SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED NOVEMBER 3, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO
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 No.)
1308 North Patt Street, Anaheim, California 92801
(Address of principal executive offices) (Zip code)
(714) 526-5533
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $1.00 per share
(Title of class)
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
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this form 10-K. X
The aggregate market value of voting stock held by non-affiliates of
the registrant on January 16, 1996 was $30,067,000.
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date: 9,396,933
shares of Common Stock, par value of $1.00 per share, as of January 16,
1996.
DOCUMENTS INCORPORATED BY REFERENCE
Items 5, 6, 7 and 8 of Part II are incorporated by reference from the
registrant's Annual Report to Shareholders for the fiscal year ended
November 3, 1995. Items 10, 11, 12 and 13 of Part III are incorporated
by reference from the registrant's Proxy Statement for the Annual
Meeting of Shareholders to be held March 20, 1996.
PART I
Item 1. Business
Background of Business
Bridgford Foods Corporation, a California corporation
(collectively with its subsidiaries, the "Company"), was organized in
1952. The Company originally began its operations 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. For
more than the past five years, the Company and its subsidiaries have
been primarily engaged in the manufacturing, marketing and distribution
of an extensive line of frozen, refrigerated and snack food products
throughout the United States. The Company has not been involved in any
bankruptcy, receivership or similar proceedings, nor has it been party
to any merger, acquisition, etc. or acquired or disposed of any
material amounts of assets during the past five years. Substantially
all of the assets of the Company have been acquired in the ordinary
course of business. The Company had no significant change in the type
of products produced or distributed, nor in the markets or methods of
distribution since the beginning of the fiscal year.
Description of Business
The Company operates in one business segment - the manufacture and
distribution of frozen, refrigerated and snack food products. The
products manufactured and distributed by the Company consist of an
extensive line of food products, including a variety of sliced luncheon
meats and cheeses, wieners, bacon, sandwiches, dry sausages, biscuits,
bread dough items and roll dough items. The products purchased by the
Company for resale include a variety of jerky, cheeses, salads, party
dips, Mexican foods, nuts and other delicatessen type food products.
In the aggregate, the Company manufactures or distributes a product
line consisting of a total of approximately 450 food products. For
fiscal year 1995, products manufactured or processed by the Company
have represented approximately 85% of the Company's consolidated sales
and items manufactured or processed by third parties for distribution
represented approximately 15% of consolidated sales. For fiscal year
1994, products manufactured or processed by the Company have
represented approximately 87% of the Company's consolidated sales and
items manufactured or processed by third parties for distribution
represented approximately 13% of consolidated sales. For each of the
fiscal years ended in 1991 through 1993, the products manufactured or
processed by the Company have represented approximately 90% of the
Company's consolidated sales, and the products manufactured or
processed by third parties for distribution by the Company have
represented approximately 10% of the Company's consolidated sales.
Operations at the Company's fresh meat division in San Diego were
phased out during the latter part of fiscal 1993 and all closure costs
were absorbed in the 1993 fiscal year. Sales at this division comprised
less than 5% of consolidated operations and closure of the facility had
no material adverse effect on the Company's operating results in fiscal
1994. Although the Company has recently introduced several new
products, none of these products have contributed significantly to the
Company's revenue growth for the fiscal year. The Company's sales are
not subject to material seasonal variations. Historically the Company
has been able to respond quickly to the receipt of orders and,
accordingly, the Company does not maintain a significant sales backlog.
The Company and its industry generally have no unusual demands or
restrictions on working capital items. The Company is not dependent
upon a single customer, or a few customers, the loss of which would
have a material adverse effect on the Company's results of operations.
During the last fiscal year the Company did not enter into any new
markets or any significant contractual or other material relationships.
The Company has two classes of similar food products, each of
which has accounted for 10% or more of consolidated sales in the prior
three fiscal years listed below. The following table shows sales, as
a percentage of consolidated sales, for each of these two classes of
similar products for each of the last three fiscal years:
1995 1994 1993
Frozen Food Products 46% 46% 43%
Refrigerated and Snack Food Products 54% 54% 57%
100% 100% 100%
To date, federal, state and local environmental laws and
regulations, including those relating to the discharge of materials
into the environment, have not had a material effect on the Company's
business.
Product Planning and Research and Development
The Company continually monitors the consumer acceptance of each
product within its extensive product line. Individual products are
regularly added to and deleted from the Company's product line. The
addition or deletion of any product has not had a material effect on
the Company's operations. The Company believes that a key factor in
the success of its products is its system of carefully targeted
research and testing of its products to ensure high quality and that
each product matches an identified market opportunity. The emphasis in
new product introductions in the past few years has been in
microwaveable, single service items. The Company is constantly
searching to develop new products to complement its existing product
line and improved processing techniques and formulas for its existing
product line. The Company utilizes an in-house test kitchen to
research and experiment with unique food preparation methods, improve
quality control and analyze new ingredient mixtures. The Company does
not anticipate any significant change in product-mix as a result of its
research and development efforts.
Marketing, Sales and Distribution
The Company markets and sells its products with its own sales
force, brokers, cooperatives, wholesalers and independent distributors.
Currently, products are sold by the Company's own sales force to 24,700
retail food stores located in 49 states and Canada. In addition, the
Company sells its products through wholesalers, cooperatives and
distributors to approximately an additional 17,000 retail outlets and
18,500 restaurants and institutions.
The Company's annual advertising expenditures are directed towards
retail and institutional customers. These customers participate in
various special promotional programs including "slotting" and direct
advertising allowances sponsored by the Company. The Company also
invests in general consumer advertising in various newspapers and
periodicals. The Company directs advertising at food service customers
with campaigns in major industry publications and through Company
participation in trade shows throughout the United States.
Competition
The products of the Company are sold under highly competitive
conditions. All food products can be considered competitive with other
food products, but the Company regards its principal competitors to
include national, regional and local producers and distributors of
refrigerated, frozen and snack food products. Several of the Company's
competitors include large companies with substantially greater
financial and marketing resources than those of the Company. Existing
competitors may broaden their product lines and potential competitors
may enter or increase their focus on the Company's market, resulting in
greater competition for the Company. The Company believes that its
products compete favorably with those of the Company's competitors.
