pacs eClub Extreme Makeover: Cafe Edition

 

90 Integrate Supply Chain Communicate "Meet me at Mimi's the all day fresh cafe." Re-engineer Food Cost Structure Improve Guest Experience Improve FY'08/09 New Store Opening Performance Establish HR Planning Drive Menu Innovation Execute Labor Management System Establish BEST Coaching Model Redesign Branded Concept Prototype Leverage New Executive Team Improve Off Premise Mode of Access Reduce Prime Costs Test Technology to Improve Speed of Service Establish Market/Site Development Process Implement Pay for Performance Expand Day Parts by Building Breakfast Establish Platform for 2011 Re-engineering Facilitate Integration into Bob Evans Operations Platform Expand Remodel Program Build Enterprise Risk Management Process Ensure Operations Owns Sales Establish Recognition Culture STRATEGIC BUSINESS FRAMEWORK FY 2010

 

91 Integrate Supply Chain Communicate "Meet me at Mimi's the all day fresh cafe." Re-engineer Food Cost Structure Improve Guest Experience Improve FY'08/09 New Store Opening Performance Establish HR Planning Drive Menu Innovation Execute Labor Management System Establish BEST Coaching Model Redesign Branded Concept Prototype Leverage New Executive Team Improve Off Premise Mode of Access Reduce Prime Costs Test Technology to Improve Speed of Service Establish Market/Site Development Process Implement Pay for Performance Expand Day Parts by Building Breakfast Establish Platform for 2011 Re-engineering Facilitate Integration into Bob Evans Operations Platform Expand Remodel Program Build Enterprise Risk Management Process Ensure Operations Owns Sales Establish Recognition Culture STRATEGIC BUSINESS FRAMEWORK FY 2010 Integrate Supply Chain Establish HR Planning Leverage New Executive Team Implement Pay for Performance Build Enterprise Risk Management Process Establish Recognition Culture

 

92 Integrate Supply Chain Communicate "Meet me at Mimi's the all day fresh cafe." Re-engineer Food Cost Structure Improve Guest Experience Improve FY'08/09 New Store Opening Performance Establish HR Planning Drive Menu Innovation Execute Labor Management System Establish BEST Coaching Model Redesign Branded Concept Prototype Leverage New Executive Team Improve Off Premise Mode of Access Reduce Prime Costs Test Technology to Improve Speed of Service Establish Market/Site Development Process Implement Pay for Performance Expand Day Parts by Building Breakfast Establish Platform for 2011 Re-engineering Facilitate Integration into Bob Evans Operations Platform Expand Remodel Program Build Enterprise Risk Management Process Ensure Operations Owns Sales Establish Recognition Culture STRATEGIC BUSINESS FRAMEWORK FY 2010 Communicate "Meet me at Mimi's the all day fresh cafe." Drive Menu Innovation Improve Off Premise Mode of Access Expand Day Parts by Building Breakfast Ensure Operations Owns Sales

 

93 Integrate Supply Chain Communicate "Meet me at Mimi's the all day fresh cafe." Re-engineer Food Cost Structure Improve Guest Experience Improve FY'08/09 New Store Opening Performance Establish HR Planning Drive Menu Innovation Execute Labor Management System Establish BEST Coaching Model Redesign Branded Concept Prototype Leverage New Executive Team Improve Off Premise Mode of Access Reduce Prime Costs Test Technology to Improve Speed of Service Establish Market/Site Development Process Implement Pay for Performance Expand Day Parts by Building Breakfast Establish Platform for 2011 Re-engineering Facilitate Integration into Bob Evans Operations Platform Expand Remodel Program Build Enterprise Risk Management Process Ensure Operations Owns Sales Establish Recognition Culture STRATEGIC BUSINESS FRAMEWORK FY 2010 Re-engineer Food Cost Structure Execute Labor Management System Reduce Prime Costs Establish Platform for 2011 Re-engineering

 

