| The Company and Summary of Significant Accounting Policies: | NOTE 1 - The Company and Summary of Significant
Accounting Policies: Bridgford Foods Corporation
(collectively with its subsidiaries, “Bridgford”, the “Company”, “we”, “our”) was organized in
1952. We originally began operations in 1932 as a retail meat market in San Diego, California and evolved into a meat wholesaler for hotels
and restaurants, a distributor of frozen food products, a processor and packer of meat, and a manufacturer and distributor of frozen food
products for sale on a retail and wholesale basis. We, including our subsidiaries, are primarily engaged in the manufacturing, marketing,
and distribution of an extensive line of frozen, refrigerated, and snack food products throughout the United States. The consolidated financial
statements include the accounts of the Company and its subsidiaries, all of which are wholly owned. All inter-company transactions and
balances have been eliminated. Use of estimates and assumptions The preparation of financial
statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements, as well as the reported revenues and expenses during the respective reporting periods. Management bases these estimates and
assumptions upon historical experience, existing and known circumstances, authoritative accounting pronouncements and other factors that
management believes to be reasonable. In addition, the Company has considered the potential impact of macroeconomic factors, including
inflation, changes in interest rates, changes in commodity pricing, changes in discretionary spending, and recessionary concerns, on its
business and operations. Although the full impact of these factors is unknown, the Company believes it has made appropriate accounting
estimates and assumptions based on the facts and circumstances available as of the reporting date. However, actual results could differ
from those estimates. Amounts estimated related to liabilities for pension benefits, self-insured workers’ compensation and employee
healthcare benefits are subject to inherent uncertainties and these estimated liabilities may ultimately settle at amounts which may vary
from current estimates. Other areas with underlying estimates include realization of deferred tax assets, cash surrender or contract value
of life insurance policies, promotional allowances and the allowance for doubtful accounts and inventory reserves. Management believes
its current estimates are reasonable and based on the best information available at the time. To the extent there are material differences
between the estimates and the actual results, future results of operations could be affected. Subsequent events Management has evaluated events
subsequent to November 1, 2024, through the date the accompanying consolidated financial statements were filed with the Securities and
Exchange Commission for transactions and other events that may require adjustment of and/or disclosure in such financial statements. On November 30, 2024, we entered
into a sixth amendment to the credit agreement with Wells Fargo Bank, N.A. dated March 1, 2018, as amended, and also executed a revolving
line of credit note pursuant to the amendment. The revolving line of credit note replaces the existing note that expired by its terms
on November 30, 2024. Under the terms of this amendment and the revolving line of credit note, we may borrow up to $ 7,500 November 30, 2025 interest rate equal to (a) the daily simple secured overnight financing rate plus 2.0%, or if unavailable,
(b) the prime rate, in each case as determined by the bank. 0.35 Based on management’s
review, no other material subsequent events were identified that require adjustment to the consolidated financial statements or additional
disclosure. Accounts Receivable Accounts receivables are recorded
at net realizable value. The value is presented net of allowance for doubtful accounts and promotional incentives. Our accounts receivable
consists mainly of trade receivables from customer sales. We evaluate the collectability of our accounts receivable based on several factors.
The provision for doubtful accounts receivable is based on historical trends and current collectability risk. Our provision for doubtful
accounts was $ 110 248 Concentrations of credit
risk Our credit risk is diversified
across a broad range of customers and geographic regions. Losses due to credit risk have recently been immaterial. The carrying amount
of cash equivalents, accounts and other receivables, accounts payable and accrued liabilities approximate fair market value due to the
short maturity of these instruments. We maintain cash balances at financial institutions, which may at times exceed the amounts insured
by the Federal Deposit Insurance Corporation. Management does not believe there is significant credit risk associated with these financial
institutions. Sales to Wal-Mart® comprised
27.8 25.4 29.1 26.5 14.2 20.2 16.3 20.5 Business segments The Company and its subsidiaries
operate in two business segments - the processing and distribution of frozen foods products, and the processing and distribution of snack
food products. See Note 7 Segment Information for further information. Fiscal year We maintain our accounting
records on a 52-53-week fiscal basis ending on the Friday closest to October 31. As part of the regular accounting cycle, fiscal year
2024 included 52 weeks and fiscal year 2023 included 53 weeks. Revenues The Company recognizes revenue
for the sale of the product at the point in time when our performance obligation has been satisfied and control of the product has transferred
to our customer, which generally occurs upon shipment, pickup or delivery to a customer based on terms of the sale. Contracts with customers
are typically short-term in nature with completion of a single performance obligation. Product is sold to foodservice, retail, institutional
and other distribution channels. Products are delivered to customers primarily through our own long-haul fleet, common carrier or through
a Company owned direct store delivery system. These delivery costs, $ 7,460 7,190 We record revenue at the transaction
price which is measured as the amount of consideration we anticipate to receive in exchange for providing product to our customers. Revenue
is recognized as the net amount estimated to be received after deducting estimated or known amounts including variable consideration for
discounts, trade allowances, consumer incentives, coupons, volume-based incentives, cooperative advertising, product returns and other
such programs. Promotional allowances, including customer incentive and trade promotion activities, are recorded as a reduction to sales
based on amounts estimated being due to customers, based primarily on historical utilization and redemption rates. Estimates are reviewed
regularly until incentives or product returns are realized and the result of any such adjustments are known. Promotional allowances deducted
from sales for fiscal years 2024 and 2023 were $ 19,746 17,256 Advertising expenses Advertising and other promotional
expenses are recorded as selling, general and administrative expenses. Advertising expenses for fiscal years 2024 and 2023 were $ 2,613 2,822 Cash and cash equivalents We consider all investments
with original maturities of three months or less to be cash equivalents. Cash equivalents include money market funds and treasury bills.