Such competitors' products compete against those of the Company for
retail shelf space, institutional distribution and customer preference.
Employees
At the end of fiscal 1995, the Company had approximately 670
employees, approximately one-half of whose employment relationship with
the Company was governed by collective bargaining agreements. These
agreements expire between September 1996 and October 1998. The
Company believes that its relationship with its employees is good.
There are currently no significant ongoing negotiations with its
employees.
Raw Materials
Although the Company has numerous sources of raw materials, the
availability of raw materials is subject to some volatility. From time
to time drought or flood conditions affect the cost of grain products
adversely in the short run, and costs of meat products in the
subsequent two to five year cycle. Similarly, periods of surplus grain
products, usually occasioned by favorable growing weather and adequate
moisture, result in an increased supply and lowering of grain costs in
ensuing seasons. Government commodity programs and export enhancement
programs can also have material effects on commodity prices. These
programs are generally not predictable beyond published information.
Item 2. Properties
The Company owns its headquarters and plant located in Anaheim,
California, a 100,000 square-foot processing facility located on five
acres of land. The Company also owns a 146,000 square-foot processing
facility on 1-1/2 acres of land in Chicago, Illinois, a 77,000 square-foot
food processing facility on 3-3/4 acres of land and a 28,000
square foot food processing facility on 1-3/4 acres of land in Dallas,
Texas. The foregoing plants are, in general, fully utilized by the
Company for processing, warehousing, distributing and administrative
purposes. In addition, the Company owns an unoccupied 2,500 square-foot
warehouse on 1/3 acre of land in Modesto, California. The
Company's 7,000 square-foot plant on 1/4 acre of land in San Diego,
California was demolished during 1994.This land is currently being
leased to a third party. The Company also leases warehouse and/or
office space in Oakland, California, Phoenix and Tucson, Arizona, and
Secaucus, New Jersey. The Company's properties are adequate to
satisfy its foreseeable needs. Additional properties may be acquired
and/or plants expanded if favorable opportunities and conditions arise.
The Company's capital improvement programs continued into 1995. These
expenditures included construction costs for a food processing facility
in North Carolina and extensive additions to existing facilities
located in Texas. Capital expenditures in fiscal year 1995 for these
projects totaled approximately $6.3 million. The balance to complete
these projects was approximately $3 million at November 3, 1995.
Item 3. Legal Proceedings
No material legal proceeding was pending at November 3, 1995
against the Company.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to the Company's shareholders during the
fourth quarter of the fiscal year ended November 3, 1995.
Executive Officers of the Registrant
The names, ages and positions of all the executive officers of the
Company as of January 1, 1996 are listed below. All executive officers
are full-time employees of the Company. Messrs. H. Wm. Bridgford and
Allan L. Bridgford are brothers. William L. Bridgford is the son of H.
Wm. Bridgford. Officers are normally appointed annually by the board of
directors at their meeting immediately following the annual meeting of
shareholders.
Name Age Position(s) with the Company
Allan L. Bridgford 60 Chairman and member of the Executive
Committee
Robert E. Schulze 61 President and member of the Executive
Committee
H. Wm. Bridgford 64 Vice President and Chairman of the
Executive Committee
Salvatore F. DeGeorge 64 Senior Vice President
Lawrence D. English 64 Vice President
William L. Bridgford 40 Secretary
Raymond F. Lancy 42 Treasurer
PART II
Item 5. Market for the Registrant's Common Stock and Related
Shareholder Matters
The Company's Common Stock, par value $1.00 per share (the "Common
Stock"), is traded in the over-the-counter market and prices are quoted
on The Nasdaq National Market under the symbol "BRID." As of January
1, 1996, there were 652 holders of record of the Company's Common
Stock. The market price and dividend information with respect to the
Company's Common Stock are set forth on the inside cover of the
Company's 1995 Annual Report to Shareholders incorporated herein by
reference. Future dividends will be dependent upon future earnings,
financial requirements and other factors.
Item 6. Selected Financial Data
The information set forth on page 4 of the Company's 1995 Annual
Report to Shareholders is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The information set forth on pages 4 and 5 of the Company's 1995
Annual Report to Shareholders is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The information set forth on pages 6 through 11 of the Company's
1995 Annual Report to Shareholders in the sections thereof entitled
"Consolidated Balance Sheets", "Consolidated Statements of Income",
"Consolidated Statements of Shareholders' Equity", "Consolidated
Statements of Cash Flows", "Notes to Consolidated Financial Statements"
and "Report of Independent Accountants" is incorporated herein by
reference.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant
Information set forth in the Company's definitive proxy statement
for the 1996 Annual Meeting of Shareholders to be held on March 20,
1996 is incorporated herein by reference. Information concerning the
executive officers of the Company is set forth in Part I hereof under
the heading "Executive Officers of the Registrant."
Item 11. Executive Compensation
Information set forth in the Company's definitive proxy statement
for the 1996 Annual Meeting of Shareholders to be held on March 20,
1996 is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Information set forth in the Company's definitive proxy statement
for the 1996 Annual Meeting of Shareholders to be held on March 20,
1996 is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
Information set forth in the Company's definitive proxy statement
for the 1996 Annual Meeting of Shareholders to be held on March 20,
1996 is incorporated herein by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(a) The following documents are filed as a part of this
report:
(1) Financial Statements. See "Index to Consolidated
Financial Statements" included in this report.
(2) Financial Statement Schedules. See "Index to
Consolidated Financial Statements" included in
this report.
(3) Exhibits. The exhibits filed as a part of this
report are listed in the accompanying "Index to
Exhibits".
