Bridgford Foods Corporation
1308 North Patt Street
P.O. Box 3773
Anaheim, California 92803
Phone (714) 526-5533
www.bridgford.com
Major Operating Facilities
Chicago, Illinois
Dallas, Texas
Statesville, North Carolina
17 Battery Place, 8th Floor
New York, NY 10004
1-800-509-5586
Independent Accountants
Transfer Agent and Registrar
Continental Stock Transfer & Trust Company
Squar, Milner, Peterson, Miranda & Williamson, LLP
Newport Beach, California
Annual Report 2011
Notice of 2012 Annual Meeting and Proxy Statement
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Directors
Officers
Division Managers
Baron R. H. Bridgford
President, Bridgford Processing
Company of Illinois
Bridgford Foods of Illinois
Blaine K. Bridgford
President
Dallas- Superior Foods Division
Bruce H. Bridgford
Chairman & President,
Bridgford Foods of California
Anaheim- Deli Division
Joseph deAlcuaz
Vice President
Dallas- Frozen-Rite Division
Monty Griffith
Vice President
Bridgford Foods of North Carolina
Jeffrey D. Robinson
Bakery Manager
Anaheim- Bread Division
Retired (formerly President,
of the Executive Committee
Interstate Electronics Corporation)
Todd C. Andrews
Vice President and Controller,
Public Storage, Inc.
Allan L. Bridgford, Jr.
Consultant
(Formerly President of
Bridgford Foods of Illinois)
Bruce H. Bridgford
Vice President
William L. Bridgford
Chairman
Richard A. Foster
D. Gregory Scott
Managing Director,
Peak Holdings, LLC
John Simmons
President
Paul R. Zippwald
Retired
(formerly Regional Vice President,
Bank of America)
Allan L. Bridgford
Vice President, member of
the Executive Committee
Bruce H. Bridgford
Vice President
Hugh Wm. Bridgford
Chairman, Executive Committee
and Vice President
Michael Bridgford
Assistant Secretary
William L. Bridgford
Chairman, and member
Chris Cole
Vice President
Joe deAlcuaz
Vice President Manufacturing
Bob Delong
Vice President,
Information Technologies
Raymond F. Lancy
Executive Vice President,
Chief Financial Officer,
Treasurer, and member of
the Executive Committee
Cindy Matthews–Morales
Corporate Secretary
and Controller
John V. Simmons
President and member of
the Executive Committee
Daniel R. Yost
Senior Vice President
To Our Shareholders
2011 was a challenging year for Bridgford Foods Corporation. High costs for
grains, meats and petroleum products offset the Company’s achievements in
the areas of cost-cutting and new product development, resulting in
unprofitable results for the year. Sales during our 2011 fiscal year were
$118,263,000, an increase of 0.5% from sales of $117,655,000 in 2010.
The Company continued to eliminate unprofitable products and operations
during the year, and continued a re-organization of portions of its dry sausage
and meat snack distribution operations. The Company recorded a net loss of
$443,000 in 2011, equal to $.05 per share. A loss of $1,675,000 related to
an unsuccessful product line introduction hampered our financial results, as
did monetary penalties imposed by OSHA and reductions in the surrender
value of life insurance policies.
A business can only be as successful as the abilities and talents of the people
who make things happen, and it is with a great sense of loss that we report
the death of Sal DeGeorge in late December of 2011. Sal retired as Senior
Vice President in 2001 but continued to aid the Company as a consultant for
many years, and his contributions to the success of Bridgford Foods are
immeasurable. He will be greatly missed.
SALES AND MARKETING
Bridgford Monkey Bread, manufactured at our Superior Foods plant in Dallas
under the direction of Division President Blaine Bridgford, continues to be a
great success. During the year, we introduced several new formats designed
for the vending and convenience store markets. An improved cinnamon
topping is providing better flavor and consistency for our customers.
Refinements to our Chicago based distribution system for dry sausage
products continued during the year. The conversion of a major customer from
direct store delivery (DSD) to a warehouse distribution program should pay
dividends well into the future. Vice President Chris Cole has made great
strides in improving our position with many of the country’s major retailers,
including traditional chains, warehouse stores and “dollar” stores.
In our North Carolina plant, new shelf-stable bakery items introduced during
the year included Cinnamon Buns, Apple and Cherry Turnovers, Tortilla Wraps
and Whole-Wheat Snack Bread. Interest in these and other new line
extensions continues to grow, both for domestic customers and in the EU
and other overseas markets.
OPERATIONS
Commodity costs during 2011 far exceeded those experienced in 2010. The
Company’s 2011 expense for bakery flour, meat, gasoline and diesel fuel was
$4.01 million higher than in 2010, which had exceeded 2009 by $4 million,
resulting in a net increase in fiscal year 2011 of about $8 million over our
2009 costs.
The Company continued our emphasis on selling manufactured, rather than
purchased, items through our Chicago distribution channels, and we currently
produce 90% of the products sold in the United States and Canada. Our
unique beef jerky production system continued to supply 100% of the
Company’s jerky requirements during the year, and we doubled our
packaging capacity just after our fiscal year end. The Company manufactures
two flavors of Sweet Baby Ray’s Beef Jerky, and they gained wider acceptance
during the year. Under the direction of Baron R.H. Bridgford, President of
Bridgford Foods of Illinois, we introduced many new products during the year,
including a shelf-stable Chorizo, .28-ounce Snack Sticks, Pepperoni and
Cheese Sticks, and a bite-size Summer Sausage.
In the frozen food division, new products introduced during the year included
a unique Whole Wheat Honey Biscuit that is not only great tasting but satisfies
the requirements for improved nutrition in elementary and secondary school
feeding programs. Additionally, a delicious White Whole Wheat Cheesy Garlic
Breadstick is having great acceptance.
Under the direction of Plant Manager Monty Griffith, we continued to
develop our Shelf-Stable Sandwich division in North Carolina during 2011.
Our Vice President of Manufacturing, Joe deAlcuaz, has contributed to the
progress we have achieved this year in improving our production operations
in all of our facilities.
The Company was subjected to significant enforcement action by OSHA
during the fiscal year, despite what we consider an excellent compliance and
safety record. While we are contesting many of these citations and proposed
penalties, we have also taken advantage of the focus on this area to improve
our existing programs and organizational structure with regard to safety,
which will only benefit the Company going forward.
FINANCIAL MATTERS
Our working capital totaled $24,015,000 at October 28, 2011, $5,821,000
(19.5%) lower than at the beginning of the fiscal year and our working capital
ratio decreased to 2.8 to 1 at October 28, 2011, compared to 3.6 to 1 at
October 29, 2010. The decrease in working capital and working capital ratio
resulted from lower operating cash flows during fiscal year 2011 plus
investments in capital assets, share repurchases and cash dividend payments.
We repurchased 130,000 shares of the Company’s common stock in the
amount of $1,312,000 ($10.09 average price paid per share) during 2011.
Projected contributions totaling $2,003,000 were recorded as a current
liability related to our defined benefit pension plan at October 28, 2011 and
we contributed a total of $1,175,000 toward this plan during the 2011 fiscal
year. The defined benefit plan was frozen in the 3rd quarter of 2006 and
replaced with a 401(k) defined contribution plan. The Company has been
free of interest bearing debt for twenty-five consecutive years and we
maintain a line of credit with Wells Fargo Bank in the amount of $2,000,000
which expires March 1, 2013.
Shareholders’ equity totaled $24,838,000, a decrease of $11,362,000
(31.4%) compared to the end of the prior year. Actuarial losses related to our
defined benefit plans in the amount of $8,308,000 were the most significant
component of this change. This loss resulted from a decrease in the Citigroup
Pension Liability Index from a discount rate of 5.45% in fiscal year 2010 to
4.65% in fiscal year 2011. This rate is used to compute the present value of
our pension obligations. The fiscal 2011 net loss decreased shareholders’
equity by $443,000 and cash dividends of $932,000 were paid during the
2011 fiscal year. Approximately 241,000 shares remain available for
repurchase under the 2 million share repurchase plan previously authorized by
the Board of Directors. Shareholders’ equity per share was $2.68 at October
28, 2011 compared to $3.88 at October 29, 2010.
Management assessed the effectiveness of the Company’s internal control
over financial reporting for the fiscal year ended October 28, 2011. We believe
our control systems are effective. Management’s Report on Internal Controls
over Financial Reporting is included in the Form 10-K report. No significant
weaknesses in internal accounting control, to the extent identified, were
unresolved at the conclusion of the 2011 fiscal year.
ORGANIZATION
Allan Bridgford Sr. and Robert Schulze, both long-time directors and officers
of the Company, retired from the Board of Directors at our October 2011
meeting. John Simmons, our President, and Allan Bridgford Jr., retired
President of Bridgford Foods of Illinois and currently a consultant to the
Company’s Chicago division, were elected to succeed them. Allan Bridgford
Sr. was elected as a Vice President at our January 2012 meeting.
SUMMARY
We have experienced a two-year escalation in the costs of the key raw
materials we use in our business. Despite price increases and the reduction of
other costs affecting our business, the impact of these commodity costs on
our financial results cannot be denied. We have started to see some relief in
commodity costs as we begin the 2012 fiscal year, but there is always
uncertainty regarding the future, as many factors including weather and
global markets come into play. We feel that the Company is well-positioned
for a successful year in 2012. As always, our Company refuses to compromise
the quality of our products or the service we provide to our customers
regardless of the short-term challenges we may face, as we believe this is the
only viable strategy for long-term success.
On behalf of all of our directors and officers, we thank our shareholders,
customers and suppliers for their support during 2011 and look forward to
reporting better results in 2012.
Respectfully,
January 26, 2012
William L. Bridgford
Chairman
John V. Simmons
President
Raymond F. Lancy
Chief Financial Officer
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended October 28, 2011
Commission file number: 0-2396
BRIDGFORD FOODS CORPORATION
(Exact name of Registrant as specified in its charter)
California
(State of incorporation)
95-1778176
(I.R.S. Employer
Identification No.)
1308 North Patt Street
Anaheim, California 92801
(Address of principal executive offices)
(714) 526-5533
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: Common Stock, par value $1.00 per share, the NASDAQ Stock
Market LLC.
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes (cid:134) No ⌧
Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes (cid:134) No ⌧
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 ⌧ No (cid:134)
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files. Yes ⌧ No (cid:134)
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. ⌧
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in
Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer (cid:134)
Non-accelerated filer (cid:134) (Do not check if a smaller reporting company)
Accelerated filer (cid:134)
Smaller reporting company ⌧
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act. Yes (cid:134) No ⌧
The aggregate market value of voting stock held by non-affiliates of the registrant on April 15, 2011 was $19,310,000.
As of January 11, 2012, there were 9,191,747 shares of common stock outstanding.
Portions of the registrant’s Proxy Statement for the registrant’s Annual Meeting of Shareholders to be held March 21, 2012 are
incorporated by reference into Part III, Items 10-14 of this Annual Report on Form 10-K.
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INDEX TO FORM 10K
PART I
Item 1. Business
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Reserved
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 6. Selected Financial Data
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Item 8. Consolidated Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information
PART III
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accountant Fees and Services
PART IV
Item 15. Exhibits and Financial Statement Schedules
SIGNATURES
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PART I
Item 1. Business
This Annual Report on Form 10-K contains certain forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and Bridgford Foods Corporation intends that
such forward-looking statements be subject to the safe harbors created thereby. Readers are cautioned that such statements,
which may be identified by words including ‘‘anticipates,’’ ‘‘believes,’’ ‘‘intends,’’ ‘‘estimates,’’ ‘‘expects,’’ and similar
expressions, are only predictions or estimations and are subject to known and unknown risks and uncertainties. These forward-
looking statements include, but are not limited to, statements regarding the following: general economic and business
conditions; the impact of competitive product and pricing; success of operating initiatives; development and operating costs;
advertising and promotional efforts; adverse publicity; acceptance of new product offerings; consumer trial and frequency;
changes in business strategy or development plans; availability, terms and deployment of capital; availability of qualified
personnel; commodity, labor, and employee benefit costs; changes in, or failure to comply with, government regulations;
weather conditions; construction schedules; and other factors referenced in this Report.
The forward-looking statements included herein are based on current expectations that involve a number of risks and
uncertainties. These forward-looking statements are based on assumptions regarding our business, which involve judgments with
respect to, among other things, future economic and competitive conditions, and future business decisions, all of which are
difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the assumptions
underlying the forward-looking statements are reasonable, actual results may differ materially from those set forth in the
forward-looking statements. In light of the significant uncertainties inherent in the forward-looking information included herein,
the inclusion of such information should not be regarded as representation by us or any other person that the objectives or plans
of our company will be achieved. The forward-looking statements contained herein speak as of the date of this Report and we
undertake no obligation to update such statements after the date hereof.
Background of Business
Bridgford Foods Corporation (collectively with its subsidiaries, “Bridgford”, the “Company”, “we”, “our”), a California
corporation 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. For more than the past five
years we and our 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. Bridgford Foods Corporation has not been
involved in any bankruptcy, receivership, or similar proceedings since inception nor have we 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 our
assets have been acquired in the ordinary course of business. We have had no significant change in the type of products produced
or distributed, nor in the markets we serve. Independent distributors now serve approximately 3,200 stores of all types in areas
impractical to serve by our Company-owned vehicles.
Description of Business
Bridgford Foods Corporation operates in two business segments - the processing and distribution of frozen products and
the processing and distribution of refrigerated and snack food products. For information regarding the separate financial
performance of the business segments refer to Note 7 of the Notes to the Consolidated Financial Statements included in this
Annual Report on Form 10-K.
The following table shows sales, as a percentage of consolidated sales, for each of these segments for each of the last two
fiscal years:
Frozen Food Products
Refrigerated and Snack Food Products
2011
2010
46%
54%
100%
46%
54%
100%
We manufacture and distribute an extensive line of food products, including biscuits, bread dough items, roll dough items,
dry sausage products, beef jerky, and a variety of sandwiches and sliced luncheon meats. The products we purchase for resale
include a variety of cheeses, salads, party dips, Mexican foods, nuts, and other delicatessen type food products.
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Products manufactured, processed or packaged by Bridgford
Products manufactured or processed by third parties for distribution
2011
2010
90%
10%
100%
86%
14%
100%
Although we have recently introduced several new products, most of these products have not contributed significantly to
our revenue growth for the fiscal year. Our sales are not subject to material seasonal variations. Historically we have been able to
respond quickly to the receipt of orders and, accordingly, do not maintain a significant sales backlog. Bridgford Foods
Corporation and its industry generally have no unusual demands or restrictions on working capital items. During the last fiscal
year we did not enter into any new markets or any significant contractual or other material relationships.
Availability of SEC Filings and Code of Conduct on Internet Website
We maintain an Internet website at http://www.bridgford.com. Available on this website, free of charge, are annual
reports on Form 10-K, quarterly reports on Form 10-Q, and reports filed under Section 16 of the Securities Exchange Act of
1934 which we file with the Securities and Exchange Commission. Our Code of Conduct is also available on the website.
Major Product Classes
Frozen Food Products
Our frozen food division serves both food service and retail customers. Approximately 150 unique frozen food products
are sold through wholesalers, cooperatives, and distributors to approximately 22,000 retail outlets and 21,000 restaurants and
institutions.
Frozen Food Products – Food Service Customers
The food service industry is composed of establishments that serve food outside the home and includes restaurants, the
food operations of health care providers, schools, hotels, resorts, corporations, and other traditional and non-traditional food
service outlets. Growth in this industry has been driven by the increase in away-from-home meal preparation, which has
accompanied the expanding number of both dual income and single-parent households. Another trend within the food service
industry is the growth in the number of non-traditional food service outlets such as convenience stores, retail stores, and
supermarkets. These non-traditional locations often lack extensive cooking, storage, or preparation facilities resulting in a need
for pre-cooked and prepared foods similar to those we provide. The expansion in the food service industry has also been
accompanied by the continued consolidation and growth of broadline and specialty food service distributors, many of which are
long-standing customers.
We supply our food service customers generally through distributors that take title to the product and resell it. Among our
customers are many of the country’s largest broadline and specialty food service distributors. These and other large end
purchasers occasionally go through extensive qualification procedures and their manufacturing capabilities are subjected to
thorough review by the end purchasers prior to our approval as a vendor. Large end purchasers typically select suppliers that can
consistently meet increased volume requirements on a national basis during peak promotional periods. We believe that
our manufacturing flexibility, national presence, and long-standing customer relationships should allow us to compete effectively
with other manufacturers seeking to provide similar products to our current large food service end purchasers, although no
assurances can be given.
Frozen Food Products – Retail Customers
The majority of our existing and targeted retail customers are involved in the resale of branded and private label packaged
foods. The same trends which have contributed to the increase in away-from-home meal preparation have also fueled the growth
in easy to prepare, microwaveable frozen and refrigerated convenience foods. Among the fastest growing segments is the frozen
and refrigerated hand-held foods market. This growth has been driven by improved product quality and variety and the
increasing need for inexpensive and healthy food items that require minimal preparation. Despite rapid growth, many categories
of frozen and refrigerated hand-held foods have achieved minimal household penetration. We believe we have been successful
in establishing and maintaining supply relationships with certain selected leading retailers in this market.
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Frozen Food Products – Sales and Marketing
Our frozen food business covers the United States and Canada. In addition to regional sales managers, we maintain a
network of independent food service and retail brokers covering most of the states as well as Canada. Brokers are compensated
on a commission basis. We believe that our broker relationships, in close cooperation with the regional sales managers, are a
valuable asset providing significant new product and customer opportunities. The regional sales managers perform several
significant functions for us, including identifying and developing new business opportunities and providing customer service and
support to our distributors and end purchasers through the effective use of our broker network.
Our annual advertising expenditures are directed towards retail and institutional customers. These customers participate in
various special promotional and marketing programs and direct advertising allowances we sponsor. We also invest in general
consumer advertising in various newspapers and periodicals including free standing inserts and coupons to advertise in major
markets. We direct advertising toward food service customers with campaigns in major industry publications and through our
participation in trade shows throughout the United States.
Refrigerated and Snack Food Products
Our refrigerated and snack food products division sells approximately 200 different items through customer owned
distribution centers and a direct store delivery network serving approximately 18,000 supermarkets, mass merchandise and
convenience retail stores located in 49 states and Canada.
Refrigerated and Snack Food Products — Customers
Our customers are comprised of large retail chains and smaller “independent” operators. This part of our business is
highly competitive. Proper placement of our product lines is critical to selling success since most items could be considered
“impulse” items which are often consumed shortly after purchase. Our ability to sell successfully to this distribution channel
depends on aggressive marketing and maintaining relationships with key buyers.
Refrigerated and Snack Food Products — Sales and Marketing
Our direct store delivery network consists of two separate divisions, refrigerated and non-refrigerated snack food products.
Refrigerated snack food products are distributed through eight different regions located in the southwest, primarily operating in
California, Arizona, and Nevada. Non-refrigerated snack food products are distributed across the United States and Canada. The
regional sales managers perform several significant functions for us including identifying and developing new business
opportunities and providing customer service and support to our customers. We also utilize the services of brokers, where
appropriate, to support efficient product distribution and customer satisfaction. Independent distributors now serve
approximately 3,200 customers of all types in areas impractical to serve by our Company-owned vehicles.
Product Planning and Research and Development
We continually monitor the consumer acceptance of each product within our extensive product line. Individual products
are regularly added to and deleted from our product line. Historically, the addition or deletion of any individual product has not
had a material effect on our operations in the current fiscal year. We believe that a key factor in the success of our products is our
system of carefully targeted research and testing of our products to ensure high quality and that each product matches an
identified market opportunity. The emphasis in new product introductions in the past several years has been in single service
items. We are constantly searching to develop new products to complement our existing product line and improved processing
techniques and formulas for our existing product line. We utilize an in-house test kitchen and consultants to research and
experiment with unique food preparation methods, improve quality control and analyze new ingredient mixtures.
During fiscal year 2011, we rolled out a unique product line created to meet specific customer requirements. After a
successful initial start-up period, the customer determined the product did not meet their specific requirements and we agreed to
accept the return of these products. Upon inspection we concluded the product had no ready market value and we donated the
product to a local food bank. Included in cost of products sold is a loss of $1,675,000 related to this donation.
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Competition
Our products are sold under highly competitive conditions. All food products can be considered competitive with other
food products, but we consider our principal competitors to include national, regional and local producers and distributors of
refrigerated, frozen and snack food products. Several of our competitors include large companies with substantially greater
financial and marketing resources than ours. Existing competitors may broaden their product lines and potential competitors may
enter or increase their focus on our market, resulting in greater competition for us. We believe that our products compete
favorably with those of our competitors. Such competitors’ products compete against ours for retail shelf space, institutional
distribution and customer preference.
Effect of Government Regulations
Our operations are subject to extensive inspection and regulation by the United States Department of Agriculture (the
“USDA”), the Food and Drug Administration (the “FDA”), and by other federal, state, and local authorities regarding the
processing, packaging, storage, transportation, distribution, and labeling of products that we manufacture, produce and
process. Our processing facilities and products are subject to continuous inspection by the USDA and/or other federal, state, and
local authorities. The USDA has issued strict regulations concerning the control of listeria monocytogenes in ready-to-eat meat
and poultry products and contamination by food borne pathogens such as E. coli and salmonella, and implemented a system of
regulation known as the Hazard Analysis Critical Control Points (“HACCP”) program. The HACCP program requires all meat
and poultry processing plants to develop and implement sanitary operating procedures and other program requirements. We
believe that we are currently in compliance with governmental laws and regulations and that we maintain the necessary permits
and licenses relating to our meat operations.
The U.S. Occupational Safety and Health Administration ("OSHA") oversees safety compliance and establishes certain
employer responsibilities to help "assure safe and healthful working conditions" and keep the workplace free of recognized
hazards or practices likely to cause death or series injury. Failure to comply with regulations of OSHA could adversely affect
our results of operation. The Company was subjected to significant enforcement actions by OSHA during fiscal year 2011,
despite what we consider an excellent compliance and safety record. We have accrued approximately $415,000 in estimated non-
tax deductible penalties for these actions. While we are contesting many of these citations and proposed penalties, we have also
taken advantage of the focus on this area to improve our existing programs and organizational structure with regard to safety,
which will benefit the Company’s ongoing safety programs.
