<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 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 March 13, 2000 the registrant had 10,889,312 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 at January 28, 2000 and October 29,
1999
b. Consolidated Statements of Income for the 13 weeks ended January
28, 2000 and January 29, 1999
b. Consolidated Statements of Shareholders' Equity for the 13 weeks
ended January 28, 2000 and January 29, 1999
c. Consolidated Statements of Cash Flows for the 13 weeks ended
January 28, 2000 and January 29, 1999
d. Notes to Consolidated 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
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, 2000 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 28 OCTOBER 29
2000 1999
----------- -----------
(UNAUDITED) (AUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $25,507,239 $25,020,839
Accounts receivable, less allowance
for doubtful accounts of $683,655
and $647,219 11,617,612 13,689,463
Inventories (Note 2) 13,206,682 16,149,918
Prepaid expenses and other current assets 2,601,910 2,376,706
----------- -----------
Total current assets 52,933,443 57,236,926
Property, plant and equipment, less
accumulated depreciation of $31,462,553
and $30,533,865 18,074,904 17,764,652
Other non-current assets 10,173,951 10,467,898
----------- -----------
$81,182,298 $85,469,476
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,550,469 $ 5,849,237
Accrued payroll and other expenses 6,659,038 6,759,979
Income taxes payable 508,510 867,510
----------- -----------
Total current liabilities 11,718,017 13,476,726
----------- -----------
Non-current liabilities 13,109,341 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 - 11,002,312 and 11,059,195 11,426,695
11,369,812 shares
Capital in excess of par value 23,339,246 26,347,123
Retained earnings 21,956,499 20,361,047
----------- -----------
Total shareholders' equity 56,354,940 58,134,865
----------- -----------
$81,182,298 $85,469,476
=========== ===========
</TABLE>
See accompanying notes to condensed financial statements.
Page 3 of 8 pages
<PAGE> 4
Item 1. b.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
13 WEEKS ENDED
--------------------------------
JANUARY 28 JANUARY 29
2000 1999
----------- -----------
<S> <C> <C>
Net sales $40,343,872 $36,559,632
----------- -----------
Cost of products sold,
excluding depreciation 24,448,917 21,190,270
Selling, general and
administrative expenses 11,109,929 10,332,169
Depreciation 928,688 809,250
----------- -----------
36,487,534 32,331,689
----------- -----------
Income before taxes 3,856,338 4,227,943
Income tax provision 1,465,000 1,607,000
----------- -----------
Net income $ 2,391,338 $ 2,620,943
=========== ===========
Basic earnings
per share (Note 3) $ 0.21 $ 0.23
=========== ===========
Diluted earnings per share $ 0.21 $ 0.23
=========== ===========
Cash dividends paid
per share (Note 3) $ 0.07 $ 0.06
=========== ===========
</TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock Capital
--------------------------- 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 $13,068,430
Net income 2,620,943
Cash dividends
($.06 per share) (685,322)
----------- ------------ ------------ -----------
January 29, 1999 11,369,812 $ 11,426,695 $ 26,347,123 $15,004,052
=========== ============ ============ ===========
October 29, 1999 11,369,812 $ 11,426,695 $ 26,347,123 $20,361,047
Net income 2,391,338
Shares repurchased (367,500) (367,500) (3,007,877)
Cash dividends
($.07 per share) (795,886)
----------- ------------ ------------ -----------
January 28, 2000 11,002,312 $ 11,059,195 $ 23,339,246 $21,956,499
=========== ============ ============ ===========
</TABLE>
See accompanying notes to condensed financial statements.
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 28 JANUARY 29
2000 1999
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,391,338 $ 2,620,943
Income charges not affecting cash:
Depreciation 928,688 809,250
Provision for losses on accounts receivable 35,913 35,913
Gain on sale of land (675,000) (615,432)
Effect on cash of changes in assets and liabilities:
Accounts receivable 2,035,938 2,528,745
Inventories 2,943,236 2,129,314
Prepaid expenses and other (225,204) (28,313)
Other non-current assets 293,947 152,285
Accounts payable and accrued expenses (1,399,709) (904,337)
Income taxes payable (359,000) (495,000)
Non-current liabilities (748,544) (300,751)
------------ ------------
Net cash provided by operating activities 5,221,603 5,932,617
------------ ------------
Cash used in investing activities:
Proceeds from sale of land 675,000 615,432
Additions to property, plant and equipment (1,238,939) (826,120)
------------ ------------
Net cash provided by investing activities (563,939) (210,688)
Cash used for financing activities:
Shares repurchased (3,375,377)
Cash dividends paid (795,887) (685,322)
------------ ------------
Net cash used in financing activities (4,171,264) (685,322)
Net increase in cash and cash equivalents 486,400 5,036,607
Cash and cash equivalents at beginning of period 25,020,839 22,272,141
------------ ------------
Cash and cash equivalents at end of period $ 25,507,239 $ 27,308,748
============ ============
Cash paid for income taxes $ 2,335,000 $ 2,811,000
============ ============
</TABLE>
See accompanying notes to condensed financial statements.
Page 5 of 8 pages
<PAGE> 6
Item 1.d.
