<PAGE> 1
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 30, 1998
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
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(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, 1998 the registrant had 10,336,415 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
-----
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 13, 1998 R. E. Schulze, President,
Date Principal Financial Officer
Page 2 of 8 pages
<PAGE> 3
Item 1.a.
BRIDGFORD FOODS CORPORATION
---------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
<TABLE>
<CAPTION>
JANUARY 30 OCTOBER 31
1998 1997
(UNAUDITED) (AUDITED)
----------- ------------
ASSETS
------
<S> <C> <C>
Current assets:
Cash and cash equivalents $18,034,371 $12,377,932
Accounts receivable, less allowance
for doubtful accounts of $566,395
and $577,156 9,124,687 11,374,263
Inventories (Note 2) 12,585,216 15,556,750
Prepaid expenses and other 2,059,134 1,827,841
----------- -----------
Total current assets 41,803,408 41,136,786
Property, plant and equipment,
less accumulated depreciation of $26,222,223
and $25,432,473 16,269,450 16,853,248
Other non-current assets 7,652,614 7,673,858
----------- -----------
$65,725,472 $65,663,892
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable $ 3,630,454 $ 5,343,687
Accrued payroll and other expenses 6,762,737 5,927,156
Income taxes payable 515,857 183,857
----------- -----------
Total current liabilities 10,909,048 11,454,700
----------- -----------
Non-current liabilities 9,146,188 9,603,410
----------- -----------
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 - 10,336,415 shares 10,393,298 10,393,298
Capital in excess of par value 13,946,359 13,946,359
Retained earnings 21,330,579 20,266,125
----------- -----------
45,670,236 44,605,782
----------- -----------
$65,725,472 $65,663,892
=========== ===========
</TABLE>
Page 3 of 8 pages
<PAGE> 4
Item 1.b.
BRIDGFORD FOODS CORPORATION
---------------------------
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
(UNAUDITED)
<TABLE>
<CAPTION>
13 WEEKS ENDED
----------------------------------
JANUARY 30 JANUARY 31
1998 1997
----------- -----------
<S> <C> <C>
Net sales $35,475,404 $31,669,311
----------- -----------
Cost of products sold,
excluding depreciation 22,208,832 20,753,461
Selling, general and
administrative expenses 9,753,961 8,392,482
Depreciation 789,750 783,250
----------- -----------
32,752,542 29,929,193
----------- -----------
Income before taxes 2,722,862 1,740,118
Income tax provision 1,035,000 661,000
----------- -----------
Net income $ 1,687,862 $ 1,079,118
=========== ===========
Basic earnings per share (Note 3) $0.16 $0.10
=========== ===========
Cash dividends paid per share (Note 3) $0.06 $0.055
=========== ===========
</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 1, 1996 9,396,933 $ 9,453,816 $ 3,024,881 $27,776,994
Net income 1,079,118
Cash dividends (Note 3)
($.055 per share) (563,816)
---------- ----------- ----------- -----------
January 31, 1997 9,396,933 $ 9,453,816 $ 3,024,881 $28,292,296
========== =========== =========== ===========
October 31, 1997 10,336,415 $10,393,298 $13,946,359 $20,266,125
Net income 1,687,862
Cash dividends
($.06 per share) (623,409)
---------- ----------- ----------- -----------
January 30, 1998 10,336,415 $10,393,298 $13,946,359 $21,330,579
========== =========== =========== ===========
</TABLE>
Page 4 of 8 pages
<PAGE> 5
Item 1.c.
BRIDGFORD FOODS CORPORATION
---------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(UNAUDITED)
<TABLE>
<CAPTION>
13 WEEKS ENDED
----------------------------------
JANUARY 30 JANUARY 31
1998 1997
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,687,862 $ 1,079,118
Income charges not affecting cash:
Depreciation 789,750 783,250
Provision for losses on accounts receivable 31,038 31,038
Effect on cash of changes in assets and liabilities:
Accounts receivable 2,218,538 1,412,101
Inventories 2,971,534 3,714,289
Prepaid expenses and other (231,293) (232,952)
Other non-current assets 21,244 89,790
Accounts payable and accrued expenses (877,652) (213,254)
Income taxes payable 332,000 (8,531)
Non-current liabilities (457,222) (571,815)
----------- -----------
Net cash provided by operating activities 6,485,799 6,083,034
----------- -----------
Cash used in investing activities:
Additions to property, plant and equipment (205,951) (641,963)
----------- -----------
Cash used for financing activities:
Cash dividends paid (623,409) (563,816)
----------- -----------
Net increase in cash and cash equivalents 5,656,439 4,877,255
Cash and cash equivalents at beginning of period 12,377,932 6,343,022
----------- -----------
Cash and cash equivalents at end of period $18,034,371 $11,220,277
=========== ===========
Cash paid for income taxes $ 1,077,000 $ 816,000
=========== ===========
</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 thirteen
weeks ended January 30, 1998 have been prepared in conformity with the
accounting principles described in the 1997 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 1997 Annual Report
to Shareholders. Certain reclassifications have been made in prior years to
conform to the current year presentation.
