<PAGE> 1
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 1, 1997
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 12, 1997 the registrant had 9,396,933 shares
of common stock outstanding.
Number of pages in this Form 10-Q 8
(end of cover page)
Page 1 of 8 pages
<PAGE> 2
BRIDGFORD FOODS CORPORATION
FORM 10-Q QUARTERLY REPORT
INDEX
<TABLE>
<CAPTION>
Part I. Financial Information Page
<S> <C>
Item 1. Financial Statements
a. Consolidated Balance Sheets 3
b. Consolidated Statements of Income 4
b. Consolidated Statements of Shareholders' Equity 4
c. Consolidated Statements of Cash Flows 5
d. Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7-8
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 8
</TABLE>
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
-------------------------------
Date: September 12, 1997 R. E. Schulze, President
and Principal Financial Officer
Page 2 of 8 pages
<PAGE> 3
Item 1.a.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
AUGUST 1 NOVEMBER 1
1997 1996
(UNAUDITED) (AUDITED)
----------- -----------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $12,201,717 $ 6,343,022
Accounts receivable, less allowance
for doubtful accounts of $558,712
and $503,584 9,230,146 10,007,141
Inventories (Note 2) 15,236,357 15,603,912
Prepaid expenses and other 8,279,418 8,469,349
----------- -----------
Total current assets 44,947,638 40,423,424
Property, plant and equipment, less
accumulated depreciation of $24,897,723
and $22,637,673 17,006,875 17,854,524
----------- -----------
$61,954,513 $58,277,948
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,988,041 $ 4,464,855
Accrued payroll and other expenses 14,849,142 13,444,084
Income taxes payable 146,787 113,318
----------- -----------
Total current liabilities 18,983,970 18,022,257
----------- -----------
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 30,491,846 27,776,994
----------- -----------
42,970,543 40,255,691
----------- -----------
$61,954,513 $58,277,948
=========== ===========
</TABLE>
Page 3 of 8 pages
<PAGE> 4
Item 1.b.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
13 WEEKS ENDED 39 WEEKS ENDED
---------------------------- ----------------------------
AUGUST 1 AUGUST 2 AUGUST 1 AUGUST 2
1997 1996 1997 1996
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $31,153,002 $28,397,951 $93,465,103 $87,535,201
----------- ----------- ----------- -----------
Cost of products sold,
excluding depreciation 19,111,815 17,681,987 58,798,993 56,537,918
Selling, general and
administrative expenses 8,580,686 7,677,801 25,299,760 22,790,825
Depreciation 730,693 734,732 2,260,050 2,091,375
----------- ----------- ----------- -----------
28,423,194 26,094,520 86,358,803 81,420,118
----------- ----------- ----------- -----------
Income before taxes 2,729,808 2,303,431 7,106,300 6,115,083
Income tax provision 1,037,000 876,000 2,700,000 2,324,000
----------- ----------- ----------- -----------
Net income $ 1,692,808 $ 1,427,431 $ 4,406,300 $ 3,791,083
=========== =========== =========== ===========
Net income
per share (Note 3) $ 0.18 $ 0.15 $ 0.47 $ 0.40
Cash dividends paid
per share (Note 3) $ 0.06 $ 0.06 $ 0.18 $ 0.18
</TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Capital
Common Stock in excess Retained
Shares Amount of par Earnings
---------- ------------ ---------- -----------
<S> <C> <C> <C> <C>
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
========== ========== ========== ===========
November 1, 1996 9,396,933 $9,453,816 $3,024,881 $27,776,994
Net income 4,406,300
Cash dividends
($.18 per share) (1,691,448)
---------- ---------- ---------- -----------
August 1, 1997 9,396,933 $9,453,816 $3,024,881 $30,491,846
========== ========== ========== ===========
</TABLE>
Page 4 of 8 pages
<PAGE> 5
Item 1.c.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
39 WEEKS ENDED
------------------------------
AUGUST 1 AUGUST 2
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,406,300 $ 3,791,083
Income charges not affecting cash:
Depreciation 2,260,050 2,091,375
Provision for losses on accounts receivable 93,113 83,363
Effect on cash of changes in assets and liabilities:
Accounts receivable 683,882 889,969
Inventories 367,555 (1,586,895)
Prepaid expenses and other 189,931 (725,644)
Accounts payable and accrued expenses 928,244 197,173
Income taxes payable 33,469 81,574
------------ -----------
Net cash provided by operating activities 8,962,544 4,821,998
Cash used in investing activities:
Additions to property, plant and equipment (1,412,401) (5,570,453)
Cash used for financing activities:
Cash dividends paid (1,691,448) (1,691,448)
------------ -----------
Net increase (decrease) in cash and cash equivalents 5,858,695 (2,439,903)
Cash and cash equivalents at beginning of period 6,343,022 7,366,362
------------ -----------
Cash and cash equivalents at end of period $ 12,201,717 $ 4,926,459
============ ===========
Cash paid for income taxes $ 2,943,000 $ 3,096,000
============ ===========
</TABLE>
Page 5 of 8 pages
<PAGE> 6
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 1, 1997 have been prepared in conformity with the accounting
principles described in the 1996 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 1996 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
Inventories are comprised as follows at the respective periods:
<TABLE>
<CAPTION>
AUGUST 1 NOVEMBER 1
1997 1996
----------- -----------
<S> <C> <C>
Meat, ingredients
and supplies $ 5,096,206 $ 4,319,692
Work in progress 1,775,017 1,501,220
Finished goods 8,365,134 9,783,000
----------- -----------
$15,236,357 $15,603,912
=========== ===========
</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 6 of 8 pages
<PAGE> 7
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 fiscal 1996. The
cost of flour has declined compared to fiscal year 1996 while pork prices have
remained at historically high levels during the first 39 weeks of fiscal year
1997.
