Bridgford Foods (BRID) 10-Q 4 Mar 16 2016 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	3 Months Ended
	Jan. 22, 2016	Feb. 29, 2016
Entity Registrant Name	BRIDGFORD FOODS CORP
Entity Central Index Key	14,177
Trading Symbol	brid
Current Fiscal Year End Date	--10-30
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		9,077,275
Document Type	10-Q
Document Period End Date	Jan. 22, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Jan. 22, 2016	Oct. 30, 2015
Current assets:
Cash and cash equivalents	$ 12,642,000	$ 5,842,000
Accounts receivable, less allowance for doubtful accounts of $82 and $146, respectively, and promotional allowances of $3,704 and $3,061, respectively	12,679,000	14,619,000
Inventories, less inventory reserves of $359 and $381, respectively (Note 2)	16,327,000	19,977,000
Prepaid expenses and other current assets	1,017,000	319,000
Total current assets	42,665,000	40,757,000
Property, plant and equipment, net of accumulated depreciation and amortization of $61,056 and $60,454, respectively	10,114,000	10,235,000
Other non-current assets	23,988,000	24,310,000
Total assets	76,767,000	75,302,000
Current liabilities:
Accounts payable	5,050,000	6,087,000
Accrued payroll, advertising and other expenses	4,425,000	5,203,000
Current portion of non-current liabilities	2,654,000	2,825,000
Income taxes payable	1,342,000	96,000
Total current liabilities	13,471,000	14,211,000
Non-current liabilities	25,804,000	25,446,000
Total liabilities	39,275,000	39,657,000
Shareholders’ equity:
Preferred stock, without par value; authorized – 1,000 shares; issued and outstanding – none	0	0
Common stock, $1.00 par value; authorized – 20,000 shares; issued and outstanding –9,077 and 9,080 shares, respectively	9,135,000	9,138,000
Capital in excess of par value	8,312,000	8,334,000
Retained earnings	42,175,000	40,303,000
Accumulated other comprehensive loss	(22,130,000)	(22,130,000)
Total shareholders’ equity	37,492,000	35,645,000
Total liabilities and shareholders’ equity	$ 76,767,000	$ 75,302,000

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Jan. 22, 2016	Oct. 30, 2015
Accounts receivable, allowance for doubtful accounts	$ 82	$ 146
Accounts receivable, allowance for promotional allowances	3,704	3,061
Inventories, reserves	359	381
Property, plant and equipment, accumulated depreciation	$ 61,056	$ 60,454
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Preferred stock, par value (in dollars per share)	$ 0	$ 0
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, shares authorized (in shares)	20,000,000	20,000,000
Common stock, shares issued (in shares)	9,077,000	9,080,000
Common stock, shares outstanding (in shares)	9,077,000	9,080,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands	3 Months Ended
	Jan. 22, 2016	Jan. 23, 2015
Net sales	$ 36,156,000	$ 34,712,000
Cost of products sold	22,377,000	25,095,000
Gross margin	13,779,000	9,617,000
Selling, general and administrative expenses	10,678,000	9,150,000
Income before taxes	3,101,000	467,000
Income tax provision	1,229,000	0
Net income	$ 1,872,000	$ 467,000
Net income per share – Basic and diluted (in dollars per share)	$ 0.21	$ 0.05
Weighted average common shares – Basic and diluted (in shares)	9,079	9,113

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Jan. 22, 2016	Jan. 23, 2015
Cash flows from operating activities:
Net income	$ 1,872,000	$ 467,000
Income or charges not affecting cash and cash equivalents:
Depreciation	700,000	722,000
Provision for (recoveries) losses on accounts receivable	(82,000)	52,000
Provision for promotional allowances	643,000	704,000
Gain on sale of property, plant and equipment	(1,000)	(29,000)
Changes in operating assets and liabilities:
Accounts receivable	1,379,000	(2,040,000)
Inventories	3,650,000	6,917,000
Prepaid expenses and other current assets	(698,000)	(325,000)
Other non-current assets	322,000	(66,000)
Accounts payable	(1,133,000)	(1,016,000)
Accrued payroll, advertising and other expenses	(949,000)	$ (258,000)
Income taxes payable	1,342,000
Non-current liabilities	393,000	$ (237,000)
Net cash provided by operating activities	7,438,000	4,891,000
Cash used in investing activities:
Proceeds from sale of property, plant and equipment	1,000	29,000
Additions to property, plant and equipment	(578,000)	(92,000)
Net cash used in investing activities	(577,000)	(63,000)
Cash used in financing activities:
Shares repurchased	(25,000)	(38,000)
Payment of capital lease obligations	(36,000)	(55,000)
Net cash used in financing activities	(61,000)	(93,000)
Net increase in cash and cash equivalents	6,800,000	4,735,000
Cash and cash equivalents at beginning of period	5,842,000	192,000
Cash and cash equivalents at end of period	12,642,000	4,927,000
Supplemental cash flow information:
Cash paid for income taxes	$ 153,000	$ 0

