<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 JULY 28, 2000
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 7, 2000 the registrant had 10,662,812 shares of common stock
outstanding.
Number of pages in this Form 10-Q 8
(end of cover page) Page 1 of 8 pages
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BRIDGFORD FOODS CORPORATION
FORM 10-Q QUARTERLY REPORT
INDEX
Part I. Financial Information
Item 1. Financial Statements
a. Consolidated Condensed Balance Sheets at July 28, 2000 and October
29, 1999
b. Consolidated Condensed Statements of Income for the 13 and 39 weeks
ended July 28, 2000 and July 30, 1999
b. Consolidated Condensed Statements of Shareholders' Equity for the
39 weeks ended July 28, 2000 and July 30,1999
c. Consolidated Condensed Statements of Cash Flows for the 39 weeks
ended July 28, 2000 and July 30,1999
d. Notes to Consolidated Condensed Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
Items 1-5 have been omitted because they are not applicable with respect to the
current reporting period.
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 7, 2000 R. E. Schulze, President,
Date Principal Financial Officer
Page 2 of 8 pages
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Item 1. a.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
JULY 28 OCTOBER 29
2000 1999
(UNAUDITED) (AUDITED)
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $18,099,822 $25,020,839
Accounts receivable, less allowance
for doubtful accounts of $626,643
and $647,219 12,487,587 13,689,463
Inventories (Note 2) 16,668,806 16,149,918
Prepaid expenses and other current assets 2,924,956 2,376,706
----------- -----------
Total current assets 50,181,171 57,236,926
Property, plant and equipment, less
accumulated depreciation of $33,282,477
and $30,533,865 18,561,814 17,764,652
Other non-current assets 10,161,238 10,467,898
----------- -----------
$78,904,223 $85,469,476
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,089,181 $ 5,849,237
Accrued payroll and other expenses 6,260,533 6,759,979
Income taxes payable 713,510 867,510
----------- -----------
Total current liabilities 11,063,224 13,476,726
----------- -----------
Non-current liabilities 12,011,841 13,857,885
----------- -----------
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 - 10,702,812 and
11,369,812 shares 10,759,695 11,426,695
Capital in excess of par value 20,485,622 26,347,123
Retained earnings 24,583,841 20,361,047
----------- -----------
55,829,158 58,134,865
----------- -----------
$78,904,223 $85,469,476
=========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
Page 3 of 8 pages
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Item 1. b.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
13 WEEKS ENDED 39 WEEKS ENDED
----------------------------- ------------------------------
JULY 28 JULY 30 JULY 28 JULY 30
2000 1999 2000 1999
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net sales $36,276,606 $ 32,356,312 $113,436,187 $102,054,843
----------- ------------ ------------ ------------
Cost of products sold,
excluding depreciation 22,025,980 18,911,321 68,316,206 58,851,023
Selling, general and
administrative expenses 10,503,261 9,261,316 31,824,951 28,952,940
Depreciation 888,643 809,250 2,749,500 2,427,750
----------- ------------ ------------ ------------
33,417,884 28,981,887 102,890,657 90,231,713
----------- ------------ ------------ ------------
Income before taxes 2,858,722 3,374,425 10,545,530 11,823,130
Income tax provision 1,086,000 1,282,000 4,007,000 4,493,000
----------- ------------ ------------ ------------
Net income $ 1,772,722 $ 2,092,425 $ 6,538,530 $ 7,330,130
=========== ============ ============ ============
Basic earnings per share $ 0.16 $ 0.18 $ 0.59 $ 0.64
=========== ============ ============ ============
Basic shares computed 10,809,098 11,369,812 11,004,757 11,369,812
=========== ============ ============ ============
Diluted earnings per share $ 0.16 $ 0.18 $ 0.58 $ 0.64
=========== ============ ============ ============
Diluted shares computed 10,985,480 11,369,812 11,181,139 11,369,812
=========== ============ ============ ============
Cash dividends paid
per share $ 0.07 $ 0.06 $ 0.21 $ 0.18
=========== ============ ============ ============
</TABLE>
CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Capital
Common Stock in excess Retained
Shares Amount of par earnings
----------- ------------ ------------ -----------
<S> <C> <C> <C> <C>
