A N N U A L R E P O R T 2 0 I 6
Notice of 20I7 Annual Meeting and Proxy Statement
TO OUR SHAREHOLDERS
Bridgford Foods Corporation’s 2016 fiscal year maintained the impressive growth,
progress and profitability we established in 2015, with pretax income reaching its
highest level since the turn of the century. The strategies employed by the Company in
reaction to a difficult 2014 fiscal year continued to reap benefits, as well as setting the
stage for continued success in the future. Lower input costs in many aspects of our
business also impacted the bottom line. Sales during our 2016 fiscal year were
$140,063,000, an increase of 7.4% over sales of $130,448,000 in 2015. The Company
recorded a net profit before taxes of $10,836,000 on operations in 2016, equal to
$1.19 per share. After taxes, the company posted net income of $7,770,000, equal to
$0.86 per share.
SALES AND MARKETING HIGHLIGHTS
Our Chicago Dry Sausage and Meat Snack Division sustained its recent track record of
impressive growth in all aspects of the business. Under the leadership of Corporate
Vice President Chris Cole and Division Vice President Baron Bridgford II, we made major
inroads in the grocery, mass merchandising and institutional sales arenas. Our Direct
Store Delivery (DSD) route system remains a critical factor in that growth, due to the
service and value it allows us to provide to our customers. New products introduced
during the year included Bridgford Sweet Baby Ray’s (BSBR) Sweet Teriyaki Beef Jerky
and BSBR Hickory & Brown Sugar Beef Jerky, bringing the number of offerings in this
increasingly popular product line to five.
Bridgford’s association with professional bass fishing continues to be a great
marketing success. The program has grown to include six professional anglers that
compete at the highest level in bass tournaments across the nation: Randy Blaukat
(MO), Luke Clausen (WA), Matt Stefan (WI), Joe Uribe Jr. (AZ), Chad Randles (NE) and
Jim Moynagh (MN). Our tremendous media coverage, grocery store promotions and
attractive truck and boat wraps have given the Bridgford brand name valuable exposure
as well as driving sales for our retail customers. Our professionals are not only among the
elite bass anglers in the world, but they are also great salespeople and representatives
of Bridgford Foods Corporation. We look forward to another outstanding season in 2017.
In our foodservice bread division, led by Senior Vice President Dan Yost, an exciting
success story is the use of our Monkey Bread by BJ’s Restaurant and Brewhouse in
their lineup of Pizookie desserts. (You’ll find a picture of this item in our report, and it
tastes even better than it looks!) We added a new dough dividing system to our
Frozen-Rite facility in Dallas to give us better weight control and product uniformity,
and we expect the products made on this line to open up new opportunities for our
marketing team.
In the retail arena, Walmart expanded distribution of our twin-pack Monkey Bites to
over 2,000 of their stores. We are co-branding a delicious cheese roll with one of our
valued institutional customers, Demos’ Restaurants, and early test-market results in
the greater Tennessee area are encouraging.
International sales continued to dominate our Shelf-Stable Sandwich business in 2016.
Sales to the U.S. Military recovered some compared to recent years, and there are
indications that 2017 could continue that trend.
We have really upped our game in the world of social media, with an ever-expanding
presence on Facebook and similar venues. Nutrition Specialist and Home Economist
Jean Moore, and Social Media and Marketing Specialist Chrystin Nevarez have done a
fantastic job of upgrading our website, developing compelling content for social media,
and driving traffic to our information. This will be a more important part of our
marketing plan every year as our ultimate customers change the way they gather and
use information.
OPERATIONS
Commodity costs throughout our business have generally been favorable for the last
18 months, and the outlook for 2017 is consistent with recent trends at this time.
Under the direction of Baron R.H. Bridgford, President of Bridgford Foods of Illinois, and
his sons Brian and Richard, we continue to produce the finest dry sausage and meat
snack products in the marketplace. We have been in our Chicago location for over 40
years now, and the Fulton Market District where we are located has changed
dramatically, particularly in the last few years. Businesses like ours are leaving in droves,
and high tech companies like Google and Facebook are moving in. We recently
obtained final approval for a zoning change for our property, which greatly increases
its value and flexibility going forward. At the same time, we have identified and entered
into a purchase agreement for an existing facility in the Chicago area. This investment
will not only improve our operational efficiency but will provide us with room to grow
our meat snack business. The transition to our new location may take several years, at
which time the options for our current property will be evaluated. This is certainly one
of the more significant and exciting developments in our Company’s history, and a lot
of hard work has gone into making it a reality.
Under the strong leadership of our team of managers in the frozen food division, Monty
Griffith in Statesville, Jeff Robinson in Anaheim, Blaine Bridgford at Superior Foods in
Dallas, and Joe deAlcuaz at Frozen-Rite, we continue to improve the efficiency and
consistency of our production operations. Perhaps the most significant development of
the past year was the achievement of SQF (Safe Quality Food) certification at both our
Frozen-Rite and our Anaheim facilities. This international standard for food safety and
operational management is hard to achieve, and is important to us in our marketing
efforts as well.
FINANCIAL MATTERS
Our working capital totaled $36,363,000 at October 28, 2016, $9,817,000 (37.0%)
higher than at the beginning of the fiscal year, and our working capital ratio increased
to 4.0 to 1 at October 28, 2016, compared to 2.9 to 1 at October 30, 2015. The increase
in working capital resulted from lower payments for meat commodities and increased
profitability. We repurchased 4,000 shares of the Company’s common stock in the
amount of $40,000 ($10.00 average price paid per share) during 2016. Projected
contributions totaling $1,099,000 were recorded as a current liability related to our
defined benefit pension plan at October 28, 2016, and we contributed a total of
$1,157,000 toward this plan during the 2016 fiscal year. The defined benefit plan was
frozen in the 3rd quarter of 2006 and replaced with a 401(k) defined contribution
plan. We maintain a line of credit with Wells Fargo Bank in the amount of $4,000,000
which expires March 1, 2018. The Company did not borrow under this line of credit
during fiscal 2016 and had no borrowings outstanding as of October 28, 2016.
Shareholders’ equity totaled $38,909,000, an increase of $3,264,000 (9.2%) compared
to the end of the prior year. Net income from operations of $7,770,000 was the most
significant component of this change. Our frozen defined benefit pension plan
recognized a loss of $7,419,000 in Shareholders’ equity. This loss resulted primarily
from a decrease in the Citigroup Pension Liability Index from 4.15% in fiscal year 2015
to 3.40% in fiscal year 2016. This rate is used to compute the present value of our
defined benefit pension obligations. Approximately 120,000 shares of the Company’s
common stock remain available for repurchase under the 2 million share repurchase
plan previously authorized by the Board of Directors. Shareholders’ equity per share was
$4.29 at October 28, 2016 compared to $3.92 at October 30, 2015.
Management assessed the effectiveness of the Company’s internal control over
financial reporting for the fiscal year ended October 28, 2016. We believe our control
systems remain 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
2016 fiscal year.
SUMMARY
An organization is only as strong as the people that make it up, and ours are the
best! It is for this reason and many others that we view the future optimistically. There
will always be bumps in the road, but with the strong foundation of the last two years
we feel well equipped to take them in stride. We appreciate all of our stakeholders:
our employees, our customers, and our suppliers, for their partnership in the past and
the contributions they will make to our success in the future. We look forward to
reporting more good news for 2017.
Our founder, Hugh H. Bridgford, was recently honored by the City of Chicago for his
historical contributions to the Fulton Market District, and the portion of Green St. where
our plant is located, between Lake St. and Randolph St., has been permanently given
honorary designation as “Hugh H. Bridgford Way”. It is a fitting tribute to a man that
we all owe so much to!