Note 1 - The Company and Summar

Note 1 - The Company and Summary of Significant Accounting Policies	3 Months Ended
	Jan. 22, 2016
Notes to Financial Statements
Basis of Presentation and Significant Accounting Policies [Text Block]	20% of AR or 10% of Sales * Wal-Mart Sales AR January 22, 2016 41.2 % 39.8 % January 23, 2015 35.8 % 35.4 % * = No other customer accounted for more than 20% of consolidated accounts receivable or 10% of consolidated sales for the twelve weeks ended January 22, 2016 or the twelve weeks ended January 23, 2015. Subsequent events Management has evaluated events subsequent to January 22, 2016 through the date that the accompanying condensed consolidated financial statements were filed with the Securities and Exchange Commission for transactions and other events which may require adjustments of and/or disclosure in such financial statements. Basic and diluted earnings per share Basic and diluted earnings per share are calculated based on the weighted average number of shares outstanding for all periods presented. No stock options, warrants, or convertible securities were outstanding as of January 22, 2016 or January 23, 2015, respectively." id="sjs-B4">Note 1 - Summary of Significant Accounting Policies: The unaudited condensed consolidated financial statements of Bridgford Foods Corporation (the "Company", "we", "our", "us") for the twelve weeks ended January 22, 2016 and January 23, 2015 have been prepared in conformity with the accounting principles described in the Company's Annual Report on Form 10-K for the fiscal year ended October 30, 2015 (the "Annual Report") and include all adjustments considered necessary by management for a fair presentation of the interim periods. This report should be read in conjunction with the Annual Report. Due to seasonality and other factors, interim results are not necessarily indicative of the results for the full year. Recent accounting pronouncements and their effect on the Company are discussed in Management's Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-Q. The October 30, 2015 balance sheet amounts within these interim condensed consolidated financial statements were derived from the audited fiscal 2015 financial statements. The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported revenues and expenses during the reporting periods. Actual results may vary from these estimates. Some of the estimates needed to be made by management include the allowance for doubtful accounts, promotional and returns allowances, inventory reserves, the estimated useful lives of property and equipment, and the valuation allowance for the Company’s deferred tax assets. Actual results could materially differ from these estimates. Amounts estimated related to liabilities for self-insured workers’ compensation, employee healthcare and pension benefits are especially subject to inherent uncertainties and these estimated liabilities may ultimately settle at amounts which vary from our current estimates. Market conditions and the volatility in stock markets may cause significant changes in the measurement of our pension fund liabilities and the performance of our life insurance policies in future periods. Financial instruments that subject the Company to credit risk consist primarily of cash and cash equivalents, accounts receivable, accounts payable and accrued payroll, advertising and other expenses. The carrying amount of these instruments approximate fair market value due to their short term maturity. At January 22, 2016, the Company had accounts in excess of the Federal Deposit Insurance Corporation insurance coverage limit. The Company has not experienced any losses in these accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. The Company grants payment terms to a significant number of customers that are diversified over a wide geographic area. The Company monitors the payment histories of its customers and maintains an allowance for doubtful accounts which is reviewed for adequacy on a quarterly basis. The Company does not require collateral from its customers. The table below shows customers that accounted for more than 20% of consolidated accounts receivable (“AR”) or 10% of consolidated sales for the twelve weeks ended January 22, 2016 and January 23, 2015, respectively. Customer Concentration > 20% of AR or 10% of Sales * Wal-Mart Sales AR January 22, 2016 41.2 % 39.8 % January 23, 2015 35.8 % 35.4 % * = No other customer accounted for more than 20% of consolidated accounts receivable or 10% of consolidated sales for the twelve weeks ended January 22, 2016 or the twelve weeks ended January 23, 2015. Subsequent events Management has evaluated events subsequent to January 22, 2016 through the date that the accompanying condensed consolidated financial statements were filed with the Securities and Exchange Commission for transactions and other events which may require adjustments of and/or disclosure in such financial statements. Basic and diluted earnings per share Basic and diluted earnings per share are calculated based on the weighted average number of shares outstanding for all periods presented. No stock options, warrants, or convertible securities were outstanding as of January 22, 2016 or January 23, 2015, respectively.