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 our business.
Importance of Key Customers
Sales to Dollar General® comprised 9.0% revenues for fiscal year 2011. Accounts receivable from Dollar General® was
20.2% of total accounts receivable at October 28, 2011. Sales to Wal-Mart® comprised 10.1% of revenues in fiscal 2010 and
9.4% of accounts receivable was due from Wal-Mart® at October 29, 2010.
Sources and Availability of Raw Materials
We purchase large quantities of pork, beef, and flour. These ingredients are generally available from a number of
different suppliers although the availability of these ingredients is subject to seasonal variation. We build ingredient inventories
to take advantage of downward trends in seasonal prices or anticipated supply limitations.
Employees
We had 517 employees at October 28, 2011, approximately 48% of whose employment relationship is governed by
collective bargaining agreements. These agreements currently expire or expired (agreements covering 126 union employees)
between February 2011 and March 2016. We believe that our relationship with all of our employees is favorable and contracts
will be settled favorably.
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Executive Officers of the Registrant
The names, ages, and positions of all our executive officers as of January 1, 2012 are listed below. Messrs. Hugh Wm.
Bridgford and Allan L. Bridgford are brothers. William L. Bridgford is the son of Hugh Wm. Bridgford and the nephew of Allan
L. Bridgford. Officers are normally appointed annually by the board of directors at their meeting immediately following the
annual meeting of shareholders. Three executive officers are full-time employees of our company, Allan L. Bridgford works
60% of full-time effective March 2005, and Hugh Wm Bridgford works 80% of full time effective January 2011.
Name
Allan L. Bridgford
Hugh Wm. Bridgford
William L. Bridgford
John V. Simmons
Raymond F. Lancy
Item 1A. Risk Factors
Age
76
80
57
56
58
Position(s) with our company
Senior Chairman and member of the Executive Committee
Vice President and Chairman of the Executive Committee
Chairman and member of the Executive Committee
President and member of the Executive Committee
Chief Financial Officer, Executive Vice President, Treasurer and member of the
Executive Committee
In addition to the other matters set forth in this Annual Report on Form 10-K, the continuing operations and the price of
our common stock are subject to the following risks, each of which could materially adversely affect our business, financial
condition, and results of operations. The risks described below are only the risks that we currently believe are material to our
business. However, additional risks not presently known, or risks that are currently believed to be immaterial, may also impair
our business operations.
We are subject to general risks in the food industry, including risks relating to changes in consumer preference and
economic conditions, any of which risks, if realized, could negatively impact our operating results and financial position.
The food industry, and the markets within the food industry in which we compete, are subject to various risks, including
the following: evolving consumer preferences, nutritional and health-related concerns, federal, state and local food inspection
and processing controls, consumer product liability claims, risks of product tampering, and the availability and expense of
liability insurance. The meat and poultry industries are subject to scrutiny due to the association of meat and poultry products
with recent outbreaks of illness, and on rare occasions even death, caused by food borne pathogens. Product recalls are
sometimes required in the food industry to withdraw contaminated or mislabeled products from the market. Additionally, the
failure to identify and react appropriately to changes in consumer trends, demands and preferences could lead to, among other
things, reduced demand and price reduction for our products. Further, we may be adversely affected by changes in domestic or
foreign economic conditions, including inflation or deflation, interest rates, availability of capital markets, consumer spending
rates, and energy availability and costs (including fuel surcharges). These and other general risks related to the food industry, if
realized by us, could have a significant adverse effect on demand for our products, as well as the costs and availability of raw
materials, ingredients and packaging materials, thereby negatively affecting our operating results and financial position.
Fluctuations in the prices that we pay for raw materials could negatively impact our financial results.
We purchase large quantities of commodity pork, beef, and flour. Historically, market prices for products we process have
fluctuated in response to a number of factors, including changes in the United States government farm support programs,
changes in international agricultural and trading policies, weather, and other conditions during the growing and harvesting
seasons.
Our operating results are heavily dependent upon the prices paid for raw materials. The marketing of our 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. While fluctuations in significant cost structure components, such as
ingredient commodities and fuel prices, have had a significant impact on profitability over the last three years, the impact of
general price inflation on our financial position and results of operations has not been significant. Future volatility of general
price inflation or deflation and raw material cost and availability could adversely affect our financial results.
7
Clean
We are subject to extensive government regulations and a failure to comply with such regulations could negatively
impact our financial results.
Our operations are subject to extensive inspection and regulation by the United States Department of Agriculture (the
“USDA”), the Food and Drug Administration (the “FDA”), and by other federal, state, and local authorities regarding the
processing, packaging, storage, transportation, distribution, and labeling of products that are manufactured, produced and
processed by us. Our processing facilities and products are subject to continuous inspection by the USDA and/or other federal,
state, and local authorities. The USDA has issued strict policies concerning the control of listeria monocytogenes in ready-to-eat
meat and poultry products and contamination by food borne pathogens such as E. coli and salmonella, and established a system
of regulation known as the Hazard Analysis Critical Control Points (“HACCP”) program. The HACCP program requires all meat
and poultry processing plants to develop and implement sanitary operating procedures and other program requirements. We
believe that we are currently in compliance with governmental laws and regulations and that we maintain necessary permits and
licenses relating to our meat operations.
A failure to obtain or a loss of necessary permits and licenses could delay or prevent us from meeting current product
demand and could adversely affect our operating performance. Furthermore, we are routinely subject to new or modified laws,
regulations and accounting standards. If found to be out of compliance with applicable laws and regulations in these or other
areas, we could be subject to civil remedies, including fines, injunctions, recalls, or asset seizures, as well as potential criminal
sanctions, any of which could have a significant adverse effect on our financial results.
We depend on our key management, the loss of which could negatively impact our operations.
Our executive officers and certain other key employees have been primarily responsible for the development and
expansion of our business, and the loss of the services of one or more of these individuals could adversely affect us. Our success
will be dependent in part upon our continued ability to recruit, motivate, and retain qualified personnel. We can not assure that
we will be successful in this regard. We have no employment or non-competition agreements with key personnel.
We depend on our major customers and any loss of such customers could have a negative impact on our
profitability.
We could suffer significant reductions in revenues and operating income if we lost one or more of our largest customers,
including Dollar General®, which accounted for 20.2% of accounts receivable in fiscal year 2011. Many of our customers, such
as supermarkets, warehouse clubs, and food distributors have consolidated in recent years. Such consolidation has produced
large, sophisticated customers with increased buying power who are more capable of operating with reduced inventories while
demanding lower pricing and increased promotional programs. These customers also may use their shelf space for their own
private label products. Failure to respond to these trends could reduce our volume and cause us to lower prices or increase
promotional spending for our product lines which could adversely affect our profitability.
With more than 80% concentration of beneficial ownership of our stock held by the Bridgford family, there are
risks that they can exert significant influence or control over our corporate matters.
Members of the Bridgford family beneficially own, in the aggregate, approximately 81% of our outstanding stock. In
addition, three members of the Bridgford family serve on the Board of Directors. As a result, members of the Bridgford family
have the ability to exert substantial influence or actual control over our management and affairs and over substantially all matters
requiring action by our shareholders, including amendments to by-laws, election and removal of directors, any proposed merger,
consolidation or sale of all or substantially all of our assets and other corporate transactions. This concentration of ownership
may also delay or prevent a change in control otherwise favored by our other shareholders and could depress our stock price.
Additionally, as a result of the Bridgford family’s significant ownership of the outstanding voting stock, we have relied on the
“controlled company” exemption from certain corporate governance requirements of the NASDAQ stock market. Therefore, we
have elected not to implement the rule that provides for a nominating committee to identify and recommend nominees to the
Board of Directors and have instead elected to have the full Board of Directors perform such function. Additionally, pursuant to
this exemption, our compensation committee, which is made up of independent directors, does not have sole authority to
determine the compensation of our executive officers, including our Chairman of the Board.
8
Clean
Item 1B. Unresolved Staff Comments
Not applicable.
Item 2. Properties
We own the following properties:
Property Location
Anaheim, California ***
Modesto, California **
Dallas, Texas *
Dallas, Texas *
Dallas, Texas *
Dallas, Texas *
Statesville, North Carolina *
Chicago, Illinois **
Building
Square
Footage
Acreage
100,000
0
94,000
30,000
16,000
3,200
42,000
156,000
5.0
0.3
4.0
2.0
1.0
1.5
8.0
1.5
* - property used by Frozen Food Products Segment
** - property used by Refrigerated and Snack Food Segment
***- property used by both Frozen Food Products and Refrigerated and Snack Food Segments
We generally fully utilize the foregoing properties for processing, warehousing, distributing and administrative
purposes. The Company also leases warehouse and/or office facilities throughout the United States and Canada through month-
to-month rental agreements. We believe that our properties are generally adequate to satisfy our foreseeable needs. Additional
properties may be acquired and/or plants expanded if favorable opportunities and conditions arise.
Item 3. Legal Proceedings
No material legal proceedings were pending against us at October 28, 2011 or as of the date of filing of this Annual
Report on Form 10-K. We are likely to be subject to claims arising from time to time in the ordinary course of our business. In
certain of such actions, plaintiffs may request punitive or other damages that may not be covered by insurance and, accordingly,
no assurance can be given with respect to the ultimate outcome of any such possible future claims or litigation or their effect on
us. Any adverse litigation trends and outcomes could significantly and negatively affect our financial results.
Item 4. Reserved
9
Clean
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Common Stock and Dividend Data
Our common stock is traded in the national over-the-counter market and is authorized for quotation on the Nasdaq Global
Market under the symbol “BRID”. The following table reflects the high and low closing sale prices reported by Nasdaq as well
as cash dividends paid for each of the last eight fiscal quarters.
Fiscal Year 2011
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Fiscal Year 2010
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Low
Cash
Dividends
Paid
14.25 $
12.38 $
10.81 $
12.15 $
11.37 $
10.76 $
6.84 $
8.90 $
0.10
0.00
0.00
0.00
Low
Cash
Dividends
Paid
11.41 $
13.02 $
16.84 $
15.63 $
7.27 $
9.77 $
11.48 $
11.54 $
0.10
0.00
0.00
0.00
High
$
$
$
$
High
$
$
$
$
On January 11, 2012, the closing sale price for our common stock on the Nasdaq Global Market was $10.00 per share. As
of January 11, 2012, there were 274 shareholders of record in our common stock.
The payment of any future dividends will be at the discretion of our Board of Directors and will depend upon future
earnings, financial requirements, and other factors.
Unregistered Sales of Equity Securities
During the period covered by this Report we did not sell or issue any equity securities that were not registered under the
Securities Act of 1933, as amended.
10
Clean
Repurchases of Equity Securities by the Issuer
During fiscal year 2011, we repurchased an aggregate of 129,900 shares of our common stock for $1,312,000 pursuant to
our repurchase plan previously authorized by the Board of Directors. The following table provides information regarding our
repurchases of common stock in each of the four periods comprising the fourth quarter of fiscal year 2011.
Total Number of
Shares
Purchased
Average Price Paid
Per Share
Total Number of
Shares Purchased
As Part of Publicly
Announced Plans
or
Programs (2)
Maximum Number of
Shares that May Yet
Be Purchased
Under the Plans
or
Programs (2)
28,826 $
11.41
28,826
252,127
6,315 $
10.15
6,315
245,812
4,008 $
561 $
39,710 $
9.68
9.66
11.01
4,008
241,804
561
39,710
241,243
Period (1)
July 9, 2011 - August
5, 2011 (4 weeks)
August 6, 2011 -
September 2,
2011 (4 weeks)
September 3, 2011 -
September 30,
2011 (4 weeks)
October 1, 2011 -
October 28, 2011 (4
weeks)
Total
(1)
The periods shown are our fiscal periods during the sixteen-week quarter ended October 28, 2011.
(2)
All repurchases reflected in the foregoing table were made on the open market. Our stock repurchase program was
approved by the Board of Directors in November 1999 (1,500,000 shares authorized, disclosed in a Form 10-K filed on
January 26, 2000) and was expanded in June 2005 (500,000 additional shares authorized, disclosed in a press release and
Form 8-K filed on June 17, 2005). Under the stock repurchase program, we are authorized, at the discretion of
management and the Board of Directors, to purchase up to an aggregate of 2,000,000 shares of our common stock on the
open market. Our Stock Purchase Plan (“Purchase Plan”) is administered by Citigroup Global Markets Inc. (“CGM”) for
purchase of shares of common stock (“Stock”) issued by us in compliance with the requirements of Rule 10b5-1 under
the Securities Exchange Act of 1934 (“Exchange Act”). Commencing on December 12, 2011 and continuing through
and including October 13, 2012, CGM shall act as our exclusive agent to purchase Stock under the Purchase Plan. This
Purchase Plan supplements any purchases of stock by us “outside” of the Purchase Plan, which may occur from time to
time, in open market transactions pursuant to Rule 10b-18 of the Exchange Act. The daily purchase quantity is defined as
a number of shares up to, but not to exceed, each day’s applicable Rule 10b-18 maximum volume limit (i.e. 25% of the
prior four calendar weeks’ average daily trading volume); however, once per week a block of stock may be purchased
that exceeds the Rule 10b-18 average daily trading volume condition, provided that no other Purchase Plan purchases are
made on any day on which such a block is purchased. As of October 28, 2011, the total maximum number of shares that
may be purchased under the Purchase Plan is 241,243 at a purchase price not to exceed $12.00 per share for a total
maximum aggregate price (exclusive of commission) of $2,894,916.
Item 6. Selected Financial Data
Not applicable to smaller reporting company.
11
Clean
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
For a complete understanding, this Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with the Consolidated Financial Statements and Notes to the Consolidated Financial
Statements contained in this Report.
Certain statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and
elsewhere in this Report constitute “forward-looking statements” within the meaning of the Securities Act of 1933 and the
Securities Exchange Act of 1934. Such forward-looking statements involve known and unknown risks, uncertainties, and other
factors which may cause the actual results, performance or achievements of Bridgford Foods Corporation to be materially
different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the following: general economic and business conditions; the impact of competitive products and
pricing; success of operating initiatives; development and operating costs; advertising and promotional efforts; adverse publicity;
acceptance of new product offerings; consumer trial and frequency; changes in business strategy or development plans;
availability, terms and deployment of capital; availability of qualified personnel; commodity, labor, and employee benefit costs;
changes in, or failure to comply with, government regulations; weather conditions; construction schedules; and other factors
referenced in this Report.
Results of Operations (in thousands except percentages)
Fiscal Year Ended October 28, 2011 (52 weeks) Compared to Fiscal Year Ended October 29, 2010 (52 weeks)
Net Sales-Consolidated
Net sales in fiscal 2011 increased $608 (0.5%) when compared to the prior year. The changes in net sales were comprised
as follows:
Impact on Net Sales - Consolidated
Selling price per pound
Unit volume in pounds
Returns activity
Promotional activity
Increase (decrease) in net sales
Net Sales-Frozen Food Products Segment
4.2% $
-3.5%
-0.3%
0.1%
0.5% $
5,499
(4,490)
(431)
30
608
Net sales in the Frozen Food Products segment in fiscal 2011 increased $665 (1.2%) compared to the prior year. The
changes in net sales were comprised as follows:
Impact on Net Sales - Frozen Food Products Segment
Selling price per pound
Unit volume in pounds
Returns activity
Promotional activity
Increase (decrease) in net sales
Net Sales-Refrigerated and Snack Food Products Segment
4.0% $
-3.2%
-0.1%
0.5%
1.2% $
2,418
(1,916)
(35)
198
665
Net sales, excluding intersegment sales, in the Refrigerated and Snack Food Products segment in fiscal 2011 decreased
$57 (0.1%) compared to the prior year. The changes in net sales were comprised as follows:
Impact on Net Sales - Refrigerated and Snack Food Products Segment
Selling price per pound
Unit volume
Returns activity
Promotional activity
Increase (decrease) in net sales
4.4% $
-3.7%
-0.6%
-0.2%
-0.1% $
3,081
(2,574)
(396)
(168)
(57)
12
Clean
Cost of Products Sold and Gross Margin-Consolidated
Cost of products sold in fiscal 2011 increased $10,173 (14.4%) compared to the prior year. Higher meat and flour
commodities costs of $4,187 were the primary contributor to this increase. We also incurred a significant product loss in the
amount of $1,675 as well as higher production labor of $648. Lower overall production volumes increased unit overhead and
unfavorable product mix changes also increased cost of sales compared to the prior year. The gross margin decreased to 31.7% in
fiscal year 2011 from 40.0% in fiscal year 2010. In addition to the factors previously noted, this margin decline resulted from the
Company’s shift to lower margin, plant to customer warehouse direct shipments, rather than using our direct store delivery
system.
Cost of Products Sold and Gross Margin–Frozen Food Products Segment
Cost of products sold in the Frozen Food Products segment in fiscal 2011 increased $1,668 (5.3%) compared to the prior
year. Higher flour commodity costs in fiscal 2011 were the primary contributing factor causing this increase. The gross margin
in the Frozen Food Products segment decreased from 41.3% in fiscal 2010 to 39.0% in fiscal 2011. The cost of purchased flour
increased approximately $1,219 in fiscal 2011 compared to the prior year.
Cost of Products Sold and Gross Margin–Refrigerated and Snack Food Products Segment
Cost of products sold in the Refrigerated and Snack Food Products segment in fiscal 2011 increased $8,371 (20.9%)
compared to the prior year. The cost of major meat commodities increased approximately $2,968 in fiscal 2011 compared to the
prior year. Production labor also increased $551 compared to the prior year. The gross margin in the Refrigerated and Snack
Food Products segment decreased from 38.9% in fiscal 2010 to 25.5% in fiscal 2011. During fiscal 2011, we rolled out a unique
product line created to meet specific customer requirements. After a successful initial start-up period the customer determined
the product did not meet their specific requirements and the Company agreed to accept the return of these products. Upon
inspection, we concluded that the product had no ready market and we donated the product to a local food bank. Included in cost
of products sold is a loss of $1,675 related to this donation
Selling, General and Administrative Expenses-Consolidated
Selling, general and administrative expenses in fiscal 2011 decreased $2,930 (7.0%) when compared to the prior
year. The decrease in this category did not directly correspond to the change in sales.
The table below summarizes the primary expense variances in this category:
52 Weeks Ended
Expense/Loss
Wages and bonus
Benefits-healthcare
Penalties
Bad debts
Depreciation
Other
Total
October 28,
2011
14,222
2,195
531
126
292
21,273
38,639
October 29,
2010
16,483
2,874
40
(351)
538
21,985
41,569
Increase
(Decrease)
(2,261)
(679)
491
477
(246)
(712)
(2,930)
Average employee headcount declined in the 2011 fiscal year compared to the prior year which decreased wages. Lower
profitability levels decreased bonus payments to employees. The Company’s self-insured healthcare benefit expense was lower
due to favorable experience trends. The Company incurred significant OSHA of approximately $415 penalties during fiscal
2011. The Company released a significant portion of the allowance for doubtful accounts during the fourth quarter of fiscal 2010
due to favorable trends in the accounts receivable aging. In fiscal year 2011, the Company incurred a significant loss due to the
bankruptcy of a customer in the amount of $69. Depreciation has declined in recent years due to a portion of the Company's
assets becoming fully depreciated during fiscal 2011.
13
Clean
Selling, General and Administrative Expenses-Frozen Food Products Segment
Selling, general and administrative expenses in the Frozen Food Products segment in fiscal 2011 increased $305 (1.8%)
compared to the prior year. Increases in this category were caused by increased profit sharing expenses and promotional costs as
a result of higher product mix profitability. A reserve for OSHA penalties was recorded during fiscal 2011. In addition, a
significant portion of the bad debt reserve was released in fiscal 2010.
Selling, General and Administrative Expenses-Refrigerated and Snack Food Products Segment
Selling, general and administrative expenses in the Refrigerated and Snack Food segment in fiscal 2011 decreased $3,225
(13.1%) compared to the prior year. The Company continued to expand its warehouse business during fiscal 2011 which
resulted in a reduction in direct selling expenses including labor commissions. Improved experience in healthcare and workers’
compensation claims resulted in lower cost in this category.
Income Taxes
The effective income tax rate was 60.2% and 21.8% in fiscal years 2011 and 2010, respectively. In fiscal year 2011, the
effective income tax rate differed from the applicable mixed statutory rate of approximately 39.6% primarily due to recording a
full valuation allowance of $11,476 (refer to Note 4 of Notes to the Consolidated Financial Statements) on our deferred tax
assets. The 2011 benefit on taxes on income of $669 consists of minimum federal and state income taxes. In fiscal year 2010,
the effective income tax rate differed from the applicable mixed statutory rate of approximately 39.6% primarily due to recording
a full valuation allowance on our deferred tax assets of $8,049 (refer to Note 4 of Notes to the Consolidated Financial
Statements). The 2010 provision for taxes on income of $1,204 consists of minimum federal and state income taxes.
Liquidity and Capital Resources (in thousands except share amounts)
Our need for operations growth, capital expenses and share repurchases are expected to be met with cash flows provided
by operating activities. We funded additions to property, plant and equipment in the amount of $1,852, share repurchases of
$1,312 and cash dividends of $932. For fiscal year 2010, net cash provided by operating activities was $4,714. We funded
additions to property, plant and equipment in the amount of $1,769, share repurchases of $277 and cash dividends of $933 from
cash balances. As a result our available cash balance decreased by $6,362 during the 2011 fiscal year.
Cash flows from operating activities:
Net (loss) income
Adjustments to reconcile net income to net cash provided by (used in) operating
$
(443) $
4,319
2011
2010
activities:
Depreciation
Provision (recovery) for losses on accounts receivable
Gain on sale of property, plant and equipment
Deferred income taxes, net
Tax valuation allowance
Changes in operating working capital
Net cash (used) provided by operating activities
For fiscal year 2011, net cash used by operating activities was $2,320.