Respectfully,
January 13, 2017
William L. Bridgford
Chairman
John V. Simmons
President
Raymond F. Lancy
Chief Financial Officer
(cid:54)(cid:40)(cid:38)(cid:56)(cid:53)(cid:44)(cid:55)(cid:44)(cid:40)(cid:54)(cid:3)(cid:36)(cid:49)(cid:39)(cid:3)(cid:40)(cid:59)(cid:38)(cid:43)(cid:36)(cid:49)(cid:42)(cid:40)(cid:3)(cid:38)(cid:50)(cid:48)(cid:48)(cid:44)(cid:54)(cid:54)(cid:44)(cid:50)(cid:49)
(cid:58)(cid:68)(cid:86)(cid:75)(cid:76)(cid:81)(cid:74)(cid:87)(cid:82)(cid:81)(cid:15)(cid:3)(cid:39)(cid:17)(cid:38)(cid:17)(cid:3)(cid:21)(cid:19)(cid:24)(cid:23)(cid:28)
(cid:3)(cid:41)(cid:50)(cid:53)(cid:48)(cid:3)(cid:20)(cid:19)(cid:16)(cid:46)
(cid:36)(cid:49)(cid:49)(cid:56)(cid:36)(cid:47)(cid:3)(cid:53)(cid:40)(cid:51)(cid:50)(cid:53)(cid:55)(cid:3)(cid:51)(cid:56)(cid:53)(cid:54)(cid:56)(cid:36)(cid:49)(cid:55)(cid:3)(cid:55)(cid:50)(cid:3)(cid:54)(cid:40)(cid:38)(cid:55)(cid:44)(cid:50)(cid:49)(cid:3)(cid:20)(cid:22)(cid:3)(cid:50)(cid:53)(cid:3)(cid:20)(cid:24)(cid:11)(cid:71)(cid:12)
(cid:50)(cid:41)(cid:3)(cid:55)(cid:43)(cid:40)(cid:3)(cid:54)(cid:40)(cid:38)(cid:56)(cid:53)(cid:44)(cid:55)(cid:44)(cid:40)(cid:54)(cid:3)(cid:40)(cid:59)(cid:38)(cid:43)(cid:36)(cid:49)(cid:42)(cid:40)(cid:3)(cid:36)(cid:38)(cid:55)(cid:3)(cid:50)(cid:41)(cid:3)(cid:20)(cid:28)(cid:22)(cid:23)
(cid:41)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:3)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:50)(cid:70)(cid:87)(cid:82)(cid:69)(cid:72)(cid:85)(cid:3)(cid:21)(cid:27)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)
(cid:38)(cid:82)(cid:80)(cid:80)(cid:76)(cid:86)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:73)(cid:76)(cid:79)(cid:72)(cid:3)(cid:81)(cid:88)(cid:80)(cid:69)(cid:72)(cid:85)(cid:29)(cid:3)(cid:19)(cid:19)(cid:19)(cid:16)(cid:21)(cid:22)(cid:28)(cid:25)(cid:3)
(cid:37)(cid:53)(cid:44)(cid:39)(cid:42)(cid:41)(cid:50)(cid:53)(cid:39)(cid:3)(cid:41)(cid:50)(cid:50)(cid:39)(cid:54)(cid:3)(cid:38)(cid:50)(cid:53)(cid:51)(cid:50)(cid:53)(cid:36)(cid:55)(cid:44)(cid:50)(cid:49)
(Exact name of Registrant as specified in its charter)
(cid:38)(cid:68)(cid:79)(cid:76)(cid:73)(cid:82)(cid:85)(cid:81)(cid:76)(cid:68)
(State of incorporation)
(cid:28)(cid:24)(cid:16)(cid:20)(cid:26)(cid:26)(cid:27)(cid:20)(cid:26)(cid:25)
(I.R.S. Employer
Identification No.)
(cid:20)(cid:22)(cid:19)(cid:27)(cid:3)(cid:49)(cid:82)(cid:85)(cid:87)(cid:75)(cid:3)(cid:51)(cid:68)(cid:87)(cid:87)(cid:3)(cid:54)(cid:87)(cid:85)(cid:72)(cid:72)(cid:87)
(cid:36)(cid:81)(cid:68)(cid:75)(cid:72)(cid:76)(cid:80)(cid:15)(cid:3)(cid:38)(cid:68)(cid:79)(cid:76)(cid:73)(cid:82)(cid:85)(cid:81)(cid:76)(cid:68)(cid:3)(cid:28)(cid:21)(cid:27)(cid:19)(cid:20)
(Address of principal executive offices)
(cid:11)(cid:26)(cid:20)(cid:23)(cid:12)(cid:3)(cid:24)(cid:21)(cid:25)(cid:16)(cid:24)(cid:24)(cid:22)(cid:22)
(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:1407)
(cid:1407)
(cid:1409)
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
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
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:1409)
(cid:1407)
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.
(cid:1409)
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
Non-accelerated filer
(cid:1407)
(Do not check if a smaller reporting company)
Accelerated filer
Smaller reporting company
(cid:1407)
(cid:1409)
(cid:1407)
(cid:1407)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act. Yes
The aggregate market value of voting stock held by non-affiliates of the registrant on April 15, 2016 was $20,069,000.
(cid:1407)
(cid:1409)
(cid:1409)
No
No
(cid:1409)
As of January 13, 2017, there were 9,076,832 shares of common stock outstanding.
Portions of the registrant’s Proxy Statement for the registrant’s Annual Meeting of Shareholders to be held March 8, 2017 are
incorporated by reference into Part III, Items 10-14 of this Annual Report on Form 10-K.
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. Mine Safety Disclosures
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
(cid:51)(cid:68)(cid:74)(cid:72)
3
3
6
8
8
9
9
10
10
11
11
16
16
16
16
17
18
18
18
18
18
18
19
19
20
2
(cid:44)(cid:87)(cid:72)(cid:80)(cid:3)(cid:20)(cid:17)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:37)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)
(cid:51)(cid:36)(cid:53)(cid:55)(cid:3)(cid:44)
This Annual Report on Form 10-K (“Report”) 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; relationships with
customers and suppliers; 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.
(cid:37)(cid:68)(cid:70)(cid:78)(cid:74)(cid:85)(cid:82)(cid:88)(cid:81)(cid:71)(cid:3)(cid:82)(cid:73)(cid:3)(cid:37)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)
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. Currently, we and our subsidiaries are
primarily engaged in the manufacturing, marketing and distribution of an extensive line of frozen and snack food products throughout
the United States. We have 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.
(cid:39)(cid:72)(cid:86)(cid:70)(cid:85)(cid:76)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:37)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)
Bridgford Foods Corporation currently operates in two business segments - the processing and distribution of frozen products
and the processing and distribution of snack food products. At the end of Fiscal year 2014, we ceased refrigerated snack food product
distribution because of continued net losses. 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 Report.
The following table shows sales, as a percentage of consolidated sales, for each business segment during the last two fiscal
years:
(cid:3)
Frozen Food Products
Snack Food Products
(cid:3)
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:3)
(cid:3)
33 %
67 %
100 %
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:3)
39 %
61 %
100 %
We manufacture all of our food products and distribute an extensive line of biscuits, bread dough items, roll dough items, dry
sausage products and beef jerky. Our direct store delivery network consists of non-refrigerated snack food products. Our frozen food
products division serves both food service and retail customers.
Although we have recently introduced several new products, most of these products have not contributed significantly to our
revenue growth for the fiscal year 2016. 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. Neither Bridgford Foods
Corporation nor its industry generally has 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.
3
(cid:36)(cid:89)(cid:68)(cid:76)(cid:79)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:54)(cid:40)(cid:38)(cid:3)(cid:41)(cid:76)(cid:79)(cid:76)(cid:81)(cid:74)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:82)(cid:71)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:38)(cid:82)(cid:81)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:44)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:72)(cid:87)(cid:3)(cid:58)(cid:72)(cid:69)(cid:86)(cid:76)(cid:87)(cid:72)
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.
(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:39)(cid:76)(cid:86)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:48)(cid:72)(cid:87)(cid:75)(cid:82)(cid:71)(cid:86)
Our products are delivered to customers using several distinct distribution channels. The distribution channel utilized is
dependent upon the needs of our customers, the most efficient proximity to the delivery point, trade customs, operating segment as
well as product type, life and stability. 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 our 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.
The factors that contribute to higher or lower margins generated from each method of distribution depend upon the accepted
selling price, level of involvement by our employees in setting up and maintaining displays, distance traveled and fuel consumed by
our company-owned fleet as well as freight and shipping costs depending on the distance the product travels to the delivery
point. Management is continually evaluating the profitability of product delivery methods, analyzing alternate methods and weighing
economic inputs to determine the most efficient and cost effective method of delivery to fulfill the needs of our customers.
(cid:48)(cid:68)(cid:77)(cid:82)(cid:85)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:38)(cid:79)(cid:68)(cid:86)(cid:86)(cid:72)(cid:86)
(cid:41)(cid:85)(cid:82)(cid:93)(cid:72)(cid:81)(cid:3)(cid:41)(cid:82)(cid:82)(cid:71)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)
Our frozen food products division serves both food service and retail customers. We sell approximately 130 unique frozen food
products through approximately 1,175 wholesalers, cooperatives and distributors.