(b) Report on Form 8-K. The Company did not file a
Current Report on Form 8-K during the quarter ended
November 3, 1995.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
BRIDGFORD FOODS CORPORATION
By: /s/ Allan L. Bridgford
Allan L. Bridgford, Chairman
Date: January 29,1996
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ Allan L. Bridgford Chairman January 29, 1996
Allan L. Bridgford
/s/ Robert E. Schulze President January 29, 1996
Robert E. Schulze
/s/ H. Wm. Bridgford Vice President January 29, 1996
H. Wm. Bridgford
/s/ Paul A. Gilbert Director January 29, 1996
Paul A. Gilbert
/s/ John W. McNevin Director January 29, 1996
John W. McNevin
/s/ Steven H. Price Director January 29, 1996
Steven H. Price
/s/ Norman V. Wagner II Director January 29, 1996
Norman V. Wagner
/s/ Paul R. Zippwald Director January 29, 1996
Paul R. Zippwald
BRIDGFORD FOODS CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of the Registrant and its
subsidiaries, including the report thereon of Price Waterhouse LLP
dated December 21, 1995, appearing on pages 6 through 11 of the
accompanying 1995 Annual Report to Shareholders are incorporated by
reference in this Annual Report on Form 10-K. With the exception of
the aforementioned information and the information incorporated in
Items 5, 6, 7 and 8, the 1995 Annual Report to Shareholders is not to
be deemed filed as part of this Annual Report on Form 10-K. The
following Financial Statement Schedules should be read in conjunction
with the financial statements in such 1995 Annual Report to
Shareholders. Financial Statement Schedules not included with this
Annual Report on Form 10-K have been omitted because they are not
applicable or the required information is shown in the financial
statements or notes thereto.
Page
Report of Independent Accountants on Financial
Statement Schedules F-2
Financial Statement Schedules for the three years
ended November 3, 1995:
Schedule VIII - Valuation and Qualifying Accounts
Accounts F-3
Schedule X - Supplementary Income Statement Information F-4
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULES
F-2
To the Board of Directors of
Bridgford Foods Corporation
Our audits of the consolidated financial statements referred to in
our report dated December 21, 1995 appearing on page 11 of the 1995
Annual Report to Shareholders of Bridgford Foods Corporation (which
report and consolidated financial statements are incorporated by
reference in this Annual Report on Form 10-K) also included an audit
of the Financial Statement Schedules listed in Item 14(a) of this
Form 10-K. In our opinion, these Financial Statement Schedules
present fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated
financial statements.
/s/Price Waterhouse LLP
Costa Mesa, California
December 21, 1995
BRIDGFORD FOODS CORPORATION
SCHEDULE VIII
VALUATION AND QUALIFYING ACCOUNTS
F-3
Provision for Accounts Balance at
Balance at losses on written off close
beginning Accounts less of
of period Receivable Recoveries period
October 29, 1993
Allowance for
doubtful
accounts $380,547 $73,600 $18,175 $435,972
October 28, 1994
Allowance for
doubtful
accounts $435,972 $64,545 $29,935 $470,582
November 3, 1995
Allowance for
doubtful
accounts $470,582 $138,650 $103,609 $505,623
BRIDGFORD FOODS CORPORATION
SCHEDULE VIII
SUPPLEMENTARY INCOME STATEMENT INFORMATION
F-4
Fiscal Years Ended
November 3, October 28, October 29,
1995 1994 1993
Maintenance
and repairs $3,170,683 $3,416,409 $2,954,841
Advertising
costs $5,530,868 $4,658,477 $3,957,590
Taxes other than payroll and income taxes, are less than 1% of total
sales as reported in the related income statements.
BRIDGFORD FOODS CORPORATION
INDEX TO EXHIBITS
Exhibit
No .
3. 1 Articles of Incorporation (filed as Exhibit 1 to Form 10 and
incorporated herein by reference).
3. 2 Amendment to Articles of Incorporation dated June 24, 1954 (filed as
Exhibit 1-a to Form 10 and incorporated herein by reference).
3. 3 Amendment to Articles of Incorporation dated September 30, 1955
(filed as Exhibit 1-c to Form 10 and incorporated herein by
reference).
3.4 Amendment to Articles of Incorporation dated April 3, 1963 (filed as
Exhibit 1-c to Form 10 and incorporated herein by reference).
3.5 Restated Articles of Incorporation, dated December 29, 1989 (filed
as Exhibit 3.5 to Form 10 on January 28, 1993 and incorporated herein
by reference).
3.6 Amendment to Articles of Incorporation, dated July 27, 1990 (filed
as Exhibit 3.6 to Form 10 on January 28, 1993 and incorporated
herein by reference).
3.7 By-laws, as amended (filed as Exhibit 2 to Form 10 and incorporated
herein by reference).
10.1 Bridgford Foods Corporation Defined Benefit Pension Plan (filed as
Exhibit 10.1 to Form 10 on January 28, 1993 and incorporated herein by
reference).
10.2 Bridgford Foods Corporation Supplemental Executive Retirement Plan
(filed as Exhibit 10.2 to Form 10 January 28, 1993 and incorporated
herein by reference).
10.3 Bridgford Foods Corporation Deferred Compensation Savings Plan.
(filed as Exhibit 10.3 to Form 10 January 28, 1993 and incorporated
herein by reference).
13.1 1995 Annual Report to Shareholders.
22.1 Subsidiaries of the Registrant.
27.1 Financial Data Schedule for the fiscal year ended November 3, 1995,
submitted to the Securities Exchange Commission in electronic format
(for SEC information only).
BRIDGFORD FOODS CORPORATION
EXHIBIT 22.1
SUBSIDIARIES OF REGISTRANT
Name of Subsidiary State in which Incorporated
Bridgford Distributing Company California
Bridgford Meat Company California
Bridgford Foods of Illinois, Inc. California
A.S.I. Corporation California
Bridgford Distributing Company of
Delaware (inactive) Delaware
American Ham Processors, Inc.*
(inactive) Delaware
Bert Packing Company (inactive) Illinois
Moriarty Meat Company (inactive) Illinois
* No shares have been issued.
[TYPE]
[DESCRIPTION]EXHIBIT 13.1 - 1995 ANNUAL REPORT TO SHAREHOLDERS
Inside Cover
DESCRIPTION OF BUSINESS
Bridgford Foods Corporation and its subsidiaries manufacture and/or
distribute refrigerated, frozen and snack food products. The Company
markets its products throughout the United States. The Company sells
its products through wholesale outlets, restaurants and institutions.
