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 February 2, 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 March 18, 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
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 undersigned thereunto duly authorized.
BRIDGFORD FOODS CORPORATION
(Registrant)
By: /s/ Robert E. Schulze
March 18, 1996 R. E. Schulze, President,
Date Principal Financial Officer
<PAGE>
<TABLE>
Item 1. a.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED BALANCE SHEETS
<CAPTION>
February 2 November 3
1996 1995
(unaudited) (audited)
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $6,029,489 $7,366,362
Accounts receivable, less allowance
for doubtful accounts of $498,775
and $505,623 8,736,916 10,191,679
Inventories (Note 2) 12,294,990 13,849,947
Prepaid expenses and other 7,809,460 6,850,434
Total current assets 34,870,855 38,258,422
Property, plant and equipment, less
accumulated depreciation of $21,676,322
and $21,065,322 16,762,627 14,364,995
51,633,482 52,623,417
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,746,208 $4,662,825
Accrued payroll and other expenses 10,609,849 11,046,103
Income taxes payable 42,800 54,917
Total current liabilities 14,398,857 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 24,755,928 24,380,875
37,234,625 36,859,572
51,633,482 52,623,417
</TABLE>
<PAGE>
<TABLE>
Item 1. b.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
13 weeks ended
February 2 January 27
1996 1995
<S> <C> <C>
Net sales $29,873,247 $28,504,586
Cost of products sold,
excluding depreciation 19,982,191 18,402,229
Selling, general and
administrative expenses 7,765,187 7,391,542
Depreciation 611,000 521,625
28,358,378 26,315,396
Income before taxes 1,514,869 2,189,190
Income tax provision 576,000 832,000
Net income $938,869 $1,357,190
Net income
per share (Note 3) $0.10 $0.14
Cash dividends paid
per share (Note 3) $0.06 $0.08
</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 $19,195,315
Net income 1,357,190
Cash dividends
($.08 per share) (751,755)
January 27, 1995 9,396,933 $9,453,816 $3,024,881 $20,556,750
November 3, 1995 9,396,933 $9,453,816 $3,024,881 $24,380,875
Net income 938,869
Cash dividends
($.06 per share) (563,816)
February 2, 1996 9,396,933 $9,453,816 $3,024,881 $24,755,928
</TABLE>
<PAGE>
<TABLE>
Item 1.c.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
13 weeks ended
February 2 January 27
1996 1995
Cash flows from operating activities:
<S> <C> <C>
Net income $938,869 $1,357,190
Income charges not affecting cash:
Depreciation 611,000 521,625
Provision for losses on accounts receivable 27,788 11,538
Effect on cash of changes in assets and liabilities:
Accounts receivable 1,426,975 2,010,641
Inventories 1,554,957 1,596,846
Prepaid expenses and other (959,026) (894,155)
Accounts payable and accrued expenses (1,352,871) (1,041,134)
Income taxes payable (12,117) (238,604)
Net cash provided by operating activities 2,235,575 3,323,947
Cash used in investing activities:
Additions to property, plant and equipment (3,008,632) (593,200)
Cash used for financing activities:
Cash dividends paid (563,816) (751,755)
Net (decrease) increase in cash and cash
equivalents (1,336,873) 1,978,992
Cash and cash equivalents at beginning of
period 7,366,362 12,648,368
Cash and cash equivalents at end of period $6,029,489 $14,627,360
Cash paid for income taxes $1,318,000 $1,589,000
</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 thirteen
weeks ended February 2, 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:
February 2 November 3
1996 1995
<S> <C> <C>
Meat, ingredients
and supplies $4,789,084 $3,552,290
Work in progress 981,906 1,861,679
Finished goods 6,524,000 8,435,978
$12,294,990 $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>
Item 2.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Sales increased by $1,369,000 (4.8%) to $29,873,000 in the
first thirteen weeks of the 1996 fiscal year compared to the
same period last year. Sales for the first thirteen weeks
decreased $1,483,000 (4.7%) compared to the previous fourteen
week period ended November 3, 1995. 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 comparison of quarters, thirteen weeks compared to
fourteen weeks and seasonal characteristics. Sales increased
compared to the prior period when average weekly sales for the
fourteen week period ($2,240,000) are compared to average
weekly sales for the first thirteen week period ($2,298,000) of
1996 by $58,000 (2.6%).