(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:41)(cid:85)(cid:82)(cid:93)(cid:72)(cid:81)(cid:3)(cid:41)(cid:82)(cid:82)(cid:71)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:177)(cid:3)(cid:41)(cid:82)(cid:82)(cid:71)(cid:3)(cid:54)(cid:72)(cid:85)(cid:89)(cid:76)(cid:70)(cid:72)(cid:3)(cid:38)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)
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.
(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:41)(cid:85)(cid:82)(cid:93)(cid:72)(cid:81)(cid:3)(cid:41)(cid:82)(cid:82)(cid:71)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:177)(cid:3)(cid:53)(cid:72)(cid:87)(cid:68)(cid:76)(cid:79)(cid:3)(cid:38)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)
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.
(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:41)(cid:85)(cid:82)(cid:93)(cid:72)(cid:81)(cid:3)(cid:41)(cid:82)(cid:82)(cid:71)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:177)(cid:3)(cid:54)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:48)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:76)(cid:81)(cid:74)
Our frozen food business covers the United States. Products produced by the Frozen Food Products segment are generally
supplied to food service and retail distributors who take title to the product upon shipment receipt through company leased long-haul
vehicles. In addition to regional sales managers, we maintain a network of independent food service and retail brokers covering most
of the United States. Brokers are compensated on a commission basis. We believe that our broker relationships, in close cooperation
with our regional sales managers, are a valuable asset providing significant new product and customer opportunities. 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.
4
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. Our advertising strategy includes our presence on social media and online distribution of
promotional material.
(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:54)(cid:81)(cid:68)(cid:70)(cid:78)(cid:3)(cid:41)(cid:82)(cid:82)(cid:71)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)
During fiscal year 2016, our snack food products division sold approximately 110 different items through customer owned
distribution centers and a direct store delivery network serving approximately 15,000 supermarkets, mass merchandise and
convenience retail stores located in 49 states.
Products produced or distributed by the Snack Food Products segment are supplied to customers through either direct delivery
to customer warehouses or direct-store-delivery to retail locations. We utilize customer managed warehouse distribution centers to
lower distribution cost. Product delivered to the customer’s warehouse is then distributed to the store where it is resold to the end
consumer. Our direct-store-delivery system focus emphasizes high quality service of our premium branded product to our customers.
We also provide the service of setting up and maintaining the display and restocking our products.
(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:54)(cid:81)(cid:68)(cid:70)(cid:78)(cid:3)(cid:41)(cid:82)(cid:82)(cid:71)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:178)(cid:3)(cid:38)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)
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.
(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:3)(cid:54)(cid:81)(cid:68)(cid:70)(cid:78)(cid:3)(cid:41)(cid:82)(cid:82)(cid:71)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:178)(cid:3)(cid:54)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:48)(cid:68)(cid:85)(cid:78)(cid:72)(cid:87)(cid:76)(cid:81)(cid:74)
Snack food products are distributed across the United States. Regional sales managers perform several significant functions
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.
(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:81)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:53)(cid:72)(cid:86)(cid:72)(cid:68)(cid:85)(cid:70)(cid:75)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:39)(cid:72)(cid:89)(cid:72)(cid:79)(cid:82)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)
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 lines and improve processing techniques and formulas. 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.
(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:87)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)
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 non-refrigerated 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.
(cid:40)(cid:73)(cid:73)(cid:72)(cid:70)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:42)(cid:82)(cid:89)(cid:72)(cid:85)(cid:81)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:53)(cid:72)(cid:74)(cid:88)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)
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
5
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 serious injury. Failure to comply with regulations of OSHA could adversely affect our results of
operations.
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.
(cid:44)(cid:80)(cid:83)(cid:82)(cid:85)(cid:87)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:46)(cid:72)(cid:92)(cid:3)(cid:38)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)
Sales to Wal-Mart® comprised 34.8% of revenues in fiscal year 2016 and 35.6% of total accounts receivable was due from
Wal-Mart® at October 28, 2016. Sales to Dollar General® comprised 7.8% of revenues in fiscal year 2016 and 24.5% of total
accounts receivable was due from Dollar General® at October 28, 2016. Sales to Wal-Mart® comprised 31.4% of revenues in fiscal
year 2015 and 42.6% of total accounts receivable was due from Wal-Mart® at October 30, 2015.
(cid:54)(cid:82)(cid:88)(cid:85)(cid:70)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:89)(cid:68)(cid:76)(cid:79)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:53)(cid:68)(cid:90)(cid:3)(cid:48)(cid:68)(cid:87)(cid:72)(cid:85)(cid:76)(cid:68)(cid:79)(cid:86)
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.
Most flour purchases are made at market price without contracts. We also purchases bulk flour under short-term fixed price
contracts at current market prices. The contracts are usually effective for a month or less and are not material to our
operations. These contracts are settled within a month’s time and no significant contracts remain open at the close of the reporting
period. We monitor and manage our ingredient costs to help negate volatile daily swings in market prices when possible. We do not
participate in the commodity futures market or hedging to limit commodity exposure.
(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:86)
We had 508 employees at October 28, 2016, approximately 38% of whose employment relationship is governed by collective
bargaining agreements. These agreements currently expire between February 2016 (in negotiations) and May 2019. We believe that
our relationship with all of our employees is favorable and contracts will be settled favorably. During the fourth quarter of fiscal year
2014, we closed the refrigerated snack food products division and withdrew from the Western Conference of Teamsters Pension Plan,
terminating approximately 44 employees.
(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:53)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:81)(cid:87)
The names, ages, and positions of all our executive officers as of January 15, 2017 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. Hugh Wm. Bridgford worked 53% of full
time and Allan L. Bridgford worked 50% of full time during fiscal year 2016.
(cid:49)(cid:68)(cid:80)(cid:72)
Allan L. Bridgford
Hugh Wm. Bridgford
William L. Bridgford
John V. Simmons
Raymond F. Lancy
(cid:36)(cid:74)(cid:72)
81
85
62
61
63
(cid:51)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:11)(cid:86)(cid:12)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:68)(cid:81)(cid:92)
Vice President 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
Item 1A. Risk Factors
In addition to the other matters set forth in this Report, 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.
6
(cid:58)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:86)(cid:88)(cid:69)(cid:77)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)(cid:85)(cid:76)(cid:86)(cid:78)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:82)(cid:82)(cid:71)(cid:3)(cid:76)(cid:81)(cid:71)(cid:88)(cid:86)(cid:87)(cid:85)(cid:92)(cid:15)(cid:3)(cid:76)(cid:81)(cid:70)(cid:79)(cid:88)(cid:71)(cid:76)(cid:81)(cid:74)(cid:15)(cid:3)(cid:68)(cid:80)(cid:82)(cid:81)(cid:74)(cid:3)(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:76)(cid:81)(cid:74)(cid:86)(cid:15)(cid:3)(cid:85)(cid:76)(cid:86)(cid:78)(cid:3)(cid:85)(cid:72)(cid:79)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:70)(cid:82)(cid:81)(cid:86)(cid:88)(cid:80)(cid:72)(cid:85)(cid:3)
(cid:83)(cid:85)(cid:72)(cid:73)(cid:72)(cid:85)(cid:72)(cid:81)(cid:70)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:68)(cid:80)(cid:76)(cid:81)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:68)(cid:86)(cid:3)(cid:90)(cid:72)(cid:79)(cid:79)(cid:3)(cid:68)(cid:86)(cid:3)(cid:74)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)(cid:72)(cid:70)(cid:82)(cid:81)(cid:82)(cid:80)(cid:76)(cid:70)(cid:3)(cid:70)(cid:82)(cid:81)(cid:71)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:15)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:82)(cid:73)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:85)(cid:76)(cid:86)(cid:78)(cid:86)(cid:15)(cid:3)(cid:76)(cid:73)(cid:3)(cid:85)(cid:72)(cid:68)(cid:79)(cid:76)(cid:93)(cid:72)(cid:71)(cid:15)(cid:3)(cid:70)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3)(cid:81)(cid:72)(cid:74)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:79)(cid:92)(cid:3)
(cid:76)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:17)
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.