The products are sold by the Company's own sales force, brokers,
cooperatives, wholesalers and independent distributors. Products are
currently sold through approximately 24,700 retail food stores in
forty-eight states within the continental United States, Hawaii and
Canada that are serviced by Company-owned service routes. Company
products are also sold throughout the country to approximately another
17,000 retail outlets and 18,500 restaurants and institutions.
The following summary represents the approximate percentage of net
sales by class of product for each of the last five fiscal years:
1995 1994 1993 1992 1991
Products manufactured
or processed by
the Company 85 87 89 89 90
Products manufactured
or processed
by others 15 13 11 11 10
Total 100 100 100 100 100
COMMON STOCK AND DIVIDEND DATA
The common stock of the Company is traded in the national over-the-counter
market and is authorized for quotation on The Nasdaq National
Market under the symbol "BRID". The following table reflects the high
and low closing prices and cash dividends paid as quoted by Nasdaq for
each of the last eight fiscal quarters.
Fiscal Prices Cash Dividends
Quarter Ended $High $Low Paid
January 28, 1994 12 1/2 9 1/4 $.05
April 29, 1994 11 8 3/4 $.05
July 29, 1994 11 8 $.05
October 28, 1994 10 3/4 7 3/4 $.05
January 27, 1995 10 3/4 9 $.08**
April 28, 1995 13 1/2 9 1/4 $.05
July 28, 1995 14 10 5/8 $.05
November 3, 1995 12 9 3/4 $.05
** Includes $.03 per share extra cash dividend.
ANNUAL SHAREHOLDERS MEETING
The 1996 annual shareholders meeting will be held at the Holiday
Inn, 222 W. Houston Avenue, Fullerton, California at 10:00 a.m. on
Wednesday, March 20, 1996.
1
TO OUR SHAREHOLDERS:
Bridgford Foods Corporation attained record sales and earnings during fiscal
1995. This was the tenth consecutive year that sales and earnings surpassed
those of the prior year and the ninth consecutive year of increased cash
dividends.
SALES, EARNINGS AND DIVIDENDS
Sales for the fifty-three weeks ended November 3, 1995 were $112,497,590,
a 3 per cent gain over sales in the fifty-two week fiscal year ended
October 28, 1994. Sales gains were a result of an increased number of direct
store distribution customers and the development of several new meat snack
and sandwich products. Net income increased by seven percent in 1995
to $6,590,855, seventy cents per share, versus $6,141,726, or sixty-five
cents per share in 1994. Abundant supplies of commodities used in our
business were available at extremely favorable prices during the early part
of our 1995 fiscal year. Adverse weather conditions in major agricultural
regions of the United States and increased exports of basic agricultural
commodities in 1995 resulted in dramatic increases in raw material costs
later in the year and beyond. Cash dividends paid in 1995 were at a record
level of twenty-three cents per share, a fifteen percent increase over the
twenty cents per share paid in 1994. Your Board of Directors increased the
quarterly cash dividend to six cents per share in January of 1996 based on
successful operations and record earnings in 1995.
FINANCIAL CONDITION
Shareholders' equity reached $36,859,572 in 1995, a 14% increase over the
prior year. The current asset to liability ratio remained strong at 2.4 to 1.
Our excellent financial condition was maintained while the Company was making
record capital expenditures of $8,774,616. The funds were spent on new
plants and equipment during 1995. All capital improvements were financed
internally from funds on hand. The Company remained debt free for
the ninth consecutive year.
OPERATIONS
1995 has been a year of large capital expenditures to increase our production
capacity and efficiency. As this report is being written, our new 2,500
pallet capacity freezer in Dallas is being "cooled down" for occupancy. This
storage freezer, with its computer operated automatic stacking crane and
computer optimized refrigeration system for energy efficiency,
will quadruple the storage capacity of the Frozen-Rite plant.
We have also added a second high capacity spiral freezer for production
efficiency at Frozen-Rite.
2
The Company's new forty-two thousand square foot frozen food plant in
Statesville, North Carolina should be completed in the second quarter
of 1996. It will initially be used to produce and store frozen doughs
and sandwiches and will service the eastern portion of the United States.
We closed our Secaucus, New Jersey frozen dough plant
during October 1995. In addition to our new plant construction in Dallas
and Statesville, theCompany spent more than $2,500,000 on capital
improvements, new vehicles and new equipment at our Chicago dry sausage plant
and our Anaheim, California meat and frozen food plant.
SUMMARY
We look forward to a good year in 1996. However, as previously mentioned,
raw material costs have escalated in both our meat and frozen food
businesses. The inventory of goods stockpiled earlier and purchased at
advantageous prices has been depleted, and operating margins have been
reduced in the short term. We anticipate these margins will stabilize as
the year progresses. We expect our new facilities in Texas and North Carolina
to reduce our operating, storage and distribution costs significantly.
Thanks to our customers, employees, suppliers and Board of Directors for their
help in making 1995 another record year.
Respectfully submitted,
Allan L. Bridgford Robert E. Schulze
Chairman President
January 19, 1996
BRIDGFORD FOODS CORPORATION
FINANCIAL SUMMARY
Fiscal Year Ended
November 3 October 28 %
1995 1994 Change
Net sales $112,497,590 $108,883,562 3
Income before taxes 10,630,855 9,906,726 7
Net income 6,590,855 6,141,726 7
Net income per share .70 .65 8
Cash dividends per share .23 .20 15
Working capital 22,494,577 24,870,630 (10)
Total assets 52,623,417 46,986,561 12
Shareholders' equity 36,859,572 32,430,012 14
Return on average
equity 19.02% 20.27%
4
SELECTED FINANCIAL DATA
November 3 October 28 October 29 October 30 November 1
1995** 1994 1993 1992 1991*
Net Sales $112,497,590 $108,883,562 $105,146,822 $100,113,269 $92,866,266
Net Income 6,590,855 6,141,726 5,576,332 5,298,407 4,489,995
Net Income Per Share .70 .65 .59 .56 .48
Current Assets 38,258,422 39,427,179 32,721,065 28,652,723 23,401,288
Current Liabilities. 15,763,845 14,556,549 11,307,436 11,437,777 9,180,192
Working Capital 22,494,577 24,870,630 21,413,629 17,214,946 14,221,096
Prop.,Plant and Equip. 14,364,995 7,559,382 6,754,042 6,879,902 5,706,253
Total Assets 52,623,417 46,986,561 39,475,107 35,532,625 29,107,541
Long-term Debt - - - - -
Deferred Taxes on Income - - - - -
Shareholders' Equity 36,859,572 32,430,012 28,167,671 24,094,848 19,927,349
Cash Dividends Per Share .23 .20 .16 .12 .11
* Per share data is adjusted for a three-for-two stock split distributed in January of 1992.
