SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended May 3, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
Commission file number 0-2396
BRIDGFORD FOODS CORPORATION
(Exact name of Registrant as specified in its charter)
California 95-1778176
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification number)
1308 N. Patt Street, Anaheim, Ca 92801
(Address of principal executive offices-Zip code)
714-526-5533
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months ( or for such shorter
period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes [ X ] No [ ]
As of June 14, 1996 the registrant had 9,396,933 shares of common
stock outstanding.
(end of cover page)
<PAGE>
BRIDGFORD FOODS CORPORATION
FORM 10-Q QUARTERLY REPORT
INDEX
Part I. Financial Information
Item 1. Financial Statements
a. Consolidated Balance Sheets
b. Consolidated Statements of Income
b. Consolidated Statements of Shareholders' Equity
c. Consolidated Statements of Cash Flows
d. Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Item 4. Submission of Matters to a Vote of Security Holders
Part II. Other Information
Items 1-5 have been omitted because they are not applicable with respect
to the current reporting period.
Item 6. Exhibits and Reports on Form 8-K
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
the undersigned thereunto duly authorized.
Bridgford Foods Corporation
(Registrant)
By: /s/ Robert E. Schulze
June 14, 1996 R. E. Schulze, President
Date and Principal Financial Officer
<PAGE>
<TABLE>
Item 1. a.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED BALANCE SHEETS
<CAPTION>
May 3 November 3
1996 1995
(unaudited) (audited)
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $3,861,254 $7,366,362
Accounts receivable, less allowance
for doubtful accounts of $507,424
and $505,623 9,439,264 10,191,679
Inventories (Note 2) 14,916,461 13,849,947
Prepaid expenses and other 8,143,112 6,850,434
Total current assets 36,360,091 38,258,422
Property, plant and equipment, less
accumulated depreciation of $22,421,965
and $21,065,322 17,589,011 14,364,995
$53,949,102 $52,623,417
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $4,209,138 $4,662,825
Accrued payroll and other expenses 11,587,572 11,046,103
Income taxes payable 56,800 54,917
Total current liabilities 15,853,510 15,763,845
Shareholders'equity:
Preferred stock, without par value
Authorized - 1,000,000 shares
Issued and outstanding - none
Common stock, $1.00 par value
Authorized - 20,000,000 shares
Issued and outstanding - 9,396,933 shares 9,453,816 9,453,816
Capital in excess of par value 3,024,881 3,024,881
Retained earnings 25,616,895 24,380,875
38,095,592 36,859,572
$53,949,102 $52,623,417
</TABLE>
<PAGE>
<TABLE>
Item 1. b.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
13 weeks ended 26 weeks ended
May 3 April 28 May 3 April 28
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales $29,264,003 $26,635,748 $59,137,250 $55,140,334
Cost of products sold,
excluding depreciation 18,873,740 17,116,881 38,855,931 35,519,110
Selling, general and
administrative expense 7,347,837 6,295,357 15,113,024 13,686,899
Depreciation 745,643 521,625 1,356,643 1,043,250
26,967,220 23,933,863 55,325,598 50,249,259
Income before taxes 2,296,783 2,701,885 3,811,652 4,891,075
Income tax provision 872,000 1,027,000 1,448,000 1,859,000
Net income $1,424,783 $1,674,885 $2,363,652 $3,032,075
Net income
per share (Note 3) $0.15 $0.18 $0.25 $0.32
Cash dividends paid
per share (Note 3) $0.06 $0.05 $0.12 $0.13
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
(Unaudited)
<CAPTION>
Capital
Common Stock in excess Retained
Shares Amount of par earnings
<S> <C> <C> <C> <C>
October 28, 1994 9,396,933 $9,453,816 $3,024,881 $19,951,315
Net income 3,032,075
Cash dividends
($.13 per share) (1,221,601)
April 28, 1995 9,396,933 $9,453,816 $3,024,881 $21,761,789
November 3, 1995 9,396,933 $9,453,816 $3,024,881 $24,380,875
Net income 2,363,652
Cash dividends
($.12 per share) (1,127,632)
May 3, 1996 9,396,933 $9,453,816 $3,024,881 $25,616,895
</TABLE>
<TABLE>
<PAGE>
Item 1.c.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
26 weeks ended
May 3 April 28
1996 1995
Cash flows from operating activities:
<S> <C> <C>
Net income $2,363,652 $3,032,075
Income charges not affecting cash:
Depreciation 1,356,643 1,043,250
Provision for losses on accounts receivable 55,575 30,000
Effect on cash of changes in assets and liabilities:
Accounts receivable 696,840 1,247,843
Inventories (1,066,514) (41,916)
Prepaid expenses and other (1,292,678) (916,815)
Accounts payable and accrued expenses 87,782 111,837
Income taxes payable 1,883 (194,604)
Net cash provided by operating activities 2,203,183 4,311,670
Cash used in investing activities:
Additions to property, plant and equipment (4,580,659) (2,176,099)
Cash used for financing activities:
Cash dividends paid (1,127,632) (1,221,601)
Net (decrease) increase in cash and cash equivalents (3,505,108) 913,970
Cash and cash equivalents at beginning of period 7,366,362 12,648,368
Cash and cash equivalents at end of period $3,861,254 $13,562,338
Cash paid for income taxes $2,428,000 $2,777,000
</TABLE>
<PAGE>
Item 1.d.