94 Integrate Supply Chain Communicate "Meet me at Mimi's the all day fresh cafe." Re-engineer Food Cost Structure Improve Guest Experience Improve FY'08/09 New Store Opening Performance Establish HR Planning Drive Menu Innovation Execute Labor Management System Establish BEST Coaching Model Redesign Branded Concept Prototype Leverage New Executive Team Improve Off Premise Mode of Access Reduce Prime Costs Test Technology to Improve Speed of Service Establish Market/Site Development Process Implement Pay for Performance Expand Day Parts by Building Breakfast Establish Platform for 2011 Re-engineering Facilitate Integration into Bob Evans Operations Platform Expand Remodel Program Build Enterprise Risk Management Process Ensure Operations Owns Sales Establish Recognition Culture STRATEGIC BUSINESS FRAMEWORK FY 2010 Improve Guest Experience Establish BEST Coaching Model Test Technology to Improve Speed of Service Facilitate Integration into Bob Evans Operations Platform

 

95 Integrate Supply Chain Communicate "Meet me at Mimi's the all day fresh cafe." Re-engineer Food Cost Structure Improve Guest Experience Improve FY'08/09 New Store Opening Performance Establish HR Planning Drive Menu Innovation Execute Labor Management System Establish BEST Coaching Model Redesign Branded Concept Prototype Leverage New Executive Team Improve Off Premise Mode of Access Reduce Prime Costs Test Technology to Improve Speed of Service Establish Market/Site Development Process Implement Pay for Performance Expand Day Parts by Building Breakfast Establish Platform for 2011 Re-engineering Facilitate Integration into Bob Evans Operations Platform Expand Remodel Program Build Enterprise Risk Management Process Ensure Operations Owns Sales Establish Recognition Culture STRATEGIC BUSINESS FRAMEWORK FY 2010 Improve FY'08/09 New Store Opening Performance Redesign Branded Concept Prototype Establish Market/Site Development Process Expand Remodel Program

 

96 Nutritious Value Fresh News Core MENU INNOVATION PLATFORMS FY 2010

 

97 Menu Engineering New Fresh & Fit Menu New Alcohol Menu Portions Engineering Key Events Mother's Day, Father's Day, Graduation, July 4th, 30th Birthday Promotional Platform JE Breakfast starting @ $5.99 JE Starters starting @ $2.99 JE Lunch starting @ $5.99 Fixed & Special Day Menus 2 Course Lunch @ $8.99 3 Course Dinner @ $12.99 To Go Online Ordering Test BBQ & Picnic Party Packs 1Q (MAY - JULY) Fresh & Fit Value Breakfast All Day Cafe Breakfast (May) Branded Bundling & Section Lunch New JE Spinach, Apple & Honey Walnut Salad Dinner Seared Scallops with Ravioli Brie Chicken Honey Dijon Petite Filet Salad Nicoise Appetizers/Desserts New Berry Petite Treats Kids New Kids Menu Design Beverages New Hot & Cold (Sprite 0, Arizona Teas, Smoothies, Blended Coffee) New Wine List & Signature Drinks Cocktail Hour Expansion At Mimi's Cafe, you get the Freshest Portions & Prices MARKETING CALENDAR FY 2010 Menu Innovation

 

98 65 75 80 70 Guest Response is Positive FY 2010 Expand Remodels in So Cal/Arizona Aug Sep Oct Nov Dec Jan Feb Mar Apr Lake Forest +4 pts. Costa Mesa +6 pts. Laguna +8 pts. San Bernardino +7 pts

 

99 IMPERATIVES FY 2010 Improve comp sales trends through new marketing efforts and spending Labor management system delivers COL savings Improved speed of service scores enhance guest experience Execute Cafe of the Future design Improve market prioritization, site selection criteria and remodel optimization Marketing innovation and concept leadership deliver renewed growth Supply chain and procurement efforts deliver COGS savings

 

100 Deliver Brand Re-launch! Extreme Makeover: Cafe Edition

 

101 Analyst Day June 3, 2008

 

102 Harvey Brownlee President and Chief Restaurant Operations Officer

 

103

 

104 Our plan to go "From Good to Great" "Owning" Regional Brands with National Growth Potential FY 2006 - 2009 Restructure for Growth FY 2010 Test & Execute Growth Initiatives FY 2011 - 2013 Drive Growth

 

105 Create a center of excellence to capture "One Best Way" synergies and "Power of BOBE" How do we grow? OPSSERVICESASSETDEVELOPMENTOPERATIONS Create a world class development organization to re-energize and exploit growth opportunities Ensure linkage between growth strategy and people capability