**53 weeks
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Favorable operating results over the past several years have
continued to provide significant liquidity to the Company. Net cash
provided by operating activities was $5,580,000 in the 1995 fiscal year
compared to $9,902,000 in 1994 and $4,838,000 in 1993. Accounts
receivable balances increased by $769,000 in 1995 (8%), $794,000 (9%)
in 1994, and $659,000 (8%) in 1993, due to the continued expansion of
the business and changing nature of the customer base. Inventories
increased $1,790,000 (15%) in 1995 due to continued business expansion,
higher raw materials costs and increased distribution of the Company's
products. Prepaid expenses increased $849,000 (33%),$256,000 (11%) and
$813,000 (55%) in 1995, 1994 and 1993 due primarily to the increased
cash surrender value of life-insurance polices. In addition, the
Company recorded income taxes receivable in prepaid expenses of
$287,000 in 1995. As a result of increased deposit requirements, income
taxes payable decreased in 1993 $487,000 (100%) compared to the prior
year. Accounts payable and accrued expenses increased $1,462,000 (10%)
in 1995 and $2,939,000 (26%) in 1994 due primarily to increases in non-funded
employee benefits. The Company's capital improvement programs continued into
1995. Cash used for additions to property, plant and equipment increased
$6,054,000 (223%) in 1995 compared to the prior year. These
expenditures included construction costs for a food processing
facility in North Carolina and extensive additions to existing
facilities located in Texas. Capital expenditures in fiscal year 1995
for these projects totaled approximately $6.3 million. The balance to
complete these projects was approximately $3 million at November 3,
1995. These investments are expected to yield higher production
capacities, improved plant utilization and realize cost savings in
future years. Although annual depreciation expense will increase as a
result of these additions, such increase is not expected to have a
material adverse impact on the operating results of the Company. Cash
used for additions to property, plant and equipment increased $993,000
(57%) in 1994 compared to the prior year. Expenditures consisted
primarily of additions of delivery vehicles, machinery and equipment
and $1,554,000 in construction projects. Cash flows used for additions
to property, plant and equipment decreased in 1993, when compared to
the prior year, by $1,152,000 (40%). Investments in manufacturing
facilities, delivery vehicles and computer information systems
comprised the bulk of expenditures in 1993.
Cash flows used to pay cash dividends increased $282,000 (15%) in
1995, $376,000 (25%) in 1994 and $373,000 (33%) in 1993, when compared
to the prior year, in recognition of the continuing success of the
Company.
Cash and cash equivalents decreased $5,282,000 (42%) in 1995 due
primarily to significant investments made in property, plant and
equipment and an increase in cash dividends paid. Cash and cash
equivalents increased in 1994 $5,375,000 (74%) due to the continued
operating success of the Company and significant increases in non-funded
employee benefits. Cash and cash equivalents increased
$1,666,000 (30%) in 1993 due primarily to strong operating performance
for the year and lower capital expenditures when compared to the prior
year. The Company has remained free of interest-bearing debt for nine
consecutive years. Working capital decreased by $2,376,000 (10%) in
1995 after reaching a record high of $24,871,000 in 1994, an increase
of $3,457,000 (16%) over the 1993 fiscal year. The decrease in working
capital is directly attributable to significant investments made by the
Company in projects in-process during the 1995 fiscal year. The
Company maintains a $2,000,000 revolving line of credit with Bank of
America that expires April 30, 1997. There were no borrowings under
this line of credit during 1995.
The Company's operating results are heavily dependent upon the
prices paid for raw materials. From time to time drought or flood
conditions affect the cost of grain products adversely in the short
run, and costs of meat products in the subsequent two to five year
cycle. Similarly, periods of surplus grain products, usually
occasioned by favorable growing weather and adequate moisture, result
in an increase of supply and lowering of grain costs in ensuing
seasons.
5
Government commodity programs and export enhancement programs
can also have material effects on commodity prices. These programs are
generally not predictable beyond published public information. 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. Commodity costs for the 1995, 1994 and 1993 fiscal
years were considered to be generally favorable. Higher flour and
lower pork prices were experienced during 1995. In 1994, lower pork
prices were partially offset by higher flour costs. Higher pork and
lower flour costs were experienced in 1993 compared to 1992. Some
amelioration of cost changes can be achieved by forward contracting for
supplies and varying the Company's advertising and promotional
activities.
The impact of inflation on the Company's financial position and
results of operations has not been significant during the last three
years. 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.
RESULTS OF OPERATIONS
1995 compared to 1994 (53 versus 52 weeks)
Sales in fiscal year 1995 increased $3,614,000 (3%) when compared to
sales of the prior year. After considering the 53 week year, sales
volume increased slightly more than 1% when compared to the prior year.
Cost of products sold increased by $1,274,000 (2%) when compared to
the prior year. The gross margin increased to 36% in 1995 compared to
35% for 1994 and 1993. Commodity costs for meat products were more
favorable in 1995 compared to prior years and this trend helped improve
margins in 1995 despite the small increase in sales.
Selling, general and administrative expenses increased $1,523,000
(6%) when compared to the prior year. This increase was generally
consistent with the overall increase in sales. Increased advertising
expenses slightly outpaced the increase in sales as a result of efforts
to more heavily promote the Company's products and to continue to
expand distribution channels.
Depreciation expense increased $93,000 (5%) when compared to the
prior year. The Company continued to expand its vehicle fleet in 1995
and this contributed to the increase. Several projects which were in
process in the prior year were placed in service during 1995 which also
contributed to the overall increase in depreciation. The Company
expects to continue the growth and modernization of facilities and
equipment used in the business. The effective tax rate remained
consistent with the prior year at 38%.
