SECURITIES AND EXCHANGE COMMISSION
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 August 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 September 13, 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
the undersigned thereunto duly authorized.
BRIDGFORD FOODS CORPORATION
(Registrant)
By:/s/ Robert E. Schulze
September 13, 1996 R. E. Schulze, President
Date and Principal Financial Officer
<PAGE>
<TABLE>
Item 1. a.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED BALANCE SHEETS
<CAPTION>
August 2 November 3
1996 1995
(unaudited) (audited)
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $4,926,459 $7,366,362
Accounts receivable, less allowance
for doubtful accounts of $468,572
and $505,623 9,218,347 10,191,679
Inventories (Note 2) 15,436,842 13,849,947
Prepaid expenses and other 7,576,078 6,850,434
Total current assets 37,157,726 38,258,422
Property, plant and equipment, less
accumulated depreciation of $23,156,697
and $21,065,322 17,844,073 14,364,995
$55,001,799 $52,623,417
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,588,516 $4,662,825
Accrued payroll and other expenses 12,317,585 11,046,103
Income taxes payable 136,491 54,917
Total current liabilities 16,042,592 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 26,480,510 24,380,875
38,959,207 36,859,572
$55,001,799 $52,623,417
</TABLE>
<PAGE>
<TABLE>
Item 1. b.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
13 weeks ended 39 weeks ended
August 2 July 28 August 2 July 28
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net sales $28,397,951 $26,000,551 $87,535,201 $81,140,885
Cost of products sold,
excluding depreciation 17,681,987 16,834,759 56,537,918 52,353,868
Selling, general and
administrative expense 7,677,801 6,166,009 22,790,825 19,852,908
Depreciation 734,732 521,625 2,091,375 1,564,875
26,094,520 23,522,393 81,420,118 73,771,651
Income before taxes 2,303,431 2,478,158 6,115,083 7,369,234
Income tax provision 876,000 941,000 2,324,000 2,800,000
Net income $1,427,431 $1,537,158 $3,791,083 $4,569,234
Net income
per share (Note 3) $0.15 $0.16 $0.40 $0.49
Cash dividends paid
per share (Note 3) $0.06 $0.05 $0.18 $0.18
</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 $19,951,315
Net income 4,569,234
Cash dividends
($.18 per share) (1,691,448)
July 28, 1995 9,396,933 $9,453,816 $3,024,881 $22,829,101
November 3, 1995 9,396,933 $9,453,816 $3,024,881 $24,380,875
Net income 3,791,083
Cash dividends
($.18 per share) (1,691,448)
August 2, 1996 9,396,933 $9,453,816 $3,024,881 $26,480,510
</TABLE>
<TABLE>
<PAGE>
Item 1.c.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
39 weeks ended
August 2 July 28
1996 1995
Cash flows from operating activities:
<S> <C> <C>
Net income $3,791,083 $4,569,234
Income charges not affecting cash:
Depreciation 2,091,375 1,564,875
Provision for losses on accounts receivable 83,363 49,200
Effect on cash of changes in assets and liabilities:
Accounts receivable 889,969 605,831
Inventories (1,586,895) (1,116,490)
Prepaid expenses and other (725,644) (1,442,326)
Accounts payable and accrued expenses 197,173 (296,891)
Income taxes payable 81,574 (77,604)
Net cash provided by operating activities 4,821,998 3,855,829
Cash used in investing activities:
Additions to property, plant and equipment (5,570,453) (5,014,898)
Cash used for financing activities:
Cash dividends paid (1,691,448) (1,691,448)
Net decrease in cash and cash equivalents (2,439,903) (2,850,517)
Cash and cash equivalents at beginning of period 7,366,362 12,648,368
Cash and cash equivalents at end of period $4,926,459 $9,797,851
Cash paid for income taxes $3,096,000 $4,094,000
</TABLE>
[CAPTION]
Item 1.d.
BRIDGFORD FOODS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - General Comments
The consolidated financial statements of the Company for the thirty-nine
weeks ended August 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.
The results of operations for the periods presented are not necessarily
indicative of the results to be expected for the 52 weeks of the fiscal
year.
Note 2 - Inventories
<TABLE>
<CAPTION>
Inventories are comprised as follows at the respective periods:
August 2 November 3
1996 1995
<S> <C> <C>
Meat, ingredients
and supplies $6,134,386 $3,552,290
Work in progress 1,441,115 1,861,679
Finished goods 7,861,341 8,435,978
$15,436,842 $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 in 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.