Significant changes in operating working capital are as follows:
1,802
126
(15)
(3,427)
3,427
(3,790)
(2,320) $
2,168
(351)
(31)
395
(395)
(1,391)
4,714
$
2011 – Operating cash flows decreased primarily due to net loss of $443 and significant increases in accounts receivable
of $2,219. Operating cash flows also decreased due to an increase of inventories and other non-current assets. An increase in
accounts payable of $882 as well as non-cash depreciation expense of $1,802 partially offset the cash flow decreases during
2011. During the 2011 fiscal year we funded $1,175 toward our defined benefit pension plan.
14
Clean
2010 – Operating cash flows increased primarily due to net income of $4,319 and a decrease in accounts receivable of
$2,460. Operating cash flow was increased by a reduction in accounts receivable, a decrease in prepaids and an increase in
accrued payroll, advertising and other expenses. An increase in inventory, a decrease in refundable income taxes, and a decrease
in the current portion of non-current liabilities partially offset the cash flow increases during 2010. During the 2010 fiscal year
we funded $1,943 toward our defined benefit pension plan.
Cash used in investing activities:
Proceeds from sale of property, plant and equipment
Proceeds from sale of equity securities
Additions to property, plant and equipment
Net cash used in investing activities
2011
2010
54 $
-
(1,852)
(1,798) $
40
-
(1,769)
(1,729)
$
$
Expenditures for property, plant and equipment include the acquisition of new equipment, upgrading of facilities to
maintain operating efficiency and investments in cost effective technologies to lower costs. In general, we capitalize the cost of
additions and improvements and expense the cost for repairs and maintenance. The Company may also capitalize costs related to
improvements that extend the life, increase the capacity, or improve the efficiency of existing machinery and
equipment. Specifically, capitalization of upgrades of facilities to maintain operating efficiency include acquisitions of
machinery and equipment used on packaging lines and refrigeration equipment used to process food products.
The table below highlights the additions to property, plant and equipment for the fifty-two weeks ended:
Temperature control
Processing equipment
Packaging lines
Office and building improvements
Delivery vehicles
Computer software and hardware
Quality control
Projects in process
Additions to property, plant and equipment
Cash used in financing activities:
Shares repurchased
Dividends Paid
Net cash used in financing activities
October 28,
2011
October 29,
2010
905 $
508
284
137
83
14
5
(84)
1,852 $
76
998
65
62
125
150
75
218
1,769
2011
2010
(1,312) $
(932)
(2,244) $
(277)
(933)
(1,210)
$
$
$
$
During fiscal year 2011, we repurchased an aggregate of 129,900 shares of our common stock for $1,312 pursuant to our
repurchase plan previously authorized by the Board of Directors.
We have remained free of interest-bearing debt for twenty-five consecutive years. We maintain a line of credit with Wells
Fargo & Company that expires March 1, 2013. Under the terms of this line of credit, we may borrow up to $2,000 at an interest
rate equal to the bank’s prime rate, unless we elect an optional interest rate. The borrowing agreement contains various
covenants, the more significant of which require us to maintain a minimum tangible net worth, a quick ratio not less than 1.0 to
1.0 and a minimum net income after tax. The Company was in violation of the tangible net worth and net income covenants
which were subsequently waived (per letter dated January 17, 2012). The Company is currently in compliance with all provisions
of the agreement. There were no borrowings under this line of credit during the 2011 fiscal year. Management believes that our
strong financial position and our capital resources are sufficient to provide for our operating needs and capital expenditures for
fiscal 2012.
15
Clean
Impact of Inflation
Our operating results are heavily dependent upon the prices paid for raw materials. The marketing of our 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. While fluctuations in significant cost structure components, such as
ingredient commodities and fuel prices, have had a significant impact on profitability over the last two fiscal years, the impact of
general price inflation on our financial position and results of operations has not been significant. However, future volatility of
general price inflation or deflation and raw material cost and availability could adversely affect our financial results.
Off-Balance Sheet Arrangements
We do not currently have any off balance sheet arrangements within the meaning of Item 303(a)(4) of Regulation S-K.
Contractual Obligations
We have remained free of interest bearing debt for twenty-five consecutive years and had no other debt or other
contractual obligations at October 28, 2011.
Critical Accounting Policies
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 and the reported revenues and expenses during the respective reporting
periods. Actual results could differ from those 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 not originally estimated. We record promotional and returns allowances and bad debt
allowances based on recent and historical trends. Management believes its current estimates are reasonable and based on the best
information available at the time.
Disclosure concerning our policies on credit risk, revenue recognition, cash surrender or contract value for life insurance
policies, deferred income tax and the recoverability of our long-lived assets are provided in Notes 1 and 4 of Notes to the
Consolidated Financial Statements.
Recently Issued Accounting Pronouncements and Regulations
Various accounting standard-setting bodies have been active in soliciting comments and issuing statements, interpretations
and exposure drafts. For information on new accounting pronouncements and the impact, if any, on our financial position or
results of operations, see Note 1 of the Notes to the Consolidated Financial Statements.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
Not applicable for smaller reporting company.
Item 8. Consolidated Financial Statements and Supplementary Data
The consolidated financial statements required by this Item and are set forth under Item 15.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable.
16
Clean
Item 9A. Controls and Procedures
Evaluation of disclosure controls and procedures
Our management, with the participation and under the supervision of our Chairman and Chief Financial Officer, has
evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end
of the period covered by this Report. Based on this evaluation, the Chairman and Chief Financial Officer have concluded that our
disclosure controls and procedures are effective as of the end of the period covered by this Report in their design and operation to
provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the
Exchange Act is accumulated and communicated to management and recorded, processed, summarized and reported within the
time periods specified by the Securities and Exchange Commission’s rules and forms.
Our management, including our Chairman and Chief Financial Officer, does not expect that our disclosure controls and
internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide
only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system
must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.
Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control
issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that
judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally,
controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management
override of the control.
The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events,
and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions;
over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or
procedures may deteriorate. Because of inherent limitations in a cost-effective control system, misstatements due to error or
fraud may occur and not be detected.
We maintain and evaluate a system of internal accounting controls, and a program of internal auditing designed to provide
reasonable assurance that our assets are protected and that transactions are performed in accordance with proper authorization,
and are properly recorded. This system of internal accounting controls is continually reviewed and modified in response to
evolving business conditions and operations and to recommendations made by the independent registered public accounting firm
and internal auditor. We have established a code of conduct. Our management believes that the accounting and internal control
systems provide reasonable assurance that assets are safeguarded and financial information is reliable.
The Audit Committee of the Board of Directors meets regularly with our financial management and counsel, and with the
independent registered public accounting firm engaged by us. Internal accounting controls and the quality of financial reporting
are discussed during these meetings. The Audit Committee has discussed with the independent registered public accounting firm
matters required to be discussed by Statement of Auditing Standards No. 114 (Communication with Audit Committees). In
addition, the Audit Committee and the independent registered public account firm have discussed the independent registered
public accounting firm’s independence from our Company and its management, including the matters in the written disclosures
required by Public Company Accounting Oversight Board Rule 3526 “Communicating with Audit Committees Concerning
Independence”.
17
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Changes in Internal Control over Financial Reports
There has been no change in our internal control over financial reporting during the last fiscal quarter covered by this
Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Section 404 of the Sarbanes-Oxley Act of 2002
In order to comply with the Sarbanes-Oxley Act of 2002 (the “Act”), we have undertaken and continue a comprehensive
effort, which includes the documentation and review of our internal controls. In order to comply with the Act, we centralized
most accounting and many administrative functions at our corporate headquarters in an effort to control the cost of maintaining
our control systems.
The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by the President on July 21, 2010,
permanently exempts small public companies with less than $75 million in market capitalization, such as the Company, from the
requirement to obtain an external audit on the effectiveness of internal financial reporting controls provided in Section 404(b) of
the Sarbanes-Oxley Act. As a result, an attestation report on internal controls over financial reporting by an independent
registered public accounting firm will no longer be required. Section 404(a) is still effective for smaller public companies and
requires the disclosure of management attestations on internal controls over financial reporting. Commencing with the fiscal
year ended October 31, 2008, we are required to issue a management report on internal control over financial reporting, with
each Annual Report on Form 10-K thereafter.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our
internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles.
Management conducted an evaluation of the effectiveness of the internal controls over financial reporting based on the
framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission. Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to
financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject
to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
Management assessed the effectiveness of our internal control over financial reporting for our fiscal year ended October
28, 2011. Based on management’s assessment and the above-referenced criteria, management believes that the internal control
over financial reporting for our fiscal year ended October 28, 2011 was effective.
Item 9B. Other Information
Not applicable.
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Item 10. Directors, Executive Officers and Corporate Governance
PART III
Information set forth in the sections entitled “Proposal 1 – Election of Directors” and “Section 16(a) Beneficial Ownership
Reporting Compliance” contained in our definitive proxy statement for the 2012 Annual Meeting of Shareholders to be held on
March 21, 2012 is incorporated herein by reference. Information concerning our executive officers is set forth in Part I, Item 1,
hereof under the heading “Executive Officers of the Registrant”.
Item 11. Executive Compensation
Information set forth in the section entitled “Compensation of Executive Officers” contained in our definitive proxy
statement for the 2012 Annual Meeting of Shareholders to be held on March 21, 2012 is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Information set forth in the section entitled “Principal Shareholders and Management” contained in our definitive proxy
statement for the 2012 Annual Meeting of Shareholders to be held on March 21, 2012 is incorporated herein by reference.
Equity Compensation Plan Information
Not applicable.
Item 13. Certain Relationships and Related Transactions, and Director Independence
Information set forth in the sections entitled “Proposal 1 – Election of Directors” and “Certain Relationships and Related
Party Transactions” contained in our definitive proxy statement for the 2012 Annual Meeting of Shareholders to be held on
March 21, 2012 is incorporated herein by reference.
We are considered a “controlled company” within the meaning of Rule 5615(c)(1) of the NASDAQ Listing Rules based
on the approximate 81% beneficial ownership of our outstanding common stock by Bridgford Industries Incorporated and are
therefore exempted from various NASD rules pertaining to certain “independence” requirements of our directors. Nevertheless,
the Board of Directors has determined that Messrs. Andrews, Foster, Scott and Zippwald, who together comprise the Audit
Committee, are all “independent directors” within the meaning of Rule 5605 of the NASDAQ Listing Rules.
Our general legal counsel is the son of the former senior chairman of the board of directors. For these services, he
currently is paid a fee of one thousand six hundred dollars for each meeting attended. Total fees paid under this arrangement for
fiscal year 2011 were $19,000 In addition, legal services are performed on our behalf and billed by a firm in which he is a
partner. Total fees billed under this arrangement for fiscal year 2011 were approximately $62,000.
Item 14. Principal Accountant Fees and Services
Information set forth in the sections entitled “Principal Accountant Fees and Services” and “Policy on Audit Committee
Pre-Approval of Audit Services And Permissible Non-Audit Services of Independent Accountants” contained in our definitive
proxy statement for the 2012 Annual Meeting of Shareholders to be held on March 21, 2012 is incorporated herein by reference.
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PART IV
Item 15. Exhibits and Financial Statement Schedules
(a)(1) Financial Statements . The following documents are filed as a part of this report:
Management’s Report on Internal Control Over Financial Reporting
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of October 28, 2011 and October 29, 2010
Consolidated Statements of Operations for years ended October 28, 2011 and October 29, 2010
Consolidated Statements of Shareholders’ Equity for years ended October 28, 2011 and October 29, 2010
Consolidated Statements of Comprehensive Income (Loss) for years ended October 28, 2011 and October 29, 2010
Consolidated Statements of Cash Flows for years ended October 28, 2011 and October 29, 2010
Notes to Consolidated Financial Statements
Page
18
22
23
24
25
25
26
27
(2) Financial Statement Schedules
Not applicable for smaller reporting company.
(3) Exhibits
(a) The exhibits below are filed or incorporated herein by reference .
Exhibit
Number
3.5
Description
Restated Articles of Incorporation, dated December 29, 1989 (filed as Exhibit 3.5 to Form 10-K 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-K on January 28, 1993
and incorporated herein by reference).
3.7
By-laws, as amended (filed as Exhibit 2 to Form 10-K on January 28, 1993 and incorporated herein by reference).
3.8
10.1
10.2
10.3
10.4
Certificate of Amendment to By-laws (filed as Exhibit 99.1 to Form 8-K on October 10, 2007 and incorporated
herein by reference).
Bridgford Foods Corporation Defined Benefit Pension Plan (filed as Exhibit 10.1 to Form 10-K on January 28, 1993
and incorporated herein by reference).*
Bridgford Foods Corporation Supplemental Executive Retirement Plan (filed as Exhibit 10.2 to Form 10-K on
January 28, 1993 and incorporated herein by reference).*
Bridgford Foods Corporation Deferred Compensation Savings Plan (filed as Exhibit 10.3 to Form 10-K on
January 28, 1993 and incorporated herein by reference).*
Bridgford Foods Corporation 1999 Stock Incentive Plan and Form of Stock Option Agreement (filed as Exhibit 4.1
to Form S-8 on May 28, 1999 and incorporated herein by reference).*
21.1
Subsidiaries of the Registrant.
24.1
Power of Attorney (included as part of the signature page)
31.1
Certification of Principal Executive Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification of Principal Financial Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
32.2
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 (Principal Executive Officer).
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 (Principal Financial Officer).
* Each of these Exhibits constitutes a management contract, compensatory plan or arrangement.
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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
Registrant
Date: January 17, 2012
/s/ WILLIAM L. BRIDGFORD
By:
William L. Bridgford
Chairman
POWER OF ATTORNEY
We, the undersigned directors and officers of Bridgford Foods Corporation, do hereby constitute and appoint William L.
Bridgford and Raymond F. Lancy, or either of them, with full power of substitution and resubstitution, our true and lawful
attorneys and agents, to do any and all acts and things in our name and behalf in our capacities as directors and officers and to
execute any and all instruments for us and in our names in the capacities indicated below, which said attorneys and agents, or
either of them, or their substitutes, may deem necessary or advisable to enable said corporation to comply with the Securities
Exchange Act of 1934, as amended, and any rules, regulations and requirements of the Securities and Exchange Commission in
connection with this Annual Report on Form 10-K, including specifically, but without limitation, power and authority to sign for
us or any of us in our names and in the capacities indicated below, any and all amendments; and we do hereby ratify and confirm
all that the said attorneys and agents, or either of them, shall do or cause to be done by virtue hereof.
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
/s/ WILLIAM L. BRIDGFORD
William L. Bridgford
/s/ BRUCE H. BRIDGFORD
Bruce H. Bridgford
/s/ JOHN V. SIMMONS
John V. Simmons
/s/ RAYMOND F. LANCY
Raymond F. Lancy
/s/ TODD C. ANDREWS
Todd C. Andrews
/s/ RICHARD A. FOSTER
Richard A. Foster
/s/ ALLAN BRIDGFORD JR.
Allan Bridgford Jr.
/s/ D. GREGORY SCOTT
D. Gregory Scott
/s/ PAUL R. ZIPPWALD
Paul R. Zippwald
Title
Chairman
(Principal Executive Officer)
Date
January 17, 2012
Director
January 17, 2012
President & Director
January 17, 2012
Chief Financial Officer
January 17, 2012
(Principal Financial and Accounting Officer)
January 17, 2012
January 17, 2012
January 17, 2012
January 17, 2012
January 17, 2012
Director
Director
Director
Director
Director
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Report Of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders
Bridgford Foods Corporation
We have audited the accompanying consolidated balance sheets of Bridgford Foods Corporation (the "Company") as of October
28, 2011 and October 29, 2010 and the related consolidated statements of operations, comprehensive income (loss),
shareholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of
its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An
audit also 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, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial
position of Bridgford Foods Corporation as of October 28, 2011 and October 29, 2010 and the results of its consolidated
operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.
/s/ Squar, Milner, Peterson, Miranda & Williamson, LLP
Newport Beach, California
January 17, 2012
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BRIDGFORD FOODS CORPORATION
CONSOLIDATED BALANCE SHEETS
October 28, 2011 and October 29, 2010
(in thousands, except per share amounts)
Current assets:
ASSETS
Cash and cash equivalents
Accounts receivable, less allowance for doubtful accounts of $124 and $80,
respectively and promotional allowances of $2,289 and $1,932, respectively
Inventories, less reserves of $318 and $166, respectively
Prepaid expenses
Refundable income taxes
Deferred income taxes, less valuation allowance of $2,432 and $2,478, respectively
Total current assets
Property, plant and equipment, net of accumulated depreciation of $55,622 and $56,007,
respectively
Other non-current assets
Deferred income taxes, less valuation allowance of $9,044 and $5,571, respectively
Total assets
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable
Accrued payroll, advertising and other expenses
Current portion of non-current liabilities
Total current liabilities
Non-current liabilities
Total liabilities
Contingencies and commitments (Notes 3, 5 and 6)
Shareholders’ equity:
Preferred stock, without par value Authorized - 1,000 shares; issued and outstanding
– none
Common stock, $1.00 par value Authorized - 20,000 shares; issued and outstanding –
9,198 and 9,328
Capital in excess of par value
Retained earnings
Accumulated other comprehensive loss
Total shareholders’ equity
Total liabilities and shareholders’ equity
2011
2010
$
9,324 $
15,686
9,702
16,888
340
1,036
-
37,290
7,903
11,773
-
56,966 $
4,246 $
5,590
3,439
13,275
18,853
32,128
7,609
16,307
291
1,594
-
41,487
7,892
11,144
-
60,523
3,364
5,532
2,755
11,651
12,672
24,323
-
-
9,255
9,214
23,096
(16,727)
24,838
56,966 $
9,385
10,396
24,471
(8,052)
36,200
60,523
$
$
$
See accompanying notes to consolidated financial statements.
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BRIDGFORD FOODS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended October 28, 2011 and October 29, 2010
(in thousands, except per share amounts)
Net sales
Cost of products sold
Gross margin
Selling, general and administrative expenses
(Loss) income before taxes
(Benefit) provision for income taxes
Net (loss) income
Basic (loss) earnings per share
2011
2010
$
118,263 $
117,655
80,736
70,563
37,527
47,092
38,639
41,569
(1,112)
5,523
(669)
(443) $
(0.05) $
1,204
4,319
0.46
$
$
Shares used to compute basic earnings per common share
9,277,515
9,334,004
See accompanying notes to consolidated financial statements
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BRIDGFORD FOODS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the years ended October 28, 2011 and October 29, 2010
(in thousands)
Net (loss) income
Defined benefit pension plans:
Actuarial (loss) gain unrecognized
Prior service cost
Other benefit
Other comprehensive (loss) income from defined benefit plans
Other postretirement benefit plans:
Actuarial (loss) gain
Prior service cost
Other benefit
Other comprehensive (loss) income from other postretirement benefit plans
Other comprehensive (loss) income, before taxes
Taxes benefit (provision) on other comprehensive (loss) income
Valuation allowance on taxes from items of other comprehensive income
Change in other comprehensive (loss) income, net of tax
2011
2010
$
(443) $
4,319
(8,308)
(4)
-
(8,312)
(405)
42
-
(363)
(8,675)
3,295
(3,295)
(8,675)
561
1
27
589
75
(6)
10
79
668
(239)
239
668
Comprehensive (loss) income
(9,118)
4,987
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
For the years ended October 28, 2011 and October 29, 2010
(in thousands)
Accumulated
other
comprehensive
income (loss)
(8,720 )
Total
shareholders’
equity
Retained
earnings
21,085
-
(933 )
4,319
-
-
-
Capital in
excess of
par value
10,646
(250 )
-
-
-
-
10,396 $
(1,182 )
Shares
Amount
Balance, October 30, 2009
Shares repurchased and retired
Cash dividends paid
Net income
Net change in defined benefit
plans
Net change in other benefit plans
Balance, October 29, 2010
Shares repurchased and retired
Cash dividends paid
Net loss
Net change in defined benefit
plans
Net change in other benefit plans
Balance, October 28, 2011
9,355
(27)
-
-
-
-
9,328 $
(130)
-
-
-
-
9,198
9,412
(27 )
-
-
-
-
9,385 $
(130 )
-
-
-
-
9,255
-
-
24,471 $
589
79
(8,052) $
-
-
(932 )
(443 )
-
-
-
-
9,214
-
-
23,096
(8,312 )
(363 )
(16,727 )
32,423
(277 )
(933 )
4,319
589
79
36,200
(1,312 )
(932 )
(443 )
(8,312 )
(363 )
24,838
See accompanying notes to consolidated financial statements.
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BRIDGFORD FOODS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended October 28, 2011 and October 29, 2010
(in thousands)
2011
2010
Cash flows from operating activities:
Net income
$
(443) $
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation
Provision (recovery) for losses on accounts receivable
Gain on sale of property, plant and equipment
Deferred income taxes, net
Tax valuation allowance
Changes in operating assets and liabilities:
Accounts receivable
Inventories
Prepaid expenses
Refundable income taxes
Other non-current assets
Accounts payable
Accrued payroll, advertising and other expenses
Current portion of non-current liabilities
Non-current liabilities
Net cash (used) provided by operating activities
Cash used in investing activities:
Proceeds from sale of property, plant and equipment
Additions to property, plant and equipment
Net cash used in investing activities
Cash used in financing activities:
Shares repurchased
Cash dividends paid
Net cash used in financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Supplemental disclosure of cash flow information:
Cash paid for income taxes
1,802
126
(15)
(3,427)
3,427
(2,219)
(581)
(50)
558
(632)
882
58
674
(2,480)
(2,320)
54
(1,852)
(1,798)
(1,312)
(932)
(2,244)
(6,362)
4,319
2,168
(351)
(31)
395
(395)
2,460
(712)
330
(1,426)
(527)
(863)
212
(885)
20
4,714
40
(1,769)
(1,729)
(277)
(933)
(1,210)
1,775
$
$
15,686
9,324 $
13,911
15,686
179 $
2,710
See accompanying notes to consolidated financial statements.
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BRIDGFORD FOODS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(in thousands except share and per share amounts, time periods and percentages)
NOTE 1- The Company and Summary of Significant Accounting Policies:
The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly-
owned. All inter-company transactions 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. 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 for 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.
We are required to 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 must measure the fair value of assets to determine if
and when adjustments are to be recorded.
Significant Fourth Quarter Adjustments
During fiscal 2011, we rolled out a unique product line created to meet specific customer requirements. After a successful
initial start-up period the customer determined the product did not meet their specific requirements and the company agreed to
accept the return of these products. Upon inspection, we concluded that the product had no ready market and we donated the
product to a local food bank. Included in cost of products sold is a fourth quarter loss of $1,675 related to this donation.
Subsequent events
Management has evaluated events subsequent to October 28, 2011 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.
