<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 APRIL 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 June 9, 2000 the registrant had 10,822,812 shares of common
stock outstanding.
Number of pages in this Form 10-Q 8
(end of cover page) Page 1 of 9 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 April 28, 2000 and October
29, 1999
b. Consolidated Condensed Statements of Income for the 13 and 26 weeks
ended April 28, 2000 and April 30, 1999
c. Consolidated Condensed Statements of Shareholders' Equity for the
26 weeks ended April 28, 2000 and April 30,1999
d. Consolidated Condensed Statements of Cash Flows for the 26 weeks
ended April 28, 2000 and April 30,1999
e. 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 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
Items 1-3 and item 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
--------------------------
Date: June 9, 2000 R. E. Schulze, President,
Principal Financial Officer
Page 2 of 9 pages
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Item 1. a.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
APRIL 28 OCTOBER 29
2000 1999
(UNAUDITED) (AUDITED)
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $24,020,907 $25,020,839
Accounts receivable, less allowance
for doubtful accounts of $633,506
and $647,219 12,203,256 13,689,463
Inventories (Note 2) 14,518,482 16,149,918
Prepaid expenses and other current assets 2,229,371 2,376,706
----------- -----------
Total current assets 52,972,016 57,236,926
Property, plant and equipment, less
accumulated depreciation of $32,393,834
and $30,533,865 18,342,893 17,764,652
Other non-current assets 10,808,151 10,467,898
----------- -----------
$82,123,060 $85,469,476
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,599,209 $ 5,849,237
Accrued payroll and other expenses 6,609,281 6,759,979
Income taxes payable 401,510 867,510
----------- -----------
Total current liabilities 11,610,000 13,476,726
----------- -----------
Non-current liabilities 14,060,591 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 - 10,837,812 and 10,894,695 11,426,695
11,369,812 shares
Capital in excess of par value 21,989,058 26,347,123
Retained earnings 23,568,716 20,361,047
----------- -----------
56,452,469 58,134,865
----------- -----------
$82,123,060 $85,469,476
=========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
Page 3 of 9 pages
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Item 1. b.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
13 WEEKS ENDED 26 WEEKS ENDED
------------------------------ ------------------------------
APRIL 28 APRIL 30 APRIL 28 APRIL 30
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $36,815,709 $33,138,899 $77,159,581 $69,698,531
----------- ----------- ----------- -----------
Cost of products sold,
excluding depreciation 21,841,309 18,749,431 46,290,226 39,939,701
Selling, general and
administrative expenses 10,211,761 9,359,456 21,321,690 19,691,625
Depreciation 932,169 809,250 1,860,857 1,618,500
----------- ----------- ----------- -----------
32,985,239 28,918,137 69,472,773 61,249,826
----------- ----------- ----------- -----------
Income before taxes 3,830,470 4,220,762 7,686,808 8,448,705
Income tax provision 1,456,000 1,604,000 2,921,000 3,211,000
----------- ----------- ----------- -----------
Net income $ 2,374,470 $ 2,616,762 $ 4,765,808 $ 5,237,705
=========== =========== =========== ===========
Basic and diluted earnings
per share (Note 3) $ 0.22 $ 0.23 $ 0.43 $ 0.46
=========== =========== =========== ===========
Cash dividends paid
per share (Note 3) $ 0.07 $ 0.06 $ 0.14 $ 0.12
=========== =========== =========== ===========
</TABLE>
CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' 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 $13,068,430
Net income 5,237,705
Cash dividends (Note 3)
($.12 per share) (1,367,511)
----------- ------------ ------------ -----------
April 30, 1999 11,369,812 $ 11,426,695 $ 26,347,123 $16,938,624
=========== ============ ============ ===========
October 29, 1999 11,369,812 $ 11,426,695 $ 26,347,123 $20,361,047
Net income 4,765,808
Shares repurchased (532,000) (532,000) (4,358,065)
Cash dividends
($.14 per share) (1,558,139)
----------- ------------ ------------ -----------
April 28, 2000 10,837,812 $ 10,894,695 $ 21,989,058 $23,568,716
=========== ============ ============ ===========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
Page 4 of 9 pages
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Item 1.c.
BRIDGFORD FOODS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
26 WEEKS ENDED
---------------------------------
APRIL 28 APRIL 30
2000 1999
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,765,808 $ 5,237,705
Income charges not affecting cash:
Depreciation 1,860,857 1,618,500
Provision for losses on accounts receivable 91,325 71,825
Gain on sale of land (675,000) (615,432)
Effect on cash of changes in assets and liabilities:
Accounts receivable 1,394,882 2,116,903
Inventories 1,631,436 1,255,569
Prepaid expenses and other 147,335 242,720
Other non-current assets (340,253) (534,460)
Accounts payable and accrued expenses (1,400,726) (524,506)
Income taxes payable (466,000) (674,000)
Non-current liabilities 202,706 650,499
------------ ------------
Net cash provided by operating activities 7,212,370 8,845,323
------------ ------------
Cash used in investing activities:
Proceeds from sale of land 675,000 615,432
Additions to property, plant and equipment (2,439,098) (2,153,807)
------------ ------------
Net cash used in investing activities (1,764,098) (1,538,375)
------------ ------------
Cash used for financing activities:
Shares repurchased (4,890,065)
Cash dividends paid (1,558,139) (1,367,511)
------------ ------------
Net cash used in financing activities (6,448,204) (1,367,511)
------------ ------------
Net increase (decrease) in cash and cash equivalents (999,932) 5,939,437
Cash and cash equivalents at beginning of period 25,020,839 22,272,141
------------ ------------
Cash and cash equivalents at end of period $ 24,020,907 $ 28,211,578
============ ============
Cash paid for income taxes $ 4,007,950 $ 4,650,750
============ ============
</TABLE>
See accompanying notes to consolidated condensed financial statements.
