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 2, 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 June 13, 1997 the registrant had 9,396,933 shares of common
stock outstanding.
Number of pages in this Form 10-Q 9
(end of cover page)
<PAGE>
BRIDGFORD FOODS CORPORATION
FORM 10-Q QUARTERLY REPORT
INDEX
Part I. Financial Information Page
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 7-8
Condition and Results of Operations
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders 9
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 9
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 13, 1997 R. E. Schulze, President
Date and Principal Financial Officer
<PAGE>
<TABLE>
Item 1. a.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED BALANCE SHEETS
<CAPTION>
May 2 November 1
1997 1996
(unaudited) (audited)
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $11,111,626 $6,343,022
Accounts receivable, less allowance
for doubtful accounts of $551,338
and $503,584 8,852,126 10,007,141
Inventories (Note 2) 14,576,102 15,603,912
Prepaid expenses and other 8,335,465 8,469,349
Total current assets 42,875,319 40,423,424
Property, plant and equipment, less
accumulated depreciation of $24,167,030
and $22,637,673 17,387,237 17,854,524
$60,262,556 $58,277,948
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $4,269,385 $4,464,855
Accrued payroll and other expenses 14,114,834 13,444,084
Income taxes payable 36,787 113,318
Total current liabilities 18,421,006 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 29,362,853 27,776,994
41,841,550 40,255,691
$60,262,556 $58,277,948
</TABLE>
<PAGE>
<TABLE>
Item 1. b.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
13 weeks ended 26 weeks ended
May 2 May 3 May 2 May 3
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net sales $30,642,790 $29,264,003 $62,312,101 $59,137,250
Cost of products sold,
excluding depreciation 18,933,718 18,873,740 39,687,179 38,855,931
Selling, general and
administrative expense 8,326,592 7,347,837 16,719,074 15,113,024
Depreciation 746,107 745,643 1,529,357 1,356,643
28,006,417 26,967,220 57,935,610 55,325,598
Income before taxes 2,636,373 2,296,783 4,376,491 3,811,652
Income tax provision 1,002,000 872,000 1,663,000 1,448,000
Net income $1,634,373 $1,424,783 $2,713,491 $2,363,652
Net income
per share (Note 3) $0.17 $0.15 $0.29 $0.25
Cash dividends paid
per share (Note 3) $0.06 $0.06 $0.12 $0.12
</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
(Unaudited)
<CAPTION>
Capital
Common Stock in excess Retained
Shares Amount of par earnings
<C> <C> <C> <C> <C>
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
November 1, 1996 9,396,933 $9,453,816 $3,024,881 $27,776,994
Net income 2,713,491
Cash dividends
($.12 per share) (1,127,632)
May 2, 1997 9,396,933 $9,453,816 $3,024,881 $29,362,853
</TABLE>
<TABLE>
<PAGE>
Item 1.c.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
26 weeks ended
May 2 May 3
1997 1996
Cash flows from operating activities:
<S> <C> <C>
Net income $2,713,491 $2,363,652
Income charges not affecting cash:
Depreciation 1,529,357 1,356,643
Provision for losses on accounts receivable 62,075 55,575
Effect on cash of changes in assets and liabilities:
Accounts receivable 1,092,940 696,840
Inventories 1,027,810 (1,066,514)
Prepaid expenses and other 133,884 (1,292,678)
Accounts payable and accrued expenses 475,280 87,782
Income taxes payable (76,531) 1,883
Net cash provided by operating activities 6,958,306 2,203,183
Cash used in investing activities:
Additions to property, plant and equipment (1,062,070) (4,580,659)
Cash used for financing activities:
Cash dividends paid (1,127,632) (1,127,632)
Net increase (decrease) in cash and cash equivalents 4,768,604 (3,505,108)
Cash and cash equivalents at beginning of period 6,343,022 7,366,362
Cash and cash equivalents at end of period $11,111,626 $3,861,254
Cash paid for income taxes $1,870,000 $2,428,000
</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 2, 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
<TABLE>
<CAPTION>
Inventories are comprised as follows at the respective periods:
May 2 November 1
1997 1996
<S> <C> <C>
Meat, ingredients
and supplies $5,374,506 $4,319,692
Work in progress 1,772,411 1,501,220
Finished goods 7,429,185 9,783,000
$14,576,102 $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>
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.
Item 2.
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 26 weeks of fiscal year 1997.