Note 2 - Inventories
- --------------------
Inventories are comprised as follows at the respective periods:
<TABLE>
<CAPTION>
JANUARY 30 OCTOBER 31
1998 1997
----------- -----------
<S> <C> <C>
Meat, ingredients and
supplies $ 4,526,991 $ 4,452,750
Work in progress 1,500,225 1,357,000
Finished goods 6,558,000 9,747,000
----------- -----------
$12,585,216 $15,556,750
=========== ===========
</TABLE>
Note 3 - Common Stock and Per Share Data
- ----------------------------------------
The weighted average shares used for computing basic earnings per share
in the accompanying statements of income were 10,336,415 for all periods
presented. Per share computations in fiscal year 1997 were recalculated to give
effect to a 10% stock dividend declared November 10, 1997.
Page 6 of 8 pages
<PAGE> 7
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. Costs for pork commodity products declined significantly in the first
quarter.
Sales increased by $3,806,000 (12.0%) to $35,475,000 in the first thirteen weeks
of the 1998 fiscal year compared to the same period last year. Sales for the
first thirteen weeks increased $1,081,000 (3.1%) compared to the previous
thirteen week period ended October 31,1997. The sales increase compared to the
first quarter of 1997 relates to higher unit sales volume and changes in product
mix. The sales increase from the prior fiscal quarter relates to changes in
product mix and seasonal characteristics.
Cost of products sold increased by $1,455,000 (7.0%) in the first thirteen weeks
of the 1998 fiscal year to $22,209,000 compared to the same period in 1997 due
primarily to higher unit sales volume and changes in product mix. Compared to
the prior thirteen-week period, cost of products sold increased $386,000 (1.8%)
due to higher unit sales volume and changes in product mix. The increase in cost
of sales did not correspond to the sales increase primarily as a result of lower
pork commodity costs in the first quarter of fiscal year 1998.
Selling, general and administrative expenses increased by $1,361,000 (16.2%) to
$9,754,000 in the first thirteen weeks of 1998 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 $1,420,000 (17.1%), as a result of
increased sales, higher advertising, payroll costs and seasonal characteristics.
Page 7 of 8 pages
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
Depreciation expense increased by $6,500 (.8%) in the first thirteen weeks of
the 1998 fiscal year compared to the same period in 1997. Depreciation expense
was $99,000 (14.4%) higher than in the prior thirteen-week period.
The effective income tax rate was 38.0% in the first thirteen weeks of fiscal
1998, consistent with the prior fiscal year and the prior thirteen-week period.
Cash and cash equivalents increased $5,656,000 (45.7%) to $18,034,000 during the
first thirteen weeks of the 1998 fiscal year. The principal items affecting the
$6,486,000 net cash provided by operating activities were net income of
$1,688,000 and accounts receivable and inventory reductions of $2,219,000 and
$2,972,000, respectively.
Cash used in investing activities for the first thirteen weeks of fiscal 1998
consisted of $206,000 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
$623,000 and $564,000 in the first thirteen weeks of fiscal years 1998 and 1997,
respectively.
The Company remained free of interest bearing debt during the first thirteen
weeks of 1998. 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 eleven 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 30, 1998, 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 THIRTEEN WEEKS ENDED
JANUARY 30, 1998, AS SET FORTH IN ITS FORM 10-Q FOR SUCH QUARTER, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> OCT-30-1998
<PERIOD-END> JAN-30-1998
<CASH> 18,034,371
<SECURITIES> 0
<RECEIVABLES> 9,691,082
<ALLOWANCES> 566,395
<INVENTORY> 12,585,216
<CURRENT-ASSETS> 41,803,408
<PP&E> 42,491,673
<DEPRECIATION> 26,222,223
<TOTAL-ASSETS> 65,725,472
<CURRENT-LIABILITIES> 10,909,048
<BONDS> 0
0
0
<COMMON> 10,393,298
<OTHER-SE> 35,276,938
<TOTAL-LIABILITY-AND-EQUITY> 65,725,472
<SALES> 35,475,404
<TOTAL-REVENUES> 35,475,404
<CGS> 22,208,832
<TOTAL-COSTS> 22,208,832
<OTHER-EXPENSES> 10,543,711
<LOSS-PROVISION> 31,038
<INTEREST-EXPENSE> 59,315
<INCOME-PRETAX> 2,722,862
<INCOME-TAX> 1,035,000
<INCOME-CONTINUING> 1,687,862
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,687,862
<EPS-PRIMARY> .16
<EPS-DILUTED> .16
</TABLE>