Cash and cash equivalents totaled $ 10,230 1,000 15,708 Restricted cash The Company had no Fair value measurements We classify levels of inputs
to measure the fair value of financial assets as follows:
● Level 1 inputs: Level 1 inputs are quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.
● Level 2 inputs: Level 2 inputs are from other than quoted market prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.
● Level 3 inputs: Level 3 inputs are unobservable and should be used to measure fair value to the extent that observable inputs are not available. The hierarchy noted above
requires us to minimize the use of unobservable inputs and to use observable market data, if available, when determining fair value. The Company does not have any assets or liabilities measured at fair
value on a recurring or non-recurring basis for the fiscal years ended November 1, 2024, and November 3, 2023, except for pension plan
investments (See Note 3 – Retirement and Other Benefit Plans). Inventories Inventories are valued at
the lower of cost (which approximates actual cost on a first-in, first-out basis) or net realizable value. Inventories include the cost
of raw materials, labor, and manufacturing overhead. We regularly review inventory quantities on hand and write down any excess or obsolete
inventories to 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 must be sold at reduced prices and
could result in additional reserve provisions. The Company recorded a net realizable value reserve of $ 1,467 513 Property, plant, and equipment Property, plant, and equipment
are carried at cost less accumulated depreciation. Major renewals and improvements are charged to the asset accounts while the cost of
maintenance and repairs is charged to expense as incurred. When assets are sold or otherwise disposed of, the cost and accumulated depreciation
are removed from the respective accounts and the resulting gain or loss is credited or charged to income. Depreciation is computed on
a straight-line basis over 10 20 5 10 3 5 The Company incurred interest costs of $ 429 579 We test long-lived assets
for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If an impairment
is indicated, we measure the fair value of assets to determine if and when adjustments are recorded. Leases Leases are recognized in accordance
with ASC Topic 842 Leases (“ASC 842”) which requires a lessee to recognize assets and liabilities with lease terms of more
than 12 months. We lease or rent property for such operations as storing inventory and equipment. We analyze our agreements to evaluate
whether or not a lease exists by determining what assets exist for which we control usage for a period of time in exchange for consideration.
In the event a lease exists, we classify it as a finance or operating lease and record a right-of-use (“ROU”) asset and the
corresponding lease liability at the inception of the lease. In the case of month-to-month lease or rental agreements with terms of 12
months or less, we made an accounting policy election to not recognize lease assets and liabilities and record them on a straight-line
basis over the lease term. The storage units rented on a month-to-month basis for use by our Snack Food Product segment direct store delivery
route system are not costly to relocate and contain no significant leasehold improvements or degree of integration over leased assets.
Orders can be fulfilled by another route storage unit interchangeably. No specialized assets exist in the rental storage units. Market
price is paid for storage units. No guarantee of debt is made. Finance lease assets are recorded
within property, plant and equipment, net of accumulated depreciation and amortization. The Company’s leases of a box truck used
in its Frozen Food Products segment qualify as finance leases. Finance lease liabilities are recorded under other liabilities. Operating
leases are recorded as ROU assets under property, plant and equipment and the corresponding liability is recorded under other liabilities.
The consolidated balance sheets reflect both the current and long-term obligation. The classification as a finance or operating lease
determines whether the recognition, measurement and presentation of expenses and cash flows are considered operating or financing. Life insurance policies We record the cash surrender
value or contract value for life insurance policies as an adjustment of premiums paid in determining the expense or income to be recognized
under the contract for the period. The cash surrender value is included in other non-current assets in the accompanying Consolidated Balance
Sheets. Expected proceeds from life insurance are recorded under prepaid expenses and other current assets (refer to Note 2 – Composition
of Certain Financial Statement Captions). Income taxes Deferred taxes are provided
for items whose financial and tax bases differ. A valuation allowance is provided against deferred tax assets when it is expected that
it is more likely than not that the related asset will not be fully realized. The determination as to whether or not a deferred tax asset
can be fully realized is subject to a significant degree of judgment, based at least partially upon a projection of future taxable income,
which takes into consideration past and future trends in profitability, customer demand, supply costs, and multiple other factors, which
are inherently difficult to predict. We provide tax accruals for
federal, state, and local exposures relating to audit results, tax planning initiatives and compliance responsibilities. The development
of these accruals requires judgments about tax issues, potential outcomes, and timing. (See Note 4 for further information). Although
the outcome of these tax audits is uncertain, in management’s opinion adequate provisions for income taxes have been made for potential
liabilities emanating from these reviews. If actual outcomes differ materially from these estimates, they could have a material impact
on our results of operations. Stock-based compensation We measure and recognize compensation
expenses for all share-based payments to employees, including grants of employee stock options, in the financial statements based on the
fair value at the date of the grant. We have not issued, awarded, granted, or entered into any stock-based payment agreements since April
29, 1999, and no Comprehensive income or
loss Comprehensive income or loss
consists of net income and additional minimum pension liability adjustments net of taxes. Recently issued
accounting pronouncements and regulations In June 2016, the FASB issued
ASU No. 2016-13 , Financial Instruments—Credit Losses In November 2023, the FASB
issued ASU No. 2023-07, Segment Reporting – Improvements to Reportable Segments Disclosures In March 2024, the SEC adopted
rules to develop standardized climate-related disclosures by publicly traded companies including the emission of greenhouse gases. The
rules are currently effective for the Company in the fiscal year beginning in 2027. However, as a result of pending legal challenges,
the actual timing of effectiveness of the rules and applicable phase-in periods, as well as whether portions of the rules remain in effect
after the legal challenges, are uncertain. The Company is currently evaluating the guidance and its impact on the financial statements. |