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. However,
management does not believe there is significant credit risk associated with these financial institutions. The provision for
doubtful accounts receivable is based on historical trends and current collectability risk. We have significant amounts receivable
with a few large, well known customers which, although historically secure, could be subject to material risk should these
customers’ operations suddenly deteriorate. Sales to Dollar General® comprised 9.0% of revenues in fiscal year 2011 and 20.2%
of accounts receivable was due from Dollar General® at October 28, 2011. Sales to Wal-Mart® comprised 10.1% of revenues in
fiscal year 2010 and 9.4% of accounts receivable was due from Wal-Mart® at October 29, 2010.
Business segments
Our Company and its subsidiaries operate in two business segments - the processing and distribution of frozen foods, and
the processing and distribution of refrigerated and snack food products. See Note 7 to the financial statements for further
information.
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Fiscal year
We maintain our accounting records on a 52-53 week fiscal basis. Fiscal years 2011 and 2010 included 52 weeks.
Revenues
Revenues are recognized upon passage of title to the customer, typically upon product pick-up, shipment or delivery to
customers. Products are delivered to customers primarily through our own long-haul fleet or through a Company owned direct
store delivery system. These delivery costs, $4,947 and $5,315 for 2011 and 2010, respectively, are included in selling, general
and administrative expenses in the accompanying consolidated financial statements. The Company also uses independent
distributors to deliver products in remote geographic areas of the country. Revenues are recognized upon shipment to the
distributor, net of return allowances. Historically, returns from distributors have been minimal. The distributor pays for these
products in full, typically within 15 days, and such payment is not contingent upon payment from the large chain stores. As a
convenience to certain large chain stores, we bill these customers on behalf of the distributor.
We record promotional and returns allowances based on recent and historical trends. Revenue is recognized as the net
amount estimated to be received after deducting estimated amounts for discounts, trade allowances and product
terms. 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. Promotional
allowances deducted from sales for fiscal years 2011 and 2010 were $7,742 and $7,629, respectively.
Advertising expenses
Advertising and other promotional expenses are recorded as selling, general and administrative expenses. Advertising
expenses for fiscal years 2011 and 2010 were $3,462 and $3,530, respectively.
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. We had cash equivalents of $9,324 at October 28, 2011 and $15,686 at October
29, 2010. All cash and cash equivalents at October 28, 2011 were held as cash balances at Wells Fargo & Company banks.
Fair value measurements
We classify levels of inputs to measure the fair value of financial assets as follows:
(cid:121) 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.
(cid:121) 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.
(cid:121) 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.
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Inventories
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 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.
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 to 20 years for buildings and
improvements, 5 to 10 years for machinery and equipment, and 3 to 5 years for transportation equipment.
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.
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. During the
fourth quarter of fiscal 2008, management recorded a full valuation allowance with respect to its deferred tax assets. 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, none of which are predictable. The Company policy outlines
measurable objective criteria that must be met before a release of the valuation allowance will occur. Due to the degree of
judgment involved, actual taxable income could differ materially from management's estimates, or the timing of taxable income
could be such that the net operating losses could expire prior to their utilization. Management could determine in the future that
the assets are realizable, materially increasing net income in one or many periods. Following recognition, management could
again change its determination in the future, materially decreasing income.
We provide tax accruals for federal, state, local and international 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 to the Consolidated Financial Statements). 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 expense 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.
Foreign currency transactions
Our foreign branch located in Canada enters into transactions that are denominated in a foreign currency. The related
transaction gains and losses arising from changes in exchange rates are not material and are included in selling, general and
administrative expenses in the consolidated statement of operations in the period the transaction occurred.
29
Clean
Comprehensive income (loss)
Comprehensive income (loss) consists of net income (loss) and additional minimum pension liability adjustments.
Recently issued accounting pronouncements and regulations
In December 2008, the FASB issued additional guidance on an employers' disclosures about plan assets of a defined
benefit pension or other postretirement plan. This interpretation is effective for financial statements issued for fiscal years ending
after December 15, 2009. We adopted this interpretation in fiscal 2010. The adoption of this interpretation increased disclosures
in the financial statements related to the assets of our defined benefit pension plans.
In May 2011, the Financial Accounting Standards Board ("FASB") issued guidance on “Fair Value Measurements:
Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS" changing
how existing fair value guidance is applied and expanding disclosure requirements. The updated guidance is to be applied
prospectively and is effective for the Company's interim and annual periods beginning after December 15, 2011, which will be
effective for us beginning the first quarter of fiscal 2013. We do not expect the adoption of this guidance to have a significant
impact on our consolidated financial statements.
In June 2011, the FASB issued guidance on the presentation of comprehensive income either in a single continuous
statement of comprehensive income or in two separate successive statements of net income and other comprehensive income.
This guidance is effective for financial statements issued fiscal years, and interim periods within those years, beginning after
December 15, 2011. However, we elected to adopt this pronouncement in 2011. We do not expect the adoption of this guidance
to have a significant impact on our consolidated financial statements.
30
Clean
NOTE 2- Composition of Certain Financial Statement Captions:
2011
2010
Inventories:
Meat, ingredients and supplies
Work in process
Finished goods
Property, plant and equipment:
Land
Buildings and improvements
Machinery and equipment
Asset impairment
Transportation equipment
Construction in process
Accumulated depreciation
Other non-current assets:
Cash surrender value benefits
Other
Accrued payroll, advertising and other expenses:
Payroll, vacation, payroll taxes and employee benefits
Accrued advertising and broker commissions
Property taxes
Others
Current portion of non-current liabilities (Note 3):
Defined benefit retirement plan
Executive retirement plans
Incentive compensation
Post retirement healthcare
Non-current liabilities (Note 3):
Defined benefit retirement plan
Executive retirement plans
Incentive compensation
Post retirement healthcare
$
$
$
$
$
$
$
$
$
$
$
$
5,434 $
1,549
9,905
16,888 $
1,807 $
13,647
41,929
(234)
6,031
345
63,525
(55,622)
7,903 $
11,615 $
158
11,773 $
3,626 $
1,149
321
494
5,590 $
2,003 $
501
878
57
3,439 $
13,438 $
3,665
683
1,067
18,853 $
3,155
1,192
11,960
16,307
1,807
13,558
41,821
(233)
6,516
430
63,899
(56,007)
7,892
11,134
10
11,144
3,603
1,182
322
425
5,532
1,175
500
1,023
57
2,755
6,878
3,482
1,424
888
12,672
31
Clean
NOTE 3- Retirement and Other Benefit Plans:
Noncontributory-Trusteed Defined Benefit Retirement Plans for Sales, Administrative, Supervisory and Certain Other
Employees
We have noncontributory-trusteed defined benefit retirement plans for sales, administrative, supervisory and certain other
employees. In the third quarter of fiscal 2006, we froze future benefit accruals under this plan for employees classified within the
administrative, sales or supervisory job classifications or within any non-bargaining class. The benefits under these plans are
primarily based on years of service and compensation levels. The funding policy of the plan is to make contributions which are at
least equal to the minimum required contributions needed to avoid a funding deficiency. The measurement date for the plan is
our fiscal year end.
Net pension cost consisted of the following:
Service cost
Interest cost
Expected return on plan assets
Amortization of unrecognized loss
Amortization of unrecognized prior service costs
Net pension cost
Years Ended
2011
2010
141 $
1,998
(2,321)
437
1
256 $
125
1,959
(1,995)
428
1
518
$
$
Net pension costs and benefit obligations are determined using assumptions as of the beginning of each fiscal year.
Weighted average assumptions for each fiscal year are as follows:
Discount rate
Rate of increase in salary levels
Expected return on plan assets
2011
2010
4.65%
N/A
8.00%
5.45%
N/A
8.00%
The benefit obligation, plan assets, and funded status of these plans as of the fiscal years ended are as follows:
Change in plan assets:
Fair value of plan assets - beginning of year
Employer contributions
Actual return on plan assets
Benefits paid
Fair value of plan assets - end of year
Change in benefit obligations:
Benefit obligations - beginning of year
Service cost
Interest cost
Actuarial loss
Benefits paid
Benefit obligations - end of year
Funded status of the plans
Unrecognized prior service costs
Unrecognized net actuarial loss
Net amount recognized
2011
2010
29,237
1,175
951
(1,056)
30,307
37,289 $
141
1,998
7,376
(1,056)
45,748
(15,441)
4
17,951
2,514 $
$
$
25,001
1,943
3,300
(1,007)
29,237
35,042
125
1,959
1,170
(1,007)
37,289
(8,052)
6
9,641
1,595
Current accounting principles require that an internal rate of return analysis be included in the discount rate selection
process. The discount rates were based on Citigroup Pension Liability Index as of October 28, 2011 and October 29, 2010.
32
Clean
Plan assets are primarily invested in marketable equity securities, corporate and government debt securities and are
administered by an investment management company. The plans’ long-term return on assets is based on the weighted-average of
the plans’ investment allocation as of the measurement date and the published historical returns for those types of asset
categories, taking into consideration inflation rate forecasts. Our expected employer contribution to the plan in fiscal year 2012 is
$2,003.
The actual and target allocation for plan assets are as follows:
Asset Class
Large Cap Equities
Mid Cap Equities
Small Cap Equities
International (including Non-U.S. Fixed Income)
Fixed Income
Other (Government/Corporate, Bonds)
Cash
Total
Target
Asset
Allocation
35.0 %
0.0 %
10.0 %
25.0 %
26.0 %
2.0 %
2.0 %
100.0
2011
33.4%
0.00%
11.7%
22.0%
28.4%
1.9%
2.6%
100.0
Target
Asset
Allocation
40.0%
0.0%
5.0%
25.0%
26.0%
2.0%
2.0%
100.0%
2010
37.4%
0.0%
3.5%
22.2%
27.3%
2.0%
7.6%
100.0%
The fair value of our pension plan assets and the level under which fair values were determined, using the hierarchy
described in Note 1, is as follows:
Level 1
Year Ended 2011
Level 3
Level 2
Total
Total plan assets
30,307
-
-
30,307
Expected payments for the pension benefits are as follows:
Fiscal Years
2012
2013
2014
2015
2016
2017-2021
Pension
Benefits
1,260
1,406
1,512
1,656
1,728
10,742
$
$
$
$
$
$
33
Clean
Executive Retirement Plans
Non-Qualified Deferred Compensation
Effective January 1, 1991 we 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. We contribute 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 attainment of retirement age. No benefit expense was recorded under these
plans for fiscal years 2011 and 2010.
Supplemental Executive Retirement Plan
In fiscal year 1991, we 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 our defined benefit
pension plan and amounts available through Social Security.
Benefits payable related to these plans and included in the accompanying financial statements were $4,166 and $3,982 at
October 28, 2011 and October 29, 2010, respectively. In connection with this arrangement we are the beneficiary of life
insurance policies on the lives of certain key employees and retirees. The aggregate cash surrender value of these policies,
included in non-current assets, was $11,615 and $11,134 at October 28, 2011 and October 29, 2010, respectively.
Expected payments for executive postretirement benefits are as follows:
Fiscal Years
2012
2013
2014
2015
2016
2017-2021
Executive
Postretirement
Benefits
$
$
$
$
$
$
506
506
516
472
281
1,136
Incentive Compensation Plan for Certain Key Executives
We provide an incentive compensation plan for certain key executives, which is based upon our pretax income. The
payment of these amounts is generally deferred over three or five-year periods. The total amount payable related to this
arrangement was $1,561 and $2,447 at October 28, 2011 and October 29, 2010, respectively. Future payments are approximately
$878, $473, $115, $68 and $27 for fiscal years 2012 through 2016, respectively.
34
Clean
Postretirement Healthcare Benefits for Selected Executive Employees
We provide postretirement health care benefits for selected executive employees. Net periodic postretirement healthcare
cost is determined using assumptions as of the beginning of each fiscal year, except for the total actual benefit payments and the
discount rate used to develop the net periodic postretirement benefit expense, which is determined at the end of the fiscal year.
Net periodic postretirement healthcare cost consisted of the following:
Service cost
Interest cost
Amortization of prior service cost
Amortization of actuarial loss
Net periodic postretirement healthcare cost
Years Ended
2011
2010
22 $
59
75
(18)
138 $
18
82
75
(20)
155
$
$
Weighted average assumptions for the fiscal years ended October 28, 2011 and October 29, 2010 are as follows:
Discount rate
Medical trend rate next year
Ultimate trend rate
Year ultimate trend rate is achieved
2011
2010
4.45%
9.50%
5.00%
2020
5.45%
9.50%
5.00%
2020
The table below shows the estimated effect of a 1% increase in healthcare cost trend rate on the following:
Interest cost plus service cost
Accumulated postretirement healthcare obligation
2011
2010
$
$
9 $
133 $
8
91
The table below shows the estimated effect of a 1% decrease in healthcare cost trend rate on the following:
Interest cost plus service cost
Accumulated postretirement healthcare obligation
2011
2010
$
$
(8) $
(109) $
(6)
(76)
The healthcare obligation and funded status of this plan as of the fiscal years ended are as follows:
Change in accumulated postretirement healthcare obligation:
Healthcare obligations - beginning of year
Service cost
Interest cost
Actuarial loss (gain)
Benefits paid
Healthcare obligations - end of year
Funded status of the plans
Unrecognized prior service costs
Unrecognized net actuarial (gain) loss
Unrecognized amounts recorded in other comprehensive income
Postretirement healthcare liability
2011
2010
945 $
21
59
136
(37 )
1,124 $
1,124
-
(112 )
112
1,124 $
1,066
18
82
(201)
(20)
945
945
75
(265)
190
945
$
$
$
35
Clean
Expected payments for the postretirement benefits are as follows:
Fiscal Years
2011
2012
2013
2014
2015
2016 -2020
Postretirement
Heathcare
Benefits
$
$
$
$
$
$
57
57
57
56
55
374
401(K) Plan for Sales, Administrative, Supervisory and Certain Other Employees
During the fiscal year ended November 3, 2006, we implemented a qualified 401(K) retirement plan (the “Plan”) for our
sales, administrative, supervisory and certain other employees. During fiscal years 2011 and 2010, we made total employer
contributions to the Plan in the amounts of $408 and $421, respectively.
NOTE 4- Income Taxes:
The provision for taxes on income includes the following:
Current:
Federal
State
Deferred:
Federal
State
2011
2010
$
(603) $
(66)
(669)
-
-
749
455
1,204
-
-
$
(669) $
1,204
The total tax provision differs from the amount computed by applying the statutory federal income tax rate to income
before income taxes as follows:
Provision for federal income taxes at the applicable statutory rate
Increase in provision resulting from state income taxes, net of federal income tax
benefit
Research & development tax credit
Non-taxable life insurance gain
Benefits of tax law changes - state
Change in valuation allowance
Other, net
2011
2010
$
(378) $
1,878
(98)
-
(163)
(114)
(4)
88
(669) $
65
(4)
(190)
-
(595)
50
1,204
$
36
Clean
Deferred income taxes result from differences in the bases of assets and liabilities for tax and accounting purposes.
Receivables allowance
Returns allowance
Inventory packaging reserve
Inventory capitalization
Incentive compensation
State taxes
Employee benefits
Other
Valuation allowance
Current tax assets, net
State taxes
Incentive compensation
Pension and health care benefits
Depreciation
Net operating loss carry-forward and credits
Valuation allowance
Non-current tax assets, net
2011
2010
53 $
180
76
254
361
16
1,483
9
(2,432)
- $
282 $
290
7,789
(801)
1,484
(9,044)
- $
34
217
61
333
275
143
1,371
44
(2,478)
-
280
609
4,705
(210)
187
(5,571)
-
$
$
$
$
Management is required to evaluate whether a valuation allowance should be established against its deferred tax assets
based on the consideration of all available evidence using a "more likely than not" standard. Realization of deferred tax assets is
dependent upon taxable income in prior carryback years, estimates of future taxable income, tax planning strategies, and
reversals of existing taxable temporary differences. Forming a conclusion that a valuation allowance is not needed is difficult
when there is negative evidence such as cumulative losses in recent years or losses expected in early future years. Management
concluded at the end of 2008 that it was more likely than not that deferred tax assets would not be realized and recorded a full
valuation allowance on all deferred tax assets during the fourth quarter of fiscal 2008.
Management reevaluated the need for a full valuation allowance at the end of 2011. Management evaluated both positive
and negative evidence. The weight of negative factors and level of economic uncertainty in our current business continued to
support the conclusion that the realization of our deferred tax assets does not meet the more likely than not standard. Therefore,
a full valuation allowance will remain against the net deferred tax assets.
As of October 28, 2011, the Company had federal and state net operating loss carryforwards of approximately $4,223 and
$4,793 respectively. These loss carryforwards will expire at various dates from 2012 through 2028.
In July 2006, the FASB issued guidance to clarify the accounting for uncertainty in income taxes recognized in an
enterprise’s financial statements. This interpretation prescribed a recognition threshold and measurement attribute for the
financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The guidance
also discussed derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The
cumulative effect, if any, of applying this guidance is to be reported as an adjustment to the opening balance of retained earnings
in the year of adoption. The provisions of this guidance have been incorporated into Accounting Standards Codification ("ASC")
740-10.
37
Clean
As of October 28, 2011, we have provided a liability of $105 for unrecognized tax benefits related to various federal and
state income tax matters. This entire amount would reduce our effective income tax rate if the asset is recognized in future
reporting periods. We have not identified any new unrecognized tax benefits.
As of October 29, 2010, we have provided a liability of $95 for unrecognized tax benefits related to various federal and
state income tax matters. This entire amount would reduce our effective income tax rate if the asset is recognized in future
reporting periods. We have not identified any new unrecognized tax benefits.
A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
Balance at beginning of year
Additions based on tax positions related to the current year
Additions for tax positions of prior years
Reductions for tax positions of prior years
Settlements
$
2011
95 $
-
10
-
-
Balance at end of year
$
105 $
2010
103
-
29
(2)
(35)
95
We recognize any future accrued interest and penalties related to unrecognized tax benefits in income tax expense. As of
October 28, 2011, we had approximately $2 in accrued interest and penalties which is included as a component of the $105
unrecognized tax benefit noted above.
During the year ended October 29, 2010, the Internal Revenue Service settled its audit of our U.S. federal income tax
returns for November 1, 2002, October 31, 2003, November 3, 2006 and November 2, 2007. This settlement resulted in the
reversal of $35 of unrecognized tax benefits associated with R&D credits we reported, which increased our tax expense by
$5. Our federal income tax returns are open to audit under the statute of limitations for the years ended October 31, 2008
through 2010.
We are subject to income tax in California and various other state taxing jurisdictions. Our state income tax returns are
open to audit under the statute of limitations for the fiscal years ended October 31, 2007 through 2010.
We do not anticipate a significant change to the total amount of unrecognized tax benefits within the next 12 months.
NOTE 5- Line of Credit:
Under the terms of a revolving line of credit with Wells Fargo & Company, we may borrow up to $2,000 through March
1, 2013. The interest rate is at the bank’s reference rate unless we elect an optional interest rate. The borrowing agreement
contains various covenants, the more significant of which require us to maintain a minimum tangible net worth, a quick ratio not
less than 1.0 to 1.0 and a minimum net income after tax. The Company was in violation of the tangible net worth and net income
covenants which were subsequently waived (per letter dated January 17, 2012). The Company is currently in compliance with all
provisions of the agreement. There were no borrowings under this line of credit during the years ended October 28, 2011 or
October 29, 2010.
NOTE 6- Contingencies and Commitments:
The Company leases warehouse and/or office facilities throughout the United States and Canada through month-to-month
rental agreements.
We leased certain transportation equipment under operating leases through 2011. The terms of the transportation leases
provided for annual renewal options and contingent rental payments based upon mileage and adjustments of rental payments
based on the Consumer Price Index. Minimum rental payments were $350 in fiscal year 2011 and $382 in fiscal year 2010.
Contingent payments were approximately $109 in fiscal year 2011 and $124 in fiscal year 2010. Transportation equipment is
currently rented on a month-to-month basis. The Company anticipates entering into new transportation equipment leases in fiscal
year 2012.
38
Clean
NOTE 7- Segment Information:
We have two reportable operating segments, Frozen Food Products (the processing and distribution of frozen products),
and Refrigerated and Snack Food Products (the processing and distribution of refrigerated meat and other convenience foods).
We evaluate each segment’s performance based on revenues and operating income. Selling and general administrative
expenses include corporate accounting, information systems, human resource and marketing management at the corporate level.
These activities are allocated to each operating segment based on revenues and/or actual usage.
The following segment information is for the years ended October 28, 2011 and October 29, 2010:
2011
Sales
Intersegment sales
Net sales
Cost of products sold
Gross margin
Selling, general and administrative expenses
Income (loss) before taxes
$
Refrigerated
and Snack
Food
Products
Frozen
Food
Products
54,680
Other
-
54,680
33,350
21,330
17,074
4,256
63,583
1,094
64,677
48,480
16,197
21,441
(5,244)
Elimination
-
-
-
-
-
-
124
(124)
(1,094)
(1,094)
(1,094)
-
-
-
Totals
118,263
118,263
80,736
37,527
38,639
(1,112)
Total assets
Additions to property, plant and equipment
$
$
11,887
23,124
659
980
21,955
213
-
-
56,966
1,852
2010
Sales
Intersegment sales
Net sales
Cost of products sold
Gross margin
Selling, general and administrative expenses
Income (loss) before taxes
Frozen Food
Products
Refrigerated
and Snack Food
Products
$
54,015 $
-
54,015
31,682
22,333
16,769
5,564
63,640 $
1,228
64,868
40,109
24,759
24,666
93
Other
- $
117,655
Elimination Totals
- $
-
-
-
-
134
(134)
(1,228)
(1,228)
(1,228)
117,655
70,563
47,092
41,569
5,523
-
-
-
Total assets
Additions to property, plant and equipment
$
$
11,668 $
805 $
20,937 $
954 $
27,918 $
10 $
- $
- $
60,523
1,769
NOTE 8- Unaudited Interim Financial Information:
Not applicable to smaller reporting company.