Sales increased by $1,379,000 (4.7%) to $30,643,000 in the second
thirteen weeks of the 1997 fiscal year compared to the same period
last year. Sales for the second thirteen weeks decreased
$1,027,000 (3.2%) compared to the previous thirteen week period
ended January 31, 1997. The sales increase compared to the second
quarter of 1996 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
1997 increased $3,175,000 (5.4%) to $62,312,000 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 $60,000 (.3%) in the second
thirteen weeks of the 1997 fiscal year to $18,934,000 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 decreased $1,820,000 (8.8%) as a
result of lower unit sales volume and changes in product mix.
Lower flour costs and higher selling prices favorably affected
operating margins in the second 13 weeks of fiscal year 1997.
<PAGE>
Management's Discussion and Analysis of Financial
Condition and Results of Operations (continued)
Selling, general and administrative expenses increased by $979,000
(13.3%) to $8,327,000 in the second thirteen weeks of 1997 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
thirteen week period, selling, general and administrative expenses
decreased by $66,000 (.8%).
Depreciation expense remained consistent in the second thirteen
weeks of the 1997 fiscal year compared to the same period in 1996.
Depreciation expense was $37,000 (4.7%) lower than in the prior
thirteen week period.
The effective income tax rate was 38.0% in the second thirteen
weeks of fiscal 1997, consistent with the prior fiscal year and
the prior thirteen week period.
Cash and cash equivalents increased $4,769,000 (75%) to
$11,112,000 during the first twenty-six weeks of the 1997 fiscal
year. The principal items favorably affecting the $6,958,000 net
cash provided by operating activities were net income of
$2,713,000 and depreciation of $1,529,000. Also contributing to
these increases were net cash inflows resulting from accounts
receivable and inventory reductions of $1,093,000 and $1,028,000,
respectively.
Cash used in investing activities for the first twenty-six weeks
of 1997 consisted of $1,062,000 in additions to property, plant
and equipment. This amount reflects the Company's continued
investment in manufacturing facilities and 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 $1,128,000 in the first twenty-six weeks of 1997 and
1996.
The Company remained free of interest bearing debt during the
first twenty-six 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.
<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 12, 1997 at the Holiday Inn, 222 W. Houston Avenue,
Fullerton, California at 10:00 a.m. Shareholders representing
8,899,941 or 95% of the 9,396,933 shares entitled to vote were
present in person or by proxy, with 39,000 broker non-votes. The
following persons were nominated and elected directors, with votes
for or withheld from specific nominees for directors as indicated:
Director For Withheld
Hugh Wm. Bridgford 8,899,577 364
Allan L. Bridgford 8,899,577 364
Robert E. Schulze 8,899,377 564
Paul A. Gilbert 8,890,947 8,994
John W. McNevin 8,887,155 12,786
Steven H. Price 8,888,255 11,686
Norman V. Wagner II 8,886,447 13,494
Paul R. Zippwald 8,888,917 11,024
Votes cast for the reappointment of Price Waterhouse LLP as the
independent public accountants for the Company for 1997 were
8,891,895 FOR, 1000 AGAINST and 7,046 ABSTAIN.
Item 6.
Exhibits and Reports on Form 8-K
(a) Exhibits:
27 - Financial Data Schedule for the 26 weeks ended May 2,
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 SUMMARY CONTAINS FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF BRIDGFORD FOODS CORPORATION FOR THE TWENTY-SIX WEEKS ENDED
MAY 2, 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>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> MAY-2-1997
<CASH> 11,111,626
<SECURITIES> 0
<RECEIVABLES> 9,403,464
<ALLOWANCES> 551,338
<INVENTORY> 14,576,102
<CURRENT-ASSETS> 42,875,319
<PP&E> 41,554,267
<DEPRECIATION> 24,167,030
<TOTAL-ASSETS> 60,262,556
<CURRENT-LIABILITIES> 18,421,006
<BONDS> 0
0
0
<COMMON> 9,453,816
<OTHER-SE> 32,387,734
<TOTAL-LIABILITY-AND-EQUITY> 60,262,556
<SALES> 62,312,101
<TOTAL-REVENUES> 62,312,101
<CGS> 39,687,179
<TOTAL-COSTS> 39,687,179
<OTHER-EXPENSES> 18,248,431
<LOSS-PROVISION> 62,075
<INTEREST-EXPENSE> 117,842
<INCOME-PRETAX> 4,376,491
<INCOME-TAX> 1,663,000
<INCOME-CONTINUING> 2,713,491
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,713,491
<EPS-PRIMARY> .29
<EPS-DILUTED> .29
</TABLE>
