Bob Evans Farms (BOBE), a full-service restaurant company, swung to a net loss for the quarter ended Jul. 25, 2014.
The company made a net loss of $1.02 million or $0.04 a share in the first-quarter against a profit of $8.38 million or $0.30 a share in the previous year period. Adjusted earnings per share met the analysts' expectation of $0.10.
Revenue during the first-quarter went down marginally 0.94 percent to $326.34 million from $329.45 million in the last year period.
Gross margin contracted by 240 basis points over the previous year period to 65.23 percent. The company's operating income dropped to $0.06 million, compared with $12 million in the last year period. That has resulted in contraction of 362 basis points in operating margins to 0.02 percent.
Chairman and chief executive officer Steve Davis said, ''Several years ago our Board and management team determined that comprehensive strategic investments in our businesses were necessary to meet the changing expectations of consumers. These investments required new processes, new skill sets, and difficult decisions along the way.''
''We are reaffirming our fiscal 2015 diluted EPS guidance range of $1.90 to $2.20. Given recent sow cost trends, we have raised second-quarter sow cost guidance to $90 to $95 per hundredweight from $80 to $90 per hundredweight, and raised our full fiscal year estimate to $87 per hundredweight from $85 per hundredweight. Additionally, we expect modest pressure on Bob Evans Restaurants' cost of sales. However, exclusion of activism costs and a lower anticipated effective tax rate are expected to offset these impacts,'' said chief financial officer Mark Hood.
Cash Flow
Bob Evans Farms has generated cash of $19.31 million from operating activities during the quarter, down 59.79 percent or $28.72 million when compared with the last year period.
The company has spent $16.61 million cash to meet investing activities during the quarter, as against cash outgo of $52.52 million in the last year period. It has made net capital expenditure of $16.36 million during the quarter, which was lower by 68.94 percent or $36.32 million, from a year ago.
The company has spent $6.91 million from financing activities during the quarter, as against cash inflow of $1.58 million in the last year period. It has borrowed net of $2.87 million through debt during the quarter. It has spent net of $1.48 million on repurchase of common stocks.
The company's cash dividend payment decreased 3.56 percent or $0.27 million to $7.28 million. Dividend payment accounted for 37.68 percent of operating cash flow for the quarter, compared with 15.71 percent in the same period previous year.
As on Jul. 25, 2014, the company's cash balance stood at $3.62 million.
Debt Position
As on Jul. 25, 2014, Bob Evans Farms's total debt stood at $462.61 million. The company total debt was 43.87 percent of total assets as on Jul. 25, 2014. Bob Evans Farms' debt to equity ratio was at 1.24 as on Jul. 25, 2014.
Shares of the company declined $1.34 or 2.73 percent to settle at $47.76 on Tuesday.