39
Clean
Exhibit 21.1
BRIDGFORD FOODS CORPORATION
SUBSIDIARIES OF REGISTRANT
Name of Subsidiary
Bridgford Marketing Company
Bridgford Meat Company
Bridgford Food Processing Corporation
Bridgford Food Processing of Texas, L.P.**
A.S.I. Corporation
Bridgford Distributing Company of Delaware (inactive)
American Ham Processors, Inc.*
Bert Packing Company (inactive)
Moriarty Meat Company
* - No shares have been issued.
** - Limited Partnership.
State in which Incorporated
California
California
California
Texas
California
Delaware
Delaware
Illinois
Illinois
40
Clean
Exhibit 31.1
I, William L. Bridgford, certify that:
1. I have reviewed this annual report on Form 10-K of Bridgford Foods Corporation;
2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this annual report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
b.
c.
d.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions):
a.
b.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
Dated: January 13, 2012
/s/ WILLIAM L. BRIDGFORD
William L. Bridgford, Chairman of the Board
(Principal Executive Officer)
41
Clean
Exhibit 31.2
I, Raymond F. Lancy, certify that:
1. I have reviewed this annual report on Form 10-K of Bridgford Foods Corporation;
2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this annual report;
3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods
presented in this annual report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined
in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.
b.
c.
d.
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles;
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during
the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial
reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons
performing the equivalent functions):
a.
b.
All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.
Dated: January 13, 2012
/s/ RAYMOND F. LANCY
Raymond F. Lancy
Chief Financial Officer, Vice President,
Treasurer and Assistant Secretary
(Principal Financial and Accounting Officer)
42
Clean
Exhibit 32.1
Certification Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
I, William L. Bridgford, Chairman of the Board of Bridgford Foods Corporation (the “Company”), certify, pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:
(1)
the Annual Report on Form 10-K of the Company for the fiscal year ended October 28, 2011 (the “Report”) fully
complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or
780(d)); and
(2)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.
Dated: January 13, 2012
/s/ WILLIAM L. BRIDGFORD
William L. Bridgford
Chairman of the Board
(Principal Executive Officer)
This certification accompanies the Annual Report on Form 10-K pursuant to Section 13(a) and Section 15(d) of the Securities
Exchange Act of 1934 and 18 U.S.C. Section 1350 and shall not be deemed filed by the Company for purposes of Section 18 of
the Securities Exchange Act of 1934.
43
Clean
Exhibit 32.2
Certification Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
I, Raymond F. Lancy, Chief Financial Officer, Vice President, Treasurer and Assistant Secretary of Bridgford Foods Corporation
(the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:
(1)
the Annual Report on Form 10-K of the Company for the fiscal year ended October 28, 2011 (the “Report”) fully
complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or
780(d)); and
(2)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of
operations of the Company.
Dated: January 13, 2012
/s/ RAYMOND F. LANCY
Raymond F. Lancy
Chief Financial Officer, Vice President
Treasurer and Assistant Secretary
(Principal Financial and Accounting Officer)
This certification accompanies the Annual Report on Form 10-K pursuant to Section 13(a) and Section 15(d) of the Securities
Exchange Act of 1934 and 18 U.S.C. Section 1350 and shall not be deemed filed by the Company for purposes of Section 18 of
the Securities Exchange Act of 1934.
44
BRIDGFORD FOODS CORPORATION
_________________________________
NOTICE OF 2012 ANNUAL MEETING OF SHAREHOLDERS
March 21, 2012
10:00 a.m. Pacific Time
_________________________________
To the Shareholders of BRIDGFORD FOODS CORPORATION:
The annual meeting of the shareholders of Bridgford Foods Corporation, a California corporation, will be held at the
offices of Bridgford Foods Corporation, 1308 North Patt Street, Anaheim, California 92801, on Wednesday, March 21, 2012 at
10:00 a.m. Pacific Time, for the following purposes:
(1) To elect eight directors to hold office for one year or until their successors are elected and qualified.
(2) To ratify the appointment of Squar, Milner, Peterson, Miranda & Williamson, LLP as the Company's independent
registered public accountants for the fiscal year ending on November 2, 2012.
(3) To transact such other business as may properly come before the meeting, or any postponements or adjournments
thereof.
The Board of Directors recommends that you vote “FOR” each of the eight director nominees referenced in Proposal 1
and “FOR” Proposal 2. Each of the Proposals is described in greater detail in the proxy statement accompanying this notice.
Only shareholders of record at the close of business on February 3, 2012 are entitled to notice of and to vote at the
meeting or any adjournment thereof.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to Be
Held on March 21, 2012.
Pursuant to the rules of the Securities and Exchange Commission, or the SEC, the Company has elected to provide
access to its proxy materials both by sending you a full set of proxy materials, including this notice of meeting, the
accompanying proxy statement and proxy card, and the 2012 Annual Report to Shareholders, and by notifying you of the
availability of the proxy materials on the Internet. The notice of annual meeting, proxy statement, proxy card and 2012
Annual Report to Shareholders are available at https://materials.proxyvote.com/108763.
All shareholders are cordially invited to attend the annual meeting. HOWEVER, TO ENSURE YOUR
REPRESENTATION AT THE MEETING, THE BOARD OF DIRECTORS RESPECTFULLY URGES YOU TO SIGN,
DATE AND RETURN THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PREPAID
ENVELOPE. If you attend the meeting in person, you may withdraw your proxy and vote your shares at the
meeting. Shareholders attending the meeting whose shares are held in the name of a broker or other nominee who desire
to vote their shares at the meeting should bring with them a letter or account statement from that firm confirming their
ownership of shares.
The meeting will be held at the principal offices of Bridgford Foods Corporation, which are located at 1308
North Patt Street, Anaheim, California 92801, one block east of Lemon St. and just south of the 91 Freeway in the city of
Anaheim, California. Driving directions may be obtained by contacting the office manager at 714-526-5533.
Your vote is extremely important. Please vote as soon as possible to ensure that your vote is recorded promptly
even if you plan to attend the annual meeting.
Anaheim, California
February 24, 2012
By order of the Board of Directors
/s/ Cindy Matthews-Morales
Cindy Matthews-Morales
Secretary
(This page intentionally left blank.)
BRIDGFORD FOODS CORPORATION
1308 North Patt Street, Anaheim, California 92801
_________________________________
PROXY STATEMENT
_________________________________
Annual Meeting of Shareholders to be held March 21, 2012
The enclosed proxy is solicited by the Board of Directors of Bridgford Foods Corporation, a California corporation (the
“Company”), for use at the annual meeting of shareholders of the Company (the “Annual Meeting”) to be held at the offices of
the Company, which are located at 1308 North Patt Street, Anaheim, California 92801, on Wednesday, March 21, 2012 at 10:00
a.m. Pacific Standard Time, and at any adjournment thereof. All shareholders of record at the close of business on February 3,
2012 are entitled to notice of and to vote at such meeting. This Proxy Statement and the accompanying proxy are being mailed
on or about February 24, 2012.
The persons named as proxies were designated by the Board of Directors. Any proxy may be revoked or superseded by
(i) executing a later proxy (ii) giving notice of revocation in writing prior to, or at, the Annual Meeting, or (iii) attending the
Annual Meeting, withdrawing the proxy and voting in person. Attendance at the Annual Meeting will not in and of itself
constitute revocation of the proxy.
All proxies, which are properly completed, signed and returned to the Company prior to the Annual Meeting, and not
revoked, will be voted in accordance with the instructions given in the proxy. If a choice is not specified in the proxy, the proxy
will be voted “FOR” election of each of the eight director nominees proposed by the Board of Directors and “FOR” ratification
of the Company’s appointment of Squar, Milner, Peterson, Miranda & Williamson, LLP as the Company’s independent
registered public accountants for the fiscal year ending on November 2, 2012. Management does not know of any matters which
will be brought before the Annual Meeting other than those specifically set forth in the notice hereof. However, if any other
matter properly comes before the Annual Meeting, it is intended that the proxies, or their substitutes, will vote on such matters in
accordance with their best judgment.
Solicitation of proxies will be primarily by mail, although some of the officers, directors and employees of the
Company may solicit proxies personally or by telephone, facsimile or electronic mail. All expenses incurred in connection with
this solicitation will be borne by the Company. The Company will reimburse brokers and others who incur costs to send proxy
materials to beneficial owners of stock in the name of a broker or nominee.
On February 3, 2012, the record date for the Annual Meeting, there were 9,191,009 shares of common stock of the
Company outstanding. The presence at the Annual Meeting of a majority of the outstanding shares, in person or by proxy
relating to any matter to be acted upon at the Annual Meeting, is necessary to constitute a quorum for the Annual Meeting.
Each share of common stock entitles the holder thereof to one vote on each matter to be voted upon by such
shareholders and, upon prior notice, to cumulate votes for the election of directors. For purposes of the quorum and the
discussion below regarding the vote necessary to take shareholder action, shareholders of record who are present at the Annual
Meeting in person or by proxy and who abstain or withhold their vote, including brokers, dealers or other nominees holding
shares of their respective customers of record who cause abstentions to be recorded at the Annual Meeting, are considered
shareholders who are present and entitled to vote and count toward the quorum. Brokers, banks or other nominees holding
shares of record for their respective customers generally are not entitled to vote on the election of directors unless they receive
voting instructions from their customers. As used herein, “uninstructed shares” means shares held by a nominee who has not
received instructions from its customers on a particular matter. As used herein, “broker non-vote” means the votes that could
have been cast on the matter by nominees with respect to uninstructed shares if the nominees had received instructions. The
effect of proxies marked “withheld” as to any director nominee or “abstain” as to any other Proposal, and the effect of broker
non-votes on each of the Proposals, is discussed in each Proposal below.
PROPOSAL 1
ELECTION OF DIRECTORS
The directors of the Company are elected annually to serve until the next annual meeting of the shareholders or until
their respective successors are elected and duly qualified. At the Annual Meeting, eight directors have been nominated for
election. The election of directors shall be by the affirmative vote of the holders of a plurality of the shares voting in person or
by proxy at the Annual Meeting. Every shareholder, or his or her proxy, entitled to vote upon the election of directors may
cumulate his or her votes and give one candidate a number of votes equal to the number of directors to be elected multiplied by
the number of votes to which his or her shares are entitled, or distribute his or her votes on the same principle among as many
candidates as he or she deems appropriate. No shareholder or proxy, however, shall be entitled to cumulate votes unless such
candidate or candidates have been nominated prior to the voting and the shareholder has given notice at the meeting, prior to the
voting, of the shareholder’s intention to cumulate such shareholder’s votes. If any one shareholder gives such notice, all
shareholders may cumulate their votes for candidates in nomination. Each of these individuals has served as a director since the
last annual meeting except for Allan Bridgford Jr. and John V. Simmons. All current directorships are being filled.
Unless otherwise instructed, shares represented by the proxies will be voted “FOR” the election of each of the nominees
listed below. Broker non-votes and proxies marked “withheld” as to one or more of the nominees will result in the respective
nominees receiving fewer votes. However, the number of votes otherwise received by the nominee will not be reduced by such
action.
Each nominee has indicated that he is willing and able to serve as director if elected. In the event that any of such
nominees shall become unavailable for any reason, an event which management does not anticipate, it is intended that proxies
will be voted for substitute nominees designated by management.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE
DIRECTOR NOMINEES NAMED BELOW.
The following table and biographical summaries set forth, with respect to each nominee for director, his age, the
positions he currently holds in the Company and the year in which he first became a director of the Company. Data with respect
to the number of shares of the Company’s common stock beneficially owned by each of such directors as of February 3, 2012
appears under the caption “PRINCIPAL SHAREHOLDERS AND MANAGEMENT” below.
Name
William L. Bridgford
Allan Bridgford Jr.
Bruce H. Bridgford
John V. Simmons
Todd C. Andrews
D. Gregory Scott
Richard A. Foster
Paul R. Zippwald
Current Position at the Company
Age
57 Chairman of the Board and Member of the Executive Committee (1)(4)
53 Director (1)(4)
59 Director (1)(4)
56 President, Director and Member of the Executive Committee (4)
46 Director (2)(3)(4)
55 Director, Audit Committee and Compensation Committee Chairman (2)(3)(4)
76 Director (2)(3)(4)
74 Director (2)(3)(4)
(1) William L. Bridgford, Allan Bridgford, Jr. and Bruce H. Bridgford are cousins.
(2) Member of the Compensation Committee.
(3) Member of the Audit Committee.
(4) Member of the Nominating Committee.
Year First
Became
Director
2004
2011
2009
2011
2004
2006
2001
1992
Directors
William L. Bridgford
William L. Bridgford has served as Chairman of the Board since March of 2006. He previously served as President of
the Company from June of 2004 until March of 2006, and Secretary of the Company for more than five years. Mr. Bridgford has
been a full-time employee of the Company since 1981. Mr. Bridgford has also served as a member of the Executive Committee
since 2004. Mr. Bridgford is a graduate of California State University, Fullerton with a degree in Business Management.
Mr. Bridgford brings to the Board extensive experience in the operations of the Company and provides strong
leadership skills that provide strategic business guidance to the Company. He is one of the principal owners of Bridgford
Industries Inc., the majority stockholder of Bridgford Foods Corporation. The Board believes his executive managerial
experience and Company knowledge base combined with his understanding of corporate values and culture qualify him to serve
as a member of the Board.
2
Allan Bridgford, Jr.
Allan L. Bridgford Jr. served as President of Bridgford Foods of Illinois, a division of the Company, from January 1983
until his retirement in October of 2002. Mr. Bridgford is a graduate of the University of Missouri with a degree in Economics.
Mr. Bridgford has extensive sales, marketing and distribution experience in the food industry. He is one of the principal
owners of Bridgford Industries Inc., the majority stockholder of Bridgford Foods Corporation.
Bruce H. Bridgford
Bruce H. Bridgford has served as President of Bridgford Foods of California, a division of the Company, since March
of 1999. Mr. Bridgford has been a full time employee of the Company since 1977 and earned a B.S. degree in Business with a
concentration in finance and marketing from the University of Southern California.
Mr. Bridgford provides key insight into the direct store delivery operations of the Company as well as strategic direction
for the sales management and marketing functions of the Company. He is one of the principal owners of Bridgford Industries
Inc., the majority stockholder of Bridgford Foods Corporation. The Board believes these skills and experiences qualify him to
serve as a member of the Board.
John V. Simmons
John V. Simmons has served as President of the Company and member of the Executive Committee since 2006. He
previously served as Vice President of the Company for more than the five years. Mr. Simmons earned a B.A. degree in
Psychology from the University of Wisconsin.
Mr. Simmons is qualified to serve as a director as he brings extensive knowledge and experience in the areas of
marketing, product research and development, trade relations and operations developed as an employee of the Company since
1979.
Todd C. Andrews
Todd C. Andrews is a Certified Public Accountant (inactive) and presently serves as Vice President and Controller of
Public Storage, a member of the S&P 500, headquartered in Glendale, California. Mr. Andrews has been employed by Public
Storage since 1997. Mr. Andrews graduated cum laude with a Bachelor of Science degree in Business Administration with an
emphasis in accounting and finance from California State University, Northridge.
Mr. Andrews is qualified to be a director due to his extensive experience in multiple accounting and finance roles over a
period of more than 20 years. In particular, Mr. Andrews is experienced in the areas of financial reporting and analysis, treasury
management, SEC reporting, internal controls and procedures and operational analysis. In addition, Mr. Andrews brings a
diverse set of perspectives to the Board from serving in positions in multiple industries, including public accounting,
entertainment, and real estate. Mr. Andrews qualifies as an audit committee financial expert and is financially sophisticated
within the meaning of the NASDAQ rules.
D. Gregory Scott
D. Gregory Scott is a Certified Public Accountant (inactive) and currently serves as the Managing Director of Peak
Holdings, LLC, an investment management company based in Beverly Hills, California. Mr. Scott has been with Peak Holdings,
LLC for more than the past five years. Peak Holdings, LLC and its affiliates own and manage in excess of three million square
feet of office, retail and warehouse space throughout the United States.
Mr. Scott qualifies as an audit committee financial expert and has financial sophistication as described in the NASDAQ
Listing Rules. Mr. Scott brings to the Board extensive financial and managerial experience, which qualifies him to serve as a
member of the Board.
Richard A. Foster
Richard A. Foster was the President of Interstate Electronics Corporation, a wholly owned subsidiary of Figgie
International, Inc., from 1979 until his retirement in 1991. Mr. Foster also served as Vice President of Figgie International, Inc.
from 1986 to 1991. He holds a B.S. degree from Stanford University and an M.S. degree from the University of California, Los
Angeles.
Mr. Foster has significant experience and background in corporate operations and has provided many years of service to
the Company as a member of the Board. The Board believes that Mr. Foster is qualified to serve as a director of the Company
due to his extensive business and managerial expertise.
3
Paul R. Zippwald
Paul R. Zippwald was Regional Vice President and Head of Commercial Banking for Bank of America NT&SA, North
Orange County, California, for more than five years prior to his retirement in July 1992. Mr. Zippwald is currently retired. He is
a graduate of the Graduate School of Credit and Financial Management at the Amos Tuck School of Business Administration of
Dartmouth College and also holds a graduate degree from the American Institute of Banking.
Mr. Zippwald brings to the Board a background and expertise in banking and investment advisory services. He has
provided many years of service to the Company as a member of the Board. The Board believes that Mr. Zippwald is qualified to
serve as a director of the Company due to his business expertise and executive managerial experience.
Public Company Directorships
Except as indicated above, none of the directors have been a director of any other public company in the past five years.
Board Meetings
During fiscal year 2011, the Company’s Board of Directors held twelve regularly scheduled monthly meetings and no
special meetings. Each of the nominees holding office during this period attended at least 75% of the aggregate number of
monthly meetings of the Board of Directors and meetings of committees upon which he served.
Arrangements or Understandings with Directors
There are no agreements or understandings pursuant to which any of the directors was elected to serve as a director.
Controlled Company Status
The Company is considered a “controlled company” within the meaning of Rule 5615(c)(1) of the NASDAQ Listing
Rules based on the approximate 78% ownership of the Company by Bridgford Industries Incorporated and is therefore exempted
from various rules pertaining to certain “independence” requirements of its directors and certain requirements with respect to the
committees of the Board. Nevertheless, the Board of Directors has determined that Messrs. Andrews, Foster, Scott and
Zippwald are all “independent directors” within the meaning of Rule 5605 of the NASDAQ Listing Rules.
Board Committees
The Board of Directors maintains three committees, the Compensation Committee, the Audit Committee and the
Nominating Committee.
Compensation Committee
The Compensation Committee for fiscal year 2011 consisted of Messrs. Andrews, Foster, Scott, Zippwald and Schulze,
who resigned from his position on the Board on October 10, 2011. As of the date of mailing of this proxy statement, the
Compensation Committee consists of Messrs. Andrews, Foster, Scott and Zippwald. Each of the members of the Compensation
Committee is a non-employee director and, notwithstanding that the Company is a “controlled company” within the meaning of
the NASDAQ Listing Rules, each member is independent as defined in Rule 5605(a)(2) of the NASDAQ Listing Rules. The
Compensation Committee is responsible for establishing and administering the Company’s compensation arrangements for all
executive officers.
The Compensation Committee meets no less frequently than annually (and more frequently as circumstances dictate) to
discuss and determine executive officer and director compensation. The Compensation Committee does not generally retain the
services of any compensation consultants. However, from time to time it utilizes compensation data from companies that the
Compensation Committee deems to be competitive with the Company in connection with its annual review of executive
compensation. The Compensation Committee has the power to form and delegate authority to subcommittees when appropriate,
provided that such subcommittees are composed entirely of directors who would qualify for membership on the Compensation
Committee pursuant to applicable NASDAQ Listing Rules. See “Compensation Discussion and Analysis” and “Director
Compensation.”
The Compensation Committee held one meeting during fiscal year 2011, which was attended by all committee members
except Mr. Schulze. No additional compensation is paid to directors for participation on the Compensation Committee. The
Compensation Committee operates under a written charter, which was adopted on October 11, 2010 and is attached as Exhibit A
to the Company’s proxy statement for the 2011 Annual Meeting of Shareholders filed with the SEC on February 18, 2011. The
charter is not available on the Company’s website.
Audit Committee
The Audit Committee for fiscal year 2011 consisted of Messrs. Andrews, Foster, Scott, Zippwald and Schulze, who
resigned from his position on the Board on October 10, 2011. As of the date of mailing of this proxy statement, the Audit
Committee consists of Messrs. Andrews, Foster, Scott and Zippwald. The Audit Committee has been established in accordance
4
with the rules and regulations of the SEC and each of the members of the Audit Committee is an “independent director” as
defined in Rule 5605(c)(2) of the NASDAQ Listing Rules. In addition, the Board has determined that Messrs. Andrews and
Scott qualify as “audit committee financial experts” as such term is used in the rules and regulations of the SEC.
The Audit Committee meets periodically with the Company’s independent registered public accountants and reviews
the Company’s accounting policies and internal controls. It also reviews the scope and adequacy of the independent registered
public accountants’ examination of the Company’s annual financial statements. In addition, the Audit Committee selects the
firm of independent registered public accountants to be retained by the Company, subject to shareholder approval, pre-approves
services rendered by its independent registered public accountants and pre-approves all related-party transactions.
The Audit Committee held 10 meetings during fiscal year 2011. Each of the members of the Audit Committee receives
$300 to $550 per meeting depending on the length of each meeting attended. In addition, the Audit Committee holds a pre-
earnings release conference with the Company’s independent registered public accountants on a quarterly basis. The Audit
Committee operates under an Amended and Restated Audit Committee Charter, which was approved on November 8, 2010 and
is attached as Exhibit B to the Company’s proxy statement for the 2011 Annual Meeting of Shareholders filed with the SEC on
February 18, 2011. The charter is not available on the Company’s website.
Nominating Committee
The Board of Directors has decided that the full Board should perform the functions of a Nominating Committee for the
Company. It made that decision because the Board believes that selecting new Board nominees is one of the most important
responsibilities the Board members have to the Company’s shareholders and, for that reason, all of the members of the Board
should have the right and responsibility to participate in the selection process. Because of its status as a “controlled company”
within the meaning of Rule 5615(c)(1) of the NASDAQ Listing Rules, the Company is not required to have a Nominating
Committee comprised solely of independent directors.