Management's Discussion and Analysis of Financial Condition and
Results of Operations
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 thirty-nine weeks of fiscal 1996
compared to the prior fiscal year. Management anticipates
that these costs will stabilize as the year progresses. Costs
of flour have declined about 10% since the close of the third
quarter while pork prices have remained at historically high
levels.
Sales in the third thirteen week period of 1996 increased by
$2,397,000 (9.2%) to $28,398,000 compared to the same period
last year. Sales for the third thirteen week period decreased
$866,000 (3.0%) compared to the previous period ended May
3,1996. The sales increase compared to the third 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 thirty-nine weeks
of 1996 increased $6,394,000 (7.9%) to $87,535,000 compared to
the same period last year. The increase in sales primarily
relates to higher sales volume and to increased selling prices
with selling prices accounting for about 1% of the sales
increase.
Cost of products sold increased by $847,000 (5.0%) in the third
quarter of the 1996 fiscal year to $17,682,000 compared to the
same period in 1995 due primarily to higher unit sales volume
and changes in product mix. The impact of higher commodity
costs was mitigated by changes in product mix during the third
thirteen week period of fiscal 1996. Compared to the prior
quarter, cost of products sold decreased $1,192,000 (6.3%) as a
result of lower unit sales volume and changes in product mix.
Selling, general and administrative expenses increased by
$1,512,000 (24.5%) to $7,677,000 in the third quarter of 1996
compared to the same period last year. The increase primarily
relates to higher sales volume and higher salaries, advertising
and delivery costs compared to the prior year. Compared to the
prior quarter, selling, general and administrative expenses
increased by $330,000 (4.5%). This increase relates to higher
sales commissions and advertising costs incurred during the
third quarter of the fiscal year compared to the prior fiscal
quarter.
<PAGE>
Depreciation expense increased by $213,000 (40.9%) in the third
thirteen week period of the 1996 fiscal year compared to the
same period in 1995. 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 during the second thirteen week
period of fiscal year 1996.
The effective income tax rate was 38.0% in the third quarter of
fiscal 1996, consistent with the prior fiscal year and the
prior quarter.
Cash and cash equivalents decreased $2,440,000 (33.1%) to
$4,926,000 during the first thirty-nine weeks of the 1996
fiscal year. The principal items favorably affecting the
$4,822,000 net cash provided by operating activities were net
income of $3,791,000 and depreciation of $2,091,000. Offsetting
these increases were net cash outflows for inventory and
prepaid expenses of $1,587,000 and $726,000, respectively.
Cash used in investing activities for the first thirty-nine
weeks of 1996 consisted of $5,570,000 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 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 $1,691,000 in the first thirty-nine weeks of
1996, consistent with the prior thirty-nine week period. The
Company paid regular quarterly cash dividends of six-cents per
share in the first three quarters of 1996 compared to a
three-cent per share extra cash dividend paid together with
three regular five-cent per share cash dividends in the first
thirty-nine weeks of 1995.
The Company remained free of interest bearing debt during the
first thirty-nine 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 39 weeks ended August
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 STATEMENTS OF BRIDGFORD FOODS CORPORATION FOR THE THIRTY-NINE
WEEKS ENDED AUGUST 2, 1996, AS SET FORTH IN THIS FORM 10-Q FOR SUCH PERIOD,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> NOV-01-1996
<PERIOD-END> AUG-02-1996
<CASH> 4,926,459
<SECURITIES> 0
<RECEIVABLES> 9,686,919
<ALLOWANCES> 468,572
<INVENTORY> 15,436,842
<CURRENT-ASSETS> 37,157,726
<PP&E> 41,000,770
<DEPRECIATION> 23,156,697
<TOTAL-ASSETS> 55,001,799
<CURRENT-LIABILITIES> 16,042,592
<BONDS> 0
0
0
<COMMON> 9,453,816
<OTHER-SE> 29,505,391
<TOTAL-LIABILITY-AND-EQUITY> 55,001,799
<SALES> 87,535,201
<TOTAL-REVENUES> 87,535,201
<CGS> 56,537,918
<TOTAL-COSTS> 56,537,918
<OTHER-EXPENSES> 24,882,200
<LOSS-PROVISION> 83,363
<INTEREST-EXPENSE> 104,808
<INCOME-PRETAX> 6,115,083
<INCOME-TAX> 2,324,000
<INCOME-CONTINUING> 3,791,083
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,791,083
<EPS-PRIMARY> .40
<EPS-DILUTED> .40
</TABLE>