(cid:41)(cid:79)(cid:88)(cid:70)(cid:87)(cid:88)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:83)(cid:85)(cid:76)(cid:70)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:90)(cid:72)(cid:3)(cid:83)(cid:68)(cid:92)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:85)(cid:68)(cid:90)(cid:3)(cid:80)(cid:68)(cid:87)(cid:72)(cid:85)(cid:76)(cid:68)(cid:79)(cid:86)(cid:3)(cid:70)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3)(cid:81)(cid:72)(cid:74)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:79)(cid:92)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:17)
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.
(cid:58)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:86)(cid:88)(cid:69)(cid:77)(cid:72)(cid:70)(cid:87)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:91)(cid:87)(cid:72)(cid:81)(cid:86)(cid:76)(cid:89)(cid:72)(cid:3)(cid:74)(cid:82)(cid:89)(cid:72)(cid:85)(cid:81)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:85)(cid:72)(cid:74)(cid:88)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:3)(cid:73)(cid:68)(cid:76)(cid:79)(cid:88)(cid:85)(cid:72)(cid:3)(cid:87)(cid:82)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:79)(cid:92)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:85)(cid:72)(cid:74)(cid:88)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:70)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3)(cid:81)(cid:72)(cid:74)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:79)(cid:92)(cid:3)
(cid:76)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:17)
Our operations are subject to extensive inspection and regulation by the USDA, 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 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 HACCP program. The HACCP program requires all meat and poultry processing plants to develop
and implement sanitary operating procedures and other program requirements. 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 serious injury.
Failure to comply with regulations of OSHA could adversely affect our results of operations. 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.
(cid:58)(cid:72)(cid:3)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:78)(cid:72)(cid:92)(cid:3)(cid:80)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:79)(cid:82)(cid:86)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:70)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3)(cid:81)(cid:72)(cid:74)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:79)(cid:92)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:17)
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 cannot assure that we will be successful in
this regard. We have no employment or non-competition agreements with key personnel.
(cid:58)(cid:72)(cid:3)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:80)(cid:68)(cid:77)(cid:82)(cid:85)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:81)(cid:92)(cid:3)(cid:79)(cid:82)(cid:86)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:86)(cid:88)(cid:70)(cid:75)(cid:3)(cid:70)(cid:88)(cid:86)(cid:87)(cid:82)(cid:80)(cid:72)(cid:85)(cid:86)(cid:3)(cid:70)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3)(cid:75)(cid:68)(cid:89)(cid:72)(cid:3)(cid:68)(cid:3)(cid:81)(cid:72)(cid:74)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:83)(cid:85)(cid:82)(cid:73)(cid:76)(cid:87)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:17)
We could suffer significant reductions in revenues and operating incomes if we lost one or more of our largest customers,
including Wal-Mart®, which accounted for 34.8% of sales in fiscal year 2016. Many of our customers, such as supermarkets,
7
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.
(cid:58)(cid:76)(cid:87)(cid:75)(cid:3)(cid:80)(cid:82)(cid:85)(cid:72)(cid:3)(cid:87)(cid:75)(cid:68)(cid:81)(cid:3)(cid:27)(cid:19)(cid:8)(cid:3)(cid:70)(cid:82)(cid:81)(cid:70)(cid:72)(cid:81)(cid:87)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:69)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:82)(cid:90)(cid:81)(cid:72)(cid:85)(cid:86)(cid:75)(cid:76)(cid:83)(cid:3)(cid:82)(cid:73)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:86)(cid:87)(cid:82)(cid:70)(cid:78)(cid:3)(cid:75)(cid:72)(cid:79)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:37)(cid:85)(cid:76)(cid:71)(cid:74)(cid:73)(cid:82)(cid:85)(cid:71)(cid:3)(cid:73)(cid:68)(cid:80)(cid:76)(cid:79)(cid:92)(cid:15)(cid:3)(cid:87)(cid:75)(cid:72)(cid:85)(cid:72)(cid:3)(cid:68)(cid:85)(cid:72)(cid:3)(cid:85)(cid:76)(cid:86)(cid:78)(cid:86)(cid:3)
(cid:87)(cid:75)(cid:68)(cid:87)(cid:3)(cid:87)(cid:75)(cid:72)(cid:92)(cid:3)(cid:70)(cid:68)(cid:81)(cid:3)(cid:72)(cid:91)(cid:72)(cid:85)(cid:87)(cid:3)(cid:86)(cid:76)(cid:74)(cid:81)(cid:76)(cid:73)(cid:76)(cid:70)(cid:68)(cid:81)(cid:87)(cid:3)(cid:76)(cid:81)(cid:73)(cid:79)(cid:88)(cid:72)(cid:81)(cid:70)(cid:72)(cid:3)(cid:82)(cid:85)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:3)(cid:80)(cid:68)(cid:87)(cid:87)(cid:72)(cid:85)(cid:86)(cid:17)
Members of the Bridgford family beneficially own, in the aggregate, more than 80% of our outstanding stock. In addition, three
members of the Bridgford family currently 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, among other things, 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.
(cid:58)(cid:72)(cid:3)(cid:83)(cid:68)(cid:85)(cid:87)(cid:76)(cid:70)(cid:76)(cid:83)(cid:68)(cid:87)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:48)(cid:88)(cid:79)(cid:87)(cid:76)(cid:72)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:85)(cid:3)(cid:51)(cid:72)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:86)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:70)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3)(cid:81)(cid:72)(cid:74)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:79)(cid:92)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:85)(cid:82)(cid:73)(cid:76)(cid:87)(cid:68)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:17)
We participate in “multiemployer” pension plans administered by labor unions on behalf of their employees. We make monthly
contributions for healthcare and pension benefit obligations. The contribution amount may change depending upon the ability of
participating companies to fund these pension liabilities as well as the actual and expected returns on pension plan assets. Should we
withdraw from the union and cease participation in a union plan, federal law could impose a penalty for additional contributions to the
plan. The penalty would be recorded as an expense in the consolidated statement of operations. The ultimate amount of the withdrawal
liability is dependent upon several factors including the funded status of the plan and contributions made by other participating
companies. During fiscal year 2014, we withdrew from the Western Conference of Teamsters Pension Plan and recorded an estimated
pension expense and a corresponding non-current liability of $798,000 related to this plan. The amount recorded was paid in October
2015. We continue to participate in other multiemployer union plans. In the event of a full or partial withdrawal from these plans, the
impact to our financial statements could be material.
(cid:40)(cid:80)(cid:76)(cid:81)(cid:72)(cid:81)(cid:87)(cid:3)(cid:71)(cid:82)(cid:80)(cid:68)(cid:76)(cid:81)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:79)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:76)(cid:86)(cid:78)(cid:3)(cid:85)(cid:72)(cid:74)(cid:88)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:70)(cid:82)(cid:88)(cid:79)(cid:71)(cid:3)(cid:81)(cid:72)(cid:74)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:79)(cid:92)(cid:3)(cid:76)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:85)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:83)(cid:82)(cid:86)(cid:76)(cid:87)(cid:76)(cid:82)(cid:81)(cid:17)
We own real property on which we operate our processing and/or our distribution operations. As is the case with any owner of
real property, we may be subject to eminent domain proceedings that can impact the value of investments we have made in real
property as well as potentially disrupt our business operations. If subject to eminent domain proceedings or other government takings
we may not be adequately compensated.
Item 1B. Unresolved Staff Comments
Not applicable.
Item 2. Properties
We own the following properties:
(cid:51)(cid:85)(cid:82)(cid:83)(cid:72)(cid:85)(cid:87)(cid:92)(cid:3)(cid:47)(cid:82)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)
Anaheim, California *
Dallas, Texas *
Dallas, Texas *
Dallas, Texas *
Dallas, Texas *
Statesville, North Carolina *
Chicago, Illinois **
*
- property used by Frozen Food Products Segment
** - property used by Snack Products Food Segment
8
(cid:37)(cid:88)(cid:76)(cid:79)(cid:71)(cid:76)(cid:81)(cid:74)(cid:3)
(cid:54)(cid:84)(cid:88)(cid:68)(cid:85)(cid:72)(cid:3)
(cid:41)(cid:82)(cid:82)(cid:87)(cid:68)(cid:74)(cid:72)
(cid:3)
(cid:3) (cid:3)
(cid:36)(cid:70)(cid:85)(cid:72)(cid:68)(cid:74)(cid:72)
100,000
94,000
30,000
16,000
3,200
42,000
156,000
(cid:3)
5.0
4.0
2.0
1.0
1.5
8.0
1.5
We utilize the foregoing properties for processing, warehousing, distributing and administrative purposes. We also lease
warehouse and/or office facilities throughout the United States 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, 2016 or as of the date of filing of this Report. 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. Mine Safety Disclosures
Not applicable.