BRIDGFORD FOODS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - General Comments
The consolidated financial statements of the Company for the thirteen weeks
ended January 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>
JANUARY 28 OCTOBER 29
2000 1999
----------- -----------
<S> <C> <C>
Meat, ingredients
and supplies $ 3,459,766 $ 3,287,918
Work in progress 1,303,849 1,837,000
Finished goods 8,443,067 11,025,000
----------- -----------
$13,206,682 $16,149,918
=========== ===========
</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 11,306,196 for the quarter ended
January 28, 2000 and 11,369,812 for the quarter ended January 29,1999. Share
used to compute diluted earnings per share were 11,581,196 for the quarter ended
January 28, 2000.
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 quarter of
fiscal 2000.
Sales increased by $3,784,000 (10.4%) to $40,344,000 in the first thirteen weeks
of the 2000 fiscal year compared to the same period last year. Compared to the
prior thirteen-week period, sales increased $3,612,000 (9.8%). The sales
increase compared to the first thirteen weeks of 1999 relates primarily to
higher unit sales volume. The sales increase compared to the prior thirteen-week
period ended October 29, 1999 relates to changes in product mix and increases in
sales volume.
Cost of products sold increased by $3,259,000 (15.4%) in the first thirteen
weeks of the 2000 fiscal year to $24,449,000 compared to the same period in
1999. Compared to the prior thirteen-week period, cost of products sold
increased $2,756,000 (12.7%) due primarily to higher unit sales and changes in
product mix. The increases in cost of sales did not correspond to the sales
increases primarily as a result of higher meat commodity costs in the first
quarter of fiscal year 2000.
Selling, general and administrative expenses increased by $778,000 (7.5%) to
$11,110,000 in the first thirteen weeks of 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 $1,283,000 (13.1%) primarily as a result of
increased sales and seasonal characteristics.
Depreciation expense increased by $119,000 (14.8%) in the first thirteen weeks
of the 2000 fiscal year compared to the same period in 1999. Depreciation
expense was $64,000 (7.4%) higher than in the prior thirteen-week period. This
increase reflects higher capital expenditures during the 1999 fiscal year
compared to recent years.
Page 7 of 8 pages
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
The effective income tax rate was 38.0% in the first thirteen weeks of fiscal
2000, consistent with the prior fiscal year and the prior thirteen-week period.
Cash and cash equivalents increased $486,000 (1.9%) to $25,507,000 during the
first thirteen weeks of the 2000 fiscal year. The principal items affecting the
$5,222,000 net cash provided by operating activities were net income of
$2,391,000 and accounts receivable and inventory reductions of $2,036,000 and
$2,943,000, respectively.
Cash used in investing activities for the first thirteen weeks of fiscal 2000
consisted of $564,000 (net of proceeds from the sale of land in the amount of
$675,000) 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
$796,000 and $685,000, respectively, in the first thirteen weeks of fiscal years
2000 and 1999. The increase results from a 1-cent per share increase in the cash
dividend declared in November 1999. In addition, 367,500 shares of common stock
were repurchased in the first quarter of fiscal year 2000 in the total amount of
$3,375,000.
The Company remained free of interest bearing debt during the first thirteen
weeks of 2000. The Company's revolving line of credit with Bank of America
expires April 30, 2001 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 January 28,
2000 and January 29, 1999. The Company's financial instruments consist of cash
and cash equivalents and life insurance policies at January 28, 2000 and
January 29, 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.
Item 6.
Exhibits and Reports on Form 8-K
(a) Exhibits:
27 - Financial Data Schedule for the 13 weeks ended January 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
<PAGE> 9
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
27 Financial Data Schedule for the 13 weeks ended January 28, 2000,
submitted to the Securities and Exchange Commission in Electronic
format (for SEC information only)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SUMMARY CONTAINS FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF BRIDGFORD FOODS CORPORATION FOR THE THIRTEEN WEEKS ENDED JANUARY
28, 2000, AS SET FORTH IN THIS 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> NOV-03-2000
<PERIOD-END> JAN-28-2000
<CASH> 25,507,239
<SECURITIES> 0
<RECEIVABLES> 12,301,267
<ALLOWANCES> 683,655
<INVENTORY> 13,206,682
<CURRENT-ASSETS> 52,933,443
<PP&E> 49,537,457
<DEPRECIATION> 31,462,553
<TOTAL-ASSETS> 81,182,298
<CURRENT-LIABILITIES> 11,718,017
<BONDS> 0
0
0
<COMMON> 11,059,195
<OTHER-SE> 45,295,745
<TOTAL-LIABILITY-AND-EQUITY> 56,354,940
<SALES> 40,343,872
<TOTAL-REVENUES> 40,343,872
<CGS> 24,448,917
<TOTAL-COSTS> 24,448,917
<OTHER-EXPENSES> 12,038,617
<LOSS-PROVISION> 35,913
<INTEREST-EXPENSE> 65,683
<INCOME-PRETAX> 3,856,338
<INCOME-TAX> 1,465,000
<INCOME-CONTINUING> 2,391,338
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,391,338
<EPS-BASIC> 0.21
<EPS-DILUTED> 0.21
</TABLE>