 

106 Lead best-in-class margin performance for BER and Mimi's Cafe Develop breakthrough operation programs to address top guest concerns Create world class operations college Lead labor management productivity for both brands Drive "One Best Way" synergy and "Power of BOBE" OPSSERVICES Restructure for Growth Key Organizing Principles

 

107 Food Safety BSC Daily Performance Report Labor Management Systems Actual vs. Theoretical Food Cost Guest Measurement Hospitality Training Key Initiatives "Adopt and Go" Mindset OPSSERVICES

 

108 Growth Imperatives GROWTH Re-engineer Menu Offerings Menu "Margineering" Reinforce Cost Control "Big 2" / Prime Cost Start-up Pro Forma Re-vitalize Supply Chain Leverage Scale Economics Reduce Suppliers Re-engineer Concept/Unit Economics Compelling Unit Economics Value Engineer VP of Real Estate, Construction and Facilities ASSETDEVELOPMENT

 

109 Develop One Best Way approach and analysis Ensure all restaurants are "growth ready" Drive compelling unit economics Develop and achieve pro forma assumptions Complete value engineering model Complete "Four Rs" analysis for current assets Key Initiatives "From Good to Great" Mindset ASSETDEVELOPMENT

 

110 Enable growth through high visibility leadership and people capability Restaurant Restructuring Strategy OPERATIONS Decentralize senior operations leaders Build training and HR capability Structure Learning Personal/professional growth Coaching Culture

 

111 Ops Vision Well-trained, well-groomed, professional Honest, friendly, proud Passionate about restaurants Deliver visible results With Our People Hot, fresh food in clean, friendly environment Restaurants as destination for friends and family With Our Guests Consistent, predictable results "Top Tier" Brand For Our Shareholders Excel with guest touch points Best place to work...like family Service and sanitation that pass the "family test" Best trained and developed people in industry Best operations in category Best at guest satisfaction In Our Restaurants

 

112 Ops Must Haves All MITs receive structured training plan at Certified Training Restaurant All Area and Market Coaches attend Operations College 100% execution of four walls marketing plan All restaurants have a marketing plan 100% execution of Labor Management System Fix outlier restaurants... NOW All Operations Leaders utilize success routines and have QBP Restaurant visit mindset: Time spent in restaurants - 60% of Head Coach/Region Coach and 80% of Area Coach/ Market Coach Meet or exceed pre-opening budget All asset actions have a launch or re-launch plan including pro forma communicated to the restaurant level

 

113 Drive operations excellence Develop breakthrough programs to address top service and quality issues Develop and integrate OBW processes Create world class operations college Create world class real estate, construction and facilities department Develop and cascade code of conduct Institute Mindshare as OBW approach to guest satisfaction Lead best-in-class margin execution Integrate operation platform Drive growth through cost controls, menu, unit economics and supply chain Create world class people development and succession planning process Ensure all new promotions are restaurant ready Ensure supply chain integration for restaurant business system Lead labor management productivity initiative Develop robust asset development process to ensure ROIC targets are met Develop performance management tools and process Implement ABC & Ds of service Institute success routines Implement OBW food safety program at restaurant level Improve new restaurant performance Drive recognition culture (OBW B3 incentive trip) Drive OBW performance management process Conduct robust quarterly review process Institute OBW balanced scorecard Execute growth-ready screens Develop OBW restaurant planning process STRATEGIC BUSINESS FRAMEWORK FY 2010

 

114 Drive operations excellence Develop breakthrough programs to address top service and quality issues Develop and integrate OBW processes Create world class operations college Create world class real estate, construction and facilities department Develop and cascade code of conduct Institute Mindshare as OBW approach to guest satisfaction Lead best-in-class margin execution Integrate operation platform Drive growth through cost controls, menu, unit economics and supply chain Create world class people development and succession planning process Ensure all new promotions are restaurant ready Ensure supply chain integration for restaurant business system Lead labor management productivity initiative Develop robust asset development process to ensure ROIC targets are met Develop performance management tools and process Implement ABC & Ds of service Institute success routines Implement OBW food safety program at restaurant level Improve new restaurant performance Drive recognition culture (OBW B3 incentive trip) Drive OBW performance management process Conduct robust quarterly review process Institute OBW balanced scorecard Execute growth-ready screens Develop OBW restaurant planning process STRATEGIC BUSINESS FRAMEWORK FY 2010 Drive operations excellence Develop and cascade code of conduct Create world class people development and succession planning process Develop performance management tools and process Drive recognition culture (OBW B3 incentive trip)