9
(cid:51)(cid:36)(cid:53)(cid:55)(cid:3)(cid:44)(cid:44)
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
(cid:38)(cid:82)(cid:80)(cid:80)(cid:82)(cid:81)(cid:3)(cid:54)(cid:87)(cid:82)(cid:70)(cid:78)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:39)(cid:76)(cid:89)(cid:76)(cid:71)(cid:72)(cid:81)(cid:71)(cid:3)(cid:39)(cid:68)(cid:87)(cid:68)
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.
(cid:41)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:60)(cid:72)(cid:68)(cid:85)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
(cid:41)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:60)(cid:72)(cid:68)(cid:85)(cid:3)(cid:21)(cid:19)(cid:20)(cid:24)
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
(cid:3) (cid:43)(cid:76)(cid:74)(cid:75)
$
$
$
$
(cid:3) (cid:43)(cid:76)(cid:74)(cid:75)
$
$
$
$
(cid:3) (cid:3) (cid:47)(cid:82)(cid:90)
10.75 $
13.46 $
13.71 $
15.72 $
(cid:3) (cid:3) (cid:47)(cid:82)(cid:90)
8.35 $
8.65 $
10.81 $
10.95 $
(cid:38)(cid:68)(cid:86)(cid:75)(cid:3)
(cid:39)(cid:76)(cid:89)(cid:76)(cid:71)(cid:72)(cid:81)(cid:71)(cid:86)(cid:3)
(cid:51)(cid:68)(cid:76)(cid:71)
(cid:3) (cid:3)
8.55 $
8.55 $
12.02 $
11.01 $
(cid:38)(cid:68)(cid:86)(cid:75)(cid:3)
(cid:39)(cid:76)(cid:89)(cid:76)(cid:71)(cid:72)(cid:81)(cid:71)(cid:86)(cid:3)
(cid:51)(cid:68)(cid:76)(cid:71)
(cid:3) (cid:3)
7.01 $
7.50 $
7.38 $
8.06 $
(cid:3)
0.00
0.00
0.00
0.00
(cid:3)
0.00
0.00
0.00
0.00
On January 11, 2017, the closing sale price for our common stock on the Nasdaq Global Market was $11.23 per share. As of
January 11, 2017, there were 774 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.
(cid:56)(cid:81)(cid:85)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:54)(cid:68)(cid:79)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:40)(cid:84)(cid:88)(cid:76)(cid:87)(cid:92)(cid:3)(cid:54)(cid:72)(cid:70)(cid:88)(cid:85)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)
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.
(cid:53)(cid:72)(cid:83)(cid:88)(cid:85)(cid:70)(cid:75)(cid:68)(cid:86)(cid:72)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:40)(cid:84)(cid:88)(cid:76)(cid:87)(cid:92)(cid:3)(cid:54)(cid:72)(cid:70)(cid:88)(cid:85)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:3)(cid:69)(cid:92)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:44)(cid:86)(cid:86)(cid:88)(cid:72)(cid:85)
During fiscal year 2016, we repurchased an aggregate of 4,455 shares of our common stock for $40,859 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 2016.
(cid:51)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:3)(cid:11)(cid:20)(cid:12)
July 9, 2016 – August 5, 2016
August 6, 2016 – September 2, 2016
September 3, 2016 – September 30, 2016
October 1, 2016 – October 28, 2016
Total
(cid:48)(cid:68)(cid:91)(cid:76)(cid:80)(cid:88)(cid:80)
(cid:49)(cid:88)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)
(cid:54)(cid:75)(cid:68)(cid:85)(cid:72)(cid:86)(cid:3)(cid:87)(cid:75)(cid:68)(cid:87)
(cid:48)(cid:68)(cid:92)(cid:3)(cid:60)(cid:72)(cid:87)(cid:3)
(cid:37)(cid:72)
(cid:51)(cid:88)(cid:85)(cid:70)(cid:75)(cid:68)(cid:86)(cid:72)(cid:71)
(cid:56)(cid:81)(cid:71)(cid:72)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)
(cid:51)(cid:79)(cid:68)(cid:81)(cid:86)(cid:3)(cid:82)(cid:85)
(cid:51)(cid:85)(cid:82)(cid:74)(cid:85)(cid:68)(cid:80)(cid:86)(cid:3)(cid:11)(cid:21)(cid:12)(cid:3)
120,113
120,113
120,113
120,113
-
-
-
-
-
(cid:55)(cid:82)(cid:87)(cid:68)(cid:79)
(cid:49)(cid:88)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)(cid:3)
(cid:54)(cid:75)(cid:68)(cid:85)(cid:72)(cid:86)
(cid:51)(cid:88)(cid:85)(cid:70)(cid:75)(cid:68)(cid:86)(cid:72)(cid:71)
(cid:36)(cid:86)(cid:3)(cid:51)(cid:68)(cid:85)(cid:87)(cid:3)(cid:82)(cid:73)
(cid:51)(cid:88)(cid:69)(cid:79)(cid:76)(cid:70)(cid:79)(cid:92)(cid:3)
(cid:36)(cid:81)(cid:81)(cid:82)(cid:88)(cid:81)(cid:70)(cid:72)(cid:71)
(cid:51)(cid:79)(cid:68)(cid:81)(cid:86)(cid:3)(cid:82)(cid:85)
(cid:51)(cid:85)(cid:82)(cid:74)(cid:85)(cid:68)(cid:80)(cid:86)(cid:3)(cid:11)(cid:21)(cid:12)(cid:3) (cid:3)
(cid:55)(cid:82)(cid:87)(cid:68)(cid:79)
(cid:49)(cid:88)(cid:80)(cid:69)(cid:72)(cid:85)(cid:3)(cid:82)(cid:73)
(cid:54)(cid:75)(cid:68)(cid:85)(cid:72)(cid:86)
(cid:3)
(cid:51)(cid:88)(cid:85)(cid:70)(cid:75)(cid:68)(cid:86)(cid:72)(cid:71) (cid:3) (cid:3)
(cid:36)(cid:89)(cid:72)(cid:85)(cid:68)(cid:74)(cid:72)
(cid:51)(cid:85)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:68)(cid:76)(cid:71)
(cid:51)(cid:72)(cid:85)(cid:3)(cid:54)(cid:75)(cid:68)(cid:85)(cid:72) (cid:3) (cid:3)
- $
-
-
-
- $
-
-
-
-
-
10
(1)
The periods shown are our fiscal periods during the sixteen-week quarter ended October 28, 2016.
(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 October 15, 2016 and continuing through and including October 14, 2017, 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, 2016, the total maximum number of shares that may be purchased
under the Purchase Plan is 120,113 at a purchase price not to exceed $10.00 per share for a total maximum aggregate price
(exclusive of commission) of $1,201,130.
Item 6. Selected Financial Data
Not applicable to smaller reporting company.
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.
(cid:53)(cid:72)(cid:86)(cid:88)(cid:79)(cid:87)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:11)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:82)(cid:88)(cid:86)(cid:68)(cid:81)(cid:71)(cid:86)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:83)(cid:87)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:68)(cid:74)(cid:72)(cid:86)(cid:12)
Fiscal Year Ended October 28, 2016 (52 weeks) Compared to Fiscal Year Ended October 30, 2015 (52 weeks)
(cid:49)(cid:72)(cid:87)(cid:3)(cid:54)(cid:68)(cid:79)(cid:72)(cid:86)(cid:16)(cid:38)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)
Net sales in fiscal year 2016 increased $9,615 (7.4%) when compared to the prior year. The changes in net sales were comprised as
follows:
(cid:44)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:49)(cid:72)(cid:87)(cid:3)(cid:54)(cid:68)(cid:79)(cid:72)(cid:86)(cid:16)(cid:38)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)
Selling price per pound
Unit sales volume in pounds
Returns activity
Promotional activity
Increase in net sales
(cid:49)(cid:72)(cid:87)(cid:3)(cid:54)(cid:68)(cid:79)(cid:72)(cid:86)(cid:16)(cid:41)(cid:85)(cid:82)(cid:93)(cid:72)(cid:81)(cid:3)(cid:41)(cid:82)(cid:82)(cid:71)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:54)(cid:72)(cid:74)(cid:80)(cid:72)(cid:81)(cid:87)
%
$
1.0
5.2
0.4
0.8
7.4
1,470
7,367
353
425
9,615
Net sales in the Frozen Food Products segment in fiscal year 2016 decreased $3,960 (-7.8%) compared to the prior year. The changes
in net sales were comprised as follows:
11
(cid:44)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:49)(cid:72)(cid:87)(cid:3)(cid:54)(cid:68)(cid:79)(cid:72)(cid:86)(cid:16)(cid:41)(cid:85)(cid:82)(cid:93)(cid:72)(cid:81)(cid:3)(cid:41)(cid:82)(cid:82)(cid:71)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)
Selling price per pound
Unit sales volume in pounds
Returns activity
Promotional activity
Decrease in net sales
%
$
0.6
-6.5
-
-1.9
-7.8
309
(3,651 )
33
(651 )
(3,960 )
The decrease in net sales in fiscal year 2016 was attributable to lower sales volumes in all categories of product. Selling prices per
pound increased slightly compared to the prior year. Returns activity essentially remained the same. Promotional activity was higher
due to increased bid price and menu allowances offered compared to fiscal 2015.