1994 compared to 1993
Sales in fiscal year 1994 increased $3,737,000 (4%) when compared to
sales of the prior year. Added unit sales volume was the principal
reason for the increase while price increases had a minor influence on
the overall sales gain. The closing of Bridgford Meat Company, the
Company's San Diego based fresh meat business, offset the increase in
sales by $2,665,000 in 1994.
Cost of products sold increased by $1,816,000 (3%) as compared to
the prior fiscal year due to higher unit sales volume. The gross
profit margin remained consistent at 35% for 1994 and 1993.
Selling, General and administrative expenses increased $987,000 (4%)
during fiscal 1994. The bulk of the increase was concentrated in the
Company's advertising programs. Advertising expenditures increased by
approximately $700,000 during 1994 as compared to the prior year.
Increased salaries and wages also contributed to higher costs.
Depreciation expense increased $36,000 (2%) in 1994 compared to
1993. The continued expansion of the Company's business requires the
addition and replacement of facilities and equipment related to
manufacturing and sales activities. The effective tax rate was 38% for
1994 and 1993.
Effective for fiscal year 1994, the Company adopted Statement of
Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions." This statement focuses
principally on postretirement health care benefits and requires accrual
of the expected cost of providing those benefits over the service lives
of the employees. Adoption of this statement did not materially impact
the Company's consolidated financial statements.
1993 compared to 1992
Sales in the 1993 fiscal year continued to grow, despite the
lingering recession in California. Sales totaled $105,147,000, which
represents an increase of $5,034,000 (5%) over sales in 1992. Added
unit sales volume was the principal reason for the increase while price
increases are estimated to represent less than 1% of the sales gain.
The sales gains were made both in existing and expanded marketing
areas.
Cost of products sold increased $3,416,000 (5%) in 1993 compared to
the prior fiscal year due primarily to higher unit sales volume. The
gross profit margin remained consistent at 35% in both 1993 and 1992.
Selling, general and administrative expenses increased $1,166,000
(5%) in the 1993 fiscal year compared to 1992. The principal factors
contributing to this increase were higher sales volumes and salaries,
wages and payroll expenses. Consistent with recent trends, the
Company's store-door delivery sales continued to increase in 1993,
resulting in higher selling costs.
Depreciation expense increased $128,000 (8%) in 1993 compared to
1992. The continued expansion of the Company's business required the
addition and replacement of facilities and equipment related to
manufacturing and sales activities. The effective tax rate in 1993 was
38% compared to 39% in 1992. The changing nature of the Company's
operations resulted in a slightly more favorable allocation of income
to certain states than in 1992. Changes in tax laws did not materially
impact the Company's effective tax rate in 1993.
6
Consolidated Balance Sheets
ASSETS
November 3 October 28
1995 1994
Current assets:
Cash and cash equivalents $ 7,366,362 $ 12,648,368
Accounts receivable, less allowance
for doubtful accounts of
$505,623 and $470,582 10,191,679 9,422,201
Inventories 13,849,947 12,060,020
Prepaid expenses 3,392,620 2,543,348
Deferred income tax benefits 3,457,814 2,753,242
Total current assets 38,258,422 39,427,179
Property, plant and equipment, net of
accumulated depreciation of $21,065,322
and $19,472,731 14,364,995 7,559,382
$52,623,417 $46,986,561
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,662,825 $ 4,253,882
Accrued payroll and other expenses 11,046,103 9,992,835
Income taxes payable 54,917 309,832
Total current liabilities 15,763,845 14,556,549
Commitments (Note 6)
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 - 9,396,933 shares 9,453,816 9,453,816
Capital in excess of par value 3,024,881 3,024,881
Retained earnings 24,380,875 19,951,315
36,859,572 32,430,012
$52,623,417 $46,986,561
See accompanying notes to consolidated financial statements.
7
Consolidated Statements of Income
Fiscal year ended
November 3 October 28 October 29
1995 1994 1993
Net sales $112,497,590 $108,883,562 $105,146,822
Cost of products sold,
excluding depreciation 71,854,739 70,580,426 68,764,378
Selling, general and
administrative expenses 28,048,294 26,525,652 25,538,829
Depreciation 1,963,702 1,870,758 1,834,283
101,866,735 98,976,836 96,137,490
Income before taxes 10,630,855 9,906,726 9,009,332
Provision for taxes on income 4,040,000 3,765,000 3,433,000
Net income $ 6,590,855 $ 6,141,726 $ 5,576,332
Net income per share $ .70 $ .65 $ .59
Consolidated Statements of Shareholders' Equity
Common stock Capital Total
in excess Retained shareholders's
Shares Amount of par earnings equity
Balance, October 30,1992 9,396,933 $ 9,453,816 $ 3,024,881 $11,616,151 $24,094,848
Net income 5,576,332 5,576,332
Cash dividends paid
($.16 per share) (1,503,509) (1,503,509)
Balance, October 29,1993 9,396,933 9,453,816 3,024,881 15,688,974 28,167,671
Net income 6,141,726 6,141,726
Cash dividends paid
($.20 per share) (1,879,385) (1,879,385)
Balance, October 28,1994 9,396,933 9,453,816 3,024,881 19,951,315 32,430,012
Net income 6,590,855 6,590,855
Cash dividends paid
($.23 per share) (2,161,295) (2,161,295)
Balance, November 3,1995 9,396,933 $ 9,453,816 $ 3,024,881 $24,380,875 $36,859,572
See accompanying notes to consolidated financial statements.