 

115 Drive operations excellence Develop breakthrough programs to address top service and quality issues Develop and integrate OBW processes Create world class operations college Create world class real estate, construction and facilities department Develop and cascade code of conduct Institute Mindshare as OBW approach to guest satisfaction Lead best-in-class margin execution Integrate operation platform Drive growth through cost controls, menu, unit economics and supply chain Create world class people development and succession planning process Ensure all new promotions are restaurant ready Ensure supply chain integration for restaurant business system Lead labor management productivity initiative Develop robust asset development process to ensure ROIC targets are met Develop performance management tools and process Implement ABC & Ds of service Institute success routines Implement OBW food safety program at restaurant level Improve new restaurant performance Drive recognition culture (OBW B3 incentive trip) Drive OBW performance management process Conduct robust quarterly review process Institute OBW balanced scorecard Execute growth-ready screens Develop OBW restaurant planning process STRATEGIC BUSINESS FRAMEWORK FY 2010 Develop breakthrough programs to address top service and quality issues Institute Mindshare as OBW approach to guest satisfaction Ensure all new promotions are restaurant ready Implement ABC & Ds of service Drive OBW performance management process

 

116 Drive operations excellence Develop breakthrough programs to address top service and quality issues Develop and integrate OBW processes Create world class operations college Create world class real estate, construction and facilities department Develop and cascade code of conduct Institute Mindshare as OBW approach to guest satisfaction Lead best-in-class margin execution Integrate operation platform Drive growth through cost controls, menu, unit economics and supply chain Create world class people development and succession planning process Ensure all new promotions are restaurant ready Ensure supply chain integration for restaurant business system Lead labor management productivity initiative Develop robust asset development process to ensure ROIC targets are met Develop performance management tools and process Implement ABC & Ds of service Institute success routines Implement OBW food safety program at restaurant level Improve new restaurant performance Drive recognition culture (OBW B3 incentive trip) Drive OBW performance management process Conduct robust quarterly review process Institute OBW balanced scorecard Execute growth-ready screens Develop OBW restaurant planning process STRATEGIC BUSINESS FRAMEWORK FY 2010 Develop and integrate OBW processes Lead best-in-class margin execution Ensure supply chain integration for restaurant business system Institute success routines Conduct robust quarterly review process Develop OBW restaurant planning process

 

117 Drive operations excellence Develop breakthrough programs to address top service and quality issues Develop and integrate OBW processes Create world class operations college Create world class real estate, construction and facilities department Develop and cascade code of conduct Institute Mindshare as OBW approach to guest satisfaction Lead best-in-class margin execution Integrate operation platform Drive growth through cost controls, menu, unit economics and supply chain Create world class people development and succession planning process Ensure all new promotions are restaurant ready Ensure supply chain integration for restaurant business system Lead labor management productivity initiative Develop robust asset development process to ensure ROIC targets are met Develop performance management tools and process Implement ABC & Ds of service Institute success routines Implement OBW food safety program at restaurant level Improve new restaurant performance Drive recognition culture (OBW B3 incentive trip) Drive OBW performance management process Conduct robust quarterly review process Institute OBW balanced scorecard Execute growth-ready screens Develop OBW restaurant planning process STRATEGIC BUSINESS FRAMEWORK FY 2010 Create world class operations college Integrate operation platform Lead labor management productivity initiative Implement OBW food safety program at restaurant level Institute OBW balanced scorecard

 

