Bob Evans Farms Inc (NASDAQ:BOBE) ended the last trading session with a minor loss of 0.44% but broke a short term trendline supporting the recent corrective bounce. If the day low at $43 holds for the next couple of sessions, a bounce can still be expected. The volume of the day at 137,000 was much lower than the daily average of 180,000, reflecting the corrective nature of the price action. The stock has been in a bear market for most of the year but the lower boundary of the long term range around $42 can provide a bounce for the bulls.
Bob Evans Farms Inc (NASDAQ:BOBE) has announced the completion of the amendment to its credit facility. The CFO of the company, Mark Hood, stated that the move is aimed at lengthening the tenor of his company’s capital structure. He clarified that this would be done through the introduction of long-term leases. Hood also revealed that BOBE is getting set to monetize on $200 million worth of restaurant properties, through sale-leaseback transactions. This would allow the company to return some capital to its shareholders, as it looks towards restructuring and getting in the right position for sustainable growth.
As per the credit agreement, Bob Evans would be required to increase its levels of permissible indebtedness to $300 million from $100 million, in the sale and leaseback sector. Additionally, the $150 million allotted to share repurchase capital would be removed for FY2016. Furthermore, the facility would now total $650 million, instead of $750 million. Bob Evans Farms has already made the filing with the SEC in this regard.
Apart from improving its capital structure, BOBE has also been looking towards catering kitchens as a side-business. The company has already started operating a few of these, in a successful bid to boost off-site sales. With this move, BOBE is providing competition to local catering businesses. The success of the catering-kitchen can be assessed by the fact that their services were for by the Buckeyes Football team.
The business took off from Ohio, where the company walled off a struggling restaurant site, to create a separate office for a staff of 10, to make bookings for the catering business. Bob Evans GM, Eric Pedersen, confessed that the idea was originally to be initiated from South Olentangy, but the restaurant was already turning great profits. However, the declining sales at the Ohio site made an ideal location for the offer.
Bob Evans Farms Inc (NASDAQ:BOBE) reported a decline of 0.44% during the October 22 session, to reach a close at $43.30, after having a trade volume of 0.00.