8
Consolidated Statements of Cash Flows
Fiscal year ended
November 3 October 28 October 29
1995 1994 1993
Cash flows from operating activities:
Net income $ 6,590,855 $ 6,141,726 $ 5,576,332
Income charges not affecting cash:
Depreciation 1,963,702 1,870,758 1,834,283
Provision for losses on
accounts receivable 138,650 64,545 73,600
Gain on sale of assets (68,153) (29,387) (39,024)
Effect on cash of changes in
assets and liabilities:
Accounts receivable (908,128) (858,465) (732,932)
Inventories (1,789,927) 473,457 (454,604)
Prepaid expenses (849,272) (255,920) (812,527)
Deferred income tax benefits (704,572) (754,275) (476,324)
Accounts payable and
accrued expenses 1,462,211 2,939,281 356,605
Income taxes payable (254,915) 309,832 (486,946)
Net cash provided by operating
activities 5,580,451 9,901,552 4,838,463
Cash used in investing activities:
Proceeds from sale of assets 73,454 73,847 58,193
Additions to property, plant
and equipment (8,774,616) (2,720,558) (1,727,591)
Net cash used in investing activities (8,701,162) (2,646,711) (1,669,398)
Cash used for financing activities:
Cash dividends paid (2,161,295) (1,879,385) (1,503,509)
Net (decrease) increase in cash
and cash equivalents (5,282,006) 5,375,456 1,665,556
Cash and cash equivalents at
beginning of year 12,648,368 7,272,912 5,607,356
Cash and cash equivalents at
end of year $ 7,366,362 $12,648,368 $ 7,272,912
Cash paid for income taxes $ 5,003,099 $ 4,021,490 $ 4,713,524
See accompanying notes to consolidated financial statements
9
Notes to Consolidated Financial Statements
NOTE 1 - THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Consolidation
The consolidated financial statements include the accounts of the
Company and its subsidiaries, all of which are wholly owned. All
intercompany transactions have been eliminated.
Business segment
The Company and its subsidiaries operate in one business segment
- - the manufacturing and/or distributing of refrigerated, frozen and
snack food products.
Fiscal year
The Company maintains its accounting records on a 52-53 week
fiscal basis. Fiscal year 1995 includes 53 weeks. Fiscal years 1994 and
1993 include 52 weeks each.
Revenues
Revenues are recognized upon product shipment or delivery to
customers.
Cash equivalents
The Company considers all investments with original maturities of
three months or less to be cash equivalents. Cash equivalents include
treasury bills of $6,987,000 at November 3, 1995 and $11,989,000 at
October 28, 1994.
Inventories
Inventories are stated at the lower of cost (determined on a
first-in, first-out basis) or market.
Property, plant and equipment
Property, plant and equipment is carried at cost less accumulated
depreciation. Major renewals and betterments are charged to the asset
accounts while the cost of maintenance and repairs is charged to income
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 the straight-line basis over 10 to 20 years
for buildings and improvements, 5 to 10 years for machinery and
equipment and 3 to 5 years for transportation equipment.
Income taxes
Deferred taxes are provided for items whose financial and tax
bases differ.
Earnings per share
Net income and cash dividends per share are calculated based on
the weighted average number of shares outstanding, 9,396,933 for all
periods presented.
NOTE 2 - COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS:
(in thousands)
1995 1994
Property, plant and equipment:
Land $ 598 $ 598
Buildings and improvements 7,083 6,747
Machinery and equipment 15,186 13,772
Transportation equipment 5,140 4,361
Construction in-progress 7,423 1,554
35,430 27,032
Accumulated depreciation 21,065 19,473
$ 14,365 $ 7,559
Inventories:
Meat, ingredients
and supplies $ 3,552 $ 3,796
Work in progress 1,862 1,525
Finished goods 8,436 6,739
$13,850 $12,060
Accrued payroll and other expenses:
Payroll, vacation and
payroll taxes $ 10,365 $ 9,057
Property taxes 208 202
Other 473 734
$ 11,046 $ 9,993
NOTE 3 - RETIREMENT AND BENEFIT PLANS:
The Company has noncontributory trusteed defined benefit
retirement plans for sales, administrative, supervisory and certain
other employees. The benefits under these plans are primarily based on
years of service and compensation levels. The Company's funding policy
is to contribute annually the maximum amount deductible for federal
income tax purposes.
Net pension cost consisted of the following (in thousands):
1995 1994 1993
Cost of benefits earned
during the year $ 568 $ 547 $ 519
Interest cost on projected
benefit obligation 585 532 472
Actual return on plan assets 152 85 (816)
Deferral of unrecognized
(loss) gain on plan assets (638) (585) 361
Amortization of transition
asset (76) (76) (76)
Amortization of unrecognized
prior service costs 24 23 37
Net pension cost $ 615 $ 526 $ 497
10
The transition asset is being amortized using the straight-line
method over 18.02 years, the average remaining service periods of
active plan participants. The discount rate and rate of increase in
future compensation levels used in determining the actuarial present
value of the projected benefit obligation were 7.5% and 6%,
respectively. The expected long-term rate of return on assets for all
fiscal years was 7.5%.
Plan assets are primarily invested in marketable equity
securities, corporate and government debt securities and real estate
and are administered by a life insurance company.
The funded status of the plan is as follows:
(in thousands):
1995 1994 1993
Plan assets at fair
market value $ 7,554 $ 6,538 $ 6,719
Actuarial present value of
benefit obligations:
Accumulated benefits
based on current salary
levels, including vested
benefits of $6,823
$5,841 and $5,558 7,208 6,214 5,661
Additional benefits based
on estimated future salary levels 1,978 1,902 1,458
Projected benefit obligation 9,186 8,116 7,119
Projected benefit obligation
in excess of
plan assets (1,632) (1,578) (400)
Unrecognized prior service
costs 235 236 515
Unrecognized (loss) gain on
plan assets (479) 156 (710)
Unrecognized net transition
asset (671) (747) (823)
Accrued pension cost $(2,547) $(1,933) $(1,418)
In fiscal year 1991, the Company adopted a non-qualified
supplemental retirement plan for certain key employees. Benefits
provided under the plan are equal to 60% of the employee's final
average earnings, less amounts provided by the Company's defined
benefit pension plan and amounts available through Social Security.