Cost of products sold increased by $1,580,000 (8.6%) in the
first thirteen weeks of the 1996 fiscal year to $19,982,000
compared to the same period in 1995 due primarily to higher
commodity costs, higher unit sales volume and changes in
product mix. Compared to the prior fourteen week period, cost
of products sold increased $481,000 (2.5%) as a result of
higher commodity costs, higher 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 thirteen weeks of fiscal 1996.
The inventory of goods stockpiled and purchased at advantageous
prices has been depleted and as a result, operating margins
declined. Management anticipates that these margins will
stabilize as the year progresses, although no assurances can be
given.
Selling, general and administrative expenses increased by
$374,000 (5.0%) to $7,765,000 in the first thirteen weeks of
1996 compared to the same period last year. The increase
relates to higher sales volume compared to the prior year.
Compared to the prior fourteen week period, selling, general
and administrative expenses decreased by $430,000 (5.3%),
consistent with the overall decrease in sales.
Depreciation expense increased by $89,000 (17.1%) in the first
thirteen weeks of the 1996 fiscal year compared to the same
period in 1995. Depreciation expense was $212,000 (53.2%)
higher than in the prior fourteen week period. Depreciation
expense in the fourth quarter of 1995 was reduced by
approximately $123,000 to adjust estimated expenses for the
fiscal year to actual.
The effective income tax rate was 38.0% in the first thirteen
weeks of fiscal 1996, consistent with the prior fiscal year and
the prior fourteen week period.
<PAGE>
Cash and cash equivalents decreased $1,337,000 (18.2%) to
$6,029,000 during the first thirteen weeks of the 1996 fiscal
year. The principal items affecting the $2,236,000 net cash
provided by operating activities were net income of $939,000
and accounts receivable and inventory reductions of $1,427,000
and $1,555,000, respectively.
Cash used in investing activities for the first thirteen weeks
of 1996 consist of $3,009,000 in additions to property, plant
and equipment. This amount reflects the Company's continued
investment in manufacturing facilities and transportation
equipment. These expenditures included construction costs
for a food processing facility in North Carolina and extensive
additions to existing facilities located in Texas. These
projects are scheduled for completion in the second quarter of
1996 and the 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 $564,000 in the first thirteen weeks of 1996,
a decrease of $188,000 (25.0%) over the comparable period last
year. The decrease relates to a three-cent per share extra
cash dividend paid together with a regular five-cent per share
cash dividend in the first 13 weeks of 1995 compared to a
regular quarterly cash dividend of six-cents per share paid in
the first thirteen weeks of 1996.
The Company remained free of interest bearing debt during the
first thirteen 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.
Item 6.
Exhibits and Reports on Form 8-K
(a) Exhibits:
27 - Financial Data Schedule for the 13 weeks ended February 2,
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 STATMENTS OF BRIDGFORD FOODS CORPORATION FOR THIRTEEN WEEKS
ENDED FEBRUARY 2, 1996, AS SET FORTH IN ITS FORM 10-Q FOR SUCH QUARTER,
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> FEB-2-1996
<CASH> 6,029,489
<SECURITIES> 0
<RECEIVABLES> 9,235,691
<ALLOWANCES> 498,775
<INVENTORY> 12,294,990
<CURRENT-ASSETS> 34,870,855
<PP&E> 38,438,949
<DEPRECIATION> 21,676,322
<TOTAL-ASSETS> 51,633,482
<CURRENT-LIABILITIES> 14,398,857
<BONDS> 0
0
0
<COMMON> 9,453,816
<OTHER-SE> 27,780,809
<TOTAL-LIABILITY-AND-EQUITY> 51,633,482
<SALES> 29,873,247
<TOTAL-REVENUES> 29,873,247
<CGS> 19,982,191
<TOTAL-COSTS> 19,982,191
<OTHER-EXPENSES> 8,376,187
<LOSS-PROVISION> 27,788
<INTEREST-EXPENSE> 33,084
<INCOME-PRETAX> 1,514,869
<INCOME-TAX> 576,000
<INCOME-CONTINUING> 938,869
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 938,869
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
</TABLE>
