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 January 31, 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 March 11, 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>
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
March 11, 1997 R. E. Schulze, President,
Date Principal Financial Officer
<PAGE>
<TABLE>
Item 1. a.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED BALANCE SHEETS
<CAPTION>
January 31 November 1
1997 1996
(unaudited) (audited)
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $11,220,277 $6,343,022
Accounts receivable, less allowance
for doubtful accounts of $533,238
and $503,584 8,564,002 10,007,141
Inventories (Note 2) 11,889,623 15,603,912
Prepaid expenses and other 8,612,511 8,469,349
Total current assets 40,286,413 40,423,424
Property, plant and equipment, less
accumulated depreciation of $23,420,923
and $22,637,673 17,713,237 17,854,524
$57,999,650 $58,277,948
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,592,469 $4,464,855
Accrued payroll and other expenses 13,531,401 13,444,084
Income taxes payable 104,787 113,318
Total current liabilities 17,228,657 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 28,292,296 27,776,994
40,770,993 40,255,691
$57,999,650 $58,277,948
</TABLE>
<PAGE>
<TABLE>
Item 1. b.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
13 weeks ended
January 31 February 2
1997 1996
<S> <C> <C>
Net sales $31,669,311 $29,873,247
Cost of products sold,
excluding depreciation 20,753,461 19,982,191
Selling, general and
administrative expenses 8,392,482 7,765,186
Depreciation 783,250 611,000
29,929,193 28,358,377
Income before taxes 1,740,118 1,514,869
Income tax provision 661,000 576,000
Net income $1,079,118 $938,869
Net income
per share (Note 3) $0.11 $0.10
Cash dividends paid
per share (Note 3) $0.06 $0.06
</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>
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
November 1, 1996 9,396,933 $9,453,816 $3,024,881 $27,776,994
Net income 1,079,118
Cash dividends
($.06 per share) (563,816)
January 31, 1997 9,396,933 $9,453,816 $3,024,881 $28,292,296
</TABLE>
<PAGE>
<TABLE>
Item 1.c.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
13 weeks ended
January 31 February 2
1997 1996
Cash flows from operating activities:
<S> <C> <C>
Net income $1,079,118 $938,869
Income charges not affecting cash:
Depreciation 783,250 611,000
Provision for losses on accounts receivable 31,038 27,788
Effect on cash of changes in assets and liabilities:
Accounts receivable 1,412,101 1,426,975
Inventories 3,714,289 1,554,957
Prepaid expenses and other (143,162) (959,026)
Accounts payable and accrued expenses (785,069) (1,352,871)
Income taxes payable (8,531) (12,117)
Net cash provided by operating activities 6,083,034 2,235,575
Cash used in investing activities:
Additions to property, plant and equipment (641,963) (3,008,632)
Cash used for financing activities:
Cash dividends paid (563,816) (563,816)
Net increase (decrease) in cash and cash equivalents 4,877,255 (1,336,873)
Cash and cash equivalents at beginning of period 6,343,022 7,366,362
Cash and cash equivalents at end of period $11,220,277 $6,029,489
Cash paid for income taxes $816,000 $1,318,000
</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 January 31, 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.
Note 2 - Inventories
Inventories are comprised as follows at the respective periods:
January 31 November 1
1997 1996
Meat, ingredients
and supplies $4,355,395 $4,319,692
Work in progress 976,228 1,501,220
Finished goods 6,558,000 9,783,000
$11,889,623 $15,603,912
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.
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 compared to the prior fiscal year. The cost of flour has declined
compared to fiscal year 1996 while pork prices have remained at historically
high levels during the first 13 weeks of fiscal year 1997.
Sales increased by $1,796,000 (6.0%) to $31,669,000 in the first thirteen
weeks of the 1997 fiscal year compared to the same period last year. Sales
for the first thirteen weeks increased $888,000 (2.9%) compared to the
previous thirteen week period ended November 1, 1996. The sales increase
compared to the first 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 changes in product mix and seasonal
characteristics.
Cost of products sold increased by $771,000 (3.9%) in the first thirteen weeks
of the 1997 fiscal year to $20,753,000 compared to the same period in 1996 due
primarily to higher unit sales volume and changes in product mix. Compared to
the prior thirteen week period, cost of products sold increased $1,417,000
(7.3%) as a result of higher commodity costs, higher unit sales volume and
changes in product mix.
Selling, general and administrative expenses increased by $627,000 (8.1%) to
$8,392,000 in the first thirteen weeks of 1997 compared to the same period
last year. The increase primarily relates to higher sales volume compared to
the prior year. Compared to the prior thirteen week period, selling, general
and administrative expenses increased by $351,000 (4.4%), consistent with the
overall increase in sales.
<PAGE>
Management's Discussion and Analysis of Financial
Condition and Results of Operations (continued)
Depreciation expense increased by $172,000 (28.2%) in the first thirteen weeks
of the 1997 fiscal year compared to the same period in 1996. Depreciation
expense was $381,000 (94.9%) lower in the prior thirteen week period. The
Company completed significant expansion projects to existing facilities
located in Texas and a food processing facility in North Carolina during the
second quarter of 1996. Full year depreciation from these projects will total
approximately $980,000. As a result, overall depreciation expense has
increased.
The effective income tax rate was 38.0% in the first thirteen weeks of fiscal
1997, consistent with the prior fiscal year and the prior thirteen week
period.
Cash and cash equivalents increased $4,877,000 (76.9%) to $11,220,000 during
the first thirteen weeks of the 1997 fiscal year. The principal items
affecting the $6,083,000 net cash provided by operating activities were net
income of $1,079,000 and accounts receivable and inventory reductions of
$1,412,000 and $3,714,000, respectively.
Cash used in investing activities for the first thirteen weeks of 1997 consist
of $641,963 in additions to property, plant and equipment. This amount
reflects the Company's continued investment in manufacturing and
transportation equipment. Capital expenditures were reduced compared to
prior quarters due to the completion of significant construction projects.
Cash used for financing activities consists of cash dividends in the amount of
$564,000 in the first thirteen weeks of 1997, consistent with the same period
last year.
The Company remained free of interest bearing debt during the first thirteen
weeks of 1997. The Company's revolving line of credit with Bank of America
expires April 30, 1998 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 13 weeks ended January 31,
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.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATMENTS OF BRIDGFORD FOODS CORPORATION FOR THE THIRTEEN WEEKS
ENDED JANUARY 31, 1997, 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> OCT-31-1997
<PERIOD-END> JAN-31-1997
<CASH> 11,220,277
<SECURITIES> 0
<RECEIVABLES> 9,097,240
<ALLOWANCES> 533,238
<INVENTORY> 11,889,623
<CURRENT-ASSETS> 40,286,413
<PP&E> 41,134,160
<DEPRECIATION> 23,420,923
<TOTAL-ASSETS> 57,999,650
<CURRENT-LIABILITIES> 17,228,657
<BONDS> 0
0
0
<COMMON> 9,453,816
<OTHER-SE> 31,317,177
<TOTAL-LIABILITY-AND-EQUITY> 57,999,650
<SALES> 31,669,311
<TOTAL-REVENUES> 31,669,311
<CGS> 20,753,461
<TOTAL-COSTS> 20,753,461
<OTHER-EXPENSES> 9,175,732
<LOSS-PROVISION> 31,038
<INTEREST-EXPENSE> 59,237
<INCOME-PRETAX> 1,740,118
<INCOME-TAX> 661,000
<INCOME-CONTINUING> 1,079,118
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,079,118
<EPS-PRIMARY> .11
<EPS-DILUTED> .11
</TABLE>