118 Drive operations excellence Develop breakthrough programs to address top service and quality issues Develop and integrate OBW processes Create world class operations college Create world class real estate, construction and facilities department Develop and cascade code of conduct Institute Mindshare as OBW approach to guest satisfaction Lead best-in-class margin execution Integrate operation platform Drive growth through cost controls, menu, unit economics and supply chain Create world class people development and succession planning process Ensure all new promotions are restaurant ready Ensure supply chain integration for restaurant business system Lead labor management productivity initiative Develop robust asset development process to ensure ROIC targets are met Develop performance management tools and process Implement ABC & Ds of service Institute success routines Implement OBW food safety program at restaurant level Improve new restaurant performance Drive recognition culture (OBW B3 incentive trip) Drive OBW performance management process Conduct robust quarterly review process Institute OBW balanced scorecard Execute growth-ready screens Develop OBW restaurant planning process STRATEGIC BUSINESS FRAMEWORK FY 2010 Create world class real estate, construction and facilities department Drive growth through cost controls, menu, unit economics and supply chain Develop robust asset development process to ensure ROIC targets are met Improve new restaurant performance Execute growth-ready screens

 

119 Thank you!

 

120 Mike Townsley President, Food Products Food Products

 

121 FY '09 Review Food Products

 

122 Key Metrics FY '09 Review Volume Up 6.0% vs. prior year (comparable pounds) Net Sales Up 6.7% vs. prior year Profit $15.6 million vs. $28.6 million in FY'08 Food Products Market Share TARGET ACTUAL Mashed Potatoes 32.8% 34.4% +1.5 points Sausage 19.0% 17.4% -1.3 points

 

123 Key Accomplishments FY '09 Review Food Products DSD conversion completed: 96% warehouse Boneless meat yield 56.61% Up 0.4% from FY'08 Delivered $1.2 million savings Returns 1.18% ($1.4 million below plan of 1.55%) Consolidated plant benefits Key Volume Changes Sides +19.2% Frozen +43.5% Sausage - 0.4% Sandwiches +42.5% Grilling +49.1% Foodservice + 6.3%

 

124 Business Challenges FY '09 Review Food Products Record sow price $44.93 Plan $33.25 PY $34.79 DSD conversion Continued competitive price pressures Growth of private label FY '09 Actual 1Q $33 $28.69 2Q $51.19 $33 3Q $49.08 $31 4Q $50.65 $36 FY 2009 Sow Cost

 

125 Distribution Map FY '09 Review Food Products Bob Evans Bob Evans and Owens Bob Evans Growth Markets

 

126 Foodservice Internal Retail 4th Qtr East 0.076 0.025 0.879582524271845 20.4 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 Retail 89% Foodservice 8% Internal (BER/Mimi's) 3% Business Profile FY '09 Review Food Products

 

FY 2009 New Authorizations FY '09 Review Food Products 596 Refrigerated Items 224 Frozen Items

 

128 FY '09 Review Food Products Boneless Meat Yield Actual vs. FY '08 P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12 YTD 56.21% 56.61% 55.5% 56.0% 56.5% 57.0% TARGET 56.57% 56.59% Company Avg FY 09

 

129 MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR 61% 57% FY '08 Total Avg 54% FY '09 Total Avg 70% Combined Warehouse % FY '09 Review Food Products 96% 79% 77% FY 08 FY 09 FY 10

 

130 Returns for Sales FY '09 Review Food Products Food Products 0.50% 1.00% 1.50% 2.00% MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR 1.75% 1.25% 0.75% YEAR PLAN <1.55%

 

131 FY '10 Strategic Plan Food Products

 

132 INNOVATIONS FY 2010 Message Convenience Versatility Value Strategic Marketing and Retail Partnerships Innovative/Reinvention Relevance Strategic Pillars Innovating from our heritage to grow nationally Products Processes Sausage Heritage Restaurant Roots National Distribution Food Products

 

133 Develop and implement talent management system Revitalize sausage sales Improve COGS as % of sales Enhance food safety initiatives Drive increased ROI with improved operations Implement programs to maximize employee job satisfaction Drive breakthrough innovation Maintain/reduce selling expense as % of sales Improve product cost CWT Meet retailer delivery requirements Management development/ succession planning Grow frozen breakfast Maintain/reduce plant operating expense as % of sales Achieve boneless meat yield target Implement efficient distribution and transportation system Assemble cost savings initiatives under Project Best Way Drive distribution with key retailers Improve purchasing efficiencies Achieve lowest distribution costs Understand feasibility of soups, gravies, sauces, pre-mixes SKU rationalization Improve sandwich cost structure Be the BEST at the buyer's desk Expand production capacity Meet retailer delivery requirements Increase Food Service penetration in core markets STRATEGIC BUSINESS FRAMEWORK FY 2010 Food Products