Total annual benefits are limited to $120,000 for each participant in
the plan. Effective January 1, 1991 the Company adopted a deferred
compensation savings plan for certain key employees. Under this
arrangement, selected employees contribute a portion of their annual
compensation to the plan. The Company contributes an amount to each
participant's account by computing an investment return equal to
Moody's Average Seasoned Bond Rate plus 2%. Employees receive vested
amounts upon death, termination or retirement. Total benefit expense
recorded under these plans for fiscal years 1995, 1994 and 1993 was
$470,000, $358,000 and $233,000, respectively. Benefits payable
related to these plans and included in accrued payroll in the
accompanying financial statements were $1,872,000 and $1,238,000 at
November 3, 1995 and October 28, 1994, respectively. In connection
with this arrangement the Company is the beneficiary of life insurance
policies on the lives of certain key employees. The aggregate cash
surrender value of these policies, included in prepaid expenses, was
$2,763,000 and $2,211,000 at November 3, 1995 and October 28, 1994,
respectively. The total (income)expense recorded related to these
policies was approximately ($20,000), $6,000and $39,000 for fiscal years
1995, 1994 and 1993, respectively.
Effective for fiscal year 1994, the Company adopted Statement of
Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions." This statement focuses
principally on postretirement health care benefits and requires accrual
of the expected cost of providing those benefits over the service lives
of the employees. Adoption of this statement did not materially impact
the Company's consolidated financial statements.
NOTE 4 - INCOME TAXES:
The provision for taxes on income includes the following:
(in thousands)
1995 1994 1993
Current:
Federal $4,102 $3,844 $3,288
State 643 675 621
4,745 4,519 3,909
Deferred:
Federal (609) (657) (414)
State (96) (97) (62)
(705) (754) (476)
$4,040 $3,765 $3,433
The total tax provision differs from the amount computed by
applying the statutory federal income tax rate to income before income
taxes as follows:
(in thousands)
1995 1994 1993
Provision for federal
income taxes at
the applicable
statutory rate $3,614 $3,368 $3,063
Increase (decrease) in
provision resulting from :
State income taxes,
net of federal income
tax benefit 397 391 374
Other, net 29 6 (4)
$4,040 $3,765 $3,433
Deferred income taxes result from differences in the bases of
assets and liabilities for tax and accounting purposes.
10
Deferred tax assets (liabilities) are comprised of the following:
(in thousands)
1995 1994
Receivables allowance $ 167 $ 150
Inventory capitalization 218 192
Deferred compensation 1,092 934
Franchise tax 100 102
Vacation benefits 321 294
Pension and
health care benefits 1,676 1,201
Depreciation (54) (120)
Other (62)
$ 3,458 $ 2,753
No valuation allowance was provided against deferred tax assets
in the accompanying statements.
NOTE 5 - LINE OF CREDIT:
Under the terms of a revolving line of credit with Bank of
America, the Company may borrow up to $2,000,000 through April 30,
1997. At any time prior to May 1997, the Company may convert
borrowings, if any, into a three-year term loan with principal and
interest payable monthly commencing May 31, 1997. The interest rate is
at the bank's reference rate unless the Company elects an optional
interest rate. The borrowing agreement contains various covenants, the
more significant of which require the Company to maintain certain levels
of shareholders' equity and working capital. The Company was in compliance
with all provisions of the agreement during the year. There were no
borrowings under this line of credit during the year.
NOTE 6 - COMMITMENTS:
The Company leases certain transportation equipment under an
operating lease expiring in 1999. The terms of the lease provide for
annual renewal options, contingent rental payments based upon mileage
and adjustments of rental payments based on the Consumer Price Index.
Minimum rental payments were $272,000, $290,000 and $299,000 in fiscal
years 1995, 1994 and 1993, respectively. Contingent payments were
$95,000 for 1995 and $92,000 for fiscal years 1994 and 1993. Future
minimum lease payments are approximately $280,000 per year from 1996
through 1998, and $150,000 in 1999. The Company also leases certain
other properties which do not result in material commitments.
Significant capital projects are in progress and include the
construction of a food processing facility in North Carolina and
extensive additions to existing facilities located in Texas.
Cumulative capital expenditures through the end of fiscal year 1995 for
these projects totaled approximately $7 million. The balance to
complete these projects was approximately $3 million at November 3,
1995. Commitments under contracts related to these projects were
approximately $1.9 million at November 3, 1995.
Report of Independent Accountants
Price Waterhouse LLP
To the Board of Directors and Shareholders of Bridgford Foods
Corporation
In our opinion, the accompanying consolidated balance sheets and
the related consolidated statements of income, shareholders' equity and
cash flows present fairly, in all material respects, the financial
position of Bridgford Foods Corporation and its subsidiaries at
November 3, 1995 and October 28, 1994, and the results of their
operations and their cash flows for each of the three years in the
period ended November 3, 1995, in conformity with generally accepted
accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for the opinion expressed
above.
/s/Price Waterhouse
Costa Mesa, California
December 21, 1995
Back Cover
Directors
Allan L. Bridgford
Chairman
H. Wm. Bridgford
Paul A. Gilbert
Senior Vice President,
Smith Barney, Inc.
John W. McNevin
Vice President
Eastman/Office Depot,
Inc.
Steven H. Price
Property Management
Robert E. Schulze
Norman V. Wagner
II Retired (formerly
President, Signal Landmark
Properties, Inc.)
Paul R. Zippwald
Retired (formerly
Regional Vice President,
Bank of America)
Officers
Allan L. Bridgford
Chairman, Board of
Directors
Robert E. Schulze
President
H. Wm. Bridgford
Chairman, Executive
Committee
Salvatore F.
DeGeorge
Senior Vice President
Lawrence D.
English
Vice President
William L.
Bridgford
Secretary
Raymond F. Lancy
Treasurer
General Offices
Bridgford Foods
Corporation
1308 North Patt
Street
P.O. Box 3773
Anaheim,
California 92803
Phone (714) 526-5533
Branch Operations
Phoenix, Arizona
Tucson, Arizona
Fresno, California
Modesto, California
Oakland, California
Sacramento, California
Chicago, Illinois
Secaucus, New Jersey
Statesville, North Carolina
Dallas, Texas
Transfer Agent
and Registrar
Chemical Mellon
Shareholder Services
450 West 33rd Street
8th Floor
New York, NY 10001
P.O. Box 24935
Church Street Station
New York, NY 10249
Phone (800) 356-2017
Independent Accountants
Price Waterhouse
LLP
Costa Mesa,
California