Note 2 - Inventories

Note 2 - Inventories	3 Months Ended
	Jan. 22, 2016
Notes to Financial Statements
Inventory Disclosure [Text Block]	Note 2 - Inventories: Inventories are comprised of the following at the respective period ends: (unaudited) January 22, 2016 October 30, 2015 Meat, ingredients and supplies $ 4,694 $ 5,268 Work in progress 807 1,125 Finished goods 10,826 13,584 $ 16,327 $ 19,977 Inventories are valued at the lower of cost (which approximates actual cost on a first-in, first-out basis) or market. Costs related to warehousing, transportation and distribution to customers are considered when computing market value. Inventories include the cost of ingredients, labor and manufacturing overhead. We regularly review inventory quantities on hand and write down any excess or obsolete inventories to estimated net realizable value. An inventory reserve is created when potentially slow-moving or obsolete inventories are identified in order to reflect the appropriate inventory value. Changes in economic conditions, production requirements, and lower than expected customer demand could result in additional obsolete or slow-moving inventory that cannot be sold or may need to be sold at reduced prices and could result in additional reserve provisions.

Note 3 - Commitments and Contin

Note 3 - Commitments and Contingencies	3 Months Ended
	Jan. 22, 2016
Notes to Financial Statements
Commitments and Contingencies Disclosure [Text Block]	Note 3 - Commitments and Contingencies: We invested in OTR (over-the-road) tractors during the third quarter of fiscal 2012 financed by a capital lease obligation in the amount of $1,848. After reevaluating our fleet delivery needs, we returned five OTR tractors financed by the capital lease arrangement with a remaining liability of $656 during the second quarter of fiscal 2015. The Company also leases warehouse and/or office facilities throughout the United States through month-to-month rental agreements. No material changes have been made to these agreements during the first twelve weeks of fiscal 2016. The Company is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters is not expected to have a material adverse effect on the Company’s consolidated financial position or results of operations. Most flour purchases are made at market price without contracts. However, the Company may purchase bulk flour at current market prices under short-term (30 - 120 days) fixed price contracts during the normal course of business. Under these arrangements, the Company is obligated to purchase specific quantities at fixed prices, within the specified contract period. These contracts provide for automatic price increases if agreed quantities are not purchased within the specified contract period. The contracts are not material. These contracts are typically settled within a month’s time and no significant contracts remain open at the close of the quarterly or annual reporting period. No significant contracts remained unfulfilled at January 22, 2016. The Company does not participate in the commodity futures market or hedging to limit commodity exposure.

Note 4 - Segment Information

Note 4 - Segment Information	3 Months Ended
	Jan. 22, 2016
Notes to Financial Statements
Segment Reporting Disclosure [Text Block]	Note 4 - Segment Information: The Company has two reportable operating segments, Frozen Food Products (the processing and distribution of frozen products) and Snack Food Products (the processing and distribution of meat and other convenience foods). We evaluate each segment's performance based on revenues and operating income. Selling, general and administrative expenses include corporate accounting, information systems, human resource management and marketing, which are managed at the corporate level. These activities are allocated to each operating segment based on revenues and/or actual usage. Assets managed at the corporate level have been included as other in the accompanying segment information. The following segment information is presented for the twelve weeks ended January 22, 2016 and January 23, 2015. Segment Information Twelve weeks Ended January 22, 2016 Frozen Food Products Snack Food Products Other Totals Sales $ 11,486 $ 24,670 $ - $ 36,156 Intersegment sales - - - - Net sales 11,486 24,670 - 36,156 Cost of products sold 7,106 15,271 - 22,377 Gross margin 4,380 9,399 - 13,779 SG&A 3,649 7,029 - 10,678 Income before taxes 731 2,370 - 3,101 Total assets $ 10,093 $ 29,163 $ 37,511 $ 76,767 Additions to PP&E $ 71 $ 509 $ (2 ) $ 578 Segment Information Twelve weeks Ended January 23, 2015 Frozen Food Products Snack Food Products Other Totals Sales $ 12,653 $ 22,059 $ - $ 34,712 Intersegment sales - - - - Net sales 12,653 22,059 - 34,712 Cost of products sold 7,810 17,285 - 25,095 Gross margin 4,843 4,774 - 9,617 SG&A 3,681 5,469 - 9,150 Income before taxes 1,162 (695 ) - 467 Total assets $ 11,154 $ 26,329 $ 19,556 $ 57,039 Additions to PP&E $ 97 $ 58 $ (63 ) $ 92