BRIDGFORD FOODS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - General Comments
The consolidated financial statements of the Company for the twenty-six
weeks ended May 3, 1996 have been prepared in conformity with
the accounting principles described in the 1995 Annual Report to
Shareholders and include all adjustments considered necessary by
management for a fair statement of the interim period. Such adjustments
consist only of normal recurring items. This report should be read in
conjunction with the Company's 1995 Annual Report to Shareholders.
Note 2 - Inventories
<TABLE>
<CAPTION>
Inventories are comprised as follows at the respective periods:
May 3 November 3
1996 1995
<C> <C>
Meat, ingredients
and supplies $6,224,083 $3,552,290
Work in progress 1,800,403 1,861,679
Finished goods 6,891,975 8,435,978
$14,916,461 $13,849,947
</TABLE>
Note 3 - Common Stock and Per Share Data
The weighted average shares used for computing earnings per share
in the accompanying statements of income were 9,396,933 for all periods
presented.
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements on this Form 10-Q under Item 2.,
Management's Discussion and Analysis of Financial Condition
and Results of Operations" and elsewhere in this Form 10-Q
constitute "forward-looking statements" within the meaning of
the Securities Act of 1933 and the Securities Exchange Act of
1934. Such forward looking statements involve known and
unknown risks, uncertainties, and other factors which may cause
the actual results, performance, or achievements of Bridgford
Foods Corporation to be materially different from any future
results, performance or achievements expressed or implied by
such forward looking statements. Such factors include, among
others, the following; general economic and business
conditions; the impact of competitive products and pricing;
success of operating initiatives; development and operating
costs; advertising and promotional efforts; adverse publicity;
acceptance of new product offerings; consumer trial and
frequency; changes in business strategy or development plans;
availability, terms and deployment of capital; availability of
qualified personnel; commodity, labor, and employee benefit
costs; changes in, or failure to comply with, government
regulations; weather conditions; construction schedules; and
other factors referenced in this Form 10-Q.
Item 2.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Sales increased by $2,628,000 (9.9%) to $29,264,000 in the
second thirteen weeks of the 1996 fiscal year compared to the
same period last year. Sales for the second thirteen weeks
decreased $609,000 (2.0%) compared to the previous thirteen
week period ended February 2, 1996. The sales increase
compared to the first quarter of 1995 relates to higher unit
sales volume, changes in product mix and increased selling
prices. The sales decrease from the prior fiscal quarter
relates to normal seasonal activity and changes in product mix.
Sales for the first twenty-six weeks of 1996 increased
$3,997,000 (7.3%) to $59,137,000 compared to the same period
last year. The increase in sales primarily relates to higher
sales volume and to increased selling prices.
Cost of products sold increased by $1,757,000 (10.3%) in the
second thirteen weeks of the 1996 fiscal year to $18,874,000
compared to the same period in 1995 due primarily to higher
unit sales volume, changes in product mix and higher commodity
costs. Compared to the prior thirteen week period, cost of
products sold decreased $1,108,000 (5.6%) as a result of lower
unit sales volume and changes in product mix.
The Company's operating results are heavily dependent upon the
prices paid for raw materials. The marketing of the company's
value-added products does not lend itself to instantaneous
changes in selling prices. Changes in selling prices are
relatively infrequent and do not compare with the volatility of
commodity markets. Higher flour and pork prices were
experienced during the first twenty-six weeks of fiscal 1996
compared to the prior fiscal year. Management anticipates
that these margins will stabilize as the year progresses,
although no assurances can be given.
Selling, general and administrative expenses increased by
$1,052,000 (16.7%) to $7,348,000 in the second thirteen weeks of 1996
compared to the same period last year. The increase primarily relates
to higher sales volume and higher salaries, advertising and
<PAGE>
Management's Discussion and Analysis of Financial
Condition and Results of Operations (continued)
delivery costs compared to the prior year. Compared to the
prior thirteen week period, selling, general and administrative
expenses decreased by $417,000 (5.4%). This decrease relates to
lower sales volume and seasonally lower advertising and
delivery costs incurred during the second thirteen weeks of the fiscal year.
Depreciation expense increased by $224,000 (43%) in the second
thirteen weeks of the 1996 fiscal year compared to the same
period in 1995. Depreciation expense was $135,000 (22%) higher
than in the prior thirteen week period. The increase in
depreciation is related primarily to the substantial completion
of a food processing facility in North Carolina and extensive
additions to existing facilities located in Texas.