October 30, 1998 11,369,812 $ 11,426,695 $ 26,347,123 $13,068,430
Net income 7,330,130
Cash dividends
($.18 per share) (2,049,699)
---------- ------------ ------------ -----------
July 30, 1999 11,369,812 $ 11,426,695 $ 26,347,123 $18,348,861
========== ============ ============ ===========
October 29, 1999 11,369,812 $ 11,426,695 $ 26,347,123 $20,361,047
Net income 6,538,530
Shares repurchased (667,000) (667,000) (5,861,500)
Cash dividends
($.21 per share) (2,315,736)
---------- ------------ ------------ -----------
July 28, 2000 10,702,812 $ 10,759,695 $ 20,485,623 $24,583,841
========== ============ ============ ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
Page 4 of 8 pages
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Item 1.c.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
39 WEEKS ENDED
-------------------------------
JULY 28 JULY 30
2000 1999
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 6,538,530 $ 7,330,130
Income charges not affecting cash:
Depreciation 2,749,500 2,427,750
Provision for losses on accounts receivable 134,063 107,738
Gain on sale of land (675,000) (615,432)
Effect on cash of changes in assets and liabilities:
Accounts receivable 1,067,813 1,656,254
Inventories (518,888) (385,776)
Prepaid expenses and other (548,250) 623,513
Other non-current assets 306,660 (1,039,570)
Accounts payable and accrued expenses (2,259,502) (1,026,578)
Income taxes payable (154,000) (1,109,000)
Non-current liabilities (1,846,044) 1,601,750
------------ ------------
Net cash provided by operating activities 4,794,882 9,570,779
------------ ------------
Cash used in investing activities:
Proceeds from sale of land 675,000 615,432
Additions to property, plant and equipment (3,546,663) (3,576,701)
------------ ------------
Net cash used in investing activities (2,871,663) (2,961,269)
------------ ------------
Cash used for financing activities:
Shares repurchased (6,528,500)
Cash dividends paid (2,315,736) (2,049,699)
------------ ------------
Net cash used in financing activities (8,844,236) (2,049,699)
------------ ------------
Net increase (decrease) in cash and cash equivalents (6,921,017) 4,559,811
Cash and cash equivalents at beginning of period 25,020,839 22,272,141
------------ ------------
Cash and cash equivalents at end of period $ 18,099,822 $ 26,831,952
============ ============
Cash paid for income taxes $ 4,680,000 $ 6,397,000
============ ============
</TABLE>
See accompanying notes to consolidated condensed financial statements.
Page 5 of 8 pages
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Item 1.d.
BRIDGFORD FOODS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note 1 - General Comments
The consolidated financial statements of the Company for the
thirty-nine weeks ended July 28, 2000 have been prepared in conformity with the
accounting principles described in the 1999 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 1999 Annual Report
to Shareholders. In November 1999 the City of San Diego (California)
Redevelopment Agency acquired, under eminent domain proceedings, land owned by
the Company and a pretax gain of $675,000 was realized. This gain is netted
against selling, general and administrative expenses in the accompanying
consolidated statements of income. A similar transaction resulted in a pretax
gain of $615,000 in the first quarter of the 1999 fiscal year.
Note 2 - Inventories
Inventories are comprised as follows at the respective periods:
<TABLE>
<CAPTION>
JULY 28 OCTOBER 29
2000 1999
------------ ------------
<S> <C> <C>
Meat, ingredients
and supplies $ 4,809,884 $ 3,287,918
Work in progress 2,616,403 1,837,000
Finished goods 9,242,519 11,025,000
------------ ------------
$16,668,806 $16,149,918
============ ============
</TABLE>
Note 3 - Basic and diluted earnings per share
The difference between basic and diluted earnings per share was a result of the
dilutive effect of employee stock options totaling 176,382 shares for all fiscal
year 2000 periods presented.
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 and in Bridgford Foods
Corporation's Annual Report on Form 10-K for the fiscal year ended October 29,
1999.
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 meat commodity products increased in the first thirty-nine
weeks of fiscal 2000. Transportation, employee healthcare and petroleum based
packaging costs also increased significantly in the first thirty-nine weeks of
fiscal 2000.