Note 5 - Income Taxes

Note 5 - Income Taxes	3 Months Ended
	Jan. 22, 2016
Notes to Financial Statements
Income Tax Disclosure [Text Block]	Note 5 – Income Taxes: The Company expects its effective tax rate for the 2016 fiscal year to be different from the federal statutory rate due to state taxes. The effective tax rate for the twelve week period ended January 22, 2016 was 39.6% to cover federal and state taxes as well as the federal alternative minimum tax. We recorded an income tax provision of $1,229 for the twelve week period ended January 22, 2016, related to federal and state taxes, based on the Company's expected annual effective tax rate. Our provision for the twelve week period ended January 23, 2015 was zero. As of January 22, 2016, the Company did not have any outstanding federal or state net operating loss carryforwards. Our federal income tax returns are open to audit under the statute of limitations for the fiscal years ended on or about October 31, 2012 through 2014. We are subject to income tax in California and various other state taxing jurisdictions. Our California state income tax returns are open to audit under the statute of limitations for the fiscal years ended on or about October 31, 2011 through 2014.

Significant Accounting Policies

Significant Accounting Policies (Policies)	3 Months Ended
	Jan. 22, 2016
Accounting Policies [Abstract]
Subsequent Events, Policy [Policy Text Block]	Subsequent events Management has evaluated events subsequent to January 22, 2016 through the date that the accompanying condensed consolidated financial statements were filed with the Securities and Exchange Commission for transactions and other events which may require adjustments of and/or disclosure in such financial statements.
Earnings Per Share, Policy [Policy Text Block]	Basic and diluted earnings per share Basic and diluted earnings per share are calculated based on the weighted average number of shares outstanding for all periods presented. No stock options, warrants, or convertible securities were outstanding as of January 22, 2016 or January 23, 2015 respectively.

Note 1 - The Company and Summ12

Note 1 - The Company and Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Jan. 22, 2016
Notes Tables
Schedules of Concentration of Risk, by Risk Factor [Table Text Block]	Wal-Mart Sales AR January 22, 2016 41.2 % 39.8 % January 23, 2015 35.8 % 35.4 %

Note 2 - Inventories (Tables)

Note 2 - Inventories (Tables)	3 Months Ended
	Jan. 22, 2016
Notes Tables
Schedule of Inventory, Current [Table Text Block]	(unaudited) January 22, 2016 October 30, 2015 Meat, ingredients and supplies $ 4,694 $ 5,268 Work in progress 807 1,125 Finished goods 10,826 13,584 $ 16,327 $ 19,977

Note 4 - Segment Information (T

Note 4 - Segment Information (Tables)	3 Months Ended
	Jan. 22, 2016
Notes Tables
Schedule of Segment Reporting Information, by Segment [Table Text Block]	Segment Information Twelve weeks Ended January 22, 2016 Frozen Food Products Snack Food Products Other Totals Sales $ 11,486 $ 24,670 $ - $ 36,156 Intersegment sales - - - - Net sales 11,486 24,670 - 36,156 Cost of products sold 7,106 15,271 - 22,377 Gross margin 4,380 9,399 - 13,779 SG&A 3,649 7,029 - 10,678 Income before taxes 731 2,370 - 3,101 Total assets $ 10,093 $ 29,163 $ 37,511 $ 76,767 Additions to PP&E $ 71 $ 509 $ (2 ) $ 578 Segment Information Twelve weeks Ended January 23, 2015 Frozen Food Products Snack Food Products Other Totals Sales $ 12,653 $ 22,059 $ - $ 34,712 Intersegment sales - - - - Net sales 12,653 22,059 - 34,712 Cost of products sold 7,810 17,285 - 25,095 Gross margin 4,843 4,774 - 9,617 SG&A 3,681 5,469 - 9,150 Income before taxes 1,162 (695 ) - 467 Total assets $ 11,154 $ 26,329 $ 19,556 $ 57,039 Additions to PP&E $ 97 $ 58 $ (63 ) $ 92