In its role as Nominating Committee, the full Board identifies and screens new candidates for Board
membership. Nevertheless, actions of the Board, in its role as Nominating Committee, can be taken only with the affirmative
vote of a majority of the independent directors on the Board, as defined by the NASDAQ Listing Rules. The Board last met in
its role as Nominating Committee in October 2011 to approve the appointments of Messrs. Allan Bridgford, Jr. and John
Simmons. The Nominating Committee does not act pursuant to a written charter.
Director Nomination Process
In identifying new Board candidates, the Board will seek recommendations from existing Board members and executive
officers. In addition, the Board will consider any candidates that may have been recommended by any of the Company’s
shareholders who have made those recommendations in accordance with the shareholder nomination procedures described
below. The Board, in its capacity as Nominating Committee, does not evaluate nominees recommended by shareholders
differently from its evaluation of other director nominees. The Board also has the authority to engage an executive search firm
and other advisors as it deems appropriate to assist in identifying qualified candidates for the Board.
In assessing and selecting Board candidates, the Board will consider such factors, among others, as the candidate’s
independence, experience, knowledge, skills and expertise, as demonstrated by past employment and board experience; the
candidate’s reputation for integrity; and the candidate’s participation in local community and local, state, regional or national
charitable organizations. When selecting a nominee from among candidates considered by the Board, it will conduct background
inquiries of and interviews with the candidates the Board members believe are best qualified to serve as directors. The Board
members will consider a number of factors in making their selection of a nominee from among those candidates, including,
among others, whether the candidate has the ability, willingness and enthusiasm to devote the time and effort required of
members of the Board; whether the candidate has any conflicts of interest or commitments that would interfere with the
candidate’s ability to fulfill the responsibilities of directors of the Company, including membership on Board committees;
whether the candidate’s skills and experience would add to the overall competencies of the Board; and whether the candidate has
any special background or experience relevant to the Company’s business.
Board Consideration of Diversity
The Board believes that differences in experience, knowledge, skills and expertise enhance the performance of the
Board. Accordingly, the Board, in its capacity as Nominating Committee, considers such diversity in selecting and evaluating
proposed Board nominees. However, the Board has not implemented a formal policy with respect to the consideration of
diversity for the composition of the Board.
Shareholder Recommendation of Board Candidates
Any shareholder desiring to submit a recommendation for consideration by the Board of a candidate that the shareholder
believes is qualified to be a Board nominee at any upcoming shareholders meeting may do so by submitting that
recommendation in writing to the Board not later than 120 days prior to the first anniversary of the date on which the proxy
materials for the prior year’s annual meeting were first sent to shareholders. However, if the date of the upcoming annual
meeting has been changed by more than 30 days from the date of the prior year’s meeting, the recommendation must be received
within a reasonable time before the Company begins to print and mail its proxy materials for the upcoming annual meeting. In
5
addition, the recommendation should be accompanied by the following information: (i) the name and address of the nominating
shareholder and of the person or persons being recommended for consideration as a candidate for Board membership; (ii) the
number of shares of voting stock of the Company that are owned by the nominating shareholder, his or her recommended
candidate and any other shareholders known by the nominating shareholder to be supporting the candidate’s nomination; (iii) a
description of any arrangements or understandings, that relate to the election of directors of the Company, between the
nominating shareholder, or any person that (directly or indirectly through one or more intermediaries) controls, or is controlled
by, or is under common control with, such shareholder and any other person or persons (naming such other person or persons);
(iv) such other information regarding each such recommended candidate as would be required to be included in a proxy
statement filed pursuant to the proxy rules of the SEC; and (v) the written consent of each such recommended candidate to be
named as a nominee and, if nominated and elected, to serve as a director. No director nominations by shareholders have been
received as of the filing of this Proxy Statement.
Board Leadership Structure and the Role of the Board in Risk Management Oversight
Board Leadership Structure.
The Board is comprised of a total of eight directors. One of those directors, William L. Bridgford, serves as the
Chairman of the Board. In this capacity, he is principally charged with fulfilling the following duties:
(cid:131)(cid:130)(cid:130)Presiding as the Chairman of the meetings of the Board of Directors;
(cid:131)(cid:130)(cid:130)Serving as a conduit of information between the independent directors and members of management;
(cid:131)(cid:130)(cid:130)Approving Board of Director meeting agendas and schedules;
(cid:131)(cid:130)(cid:130)Calling executive session meetings of the Independent Directors, as needed;
(cid:131)(cid:130)(cid:130)Reviewing information sent to the Board of Directors;
(cid:131)(cid:130)(cid:130)Working with the Chief Financial Officer and Corporate Secretary to ensure the Board has adequate resources
to support its decision-making obligations;
(cid:131)(cid:130)(cid:130)Meeting with shareholders as appropriate; and
(cid:131)(cid:130)(cid:130)Such other responsibilities and duties as the Board of Directors shall designate.
The Company has not appointed a Chief Executive Officer. Instead, the Company has historically utilized an Executive
Committee to serve in the capacity of Chief Executive Officer. The Board believes that the Executive Committee structure is
appropriate for the Company because it requires a full committee of officers, each of whom bring their own experiences and
perspectives to bear on their decision making, to discuss and vote on important decisions affecting the Company. The Company
has utilized an Executive Committee in lieu of appointing a Chief Executive Officer for more than twenty years. See "Executive
Officers" for further discussion about the role and membership of the Executive Committee.
The Chairman of the Board serves on the Executive Committee. Thus, the roles of Chairman of the Board and Chief
Executive Officer are intertwined to some extent. However, the Chairman of the Board and the President represent only two of
the five members of the Executive Committee and no other directors serve on the Executive Committee. Accordingly, three
members of the Executive Committee, comprising a majority of the voting power on the Executive Committee, are not directors
of the Company. The Board believes that this structure properly maintains the independence of the Board as a whole, and of the
Chairman of the Board, from the management team.
The Board’s Role in Risk Oversight.
The responsibility for the day-to-day management of risk lies with the Executive Committee. Risk management is not
viewed by the Executive Committee as a separate function, but rather is viewed as part of the day-to-day process of running the
Company. It is the Board’s responsibility to oversee the Executive Committee with respect to its risk management function and
to ensure that the Company’s risk management system is well-functioning and consistent with the Company’s overall corporate
strategy and financial goals. In fulfilling that oversight role, the Board focuses on the adequacy of the Company's overall risk
management system. The Board believes that an effective risk management system will adequately identify the material risks to
the Company’s business, monitor the effectiveness of the risk mitigating policies and procedures, and provide the Executive
Committee with input with respect to the risk management process.
Code of Ethics
The Company adopted a code of ethics that is applicable to, among other individuals, its principal executive officer,
principal financial officer, principal accounting officer or controller, or persons performing similar functions, and posted the
code of ethics on its website at http://www.bridgford.com (and designated therein as the Code of Conduct). Any amendment or
waiver to the Company’s code of ethics that applies to its directors or executive officers will be posted on its website or in a
report filed with the SEC on Form 8-K.
Communications with the Board
Shareholders may communicate with the Board or any of the directors by sending written communications addressed to
the Board of Directors generally, or to any director(s), to Bridgford Foods Corporation, 1308 North Patt Street, Anaheim,
California 92801, Attention: Corporate Secretary. All communications are compiled by the Corporate Secretary and forwarded
to the Board or the individual director(s) accordingly.
6
Director Attendance at Annual Meetings
The Company does not currently have a specific policy regarding director attendance at annual shareholder
meetings. However, directors are strongly encouraged to attend annual shareholder meetings. All eight directors (then serving
as directors of the Company) attended the Company’s 2011 Annual Meeting of Shareholders.
Executive Officers
Members of the Company’s Executive Committee, comprised of the five executive officers named below, act in the
capacity of Chief Executive Officer of the Company. The following five executive officers are elected annually to serve on the
Executive Committee at the pleasure of the Board of Directors:
Allan L. Bridgford (1)
Hugh Wm. Bridgford
William L. Bridgford
John V. Simmons
Raymond F. Lancy
Vice President and Member of the Executive Committee (2)
Vice President and Chairman of the Executive Committee (2)
Chairman of the Board and Member of the Executive Committee (2)
President and Member of the Executive Committee
Chief Financial Officer, Vice President, Treasurer and Member of the
Executive Committee
(1) Allan L. Bridgford resigned from his position as a director of the Company on October 10, 2011. His son, Allan Bridgford,
Jr., was appointed to fill the vacancy created by his resignation.
(2) William L. Bridgford is the son of Hugh Wm. Bridgford and the nephew of Allan L. Bridgford. Hugh Wm. Bridgford and
Allan L. Bridgford are brothers.
A biographical summary regarding William L. Bridgford and John V. Simmons is set forth above under the caption
“Directors.” Biographical information with respect to the Company’s other executive officers is set forth below:
Allan L. Bridgford
Allan L. Bridgford, age 76, previously served as Senior Chairman of the Board from March of 2006 to October of
2011. From March of 1995 through March of 2006, Mr. Bridgford served as Chairman of the Board. He has been an employee
of the Company since 1957, and reduced his work schedule to 80% in March of 2000 and 60% in March of 2005. Mr.
Bridgford’s base compensation was reduced by the same percentage as his regular work schedule reduction. Mr. Bridgford has
also served as a member of the Executive Committee since 1972. He is a graduate of Stanford University with a degree in
Economics.
Hugh Wm. Bridgford
Hugh Wm. Bridgford, age 80, has served as Vice President of the Company and Chairman of the Executive Committee
since March of 1995. He previously served as Chairman of the Board of Directors of the Company for more than five years and
was a full time employee of the Company from 1955 through December 2010. Mr. Bridgford reduced his work schedule to 80%
in January 2011. He also served as a member of the Executive Committee since 1972. Mr. Bridgford is a graduate of Stanford
University with a degree in Economics and completed the Executive Program at the University of California at Los Angeles
Graduate School of Business.
Raymond F. Lancy
Raymond F. Lancy, age 58, has served as Treasurer of the Company for more than the past five years. He has also
served as a member of the Executive Committee since 2001, Vice President since 2001 and Chief Financial Officer since
2003. Mr. Lancy is a Certified Public Accountant (inactive) and worked for ten years as an auditor at
PricewaterhouseCoopers. He earned a Bachelor of Science degree with a major in Administration with high honors from
California State University, San Bernardino.
Agreements or Understandings with Officers
There are no agreements or understandings pursuant to which any of the executive officers was selected to serve as an
executive officer.
7
PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth certain information known to the Company with respect to the beneficial ownership of the
Company’s common stock as of February 3, 2012 by each shareholder known by the Company to be the beneficial owner of
more than 5% of the Company’s common stock, by each director and nominee for director, by each executive officer named in
the Summary Compensation Table and by all executive officers and directors as a group. The information as to each person or
entity has been furnished by such person or group.
Amount and Nature of Shares Beneficially Owned
Sole Voting and
Investment Power
Shared Voting and
Investment
Power(2)
Total
Beneficially
Owned(3)
Percentage of
Outstanding
Shares
Beneficially
Owned(3)
7,156,396
47,917
155,882
7,986
1,654
167,870
6,175
14,094
363
200
2,234
8,550
1,452
—
7,156,396
7,156,396
7,156,396
7,156,396
—
7,156,396
7,156,396
—
—
—
7,156,396
7,204,313
7,312,278
7,164,382
7,158,050
167,870
7,162,571
7,170,490
363
200
2,234
8,550
1,452
77.9%
78.4%
79.6%
77.9%
77.9%
1.8%
77.9%
78.0%
*
*
*
0.1%
*
7,567,235
7,156,396
7,567,235
82.3%
Name and Address
of Beneficial Owner(1)
Bridgford Industries Incorporated
1707 Good-Latimer Expressway
Dallas, TX 75226
Hugh Wm. Bridgford
Allan L. Bridgford(4)
Bruce H. Bridgford
Baron R.H. Bridgford
170 North Green St.
Chicago, IL 60607
Robert E. Schulze(5)
William L. Bridgford
Allan Bridgford Jr.
John V. Simmons
1707 Good-Latimer Expressway
Dallas, TX 75226
Todd C. Andrews
Richard A. Foster
D. Gregory Scott
Paul R. Zippwald
All directors and executive officers
as a group (12 persons)
* Represents ownership of less than one percent (1%) of the outstanding shares.
(1) Unless otherwise indicated, the address of such beneficial owner is the Company’s principal executive offices, which are
located at 1308 North Patt Street, Anaheim, California 92801.
(2) Represents shares beneficially owned by Bridgford Industries Incorporated, a Delaware corporation (“BII”) as reported on
Schedule 13D filed with the SEC on April 5, 2010. Other than ownership of these shares, BII does not presently have any
significant business or assets. Allan L. Bridgford, Hugh Wm. Bridgford, William L. Bridgford, Bruce H. Bridgford, Baron
R.H. Bridgford and Allan Bridgford Jr. presently own 16.49%, 10.82%, 7.94%, 10.56%, 9.83% and 4.28%, respectively, of
the outstanding voting capital stock of BII. The remaining shares of BII capital stock is owned of record, or beneficially, by
32 additional members of the Bridgford family. The officers of BII jointly vote all of the Company’s shares held by BII.
(3) Applicable percentage of ownership as of February 3, 2012 is based upon 9,191,009 shares of common stock
outstanding. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting and investment
power with respect to shares shown as beneficially owned. Except as otherwise indicated, and subject to community
property laws where applicable, to the knowledge of the Company the persons listed above have sole voting and investment
power with respect to all shares shown as beneficially owned by them.
(4) Mr. Bridgford resigned from his position as a director of the Company effective October 10, 2011. However, Mr. Bridgford
continues to serve as a member of the Company’s Executive Committee.
(5) Mr. Schulze resigned from his position as a director of the Company effective October 10, 2011.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors, executive officers,
and holders of more than 10% of the Company’s common stock, to file with the SEC initial reports of ownership and reports of
changes in ownership of common stock of the Company. Officers, directors and 10% shareholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they file. To the Company’s knowledge, based solely
on the review of copies of such reports furnished to the Company and written representations that no other reports were required,
during the fiscal year ended October 28, 2011, all of the Company’s officers, directors and 10% shareholders complied with all
applicable Section 16(a) filing requirements.
8
COMPENSATION OF EXECUTIVE OFFICERS
Compensation Discussion and Analysis
Compensation Overview
This section provides information regarding the compensation paid to the Company’s “named executive officers” or
“NEOs,” all of whom are members of the Executive Committee. The Company has historically been and continues to be
principally managed by the Executive Committee. The Executive Committee, as a unit, serves as the Company’s “Chief
Executive Officer.” The Executive Committee currently consists of the following five members:
• Hugh Wm. Bridgford, Vice President and Chairman of the Executive Committee
• Allan L. Bridgford
• William L. Bridgford, Chairman of the Board (Principal Executive Officer)
•
• Raymond F. Lancy, Chief Financial Officer, Vice President and Treasurer (Principal Financial Officer)
John V. Simmons, President
The Company’s executive compensation program is overseen by the Compensation Committee of the Board (the
“Committee”), which is comprised of certain non-employee members of the Board. The basic responsibility of the Committee is
to review the performance of the officers and key employees toward achieving the Company’s strategic goals and to help ensure
that the Company is able to attract and retain individuals who can lead the Company to achieve those goals. Each member of the
Committee is an independent director as defined in Rule 5605(a)(2) of the NASDAQ Listing Rules.
One of the Company’s primary strategic goals is to increase shareholder value while meeting its objectives for customer
satisfaction, improved sales and financial performance, sound corporate governance, and competitive advantage. The Company’s
current emphases on controlling costs and improving profit margins on a consistent basis are also important factors which affect
the Company’s compensation decisions. The Committee’s goal is to work with management to balance the Company’s financial
goals and circumstances with the need to attract, motivate and retain the fully qualified and capable individuals the Company
needs to meet and surpass its customers’ and shareholders’ expectations in a highly-competitive industry.
Compensation Philosophy and Objectives
The core of the Company’s executive compensation philosophy is to pay for performance. To that end, incentive bonus
targets are set each year to reward excellent executive performance based upon the achievement of profit objectives by business
unit and the Company’s overall profitability based on pretax income, thus stimulating all executives to assume broad
responsibility for the Company’s overall financial welfare and financial performance.
The Committee’s guiding principles are as follows:
• Work with management to provide a compensation program that recognizes individual contributions as well as the
Company’s overall business results;
• Provide reasonable levels of total compensation which will enable the Company to attract and retain qualified and
capable executive talent within its industry, while also considering the Company’s current goals of controlling costs
and effecting consistent improvements in its overall financial condition;
• Motivate executive officers to deliver optimum individual and business unit performance;
• Develop and retain a leadership team that is capable of successfully operating and growing an increasingly
competitive and complex business in a rapidly changing industry;
• Ensure that executive compensation-related disclosures are made to the public on a timely basis.
Role of the Compensation Committee
The compensation of all NEOs is recommended by the Executive Committee and, after review and analysis, approved
by the Compensation Committee. The Compensation Committee met one time during fiscal year 2011. The responsibilities of
the Compensation Committee are as follows:
• Review and approve, on an annual basis, the total compensation and compensation structure for the Executive
Committee, including base salary, benefits, bonuses and equity compensation (if any). The Board’s evaluation of
the Executive Committee’s performance is considered in setting incentives. The Committee seeks to maintain an
appropriate balance, in light of overall Company performance and profitability, between the compensation of the
Executive Committee and the compensation of other officers and employees generally. The Committee may also
make any interim adjustments in any such compensation or plan as the Committee may deem appropriate, or as may
be requested by the Board or the Compensation Committee.
• Provide oversight of senior management’s decisions concerning the compensation of management, including
evaluation procedures for Company officers and other executives deemed eligible for bonuses or equity
compensation.
• Review and approve compensation packages for new management personnel and, as needed, termination packages
for departing management personnel.
• Review and, as deemed necessary or desirable, oversee the administration of the Company’s stock incentive and
stock purchase plans, if any.
9
• Assist the Board of Directors and management in developing and evaluating potential candidates for executive
positions.
• Advise the Board of Directors in its succession-planning initiatives for the Company’s executive officers and other
management personnel.
• Oversee preparation of a report on executive compensation as required for inclusion in the Company’s annual proxy
statement.
Role of Management in the Compensation Determination Process
The Company’s senior management team, particularly the Chairman of the Board and the Chairman of the Executive
Committee, support the Committee in the executive compensation decision-making process. At the request of the Compensation
Committee, one or more members of the Executive Committee may present a performance assessment and recommendations to
the Committee regarding base salaries, bonus payments, incentive plan structure and other compensation-related matters for the
Company’s executives (other than with respect to their own compensation).
Role of Compensation Consultant
The Compensation Committee has decided not to utilize the services of a paid compensation consultant after concluding
that such a consultant would provide insufficient value compared to the cost.
Total Compensation for Executive Officers
The compensation packages offered to the Company’s executive officers are comprised of one or more of the following
elements:
• Base salary;
• Discretionary cash bonuses;
• Post retirement healthcare and pension benefits.
The Company does not have any formal policies which dictate the amount to be paid with respect to each element, nor
does it have any policies which dictate the relative proportion of the various elements. The Company also does not have any
formal policies for allocating between cash and non-cash compensation or short-term and long-term compensation. Instead, the
Company relies on the judgment of the Compensation Committee and input and feedback from the management team, including
in particular members of the Executive Committee. The Committee has no plans to adopt any such formulas, ratios or other such
targets that might artificially dilute the Company’s effectiveness in achieving its overall profit objectives. In fact, all of the
Company’s compensation policy decisions are made in the context of its current financial position and are subordinated to the
Company’s current goal of achieving overall profitability on an annual basis. Each of the compensation components is described
in more detail below.
Base Salary
The Company provides executive officers and other employees with base salary to compensate them for services
rendered during the fiscal year. The purpose of base salary is to reward effective fulfillment of an executive’s assigned job
responsibilities, and to reflect the position’s relative value to the Company and competitiveness of the executive job
market. Base salaries for executive officers are determined based on the nature and responsibility of the position, salary norms
for comparable positions at similar companies, the expertise and effectiveness of the individual executive, and the
competitiveness of the market for the executive officer’s services.
The Company has successfully held most base salaries at the low end of the competitive range in order to reduce its
overall cost structure and to achieve systematic improvement in the financial performance of the business without incurring a
large turnover in executive talent and leadership.
Any “merit increases” for the Company’s executive officers are subject to the same budgetary constraints that apply to
all other employees. Executive officer salaries are evaluated as part of the Company’s annual review process and may be
adjusted where justified in the context of the Company’s current focus on profitability and controlling expenses.
For fiscal year 2011, the Compensation Committee set a base salary of $4,430.18 per week for each Executive
Committee member, reduced on a pro-rata basis for any member working less than a full time schedule. This change represented
an approximate 2% increase in the base salary compared to fiscal year 2010, which was derived from management’s assessment
of the increase in the cost of living. The same percentage increase was applied to all non-executive, non-union team members
when evaluating salary changes.
Discretionary Cash Bonuses
The Company’s policy is to make a significant portion of each NEO’s total compensation contingent upon the
Company’s financial performance. The Compensation Committee believes that the payment of cash bonuses based on the
Company’s financial success allows the Company to offer a competitive total compensation package despite relatively lower
base salaries, while aligning a significant portion of executive compensation with the achievement of positive Company financial
results. However, while the payment of these cash bonuses to the NEOs is generally correlated with the achievement of positive
Company financial results, there are no specific performance targets communicated to the NEOs in advance, and the bonuses are
ultimately paid at the discretion of the Compensation Committee after receiving input from the Chairman of the Board. The
Compensation Committee did not grant cash bonuses to the NEOs with respect to fiscal year 2011.
10
Long-Term Equity-Based Incentive Compensation
The Compensation Committee has concluded that long-term stock-related compensation has very limited value as an
employee incentive or retention tool because the Company’s equity-based incentive awards have historically provided little or no
value to the recipient. In addition, beginning in 2005, U.S. accounting rules required the Company to expense any stock option
awards according to a formula which could impose a costly charge on the Company’s income statements, thereby burdening or
erasing its profit margins. Because of these factors, the Company has not granted stock options or restricted stock awards for
many years. Instead, the Compensation Committee aims to align the interests of the NEOs with those of the Company's
shareholders by creating a link between the payment of executive compensation and the achievement of Company financial goals
as described above. The Company’s 1999 Stock Incentive Plan expired by its own terms on April 29, 2009 and no additional
stock options or restricted stock may be granted thereunder.