Page 5 of 9 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 twenty-six
weeks ended April 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:
APRIL 28 OCTOBER 29
2000 1999
----------- -----------
Meat, ingredients
and supplies $ 4,089,910 $ 3,287,918
Work in progress 2,816,987 1,837,000
Finished goods 7,611,585 11,025,000
----------- -----------
$14,518,482 $16,149,918
=========== ===========
Note 3 - Common Stock and Per Share Data
The weighted average shares used for computing basic and diluted earnings
per share in the accompanying statements of income were 11,102,587 and
10,898,977 for the twenty-six and thirteen weeks ended April 28, 2000 and
11,369,812 for the twenty-six and thirteen weeks ended April 30,1999.
Page 6 of 9 pages
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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 and second
quarters of fiscal 2000.
Sales increased by $3,677,000 (11.1%) to $36,816,000 in the second thirteen
weeks of the 2000 fiscal year compared to the same period last year. Sales for
the second thirteen weeks decreased $3,528,000 (8.8%) compared to the previous
thirteen-week period ended January 28, 2000. The sales increase compared to the
second quarter of 1999 relates primarily to higher unit sales volume. The sales
decrease from the prior fiscal quarter relates to changes in product mix and
seasonal characteristics. Sales for the first twenty-six weeks of 1999 increased
$7,461,000 (10.7%) to $77,160,000 compared to the same period last year. The
increase in sales primarily relates to higher unit sales volume and changes in
product mix.
Cost of products sold increased by $3,092,000 (16.5%) in the second thirteen
weeks of the 2000 fiscal year to $21,841,000 compared to the same period in
1999. Compared to the prior thirteen-week period, cost of products sold
decreased $2,608,000 (10.7%). The increase in cost of products sold in the
second thirteen-week period primarily relates to increased unit sales volume and
increased pork commodity costs. The decrease in cost of products sold compared
to the prior quarter relates primarily to changes in product mix and seasonal
characteristics. Cost of products sold for the first twenty-six weeks of 2000
increased $6,351,000 (15.9%) to $46,290,000. The percentage increase in cost of
products sold did not correspond to the sales increase in the first twenty-six
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 $852,000 (9.1%) to
$10,212,000 in the second 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 decreased by $898,000 (8.1%). The significant decrease
in selling, general and administrative expenses compared to the prior
thirteen-week period relates to the decrease in sales and seasonal
characteristics. Selling, general and administrative expenses increased
$1,630,000 (8.3%) in the first twenty-six weeks of fiscal 2000. The increase
primarily relates to higher sales volume compared to the prior year.
Page 7 of 9 pages
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
Depreciation expense increased by $123,000 (15.2%) in the second thirteen weeks
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 $242,000 (15.0%) in
the first twenty-six weeks of the 2000 fiscal year compared to the same period
in 1999.
The effective income tax rate was 38.0% in the first twenty-six weeks of fiscal
2000, consistent with the prior fiscal year and the prior thirteen-week period.
Cash and cash equivalents decreased $1,000,000 (4%) to $24,021,000 during the
first twenty-six weeks of the 2000 fiscal year. The principal items affecting
the $7,212,000 net cash provided by operating activities were net income of
$4,766,000 and accounts receivable and inventory reductions of $1,395,000 and
$1,631,000, respectively.
Cash used in investing activities for the first twenty-six weeks of fiscal 2000
consisted of $1,764,000 (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
$1,558,000 and $1,368,000, respectively, in the first twenty-six 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, 532,000 shares of common stock were repurchased in the first
twenty-six weeks of fiscal year 2000 in the total amount of $4,890,000. 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 twenty-six
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 April 28,
2000 and April 30, 1999. The Company's financial instruments consist of cash and
cash equivalents and life insurance policies at April 28, 2000 and April 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.
Page 8 of 9 pages
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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 15, 2000
at the Four Points Sheraton, 1500 South Raymond Avenue, Fullerton, California at
10:00 a.m. Shareholders representing 10,466,744 or 95.3% of the 10,979,312
shares entitled to vote were present in person or by proxy. The following
persons were nominated and elected directors. Votes withheld from specific
nominees were insignificant.
Hugh Wm. Bridgford Allan L. Bridgford Robert E. Schulze
Paul A. Gilbert John W. McNevin Steven H. Price
Norman V. Wagner II Paul R. Zippwald
Votes cast for directors were 10,425,779 FOR and 40,965 ABSTAIN or WITHHELD.
Votes cast for the reappointment of PriceWaterhouse Coopers LLP, as the
independent public accountants for the Company for 2000 were 10,460,081 FOR,
4,327 AGAINST and 2,336 ABSTAIN or WITHHELD.
ITEM 6.
Exhibits and Reports on Form 8-K
(a) Exhibits:
27 - Financial Data Schedule for the 26 weeks ended April 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 9 of 9 pages