The effective income tax rate was 38.0% in the second thirteen
weeks of fiscal 1996, consistent with the prior fiscal year and
the prior thirteen week period.
Cash and cash equivalents decreased $3,505,000 (47.6%) to
$3,861,000 during the first twenty-six weeks of the 1996 fiscal
year. The principal items favorably affecting the $2,203,000
net cash provided by operating activities were net income of
$2,364,000 and depreciation of $1,357,000. Offsetting these
increases were net cash outflows for inventory and prepaid
expenses of $1,067,000 and $1,293,000, respectively.
Cash used in investing activities for the first twenty-six
weeks of 1996 consisted of $4,581,000 in additions to property,
plant and equipment. This amount reflects the Company's
continued investment in manufacturing facilities and
transportation equipment. These expenditures include
construction costs for a food processing facility in North
Carolina and extensive additions to existing facilities located
in Texas. These projects were substantially complete in the
second quarter of 1996 and these investments are expected to
yield higher production capacities, improved plant utilization
and realize cost savings in future years. Capital expenditures
are expected to be reduced in subsequent quarters.
Cash used for financing activities consists of cash dividends
in the amount of $1,128,000 in the first twenty-six weeks of
1996, a decrease of $94,000 (7.7%) over the comparable period
last year. The decrease relates to regular quarterly cash
dividends of six-cents per share paid in the first two quarters
of 1996 compared to a three-cent per share extra cash dividend
paid together with two regular five-cent per share cash
dividends in the first 26 weeks of 1995.
The Company remained free of interest bearing debt during the
first twenty-six weeks of 1996. The Company's revolving line
of credit with Bank of America expires April 30, 1997 and
provides for borrowings up to $2,000,000. The Company has not
borrowed under the line for more than nine consecutive years.
The impact of inflation on the Company's financial position and
results of operations has not been significant. Management is
of the opinion that the Company's strong financial position and
its capital resources are sufficient to provide for its
operating needs and capital expenditures.
<PAGE>
Part II. Other Information
Item 4.
Submission of Matters to a Vote of Security Holders
The Company held its annual meeting of shareholders on
Wednesday, March 20, 1996 at the Holiday Inn, 222 W. Houston
Avenue, Fullerton, California at 10:00 a.m. Shareholders
representing 8,645,702 or 92% of the 9,396,933 shares entitled
to vote were present in person or by proxy, with 32,000 broker
non-votes. The following persons were nominated
and elected directors, with votes for or withheld from specific
nominees for directors as indicated:
FOR WITHHELD
H. Wm. Bridgford 8,643,938 1,764
Allan L. Bridgford 8,643,938 1,764
Robert E. Schulze 8,644,302 1,400
Paul A. Gilbert 8,643,802 1,900
John W. McNevin 8,644,272 1,430
Steven H. Price 8,644,302 1,400
Norman V. Wagner II 8,644,272 1,430
Paul R. Zippwald 8,643,802 1,900
Votes cast for the reappointment of Price Waterhouse LLP as the
independent public accountants for the Company for 1996 were
8,643,627 FOR, 400 AGAINST and 1,675 ABSTAIN.
Item 6.
Exhibits and Reports on Form 8-K
(a) Exhibits:
27 - Financial Data Schedule for the 26 weeks ended May 3,
1996, submitted to the Securities and Exchange Commission in
electronic format (for SEC information only)
(b) - Reports on Form 8-K
No Report on Form 8-K has been filed during the quarter for
which
this report is filed.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF BRIDGFORD FOODS CORPORATION FOR THE TWENTY-SIX WEEKS
ENDED MAY 3, 1996, AS SET FORTH IN THIS FORM 10-Q FOR SUCH PERIOD,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> NOV-1-1996
<PERIOD-END> MAY-3-1996
<CASH> 3,861,254
<SECURITIES> 0
<RECEIVABLES> 9,946,688
<ALLOWANCES> 507,424
<INVENTORY> 14,916,461
<CURRENT-ASSETS> 36,360,091
<PP&E> 40,010,976
<DEPRECIATION> 22,421,965
<TOTAL-ASSETS> 53,949,102
<CURRENT-LIABILITIES> 15,853,510
<BONDS> 0
0
0
<COMMON> 9,453,816
<OTHER-SE> 28,641,776
<TOTAL-LIABILITY-AND-EQUITY> 53,949,102
<SALES> 59,137,250
<TOTAL-REVENUES> 59,137,250
<CGS> 38,855,931
<TOTAL-COSTS> 38,855,931
<OTHER-EXPENSES> 16,469,667
<LOSS-PROVISION> 55,575
<INTEREST-EXPENSE> 66,065
<INCOME-PRETAX> 3,811,652
<INCOME-TAX> 1,448,000
<INCOME-CONTINUING> 2,363,652
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,363,652
<EPS-PRIMARY> .25
<EPS-DILUTED> .25
</TABLE>