Sales in the third thirteen week period ended August 1,1997 increased by
$2,755,000 (9.7%) to $31,153,000 compared to the same period last year. Sales
for the third thirteen week period increased $510,000 (1.7%) compared to the
previous period ended May 2,1997. The sales increase compared to the third
quarter of 1996 relates to higher unit sales volume, changes in product mix and
increased selling prices. The sales increase from the prior fiscal quarter
relates to higher unit sales volume and changes in product mix. Sales for the
first thirty-nine weeks of 1997 increased $5,930,000 (6.8%) to $93,465,000
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 2% of the sales increase.
Cost of products sold increased by $1,430,000 (8.1%) in the third quarter of the
1997 fiscal year to $19,112,000 compared to the same period in 1996 due
primarily to higher unit sales volume and changes in product mix. Compared to
the prior quarter, cost of products sold increased $178,000 (.9%) as a result of
higher unit sales volume and changes in product mix. Lower flour costs, higher
selling prices and lower manufacturing overhead favorably affected operating
margins in the first 39 weeks of fiscal year 1997.
Selling, general and administrative expenses increased by $903,000 (11.8%) to
$8,581,000 in the third quarter of 1997 compared to the same period last year.
The increase primarily relates to higher sales volume, salaries and advertising
costs compared to the prior year. Compared to the prior quarter, selling,
general and administrative expenses increased by $254,000 (3.1%). This increase
relates to higher sales volume, salaries and advertising costs incurred during
the third quarter of the fiscal year 1997 compared to the prior fiscal quarter.
Page 7 of 8 pages
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
Depreciation expense decreased slightly (.6%) compared to the same period in
1996. The slight decrease in depreciation is related primarily to significantly
lower capital expenditure activity in fiscal year 1997 compared to prior years.
The effective income tax rate was 38.0% in the third quarter of fiscal 1997,
consistent with the prior fiscal year and the prior quarter.
Cash and cash equivalents increased $5,859,000 (92.4%) to $12,202,000 during the
first thirty-nine weeks of the 1997 fiscal year. The principal items favorably
affecting the $8,963,000 net cash provided by operating activities were net
income of $4,406,000, depreciation of $2,260,000 and increases in accrued
expenses of $1,405,000.
Cash used in investing activities for the first thirty-nine weeks of 1997
consisted of $1,412,000 in additions to property, plant and equipment. This
amount reflects the Company's continued modernization of manufacturing
facilities and investment in transportation equipment.
Cash used for financing activities consists of cash dividends, paid at the
quarterly rate of 6 cents per share, in the total amount of $1,691,000 in the
first thirty-nine weeks of 1997 and 1996.
The Company remained free of interest bearing debt during the first thirty-nine
weeks of 1997. The Company's revolving line of credit with Bank of America
expires April 30, 1999 and provides for borrowings up to $2,000,000. The Company
has not borrowed under the line for more than ten 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 1,1997 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.
Page 8 of 8 pages
<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 1, 1997, AS SET FORTH IN THIS FORM 10-Q FOR SUCH PERIOD, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> AUG-01-1997
<CASH> 12,201,717
<SECURITIES> 0
<RECEIVABLES> 9,788,858
<ALLOWANCES> 558,712
<INVENTORY> 15,236,357
<CURRENT-ASSETS> 44,947,638
<PP&E> 41,904,598
<DEPRECIATION> 24,897,723
<TOTAL-ASSETS> 61,954,513
<CURRENT-LIABILITIES> 18,983,970
<BONDS> 0
0
0
<COMMON> 9,453,816
<OTHER-SE> 33,516,727
<TOTAL-LIABILITY-AND-EQUITY> 61,954,513
<SALES> 93,465,103
<TOTAL-REVENUES> 93,465,103
<CGS> 58,798,993
<TOTAL-COSTS> 58,798,993
<OTHER-EXPENSES> 27,559,810
<LOSS-PROVISION> 93,113
<INTEREST-EXPENSE> 176,384
<INCOME-PRETAX> 7,106,300
<INCOME-TAX> 2,700,000
<INCOME-CONTINUING> 4,406,300
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,406,300
<EPS-PRIMARY> .47
<EPS-DILUTED> .47
</TABLE>