 

134 Develop and implement talent management system Meet retailer delivery requirements Improve COGS as % of sales Improve product CWT Meet retailer delivery requirements Implement programs to maximize employee job satisfaction Drive distribution with key retailers Maintain/reduce selling expense as % of sales Enhance food safety initiatives Drive increased ROI with improved operations Management development/ succession planning Drive breakthrough innovation Maintain/reduce plant operating expense as % of sales Achieve lowest distribution costs Expand production capacity Assemble cost savings initiatives under project Best Way SKU rationalization Improve purchasing efficiencies Achieve boneless meat yield target Understand feasibility of soups, gravies, sauces, pre-mixes Revitalize sausage sales Improve sandwich cost structure Be the BEST at the buyer's desk Implement efficient distribution and transportation system Grow frozen breakfast Increase Food Service penetration in core markets STRATEGIC BUSINESS FRAMEWORK FY 2010 Food Products Develop and implement talent management system Implement programs to maximize employee job satisfaction Management development/ succession planning Assemble cost savings initiatives under Project Best Way

 

135 Develop and implement talent management system Meet retailer delivery requirements Improve COGS as % of sales Improve product CWT Meet retailer delivery requirements Implement programs to maximize employee job satisfaction Drive distribution with key retailers Maintain/reduce selling expense as % of sales Enhance food safety initiatives Drive increased ROI with improved operations Management development/ succession planning Drive breakthrough innovation Maintain/reduce plant operating expense as % of sales Achieve lowest distribution costs Expand production capacity Assemble cost savings initiatives under project Best Way SKU rationalization Improve purchasing efficiencies Achieve boneless meat yield target Understand feasibility of soups, gravies, sauces, pre-mixes Revitalize sausage sales Improve sandwich cost structure Be the BEST at the buyer's desk Implement efficient distribution and transportation system Grow frozen breakfast Increase Food Service penetration in core markets STRATEGIC BUSINESS FRAMEWORK FY 2010 Food Products Revitalize sausage sales Drive breakthrough innovation Grow frozen breakfast Drive distribution with key retailers SKU rationalization Meet retailer delivery requirements Increase Food Service penetration in core markets

 

136 Develop and implement talent management system Meet retailer delivery requirements Improve COGS as % of sales Improve product CWT Meet retailer delivery requirements Implement programs to maximize employee job satisfaction Drive distribution with key retailers Maintain/reduce selling expense as % of sales Enhance food safety initiatives Drive increased ROI with improved operations Management development/ succession planning Drive breakthrough innovation Maintain/reduce plant operating expense as % of sales Achieve lowest distribution costs Expand production capacity Assemble cost savings initiatives under project Best Way SKU rationalization Improve purchasing efficiencies Achieve boneless meat yield target Understand feasibility of soups, gravies, sauces, pre-mixes Revitalize sausage sales Improve sandwich cost structure Be the BEST at the buyer's desk Implement efficient distribution and transportation system Grow frozen breakfast Increase Food Service penetration in core markets STRATEGIC BUSINESS FRAMEWORK FY 2010 Food Products Improve COGS as % of sales Maintain/reduce selling expense as % of sales Maintain/reduce plant operating expense as % of sales Improve purchasing efficiencies Improve sandwich cost structure

 

137 Develop and implement talent management system Meet retailer delivery requirements Improve COGS as % of sales Improve product CWT Meet retailer delivery requirements Implement programs to maximize employee job satisfaction Drive distribution with key retailers Maintain/reduce selling expense as % of sales Enhance food safety initiatives Drive increased ROI with improved operations Management development/ succession planning Drive breakthrough innovation Maintain/reduce plant operating expense as % of sales Achieve lowest distribution costs Expand production capacity Assemble cost savings initiatives under project Best Way SKU rationalization Improve purchasing efficiencies Achieve boneless meat yield target Understand feasibility of soups, gravies, sauces, pre-mixes Revitalize sausage sales Improve sandwich cost structure Be the BEST at the buyer's desk Implement efficient distribution and transportation system Grow frozen breakfast Increase Food Service penetration in core markets STRATEGIC BUSINESS FRAMEWORK FY 2010 Food Products Enhance food safety initiatives Improve product cost CWT Achieve boneless meat yield target Achieve lowest distribution costs Be the BEST at the buyer's desk