(cid:49)(cid:72)(cid:87)(cid:3)(cid:54)(cid:68)(cid:79)(cid:72)(cid:86)(cid:16)(cid:54)(cid:81)(cid:68)(cid:70)(cid:78)(cid:3)(cid:41)(cid:82)(cid:82)(cid:71)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:54)(cid:72)(cid:74)(cid:80)(cid:72)(cid:81)(cid:87)
Net sales in the Snack Food Products segment in fiscal year 2016 increased $13,575 (17.0%) compared to the prior year. The changes
in net sales were comprised as follows:
(cid:44)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:49)(cid:72)(cid:87)(cid:3)(cid:54)(cid:68)(cid:79)(cid:72)(cid:86)(cid:16)(cid:54)(cid:81)(cid:68)(cid:70)(cid:78)(cid:3)(cid:41)(cid:82)(cid:82)(cid:71)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)
Selling price per pound
Unit sales volume in pounds
Returns activity
Promotional activity
Total - Increase in net sales
%
$
1.3
12.7
0.9
2.1
17.0
1,161
11,018
320
1,076
13,575
The increase in net sales in fiscal year 2016 was attributable to the increase in weighted average selling price per pound compared to
fiscal year 2015 primarily as a result of a shift in sales mix to higher value beef products. Volume in the beef products category
increased significantly compared to the prior year. Volume related to pork based products was lower and selling prices increased
slightly. Promotional and returns activity were both lower than the prior year due to more limited promotional offers on warehouse
shipments compared to the prior fiscal year.
(cid:38)(cid:82)(cid:86)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:54)(cid:82)(cid:79)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:42)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3)(cid:48)(cid:68)(cid:85)(cid:74)(cid:76)(cid:81)(cid:16)(cid:38)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)
Cost of products sold from continuing operations increased by $1,271 (1.5%) compared to the prior year. Overhead spending
increased due to significant increases in pension, workers’ compensation, facility repairs and hourly wages. The Company’s pension
cost increased due to a lower discount rate compared to the prior fiscal year. The Company's lower workers' compensation benefits
cost from last year was due to a change in the accounting estimate of future liabilities which did not reoccur this fiscal year. The main
driver of the increase in cost of goods sold was higher sales volume in the Snack Food Products segment. Decreases in meat
commodity costs year to date partially offset the increase in cost of products sold as described in the segment analysis below. The
gross margin increased from 35.9% to 39.4% during fiscal year 2016.
(cid:38)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:38)(cid:82)(cid:86)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:54)(cid:82)(cid:79)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:54)(cid:72)(cid:74)(cid:80)(cid:72)(cid:81)(cid:87)
Frozen Food Products Segment
Snack Food Products Segment
Total
$
%
(1,101 )
2,372
1,271
Commodity $
(Decrease)
Increase
-1.3
2.8
1.5
(575 )
(5,760 )
(6,335 )
(cid:38)(cid:82)(cid:86)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:54)(cid:82)(cid:79)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:42)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3)(cid:48)(cid:68)(cid:85)(cid:74)(cid:76)(cid:81)(cid:177)(cid:41)(cid:85)(cid:82)(cid:93)(cid:72)(cid:81)(cid:3)(cid:41)(cid:82)(cid:82)(cid:71)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:54)(cid:72)(cid:74)(cid:80)(cid:72)(cid:81)(cid:87)
Cost of products sold in the Frozen Food Products segment decreased by $1,101 (-3.6%) to $29,271 in fiscal year 2016 compared to
the prior year. Lower unit volume and to a lesser extent lower flour commodity costs of approximately $575 were the primary
contributing factors to this decrease. The gross margin percentage decreased from 39.9% to 37.2% during fiscal year 2016 compared
to the prior fiscal year.
(cid:38)(cid:82)(cid:86)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:54)(cid:82)(cid:79)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:42)(cid:85)(cid:82)(cid:86)(cid:86)(cid:3)(cid:48)(cid:68)(cid:85)(cid:74)(cid:76)(cid:81)(cid:177)(cid:54)(cid:81)(cid:68)(cid:70)(cid:78)(cid:3)(cid:41)(cid:82)(cid:82)(cid:71)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:54)(cid:72)(cid:74)(cid:80)(cid:72)(cid:81)(cid:87)
Cost of products sold in the Snack Food Products segment increased by $2,372 (4.5%) compared to the prior year due primarily to
higher sales volume which was partially offset by lower meat commodity costs. The cost of significant meat commodities decreased
approximately $5,760 during fiscal year 2016 compared to the prior year. The gross margin earned in this segment increased from
33.4% to 40.5% during fiscal year 2016 primarily as a result of lower meat commodity costs.
12
(cid:54)(cid:72)(cid:79)(cid:79)(cid:76)(cid:81)(cid:74)(cid:15)(cid:3)(cid:42)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:71)(cid:80)(cid:76)(cid:81)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:40)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:86)(cid:16)(cid:38)(cid:82)(cid:81)(cid:86)(cid:82)(cid:79)(cid:76)(cid:71)(cid:68)(cid:87)(cid:72)(cid:71)
Selling, general and administrative expenses ("SG&A") in fiscal year 2016 increased $5,626 (14.5%) when compared to the prior
year. The increase in this category did not directly correspond to the change in sales.
The table below summarizes the primary expense variances in this category:
Wages and bonus
Pension cost
Product advertising
Outside consultants
Workers’ compensation
Healthcare
Fuel
Outside storage
Travel
Reserve for doubtful accounts
Insurance
Other SG&A
Total - SG&A
$
52 weeks ended
October 28,
2016
October 30,
2015
Expense
Increase
(Decrease)
18,617 $
1,668
4,318
1,748
241
1,919
1,187
884
1,769
(166 )
847
11,345
44,377
15,837 $
538
3,407
1,163
(167 )
2,271
1,485
618
1,568
24
997
11,010
38,751
2,780
1,130
911
585
408
(352 )
(298 )
266
201
(190 )
(150 )
335
5,626
Higher profits and profit sharing accruals resulted in increased wages and bonus in fiscal year 2016 compared to the same period in
the prior year. The increase in pension cost was due to lower discount rates, a revision to the expected return on plan assets and an
adverse change in mortality tables. Costs for product advertising increased mainly as a result of higher payments under brand
licensing agreements in the Snack Food Products segment during fiscal 2016. Outside consulting costs increased due to higher real
estate advisory and entitlement related services as well as other related legal fees. Workers’ compensation costs increased due to a
change in accounting estimate that occurred in the prior fiscal year that did not reoccur in the current fiscal year. Healthcare expenses
decreased due to a change in accounting estimate. The decrease in fuel expense was driven by per gallon fuel price decreases
compared to the prior year as a result of lower cost trends in petroleum markets. The increase in outside storage and travel were a
direct result of the increase in sales volume. The reserve for doubtful accounts was lowered due to favorable collection activity.
Insurance expense decreased due to favorable market conditions, a change in coverage levels and favorable claims experience. The
major components comprising the increase of “Other SG&A” expenses were higher repairs and maintenance and utility expense.