Pension and Retirement Benefits
Retirement Plan for Administrative and Sales Employees of Bridgford Foods Corporation. The Company has a defined
benefit plan (the “Primary Benefit Plan”) for certain of its employees not covered by collective bargaining agreements. The
Primary Benefit Plan, administered by a major life insurance company, presently provides that participants receive an annual
benefit on retirement equal to 1.5% of their total compensation from the Company during their period of participation from
1958. Benefits are not reduced by Social Security payments or by payments from other sources and are payable in the form of
fully-insured monthly lifetime annuity contracts commencing at age 65 or the participant’s date of retirement, whichever is
later. Effective May 12, 2006, future benefit accruals under the Primary Benefit Plan were frozen.
Supplemental Executive Retirement Plan. Retirement benefits otherwise available to certain key executives under the
Primary Benefit Plan have been limited by the effects of the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”) and
the Tax Reform Act of 1986 (“TRA”). To offset the loss of retirement benefits associated with TEFRA and TRA, the Company
has adopted a non-qualified “makeup” benefit plan (the “Supplemental Executive Retirement Plan”). Benefits will be provided
under the Supplemental Executive Retirement Plan in an amount equal to 60% of their final average earnings minus any pension
benefits and primary insurance amounts available to them under Social Security. However, in all cases the benefits are capped at
$120,000 per year for Allan L. Bridgford and Hugh Wm. Bridgford. Benefits provided under this plan for William L. Bridgford
and Raymond F. Lancy are calculated at 50% of final average earnings, capped at $200,000 per year, without offsets for other
pension or Social Security benefits.
Bridgford Foods Retirement Savings 401(k) Plan. The Company implemented a 401(k) plan effective May 13,
2006. The Company makes a matching contribution to each employee’s account based on pretax contributions in an amount
equal to 100% of the first 3% of compensation and 50% of the next 2% of compensation contributed to the Plan. No amounts
are contributed by the Company unless the employee elects to make a pretax contribution to the plan.
Non-Qualified Deferred Compensation
Effective January 1, 1991 the Company adopted a deferred compensation savings plan for certain key
employees. Under this arrangement, selected employees contributed a portion of their annual compensation to the plan. The
Company contributed an amount to each participant’s account by computing an investment return equal to Moody’s Average
Seasoned Bond Rate plus 2%. The purpose of the plan was to provide tax planning and supplemental funds upon retirement or
death for certain selected employees and to aid in retaining and attracting employees of exceptional ability. Separate accounts
are maintained for each participant to properly reflect his or her total vested account balance.
Perquisites and Other Benefits
The Company provides its executive officers with various health and welfare programs and other employee benefits
which are generally available on the same cost-sharing basis to all of its employees. However, in keeping with the Company’s
policy of controlling costs in connection with its profitability objectives, it does not provide any significant perquisites or other
special benefits to its executive officers including, but not limited to, payment of club memberships, fees associated with
financial planning, executive dining rooms or special transportation rights. The Company does not own an airplane and does not
provide aircraft for executives for business or personal purposes.
The Company provides post-retirement healthcare for certain executives and their spouses (who are within fifteen years
of age of the employee) who have reached normal retirement age. This coverage is secondary to Medicare. Coverage for
spouses continues upon the death of the employee. The maximum benefit under the plan is $100,000 per year per retiree. The
plan is subject to annual renewal by the Board of Directors and may be discontinued at the Board’s discretion. The plan was
renewed for one year at the Board of Directors meeting held in December 2011. The combined cost of this plan during fiscal
year 2011 was $138,000 for all active and retired participants.
The Company pays life and disability insurance premiums on policies under which the Company’s President is the
named owner and beneficiary.
Employment Agreements
The Company currently does not have any employment, severance, change of control or similar agreements with any of
its NEOs. Refer to the compensation discussion below for information on pension, deferred compensation, and benefit-related
payments payable in the event of a qualifying event such as employment termination, disability, death, or
sale/merger/acquisition.
11
Tax and Accounting Implications
The Compensation Committee is responsible for considering the deductibility of executive compensation under
Section 162(m) of the Internal Revenue Code, which provides that it may not deduct non-performance-based compensation of
more than $1,000,000 that is paid to its executive officers. The Company believes that the compensation paid under the current
management incentive programs is fully deductible for federal income tax purposes. In certain situations, the Committee may
approve compensation that will not meet the requirements for deductibility in order to ensure competitive levels of compensation
for its executives and to meet its obligations under the terms of various incentive programs. However, the issue of deductibility
has not come before the Committee in recent years and is not expected to be a concern for the foreseeable future.
Shareholder Advisory Vote on Executive Compensation and Frequency of Advisory Vote
Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), the
Company held its first advisory (non-binding) shareholder vote on the compensation of the Company’s named executive officers
(commonly known as a “say-on-pay” proposal), and its first shareholder vote on the frequency of such say-on-pay proposal, at its
2011 Annual Meeting of Shareholders. At such meeting, the shareholders of the Company approved the overall compensation of
the Company’s named executive officers and elected to hold a say-on-pay vote every three years. Accordingly, the Company’s
next say-on-pay proposal will be included in its proxy statement for its 2014 Annual Meeting of Shareholders.
Summary Compensation Table
The table below provides summary information concerning cash and certain other compensation paid to or accrued for
the Company’s NEOs during fiscal years 2009, 2010 and 2011, respectively. Each of the NEOs named below are also members
of the Executive Committee, which acts in the capacity of Chief Executive Officer of the Company. See “Compensation
Discussion and Analysis” for further discussion of compensation arrangements pursuant to which the amounts listed in the table
below were paid or awarded and the criteria for such payment or award.
Base
Salary Bonus(1)
0
138,268
115,338
135,557
147,042
131,609
Stock
Awards(2)
—
—
—
Year
2011
2010
2009
Option
Awards(3)
—
—
—
Non-Equity
Incentive Plan
Compensation(4)
—
—
—
Change in
Pension
Value and
Non-
Qualified
Deferred
Compensation
Earnings(5)
168,336
0
0
All Other
Compensation(6) Total
0
0
0
306,604
250,895
278,651
2011
2010
2009
187,017
225,929
219,348
0
192,230
245,070
2011
2010
2009
230,447
225,929
219,348
0
192,230
245,070
2011
2010
2009
230,447
225,929
219,348
0
192,230
245,070
2011
2010
2009
230,447
225,929
219,348
0
192,230
245,070
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
161,136
0
0
264,340
98,762
162,676
103,091
12,404
96,549
228,494
98,959
131,463
9,800
10,130
9,799
357,953
428,289
474,217
9,800
12,305
8,774
504,587
529,226
635,868
34,176
34,601
33,150
367,715
465,164
594,117
9,800
10,219
8,559
468,741
527,337
604,440
Name and Principal
Position
Allan L. Bridgford
Member of the
Executive Committee;
Former Senior
Chairman of the Board
Hugh Wm. Bridgford
Vice President and
Chairman of the
Executive Committee
William L. Bridgford
Chairman of the Board;
Member of the
Executive Committee
(Principal Executive
Officer)
John V. Simmons
President; Member of
the Executive
Committee
Raymond F. Lancy
Chief Financial
Officer,
Vice President and
Treasurer (Principal
Financial Officer)
(1) No discretionary cash bonuses were paid to the NEOs with respect to fiscal year 2011. Discretionary cash bonuses earned by
each of the NEOs in fiscal year 2009 and fiscal year 2010 are being paid in three equal annual installments beginning in
January 2010 and January 2011, respectively.
12
(2) The Company did not grant any stock awards to any of the NEOs during fiscal years 2009, 2010 or 2011.
(3) The Company did not grant any option awards to any of the NEOs during fiscal years 2009, 2010 or 2011.
(4) The Company did not utilize any non-equity incentive plans in order to pay compensation to its NEOs in fiscal year
2011. While it is the Company’s policy to provide each of the NEOs with an opportunity to earn cash bonuses that are
correlated with the Company’s financial performance, the payment of the bonuses are ultimately subject to the discretion of
the Compensation Committee. See “Compensation Discussion and Analysis – Total Compensation for Executive Officers –
Discretionary Cash Bonuses.”
(5) This column includes the aggregate positive change in actuarial present value of each NEO’s accumulated benefit under all
defined benefit and actuarial pension plans. In accordance with SEC rules, to the extent the aggregate change in present
value of all defined benefit and actuarial pension plans for a particular fiscal year would have been a negative amount, the
amount has instead been reported as $0 and the aggregate compensation for the NEO in the “Total” column has not been
adjusted to reflect the negative amount. In addition, to the extent that the change in present value of any particular defined
benefit or actuarial pension plan for a particular year was a negative amount, the negative amount has not been used to offset
the positive change in present value associated with the other applicable defined benefit or actuarial pension plans. The
aggregate negative change in the present value of the non-qualified deferred compensation plan and pension and retirement
benefits for certain NEOs in certain fiscal years was as follows: (i) fiscal year 2010 (Allan L. Bridgford, ($107,334)) and
(Hugh Wm. Bridgford, ($118,466)), and (ii) fiscal year 2009 (Allan L. Bridgford, ($20,322)) and (Hugh Wm. Bridgford,
($18,663)).
(6) Includes matching contributions to the Bridgford Foods Retirement Savings 401(k) plan made by the Company on behalf of
each of the NEOs. In addition, the amount for Mr. Simmons includes premiums in the amount of $24,376 for life and
disability insurance policies issued for the benefit of Mr. Simmons and his designees.
Narrative to Summary Compensation Table
See “Compensation Discussion and Analysis” for further discussion of compensation arrangements pursuant to which
amounts listed under the Summary Compensation Table were paid or awarded and the criteria for such payment or award.
Grants of Plan-Based Awards
There were no stock options, restricted stock, restricted stock units or equity or non-equity-based performance awards
granted to the Company’s NEOs during fiscal years 2011, 2010 or 2009.
Outstanding Equity Awards at Fiscal Year-End
There were no outstanding options or stock awards held by any NEO as of October 28, 2011.
Option Exercises and Stock Vested
There were no shares acquired upon the exercise of stock options or vesting of stock awards by any NEO during fiscal
years 2009, 2010 or 2011.
Pension Benefits
The tables below provide information concerning retirement plan benefits for each NEO and payments due upon certain
termination scenarios.
Retirement Plan for Administrative and Sales Employees of Bridgford Foods Corporation
Normal Retirement: Benefits commence upon reaching the “Normal Retirement Date”, which is the first day of the
month on or after attainment of age 65. Pension benefit payments begin on the normal retirement date and continue until death.
Early Retirement: A participant may choose to retire up to ten years before the normal retirement date. If a participant
retires early, the accrued pension will be reduced by a percentage to reflect the longer period over which pension benefits will be
received. If a participant is married for at least one year and dies before retirement, a pension benefit will be payable to the
surviving spouse for his or her life; provided certain eligibility requirements have been met.
Death Benefits: Payments to a surviving spouse will begin on the first day of the month following a participant’s death
but not sooner than the earliest date a participant could have elected to retire.
Disability Benefits: A disability benefit is the accrued pension credited to a participant as of the date of disability.
13
The years of credited service, present value of accumulated plan benefits and payments made during the fiscal year were
as follows:
For the Fiscal Year ended October 28, 2011:
Name
Allan L. Bridgford
Hugh Wm. Bridgford
William L. Bridgford
John V. Simmons
Raymond F. Lancy
Number of
Years
Credited
Service
53
55
38
32
19
Present
Value
of
Accumulated
Benefit (1)
$
$
$
$
$
968,103 $
833,053 $
499,622 $
400,142 $
365,384 $
Payments
During
Fiscal Year
72,044
51,854
—
—
—
(1) The assumed discount rate used was 4.65% to compute the present value of the accumulated benefit. The RP-2000
Combined Mortality Table was used and an expected return on assets of 8.0% was assumed.
For the Fiscal Year ended October 29, 2010:
Name
Allan L. Bridgford
Hugh Wm. Bridgford
William L. Bridgford
John V. Simmons
Raymond F. Lancy
Number of
Years
Credited
Service
52
54
37
31
18
Present
Value
of
Accumulated
Benefit (1)
$
$
$
$
$
799,767 $
671,917 $
374,466 $
297,051 $
276,074 $
Payments
During
Fiscal Year
71,419
51,403
—
—
—
(1) The assumed discount rate used was 5.45% to compute the present value of the accumulated benefit. The RP-2000
Combined Mortality Table was used and an expected return on assets of 8.0% was assumed.
For the Fiscal Year ended October 30, 2009:
Name
Allan L. Bridgford
Hugh Wm. Bridgford
William L. Bridgford
John V. Simmons
Raymond F. Lancy
Number of
Years
Credited
Service
51
53
36
30
17
Present
Value
of
Accumulated
Benefit (1)
$
$
$
$
$
835,956 $
713,754 $
358,735 $
284,647 $
260,146 $
Payments
During
Fiscal Year
71,989
51,808
—
—
—
(1) The assumed discount rate used was 5.75% to compute the present value of the accumulated benefit. The RP-2000
Combined Mortality Table was used and an expected return on assets of 8.00% was assumed.
Supplemental Executive Retirement Plan (SERP)
Payment of Retirement Benefit: All retirement, disability and death benefits shall be paid in monthly installments
beginning on the commencement date following the participant’s retirement, disability or death and shall continue for a period of
fifteen years.
Normal Retirement: Benefits commence upon reaching the “Normal Retirement Date”, which means the date on which
the participant has both attained age 65 and completed at least ten years of participation. SERP benefit payments begin at the
normal retirement date and continue until death.
Early Retirement: A participant may choose to retire up to ten years before the normal retirement date if the participant
has completed at least five years of participation. If a participant retires early, the SERP benefit will be determined based on the
vested percentage attained as the time of retirement.
14
Death Benefits: If a participant dies prior to having commenced receipt of benefits and is eligible for benefits
hereunder, the participant’s beneficiary shall be entitled to receive an annual death benefit equal to the Normal Retirement
Benefit determined as if the participant attained Normal Retirement Age on the date of his death, or, if after the Participant’s
Normal Retirement Date, equal to the Late Retirement Benefit. If a participant dies after having commenced receipt of benefits,
benefits shall continue to be paid but to the Participant’s Beneficiary at the same time and in the same form as the benefits would
have been payable to the participant. No benefit will be payable to a participant’s beneficiary if the participant terminates
employment with the Company before he is eligible for a retirement benefit and thereafter dies.
Disability Benefits: A disability benefit is the vested percentage of SERP benefit credited to a participant as of the date
of disability.
The present value of accumulated plan benefits and payments made during the fiscal year were as follows:
For the Fiscal Year ended October 28, 2011:
Present
Value
of
Accumulated
Benefit (1)
217,101 $
$
$
257,343 $
$ 1,219,308 $
— $
$
1,219,308 $
$
Payments
During
Last Fiscal
Year
51,528
61,080
—
—
—
Present
Value
of
Accumulated
Benefit (1)
$
247,763 $
293,688 $
$
$ 1,080,124 $
$
— $
1,080,124 $
$
Payments
During
Last Fiscal
Year
51,528
61,080
—
—
—
Present
Value
of
Accumulated
Benefit (1)
Payments
During
Last Fiscal
Year
$
$
$
$
$
277,293 $
328,692 $
997,093 $
— $
997,093 $
51,528
61,080
—
—
—
Name
Allan L. Bridgford
Hugh Wm. Bridgford
William L. Bridgford
John V. Simmons
Raymond F. Lancy
(1) A 4.65% discount rate was used to compute the present values.
For the Fiscal Year ended October 29, 2010:
Name
Allan L. Bridgford
Hugh Wm. Bridgford
William L. Bridgford
John V. Simmons
Raymond F. Lancy
(1) A 6.25% discount rate was used to compute the present values.
For the Fiscal Year ended October 30, 2009:
Name
Allan L. Bridgford
Hugh Wm. Bridgford
William L. Bridgford
John V. Simmons
Raymond F. Lancy
(1) A 7.00% discount rate was used to compute the present values.
15
The following table estimates the present value of SERP benefits under different employment termination scenarios as
of October 28, 2011:
Present
Value
of Benefit
Upon
Voluntary
Termination
of
Employment
(1)
217,101 $
257,343 $
621,801 $
— $
$
$
$
$
$
Present
Value
of Benefit
Upon Death
(1)
217,101 $
257,343 $
1,219,308 $
— $
621,801 $ 1,219,308 $ 1,219,308 $
Present
Value
of Benefit
if Disabled
(1)
217,101 $
257,343 $
1,219,308 $
— $
Present Value
of Benefit Upon
Involuntary
Termination of
Employment Due
to Sale/Merger/
Acquisition (1)
217,101
257,343
1,219,308
—
1,219,308
Name
Allan L. Bridgford
Hugh Wm. Bridgford
William L. Bridgford (2)
John V. Simmons
Raymond F. Lancy (2)
(1) In each scenario above, the benefit amount shown is calculated at October 28, 2011. A 4.65% discount rate was used to
compute the present values. In the case of a voluntary termination, the participant shall be entitled to the vested portion of
any such early retirement benefit but shall not commence receipt of such early retirement benefit until the commencement
date following the date the participant would have attained the early retirement date had the participant remained employed
by the Company. Upon a finding that the participant (or, after the participant’s death, a beneficiary) has suffered an
unforeseeable emergency, the Committee may at the request of the participant or beneficiary, and subject to compliance with
Internal Revenue Code Section 409A, accelerate distribution of benefits under the SERP in the amount reasonably necessary
to alleviate such unforeseeable emergency.
(2) Benefits for William L. Bridgford and Raymond F. Lancy are paid in the form of a monthly annuity. The actual payment
amount for William L. Bridgford and Raymond F. Lancy would be determined using a discount rate similar to the rate
required for qualified plans. The rate assumed for these estimates is 4.65%.
The following table estimates future SERP payments under different termination scenarios as of October 28, 2011:
Name
Allan L. Bridgford
Payment Upon
Voluntary
Termination
of Employment
Payment if
Disabled (1)
Death Benefit
from Plan (2)
Continues to receive
$4,294 for another
56 months
Continues to receive
$4,294 for another
56 months
Continues to receive
$4,294 for another
56 months
Hugh Wm. Bridgford Continues to receive
$5,090 for another
56 months
$4,786 per month for
180 months beginning
on 10/28/2011
William L. Bridgford
Continues to receive
$5,090 for another
56 months
$9,385 per month for
180 months
commencing after
disability
Continues to receive
$5,090 for another
56 months
$9,385 per month for
180 months beginning
just after death
Involuntary
Termination of
Employment Due
to Sale/Merger/
Acquisition (2)
Continues to receive
$4,294 for another
56 months
Continues to receive
$5,090 for another
56 months
Lump Sum payment due at
termination of $1,219,307
John V. Simmons
—
—
—
—
Raymond F. Lancy
$4,786 per month for
180 months beginning
on 10/28/2011
$9,385 per month for
180 months
commencing after
disability
$9,385 per month for
180 months beginning
just after death
Lump Sum payment due at
termination of $1,219,307
(1) Disability amount is decreased by any Company paid disability insurance policies, Social Security disability benefits, or
other Federal or State disability programs. In the case of a voluntary termination, the participant shall be entitled to the
vested portion of any such early retirement benefit but shall not commence receipt of such early retirement benefit until the
commencement date following the date the participant would have attained the early retirement date had the participant
remained employed by the Company. Upon a finding that the participant (or, after the participant’s death, a beneficiary) has
suffered an unforeseeable emergency, the Committee may at the request of the participant or beneficiary, and subject to
compliance with Internal Revenue Code Section 409A, accelerate distribution of benefits under the SERP in the amount
reasonably necessary to alleviate such unforeseeable emergency.
16
(2) Assumes death or involuntary termination on October 28, 2011. The discount rate used to calculate the per month payment
or lump sum amount is 4.65%.
See “Compensation Discussion and Analysis – Total Compensation for Executive Officers -- Pension and Retirement
Benefits” for further discussion of the pension benefits contained in the tables above.
Non-Qualified Deferred Compensation
The table below provides information concerning deferred compensation plan benefits for each NEO during the fiscal
year ended October 28, 2011.
Name
Allan L. Bridgford
Hugh Wm. Bridgford
William L. Bridgford
John V. Simmons
Raymond F. Lancy
Executive
Contributions
in
Company
Contributions
in
Fiscal Year
Fiscal Year
Aggregate
Earnings in
Fiscal Year
Aggregate
Withdrawals/
Distributions
$
$
$
$
$
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
74,884 $
74,884 $
— $
— $
— $
Aggregate
Balance at
Fiscal Year
End
298,767
298,767
—
—
—
The table below provides information concerning deferred compensation plan benefits for each NEO during the fiscal
year ended October 29, 2010.
Name
Allan L. Bridgford
Hugh Wm. Bridgford
William L. Bridgford
John V. Simmons
Raymond F. Lancy
Executive
Contributions
in
Company
Contributions
in
Fiscal Year
Fiscal Year
Aggregate
Earnings in
Fiscal Year
Aggregate
Withdrawals/
Distributions
$
$
$
$
$
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
76,161 $
76,161 $
— $
— $
— $
Aggregate
Balance at
Fiscal Year
End
351,071
351,071
—
—
—
The table below provides information concerning deferred compensation plan benefits for each NEO during the fiscal
year ended October 30, 2009.
Name
Allan L. Bridgford
Hugh Wm. Bridgford
William L. Bridgford
John V. Simmons
Raymond F. Lancy
Executive
Contributions
in
Company
Contributions
in
Fiscal Year
Fiscal Year
Aggregate
Earnings in
Fiscal Year
Aggregate
Withdrawals/
Distributions
$
$
$
$
$
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
— $
77,081 $
77,081 $
— $
— $
— $
Aggregate
Balance at
Fiscal Year
End
398,696
398,696
—
—
—
The following table estimates the present value of non-qualified deferred compensation benefits under different
employment termination scenarios as of October 28, 2011:
Name
Allan L. Bridgford
Hugh Wm. Bridgford
William L. Bridgford
John V. Simmons
Raymond F. Lancy
Present
Value
of Benefit at
Termination
of
Employment
Present
Value
of Benefit if
Disabled
Present
Value
of Benefit
Upon Death
Present Value
of Benefit Upon
Involuntary
Termination of
Employment Due
to Sale/Merger/
Acquisition
$
$
$
$
$
298,767 $
298,767 $
— $
— $
— $
298,767 $
298,767 $
— $
— $
— $
298,767 $
298,767 $
— $
— $
— $
298,767
298,767
—
—
—
17
Allan L. Bridgford and Hugh Wm. Bridgford each currently receive a monthly deferred compensation payment of
$6,222. As of October 28, 2011, fifty-six (56) such monthly payments are remaining for these recipients.