 

138 Develop and implement talent management system Meet retailer delivery requirements Improve COGS as % of sales Improve product CWT Meet retailer delivery requirements Implement programs to maximize employee job satisfaction Drive distribution with key retailers Maintain/reduce selling expense as % of sales Enhance food safety initiatives Drive increased ROI with improved operations Management development/ succession planning Drive breakthrough innovation Maintain/reduce plant operating expense as % of sales Achieve lowest distribution costs Expand production capacity Assemble cost savings initiatives under project Best Way SKU rationalization Improve purchasing efficiencies Achieve boneless meat yield target Understand feasibility of soups, gravies, sauces, pre-mixes Revitalize sausage sales Improve sandwich cost structure Be the BEST at the buyer's desk Implement efficient distribution and transportation system Grow frozen breakfast Increase Food Service penetration in core markets STRATEGIC BUSINESS FRAMEWORK FY 2010 Food Products Drive increased ROI with improved operations Meet retailer delivery requirements Implement efficient distribution and transportation system Understand feasibility of soups, gravies, sauces, pre-mixes Expand production capacity

 

139 Digital Backyard Entertaining FSI Memorial Day Backyard Entertaining Account Specific Kroger Mailers and other opportunities Sponsorships Clippers, Crew, Columbus Zoo, Cleveland Zoo, Dayton Dragons, Sunny 95 Block Parties/Listener Lunches, OSU Athletics, Frisco Rough Riders Innovation Express Turkey Patties New Sandwiches Stack Pack Bacon Natural Sausage SUMMER MARKETING CALENDAR FY 2010 Food Products Bob Evans has easy home style meal solutions that fit your schedule and your budget

 

140 New distribution model Route elimination with move from DSD to warehouse Frozen/slack distribution method Sales team restructure Build retail alliances, account "ownership" Centralized sales and promotion planning to accommodate warehouse purchasing Customer P&Ls/segmentation The Road to National Distribution FY 2010 Food Products

 

141 Focus on sausage sales Solid grilling program Frozen breakfast growth Complete repositioning work initiated in FY'09 Energize new product innovation pipeline Plant P&Ls Capacity rationalization project Sow procurement strategy/ higher % contracted Streamline sandwich cost structure Sales & Marketing Operations Imperatives FY 2010 Food Products

 

142 Don Radkoski Chief Financial Officer

 

143 FY 2010 Outlook

 

144 FY 2010 Outlook Reported Results Will Include 53rd Week Additional week occurs in 4th Quarter Estimated impact: Net Sales increase $31.0 million Operating Income increase $5.0 million

 

145 $110 to 115 million Operating Income FY 2010 Outlook

 

146 Net Sales FY 2010 Outlook Overall Growth: 1.5% to 2.0% Bob Evans Restaurants SSS: -1.5% to -2.0% Mimi's Cafe SSS: -3.0% to -5.0% Food Products Sales Growth: 5.0% to 6.0%

 

147 FY 2010 Outlook Development Bob Evans No new restaurants 2 rebuilt restaurants Mimi's Cafe 2 new restaurants

 

148 "BIG TWO" Prime Costs Cost of Sales Hog costs of approximately $50 to $55 per hundredweight Food Products: Continued improvement due to easing commodities prices, positive mix shifts and effective supply chain management Restaurant Segment: Operating Wages Continued pressure from minimum wage increases, mostly offset by labor efficiencies FY 2010 Outlook

 

149 Depreciation & Amortization FY 2010 Outlook FY 2010 Approx. $85 million FY 2009 $82 million

 

150 FY 2010 Outlook Operating Margins Restaurant Segment Approx. 6% to 8% Food Products Segment Approx. 4% to 5%

 

151 FY 2010 Outlook Net Interest Expense $12 to $13 million Effective Tax Rate Approx. 33%

 

152 FY 2010 Outlook Diluted Weighted Average Shares Outstanding FY 2010: 31.0 million FY 2009: 30.7 million Capital Expenditures FY 2010: Approx. $60 to $65 million FY 2009: $96 million

 

153 Questions & Answers

 

154 Thank you!