(cid:54)(cid:72)(cid:79)(cid:79)(cid:76)(cid:81)(cid:74)(cid:15)(cid:3)(cid:42)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:71)(cid:80)(cid:76)(cid:81)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:40)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:86)(cid:16)(cid:41)(cid:85)(cid:82)(cid:93)(cid:72)(cid:81)(cid:3)(cid:41)(cid:82)(cid:82)(cid:71)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:54)(cid:72)(cid:74)(cid:80)(cid:72)(cid:81)(cid:87)
SG&A expenses in the Frozen Food Products segment decreased by $148 (-1.0%) to $14,477 during fiscal year 2016 compared to the
prior fiscal year. The overall decrease in SG&A expenses was mainly due to lower sales volume and as a result lower indirect selling
expenses including a reduction in wages, bonus and broker commissions.
(cid:54)(cid:72)(cid:79)(cid:79)(cid:76)(cid:81)(cid:74)(cid:15)(cid:3)(cid:42)(cid:72)(cid:81)(cid:72)(cid:85)(cid:68)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:71)(cid:80)(cid:76)(cid:81)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:40)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:86)(cid:16)(cid:53)(cid:72)(cid:73)(cid:85)(cid:76)(cid:74)(cid:72)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:54)(cid:81)(cid:68)(cid:70)(cid:78)(cid:3)(cid:41)(cid:82)(cid:82)(cid:71)(cid:3)(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)(cid:3)(cid:54)(cid:72)(cid:74)(cid:80)(cid:72)(cid:81)(cid:87)
SG&A expenses in the Snack Food Products segment increased by $5,774 (23.9%) to $29,900 during fiscal year 2016 compared to
the prior fiscal year. Most of the increase was due to higher sales and higher wages and bonus and increased payments under product
licensing fees.
(cid:44)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:55)(cid:68)(cid:91)(cid:72)(cid:86)
The effective income tax rate was 28.3% and -89.8% in fiscal years 2016 and 2015, respectively. In fiscal year 2016, the effective
income tax rate differed from the applicable mixed statutory rate of approximately 37.7% primarily due to the Domestic Production
Activities Deduction and a change in the liability on unrecognized benefits related to research and development tax credits (refer to
Note 4 of Notes to the Consolidated Financial Statements for more information). The 2015 tax benefit of $7,323 related primarily to
the reversal of the valuation allowance partially offset by income tax expense on book income.
(cid:47)(cid:76)(cid:84)(cid:88)(cid:76)(cid:71)(cid:76)(cid:87)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)(cid:53)(cid:72)(cid:86)(cid:82)(cid:88)(cid:85)(cid:70)(cid:72)(cid:86)(cid:3)(cid:11)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:82)(cid:88)(cid:86)(cid:68)(cid:81)(cid:71)(cid:86)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:83)(cid:87)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:12)
The principal source of our operating cash flow is cash receipts from the sale of our products, net of costs to manufacture, store,
market and deliver to customers. The Company did not borrow on the line of credit during fiscal 2016. There were no borrowings
outstanding under this line of credit as of October 28, 2016. The Company was in compliance with all loan covenants except the
13
capital expenditure maximum which was subsequently waived in a letter dated December 19, 2016. We typically fund our operations
from cash balances and cash flow generated from operations. We normally expect positive operating cash flows in the first quarter of
our fiscal year from the liquidation of inventory and accounts receivable balances related to holiday season sales. We typically build
inventories in the third quarter for anticipated promotional sales that occur in the fourth and first quarters. Anticipated commodity
price trends may also affect cash balances. Certain commodities may be purchased in advance of our immediate needs to lower the
ultimate cost of processing or to meet customer demand.
(cid:38)(cid:68)(cid:86)(cid:75)(cid:3)(cid:73)(cid:79)(cid:82)(cid:90)(cid:86)(cid:3)(cid:73)(cid:85)(cid:82)(cid:80)(cid:3)(cid:82)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:70)(cid:87)(cid:76)(cid:89)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:29)
(cid:3)
(cid:3)
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation
(Recovery) provision for losses on accounts receivable
Provision for promotional allowances
Loss (gain) on sale of property, plant and equipment
Deferred income taxes, net
Tax valuation allowance
Changes in operating working capital
Net cash provided by operating activities
(cid:3)
(cid:3)
$
$
(cid:24)(cid:21)(cid:3)(cid:58)(cid:72)(cid:72)(cid:78)(cid:86)
(cid:3) (cid:3)
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:3)
(cid:3)
7,770 $
15,442
3,043
(166 )
790
3
(1,034 )
-
(5,879 )
4,527 $
3,050
24
2,749
(127 )
3,171
(10,848 )
(6,001 )
7,460
For the fifty-two weeks ended October 28, 2016, net cash provided by operating activities was $4,527, a decrease of $2,933 compared
to the fifty-two weeks ended October 30, 2015. The decrease is primarily related to payment of income taxes of $4,267 and an
increase in inventory levels in the Snack Food Product segment. During fiscal year 2016, we funded $1,150 towards our defined
benefit pension plan. Plan funding strategies may be adjusted depending upon economic conditions, investment options, tax
deductibility, or legislative changes in funding requirements.
Our cash conversion cycle (defined as days of inventory and trade receivables less days of trade payables outstanding) was equal to 89
days for the fifty-two weeks ended October 28, 2016 and 79 days for the fifty-two weeks ended October 30, 2015. The Company
increased payment terms to certain large customers during fiscal year 2016 which increased our cash conversion cycle.
For the fifty-two weeks ended October 28, 2015, net cash provided by operating activities was $7,460. This result was primarily
related to net income. During fiscal year 2015, we funded $1,157 towards our defined benefit pension plan.
(cid:38)(cid:68)(cid:86)(cid:75)(cid:3)(cid:88)(cid:86)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:76)(cid:81)(cid:89)(cid:72)(cid:86)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:70)(cid:87)(cid:76)(cid:89)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:29)
(cid:3)
(cid:3)
Proceeds from sale of property, plant and equipment
Additions to property, plant and equipment
Net cash used in investing activities
(cid:3)
(cid:3)
$
$
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:24)(cid:21)(cid:3)(cid:58)(cid:72)(cid:72)(cid:78)(cid:86)
(cid:3) (cid:3)
24 $
(3,265 )
(3,241 ) $
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:3)
(cid:3)
52
(1,404 )
(1,352 )
Expenditures for property, plant and equipment include the acquisition of 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. We 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:
(cid:3)
(cid:3)
(cid:24)(cid:21)(cid:3)(cid:58)(cid:72)(cid:72)(cid:78)(cid:86)
(cid:3)
(cid:3)
Temperature control
Processing equipment
Packaging lines
Office and building improvements
Vehicles for sales and/or delivery
Quality control and communication systems
Computer software and hardware
Forklifts
Increase in projects in process
Additions to property, plant and equipment
14
(cid:50)(cid:70)(cid:87)(cid:82)(cid:69)(cid:72)(cid:85)(cid:3)(cid:21)(cid:27)(cid:15)(cid:3)
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:3) (cid:3)
- $
550
270
267
1,273
-
254
39
612
3,265 $
(cid:50)(cid:70)(cid:87)(cid:82)(cid:69)(cid:72)(cid:85)(cid:3)(cid:22)(cid:19)(cid:15)(cid:3)
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:3)
6
200
72
18
664
49
-
-
395
1,404
(cid:3)
$
$
(cid:38)(cid:68)(cid:86)(cid:75)(cid:3)(cid:88)(cid:86)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:73)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:81)(cid:74)(cid:3)(cid:68)(cid:70)(cid:87)(cid:76)(cid:89)(cid:76)(cid:87)(cid:76)(cid:72)(cid:86)(cid:29)
(cid:3)
Shares repurchased
Payments of capital lease obligations
Net cash used in financing activities
(cid:3)
(cid:3)
$
$
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:24)(cid:21)(cid:3)(cid:58)(cid:72)(cid:72)(cid:78)(cid:86)
(cid:3) (cid:3)
(40 ) $
(103 )
(143 ) $
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:3)
(cid:3)
(283 )
(175 )
(458 )
Our stock repurchase program was approved by the Board of Directors in November 1999 and was expanded in June 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. As of the end of fiscal year 2016, 120,113 shares were still
authorized for repurchase under the program.
We invested in OTR (over-the-road) tractors during fiscal year 2012 financed by a capital lease obligation in the amount of
$1,848. After reevaluating our fleet delivery needs, we returned six OTR tractors financed by the capital lease arrangement with a
remaining liability of $656 and $69 during the second quarter of fiscal year 2015 and third quarter of fiscal year 2016, respectively.
The total capital lease obligation remaining as of October 28, 2016 is $553. The capital lease arrangement replaced the long-standing
month-to-month leases of transportation equipment.