Note 1 - The Company and Summ15

Note 1 - The Company and Summary of Significant Accounting Policies (Details Textual)	3 Months Ended
	Jan. 22, 2016	Jan. 23, 2015
Accounts Receivable [Member]
Concentration Risk, Percentage	20.00%	20.00%
Sales Revenue, Net [Member]
Concentration Risk, Percentage	10.00%	10.00%

Note 1 - Concentration Risk (De

Note 1 - Concentration Risk (Details)	3 Months Ended
	Jan. 22, 2016	Jan. 23, 2015
Wal-Mart [Member] | Customer Concentration Risk [Member] | Sales Revenue, Net [Member]
Concentration Risk, Percentage	41.20%	35.80%
Wal-Mart [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member]
Concentration Risk, Percentage	39.80%	35.40%
Sales Revenue, Net [Member]
Concentration Risk, Percentage	10.00%	10.00%
Accounts Receivable [Member]
Concentration Risk, Percentage	20.00%	20.00%

Note 2 - Schedule of Inventorie

Note 2 - Schedule of Inventories (Details) - USD ($) $ in Thousands	Jan. 22, 2016	Oct. 30, 2015
Meat, ingredients and supplies	$ 4,694	$ 5,268
Work in progress	807	1,125
Finished goods	10,826	13,584
	$ 16,327	$ 19,977

Note 3 - Commitments and Cont18

Note 3 - Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Apr. 17, 2015	Jul. 06, 2012	Jan. 22, 2016
Capital Lease Obligations Incurred		$ 1,848
Return of Equipment Financed by Capital Lease	$ 656
Capital Leases, Future Minimum Payments Due			$ 689

Note 4 - Segment Information (D

Note 4 - Segment Information (Details Textual)	12 Months Ended
	Oct. 30, 2015
Number of Reportable Segments	2

Note 4 - Segment Information 20

Note 4 - Segment Information (Details) - USD ($)	3 Months Ended
	Jan. 22, 2016	Jan. 23, 2015
Frozen Food Products [Member]
Sales	$ 11,486,000	$ 12,653,000
Intersegment sales
Net sales	$ 11,486,000	$ 12,653,000
Cost of products sold	7,106,000	7,810,000
Gross margin	4,380,000	4,843,000
Selling, general and sdministrative	3,649,000	3,681,000
Income before taxes	731,000	1,162,000
Total assets	10,093,000	11,154,000
Additions to property, plant and equipment	71,000	97,000
Refrigerated and Snack Food Products [Member]
Sales	$ 24,670,000	$ 22,059,000
Intersegment sales
Net sales	$ 24,670,000	$ 22,059,000
Cost of products sold	15,271,000	17,285,000
Gross margin	9,399,000	4,774,000
Selling, general and sdministrative	7,029,000	5,469,000
Income before taxes	2,370,000	(695,000)
Total assets	29,163,000	26,329,000
Additions to property, plant and equipment	$ 509,000	$ 58,000
Other Segments [Member]
Sales
Intersegment sales
Net sales
Cost of products sold
Gross margin
Selling, general and sdministrative
Income before taxes
Total assets	$ 37,511,000	$ 19,556,000
Additions to property, plant and equipment	(2,000)	(63,000)
Sales	$ 36,156,000	$ 34,712,000
Intersegment sales
Net sales	$ 36,156,000	$ 34,712,000
Cost of products sold	22,377,000	25,095,000
Gross margin	13,779,000	9,617,000
Selling, general and sdministrative	10,678,000	9,150,000
Income before taxes	3,101,000	467,000
Total assets	76,767,000	57,039,000
Additions to property, plant and equipment	$ 578,000	$ 92,000

Note 5 - Income Taxes (Details

Note 5 - Income Taxes (Details Textual) - USD ($)	Jan. 22, 2016	Jan. 22, 2016	Jan. 23, 2015
State and Local Jurisdiction [Member] | Earliest Tax Year [Member]
Open Tax Year		2,011
State and Local Jurisdiction [Member] | Latest Tax Year [Member]
Open Tax Year		2,014
State and Local Jurisdiction [Member]
Operating Loss Carryforwards	$ 0	$ 0
Domestic Tax Authority [Member] | Earliest Tax Year [Member]
Open Tax Year		2,012
Domestic Tax Authority [Member] | Latest Tax Year [Member]
Open Tax Year		2,014
Domestic Tax Authority [Member]
Operating Loss Carryforwards	$ 0	$ 0
Effective Income Tax Rate Reconciliation, Percent	39.60%
Income Tax Expense (Benefit)		$ 1,229,000	$ 0