The deferred compensation amounts are calculated using a crediting rate equal to Moody’s Average Seasoned Bond
Rate, plus 2%. This rate is subject to fluctuation. Upon death, the deferred compensation benefits are paid in a lump sum equal
to the individual’s remaining account balance.
See “Compensation Discussion and Analysis – Total Compensation for Executive Officers – Non-Qualified Deferred
Compensation” for further discussion of the non-qualified deferred compensation benefits contained in the tables above.
Director Compensation
The table below summarizes the total compensation paid by the Company to directors who were not NEOs during fiscal
year 2011. Directors who were NEOs did not receive any additional compensation for their services as directors.
Fees
Earned
or Paid
Cash
$
$
$
$
$
22,350 $
—
22,850 $
21,250 $
21,800 $
23,400 $
Name
Todd C. Andrews
Allan Bridgford, Jr.(2)
Richard A. Foster
Robert E. Schulze (3)
D. Gregory Scott
Paul R. Zippwald
Stock
awards
Option
awards
Non-Equity
Incentive Plan
Compensation
Change in
Pension Value
and Non-
Qualified
Deferred
Compensation
Earnings(1)
All Other
Compensation
Total
— $
—
— $
— $
— $
— $
— $
—
— $
— $
— $
— $
— $
—
— $
— $
— $
— $
— $
—
— $
54,191 $
— $
— $
— $
—
— $
— $
— $
— $
22,350
—
22,850
75,441
21,800
23,400
(1) The amount reflected above includes the change in present value of the defined benefit pension plan, assuming a discount
rate of 4.65%, and the SERP and Non-Qualified Deferred Compensation Plan, assuming a discount rate of 4.65%. Mr.
Schulze received contributions to such plans as an employee of the Company prior to his retirement on June 30, 2004.
(2) Mr. Bridgford was appointed to the Board to fill the vacancy created by the resignation of his father, Allan L. Bridgford Sr.,
on October 10, 2011 and did not receive any compensation as a member of the Board in fiscal year 2011.
(3) Mr. Schulze resigned from his position on the Board on October 10, 2011.
The Company uses cash compensation to attract and retain qualified candidates to serve on its Board of Directors. In
setting director compensation, the Company considers the demands that have been placed and will continue to be placed on the
directors and the skill-level required by its directors. In addition, as with the Company’s executive officers, compensation
decisions for directors are made in the context of the Company’s focus on controlling costs and increasing profitability.
The directors are not paid an annual retainer for their service on the Board. Instead, each non-employee director was
paid $1,500 for each of the first two Board meetings attended during fiscal year 2011 and $1,600 for each subsequent Board
meeting attended in fiscal year 2011. Members of the Audit Committee were paid $300 to $550 for each Audit Committee
meeting attended depending on the length of the meeting. The members of the Compensation Committee were not paid any
additional compensation for their service. In addition, the directors were not paid any additional compensation for their service
on the Nominating Committee.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
The Company's general legal counsel is the son of Allan L. Bridgford. For his legal counsel, he currently is paid a fee
of $1,500 to $1,600 for each Board of Directors meeting attended. Total fees paid under this arrangement were $19,000 in fiscal
year 2011 and $16,050 in fiscal year 2010. In addition, legal services are performed on behalf of the Company and billed by a
firm in which he is a partner. Total fees billed under this arrangement for each of fiscal years 2011 and 2010 were approximately
$62,212 and $70,000, respectively. Other than the relationship noted above, the Company is not aware of any related party
transactions that would require disclosure as a related party transaction under SEC rules.
The Company’s executive officers, directors, nominees for directors and principal shareholders, including their
immediate family members and affiliates, are prohibited from entering into related party transactions with the Company that
would be reportable under Item 404 of Regulation S-K without the prior approval of its Audit Committee (or other independent
committee of the Board of Directors in cases where it is inappropriate for the Audit Committee to review such transaction due to
a conflict of interest). Any request for the Company to enter into a transaction with an executive officer, director, or nominee for
director, principal shareholder or any of such persons’ immediate family members or affiliates that would be reportable under
18
Item 404 of Regulation S-K must first be presented to the Audit Committee for review, consideration and approval. In approving
or rejecting the proposed agreement, the Audit Committee will consider the relevant facts and circumstances available and
deemed relevant, including but not limited to, the risks, costs, and benefits to the Company, the terms of the transactions, the
availability of other sources for comparable services or products, and, if applicable, the impact on director independence. The
Audit Committee shall only approve those agreements that, in light of known circumstances, are in or are not inconsistent with,
the Company’s best interests, as determined in good faith by the Audit Committee (or other independent committee, as
applicable). The requirement for the Audit Committee to review related-party transactions is set forth in the Amended and
Restated Audit Committee Charter, which was approved on November 8, 2010 and is attached as Exhibit A to the Company’s
proxy statement for its 2011 Annual Meeting of Shareholders filed with the SEC on February 18, 2011.
19
PROPOSAL 2
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors has, subject to ratification by the shareholders, appointed Squar, Milner,
Peterson, Miranda & Williamson, LLP as the Company’s independent registered public accounting firm for the fiscal year
ending November 2, 2012.
The affirmative vote of a majority of the shares present or represented by proxy at the Annual Meeting and entitled to
vote on the matter is required to ratify the appointment of Squar, Milner, Peterson, Miranda and Williamson, LLP. Abstentions
will have the same effect as votes against the Proposal. Brokers have discretion to vote uninstructed shares with respect to this
Proposal. Accordingly, broker non-votes will not occur with respect to this Proposal.
Proxies received in response to this solicitation will be voted “FOR” the approval of Squar, Milner, Peterson, Miranda
& Williamson, LLP unless otherwise specified in the proxy In the event of a negative vote on such ratification, the Audit
Committee of the Board of Directors will reconsider its selection. Representatives of Squar, Milner, Peterson, Miranda &
Williamson, LLP will be present at the meeting and available to respond to questions. They will have the opportunity to make a
statement if they so desire.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE
APPOINTMENT OF SQUAR, MILNER, PETERSON, MIRANDA & WILLIAMSON, LLP AS THE COMPANY’S
INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING NOVEMBER 2, 2012.
Audit Fees
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Fees billed by Squar, Milner, Peterson, Miranda & Williamson, LLP for the audit of the Company’s annual financial
statements and the review of the financial statements included in the Company’s quarterly reports on Form 10-Q for fiscal year
2011 totaled $122,040. Fees billed by Squar, Milner, Peterson, Miranda & Williamson, LLP for the audit of the Company’s
annual financial statements and the review of the financial statements included in the Company’s quarterly reports on Form 10-Q
for fiscal year 2010 totaled $151,200.
Audit-Related Fees
Audit-related fees typically consist of fees billed for assurance and related services that are reasonably related to the
performance of the audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees.”
These services may include consultations related to the Sarbanes-Oxley Act and consultations concerning financial accounting
and reporting standards. Fees billed by Squar, Milner, Peterson, Miranda & Williamson, LLP during fiscal year 2010 for these
types of services totaled $5,500. There were no audit-related fees billed by Squar, Milner, Peterson, Miranda & Williamson,
LLP for fiscal year 2011.
Tax Fees
Tax fees are comprised of services that include assistance related to state tax compliance services and consultations
regarding federal and state research and development tax credits. There were no tax fees billed by Squar, Milner, Peterson,
Miranda & Williamson, LLP for fiscal year 2011 or fiscal year 2010.
All Other Fees
All other fees are comprised of fees for initial planning for certification of internal controls over financial reporting.
No such fees were billed by Squar, Milner, Peterson, Miranda & Williamson, LLP for fiscal year 2011 or fiscal year 2010.
POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT SERVICES AND PERMISSIBLE NON-AUDIT
SERVICES OF INDEPENDENT ACCOUNTANTS
The Audit Committee’s policy is to pre-approve all audit and permissible non-audit services performed by the independent
registered public accountants. These services may include audit services, audit-related services, tax services and other
services. During fiscal years 2011 and 2010, the Audit Committee approved all such services rendered by its independent registered
public accountants. For audit services, the independent registered public accountants provide the Audit Committee with an audit
plan including proposed fees in advance of the annual audit. The Audit Committee approves the plan and fees for the audit.
For non-audit services, the Company’s senior management will submit from time to time to the Audit Committee for
approval non-audit services that it recommends the Audit Committee engage the independent registered public accountants to
provide during the fiscal year. The Company’s senior management and the independent registered public accountants will each
confirm to the Audit Committee that each non-audit service is permissible under all applicable legal requirements. A budget,
estimating non-audit service spending for the fiscal year, will be provided to the Audit Committee along with the request. The
Audit Committee must approve both permissible non-audit services and the budget for such services.
20
REPORT OF THE AUDIT COMMITTEE
Pursuant to a meeting of the Audit Committee on January 9, 2012, the Audit Committee reports that it has: (i) reviewed
and discussed the Company’s audited financial statements with management; (ii) discussed with the independent registered
public accountants the matters (such as the quality of the Company’s accounting principles and internal controls) required to be
discussed by the Statement on Auditing Standards No. 61, amended (AICPA, Professional Standards, Vol. 1, AU section 380), as
adopted by the Public Company Accounting Oversight Board in Rule 3200T; and (iii) received the written disclosures and the
letter from Squar, Milner, Peterson, Miranda & Williamson, LLP regarding its communications with the audit committee
concerning independence, and has discussed with them their independence. Based on the review and discussions referred to in
items (i) through (iii) above, the Audit Committee recommended to the Board that the audited financial statements be included in
the Company’s annual report for the Company’s fiscal year ended October 28, 2011.
AUDIT COMMITTEE
Todd C. Andrews, Chairman
Richard A. Foster
D. Gregory Scott
Paul R. Zippwald
The foregoing Audit Committee Report shall not be deemed soliciting material, shall not be deemed filed with the SEC
and shall not be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general
incorporation language in any such filing.
21
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the 2013 Annual Meeting of Shareholders must be received at the
Company’s principal office no later than November 2, 2012 in order to be considered for inclusion in the proxy statement and
form of proxy relating to that meeting. Matters pertaining to such proposals, including the number and length thereof, eligibility
of persons entitled to have such proposals included and other aspects are regulated by the Securities Exchange Act of 1934 and
the rules and regulations of the Securities and Exchange Commission.
Additionally, if the Company is not provided notice of a shareholder proposal, which the shareholder has not previously
sought to include in the Company’s proxy statement, by January 10, 2013, the Company will be allowed to use its discretionary
voting authority when the proposal is raised at the meeting, without any discussion of the matter in the proxy statement.
HOUSEHOLDING; SHAREHOLDERS SHARING THE SAME ADDRESS
The SEC rules permit brokers and other persons who hold the Company's shares for beneficial owners, to participate in
a practice known as “householding,” which means that only one copy of the proxy statement and annual report will be sent to
multiple shareholders who share the same address unless other instructions are provided to the Company. Householding is
designed to reduce printing and postage costs and therefore results in cost savings for the Company. If you receive a household
mailing this year and would like to have additional copies of this proxy statement and/or the 2011 Annual Report mailed to you,
or if you would like to opt out of this practice for future mailings, please contact your broker or other nominee record holder, or
submit your request to Bridgford Foods Corporation, 1308 North Patt Street, Anaheim, California 92801, Attention: Corporate
Secretary. Upon receipt of any such request, the Company agrees to promptly deliver a copy of this proxy statement and/or the
2011 Annual Report to you. In addition, if you are currently a shareholder sharing an address with another shareholder and wish
to receive only one copy of future proxy materials for your household, please contact us using the contact information set forth
above.
OTHER MATTERS
The Board of Directors is not aware of any matters to be acted upon at the meeting other than the Proposals described in
this proxy statement. If, however, any other matter shall properly come before the meeting, the persons named in the proxy
accompanying this statement will have discretionary authority to vote all proxies with respect thereto in accordance with their
best judgment.
FORM 10-K
The Corporation will furnish without charge to each person whose proxy is being solicited, upon request of any such
person, a copy of the Annual Report of the Corporation on Form 10-K for the fiscal year ended October 28, 2011, as such was
filed with the SEC, including financial statements and associated schedules. Such report was filed with the SEC on January 17,
2012 and is available on the SEC’s website at www.sec.gov, as well as the Company’s website at http://
www.bridgford.com. Requests for copies of such report should be directed to Bridgford Foods Corporation, 1308 North Patt
Street, Anaheim, California 92801, Attention: Corporate Secretary.
22
Directors
Officers
Division Managers
Baron R. H. Bridgford
President, Bridgford Processing
Company of Illinois
Bridgford Foods of Illinois
Blaine K. Bridgford
President
Dallas- Superior Foods Division
Bruce H. Bridgford
Chairman & President,
Bridgford Foods of California
Anaheim- Deli Division
Joseph deAlcuaz
Vice President
Dallas- Frozen-Rite Division
Monty Griffith
Vice President
Bridgford Foods of North Carolina
Jeffrey D. Robinson
Bakery Manager
Anaheim- Bread Division
Todd C. Andrews
Vice President and Controller,
Public Storage, Inc.
Allan L. Bridgford, Jr.
Consultant
(Formerly President of
Bridgford Foods of Illinois)
Bruce H. Bridgford
Vice President
William L. Bridgford
Chairman
Richard A. Foster
Retired (formerly President,
Interstate Electronics Corporation)
D. Gregory Scott
Managing Director,
Peak Holdings, LLC
John Simmons
President
Paul R. Zippwald
Retired
(formerly Regional Vice President,
Bank of America)
Allan L. Bridgford
Vice President, member of
the Executive Committee
Bruce H. Bridgford
Vice President
Hugh Wm. Bridgford
Chairman, Executive Committee
and Vice President
Michael Bridgford
Assistant Secretary
William L. Bridgford
Chairman, and member
of the Executive Committee
Chris Cole
Vice President
Joe deAlcuaz
Vice President Manufacturing
Bob Delong
Vice President,
Information Technologies
Raymond F. Lancy
Executive Vice President,
Chief Financial Officer,
Treasurer, and member of
the Executive Committee
Cindy Matthews–Morales
Corporate Secretary
and Controller
John V. Simmons
President and member of
the Executive Committee
Daniel R. Yost
Senior Vice President
To Our Shareholders
2011 was a challenging year for Bridgford Foods Corporation. High costs for
The Company was subjected to significant enforcement action by OSHA
grains, meats and petroleum products offset the Company’s achievements in
during the fiscal year, despite what we consider an excellent compliance and
the areas of cost-cutting and new product development, resulting in
safety record. While we are contesting many of these citations and proposed
unprofitable results for the year. Sales during our 2011 fiscal year were
penalties, we have also taken advantage of the focus on this area to improve
$118,263,000, an increase of 0.5% from sales of $117,655,000 in 2010.
our existing programs and organizational structure with regard to safety,
The Company continued to eliminate unprofitable products and operations
which will only benefit the Company going forward.
during the year, and continued a re-organization of portions of its dry sausage
and meat snack distribution operations. The Company recorded a net loss of
$443,000 in 2011, equal to $.05 per share. A loss of $1,675,000 related to
an unsuccessful product line introduction hampered our financial results, as
did monetary penalties imposed by OSHA and reductions in the surrender
value of life insurance policies.
FINANCIAL MATTERS
Our working capital totaled $24,015,000 at October 28, 2011, $5,821,000
(19.5%) lower than at the beginning of the fiscal year and our working capital
ratio decreased to 2.8 to 1 at October 28, 2011, compared to 3.6 to 1 at
October 29, 2010. The decrease in working capital and working capital ratio
resulted from lower operating cash flows during fiscal year 2011 plus
A business can only be as successful as the abilities and talents of the people
investments in capital assets, share repurchases and cash dividend payments.
who make things happen, and it is with a great sense of loss that we report
We repurchased 130,000 shares of the Company’s common stock in the
the death of Sal DeGeorge in late December of 2011. Sal retired as Senior
amount of $1,312,000 ($10.09 average price paid per share) during 2011.
Vice President in 2001 but continued to aid the Company as a consultant for
Projected contributions totaling $2,003,000 were recorded as a current
many years, and his contributions to the success of Bridgford Foods are
liability related to our defined benefit pension plan at October 28, 2011 and
immeasurable. He will be greatly missed.
SALES AND MARKETING
Bridgford Monkey Bread, manufactured at our Superior Foods plant in Dallas
under the direction of Division President Blaine Bridgford, continues to be a
great success. During the year, we introduced several new formats designed
for the vending and convenience store markets. An improved cinnamon
we contributed a total of $1,175,000 toward this plan during the 2011 fiscal
year. The defined benefit plan was frozen in the 3rd quarter of 2006 and
replaced with a 401(k) defined contribution plan. The Company has been
free of interest bearing debt for twenty-five consecutive years and we
maintain a line of credit with Wells Fargo Bank in the amount of $2,000,000
which expires March 1, 2013.
topping is providing better flavor and consistency for our customers.
Shareholders’ equity totaled $24,838,000, a decrease of $11,362,000
Refinements to our Chicago based distribution system for dry sausage
products continued during the year. The conversion of a major customer from
direct store delivery (DSD) to a warehouse distribution program should pay
dividends well into the future. Vice President Chris Cole has made great
strides in improving our position with many of the country’s major retailers,
including traditional chains, warehouse stores and “dollar” stores.
In our North Carolina plant, new shelf-stable bakery items introduced during
the year included Cinnamon Buns, Apple and Cherry Turnovers, Tortilla Wraps
and Whole-Wheat Snack Bread. Interest in these and other new line
extensions continues to grow, both for domestic customers and in the EU
and other overseas markets.
OPERATIONS
Commodity costs during 2011 far exceeded those experienced in 2010. The
Company’s 2011 expense for bakery flour, meat, gasoline and diesel fuel was
$4.01 million higher than in 2010, which had exceeded 2009 by $4 million,
resulting in a net increase in fiscal year 2011 of about $8 million over our
2009 costs.
The Company continued our emphasis on selling manufactured, rather than
purchased, items through our Chicago distribution channels, and we currently
produce 90% of the products sold in the United States and Canada. Our
unique beef jerky production system continued to supply 100% of the
Company’s jerky requirements during the year, and we doubled our
packaging capacity just after our fiscal year end. The Company manufactures
two flavors of Sweet Baby Ray’s Beef Jerky, and they gained wider acceptance
during the year. Under the direction of Baron R.H. Bridgford, President of
Bridgford Foods of Illinois, we introduced many new products during the year,
including a shelf-stable Chorizo, .28-ounce Snack Sticks, Pepperoni and
Cheese Sticks, and a bite-size Summer Sausage.
In the frozen food division, new products introduced during the year included
a unique Whole Wheat Honey Biscuit that is not only great tasting but satisfies
the requirements for improved nutrition in elementary and secondary school
feeding programs. Additionally, a delicious White Whole Wheat Cheesy Garlic
Breadstick is having great acceptance.
Under the direction of Plant Manager Monty Griffith, we continued to
develop our Shelf-Stable Sandwich division in North Carolina during 2011.
Our Vice President of Manufacturing, Joe deAlcuaz, has contributed to the
progress we have achieved this year in improving our production operations
(31.4%) compared to the end of the prior year. Actuarial losses related to our
defined benefit plans in the amount of $8,308,000 were the most significant
component of this change. This loss resulted from a decrease in the Citigroup
Pension Liability Index from a discount rate of 5.45% in fiscal year 2010 to
4.65% in fiscal year 2011. This rate is used to compute the present value of
our pension obligations. The fiscal 2011 net loss decreased shareholders’
equity by $443,000 and cash dividends of $932,000 were paid during the
2011 fiscal year. Approximately 241,000 shares remain available for
repurchase under the 2 million share repurchase plan previously authorized by
the Board of Directors. Shareholders’ equity per share was $2.68 at October
28, 2011 compared to $3.88 at October 29, 2010.
Management assessed the effectiveness of the Company’s internal control
over financial reporting for the fiscal year ended October 28, 2011. We believe
our control systems are effective. Management’s Report on Internal Controls
over Financial Reporting is included in the Form 10-K report. No significant
weaknesses in internal accounting control, to the extent identified, were
unresolved at the conclusion of the 2011 fiscal year.
ORGANIZATION
Allan Bridgford Sr. and Robert Schulze, both long-time directors and officers
of the Company, retired from the Board of Directors at our October 2011
meeting. John Simmons, our President, and Allan Bridgford Jr., retired
President of Bridgford Foods of Illinois and currently a consultant to the
Company’s Chicago division, were elected to succeed them. Allan Bridgford
Sr. was elected as a Vice President at our January 2012 meeting.
SUMMARY
We have experienced a two-year escalation in the costs of the key raw
materials we use in our business. Despite price increases and the reduction of
other costs affecting our business, the impact of these commodity costs on
our financial results cannot be denied. We have started to see some relief in
commodity costs as we begin the 2012 fiscal year, but there is always
uncertainty regarding the future, as many factors including weather and
global markets come into play. We feel that the Company is well-positioned
for a successful year in 2012. As always, our Company refuses to compromise
the quality of our products or the service we provide to our customers
regardless of the short-term challenges we may face, as we believe this is the
only viable strategy for long-term success.
On behalf of all of our directors and officers, we thank our shareholders,
customers and suppliers for their support during 2011 and look forward to
reporting better results in 2012.
in all of our facilities.
Respectfully,
January 26, 2012
William L. Bridgford
Chairman
John V. Simmons
President
Raymond F. Lancy
Chief Financial Officer
Bridgford Foods Corporation
1308 North Patt Street
P.O. Box 3773
Anaheim, California 92803
Phone (714) 526-5533
www.bridgford.com
Major Operating Facilities
Chicago, Illinois
Dallas, Texas
Statesville, North Carolina
Transfer Agent and Registrar
Continental Stock Transfer & Trust Company
17 Battery Place, 8th Floor
New York, NY 10004
1-800-509-5586
Independent Accountants
Squar, Milner, Peterson, Miranda & Williamson, LLP
Newport Beach, California
Annual Report 2011
Notice of 2012 Annual Meeting and Proxy Statement
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