Sales increased by $3,920,000 (12.1%) to $36,277,000 in the third thirteen weeks
of the 2000 fiscal year compared to the same period last year. Sales for the
third thirteen weeks decreased $539,000 (1.5%) compared to the previous
thirteen-week period ended April 28, 2000. The sales increase compared to the
third quarter of 1999 relates primarily to higher unit sales volume and
increased selling prices. The sales decrease from the prior fiscal quarter
relates to changes in product mix and seasonal characteristics. Sales for the
first thirty-nine weeks of 2000 increased $11,381,000 (11.2%) to $113,436,000
compared to the same period last year. The increase in sales primarily relates
to higher unit sales volume, increased selling prices and changes in product
mix.
Cost of products sold increased by $3,115,000 (16.5%) in the third thirteen-week
period of the 2000 fiscal year to $22,026,000 compared to the same period in
1999. Compared to the prior thirteen-week period, cost of products sold
increased $185,000 (.9%). The increase in cost of products sold compared to the
third thirteen week period of fiscal year 1999 primarily relates to increased
unit sales volume and increased pork commodity costs. The increase in cost of
products sold compared to the prior thirteen week period relates primarily to
changes in product mix, higher commodity costs and seasonal characteristics.
Cost of products sold for the first thirty-nine weeks of 2000 increased
$9,465,000 (16.1%) to $68,316,000. The percentage increase in cost of products
sold did not correspond to the sales increase in the first thirty-nine weeks of
fiscal 2000 primarily as a result of higher pork commodity costs compared to the
same period in the prior year.
Selling, general and administrative expenses increased by $1,242,000 (13.4%) to
$10,503,000 in the third thirteen weeks of fiscal year 2000 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 $292,000 (2.9%). Selling, general and
administrative expenses increased $2,872,000 (9.9%) in the first thirty-nine
weeks of fiscal 2000. The increase primarily relates to higher sales volume
compared to the prior year.
Page 7 of 8 pages
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
Depreciation expense increased by $79,000 (9.8%) in the third thirteen-week
period of the 2000 fiscal year compared to the same period in 1999. This
increase reflects higher capital expenditures during the 1999 and 2000 fiscal
years compared to recent years. Depreciation expense increased by $322,000
(13.3%) in the first thirty-nine weeks of the 2000 fiscal year compared to the
same period in 1999.
The effective income tax rate was 38.0% in the first thirty-nine weeks of fiscal
2000, consistent with the prior fiscal year and the prior thirteen-week period.
Cash and cash equivalents decreased $6,921,000 (28%) to $18,100,000 during the
first thirty-nine weeks of the 2000 fiscal year. The principal items favorably
affecting the $4,795,000 net cash provided by operating activities were net
income of $6,539,000, accounts receivable reductions of $1,068,000 and
depreciation in the amount of $2,750,000. These sources of cash were offset by a
$2,260,000 reduction in accounts payable and accrued expense and the Company's
$3,000,000 contribution to its defined benefit pension plan in July 2000.
Cash used in investing activities for the first thirty-nine weeks of fiscal 2000
consisted of $3,547,000 in additions to property, plant and equipment. This
amount reflects the Company's continued investment in manufacturing and
transportation equipment.
Cash used for financing activities consists of cash dividends in the amount of
$2,316,000 and $2,050,000, respectively, in the first thirty-nine weeks of
fiscal years 2000 and 1999. The increase results from a one-cent per share
increase in quarterly cash dividends beginning with the one declared November 8,
1999. In addition, 667,000 shares of common stock were repurchased in the first
thirty-nine weeks of fiscal year 2000 in the total amount of $6,529,000. The
Board of Directors has approved the repurchase of up to 1,000,000 shares of
Company's common stock.
The Company remained free of interest bearing debt during the first thirty-nine
weeks of 2000. The Company's revolving line of credit with Bank of America
expires April 30, 2002 and provides for borrowings up to $2,000,000. The Company
has not borrowed under the line for more than thirteen 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 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company does not have significant overall currency exposure at July 28, 2000
and July 30, 1999. The Company's financial instruments consist of cash and cash
equivalents and life insurance policies at July 28, 2000 and July 30,1999 and
the carrying value of the Company's financial instruments approximated their
fair market values based on current market prices and rates. It is not the
Company's policy to enter into derivative financial instruments. The Company
does not currently have any significant foreign currency exposure.
Part II. Other Information
ITEM 6.
Exhibits and Reports on Form 8-K
(a) Exhibits:
27 - Financial Data Schedule for the 39 weeks ended July 28, 2000, 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