We maintain a line of credit with Wells Fargo Bank, N.A. that expires on March 1, 2018. Under the terms of this line of credit, we
may borrow up to $4,000 at an interest rate equal to the bank’s prime rate or Libor plus 1.75%. The borrowing agreement contains
various covenants, the more significant of which require us to maintain a minimum tangible net worth, a minimum quick ratio, a
minimum net income after tax and total capital expenditures of less than $3,000. We were in compliance with all loan covenants as of
October 28, 2016, except the capital expenditure maximum, which was subsequently waived in a letter dated December 19, 2016.
There have been no borrowings under this line of credit during fiscal year 2016.
(cid:44)(cid:80)(cid:83)(cid:68)(cid:70)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:44)(cid:81)(cid:73)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)
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.
The impact of inflation on our financial position and results of operations has not been significant. Management is of the opinion
that our strong financial position and our capital resources are sufficient to provide for our operating needs and capital expenditures
for fiscal year 2016.
(cid:50)(cid:73)(cid:73)(cid:16)(cid:37)(cid:68)(cid:79)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:54)(cid:75)(cid:72)(cid:72)(cid:87)(cid:3)(cid:36)(cid:85)(cid:85)(cid:68)(cid:81)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)
We do not currently have any off balance sheet arrangements within the meaning of Item 303(a)(4) of Regulation S-K.
(cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:68)(cid:70)(cid:87)(cid:88)(cid:68)(cid:79)(cid:3)(cid:50)(cid:69)(cid:79)(cid:76)(cid:74)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)
We have remained free of interest bearing debt (excluding capital leases) for twenty-eight of the last twenty-nine years (with fiscal
year 2014 being the only exception) and had no other debt or other contractual obligations within the meaning of Item 303(a)(5) of
Regulation S-K, as of October 28, 2016.
(cid:38)(cid:85)(cid:76)(cid:87)(cid:76)(cid:70)(cid:68)(cid:79)(cid:3)(cid:36)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:51)(cid:82)(cid:79)(cid:76)(cid:70)(cid:76)(cid:72)(cid:86)
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 promotions, returns allowances, bad debt and inventory 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.
15
(cid:53)(cid:72)(cid:70)(cid:72)(cid:81)(cid:87)(cid:79)(cid:92)(cid:3)(cid:44)(cid:86)(cid:86)(cid:88)(cid:72)(cid:71)(cid:3)(cid:36)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:51)(cid:85)(cid:82)(cid:81)(cid:82)(cid:88)(cid:81)(cid:70)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:53)(cid:72)(cid:74)(cid:88)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)
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 are set forth under Item 15.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Not applicable.
Item 9A. Controls and Procedures
(cid:40)(cid:89)(cid:68)(cid:79)(cid:88)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:71)(cid:76)(cid:86)(cid:70)(cid:79)(cid:82)(cid:86)(cid:88)(cid:85)(cid:72)(cid:3)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:85)(cid:82)(cid:70)(cid:72)(cid:71)(cid:88)(cid:85)(cid:72)(cid:86)
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, including our principal executive officer and principal financial officer,
and recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s
rules and forms to allow timely decisions regarding required disclosures.
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 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 our independent registered public accounting firm. 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. 16 (Communication with Audit Committees). In addition, the Audit
Committee and the independent registered public accounting 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”.
16
(cid:38)(cid:75)(cid:68)(cid:81)(cid:74)(cid:72)(cid:86)(cid:3)(cid:76)(cid:81)(cid:3)(cid:44)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:79)(cid:3)(cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:3)(cid:82)(cid:89)(cid:72)(cid:85)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:86)
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.
(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:23)(cid:19)(cid:23)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:54)(cid:68)(cid:85)(cid:69)(cid:68)(cid:81)(cid:72)(cid:86)(cid:16)(cid:50)(cid:91)(cid:79)(cid:72)(cid:92)(cid:3)(cid:36)(cid:70)(cid:87)(cid:3)(cid:82)(cid:73)(cid:3)(cid:21)(cid:19)(cid:19)(cid:21)
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 has not been presented. Section 404(a) is still effective for smaller public companies and requires the disclosure of
management attestations on internal controls over financial reporting.
(cid:48)(cid:68)(cid:81)(cid:68)(cid:74)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:182)(cid:86)(cid:3)(cid:36)(cid:81)(cid:81)(cid:88)(cid:68)(cid:79)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:82)(cid:81)(cid:3)(cid:44)(cid:81)(cid:87)(cid:72)(cid:85)(cid:81)(cid:68)(cid:79)(cid:3)(cid:38)(cid:82)(cid:81)(cid:87)(cid:85)(cid:82)(cid:79)(cid:3)(cid:50)(cid:89)(cid:72)(cid:85)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:76)(cid:81)(cid:74)
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
Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control-Integrated Framework (2013) and
related illustrative documents as an update to Internal Control-Integrated Framework (1992). Management has determined that the 17
principles are present and functioning during its assessment of the effectiveness of our internal controls. 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,
2016. 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, 2016 was effective.
Item 9B. Other Information
Not applicable.
17
Item 10. Directors, Executive Officers and Corporate Governance
(cid:51)(cid:36)(cid:53)(cid:55)(cid:3)(cid:44)(cid:44)(cid:44)
The information required by this item will be included in the Proxy Statement, which will be filed with the Securities and
Exchange Commission not late than 120 days after the end of our fiscal year ended October 28, 2016, and is incorporated herein by
reference. Information concerning our executive officers is set forth in Part I, Item 1 of this Report under the heading “Executive
Officers of the Registrant”.
Item 11. Executive Compensation
The information required by this item will be included in the Proxy Statement, which will be filed with the Securities and
Exchange Commission not late than 120 days after the end of our fiscal year ended October 28, 2016, and is incorporated herein by
reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item will be included in the Proxy Statement, which will be filed with the Securities and
Exchange Commission not late than 120 days after the end of our fiscal year ended October 28, 2016, and is incorporated herein by
reference.
(cid:40)(cid:84)(cid:88)(cid:76)(cid:87)(cid:92)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:44)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)
Not applicable, as we do not have any compensation plans under which our equity securities are authorized for issuance.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item will be included in the Proxy Statement, which will be filed with the Securities and
Exchange Commission not late than 120 days after the end of our fiscal year ended October 28, 2016, and 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 our
approximate 80% beneficial ownership of our outstanding common stock by Bridgford Industries Incorporated and are therefore
exempted from various NASDAQ Listing Rules pertaining to certain “independence” requirements of our directors. Nevertheless, the
Board of Directors has determined that Messrs. Andrews, Ross, and Scott, 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. As legal counsel to the board, he
currently is paid a fee of two thousand dollars for each meeting attended. Total fees paid under this arrangement for fiscal year 2016
were approximately twenty thousand dollars. 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 2016 were approximately $160,000.
Director Allan Bridgford Jr., son of the former senior chairman of the Board of Directors, is providing consulting services to
the Chicago plant and management. The contract on behalf of the Company with Allan Bridgford Jr. is for consulting services
at $1,200 per day. Total fees billed under this arrangement for fiscal year 2016 were approximately $139,000. As a member of the
board of directors, he was paid a fee of $2,000 for each meeting attended during fiscal year 2016. Total fees paid under this
arrangement for fiscal year 2016 were $19,900. Under a new arrangement with Allan Bridgford Jr., we accrued approximately
$547,000 of profit sharing based on fiscal year 2016 profitability to be paid out in three installments equally over the next three years.
Real estate consultant and Board member Keith Ross currently provides consulting services to the board and management. He
was paid a fee of $2,000 for each board meeting attended and $550 for each audit committee meeting attended during fiscal year 2016
for a total of $11,250 during fiscal year 2016. Total fees paid during fiscal year 2016 for consulting services were $257,000.
Item 14. Principal Accountant Fees and Services
The information required by this item will be included in the Proxy Statement, which will be filed with the Securities and
Exchange Commission not late than 120 days after the end of our fiscal year ended October 28, 2016, and is incorporated herein by
reference.
18
Item 15. Exhibits and Financial Statement Schedules
(cid:51)(cid:36)(cid:53)(cid:55)(cid:3)(cid:44)(cid:57)
(a)(1) Financial Statements . The following documents are filed as a part of this Report:
Management’s Annual Report on Internal Control Over Financial Reporting
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of October 28, 2016 and October 30, 2015
Consolidated Statements of Operations for years ended October 28, 2016 and October 30, 2015
Consolidated Statements of Comprehensive Income for years ended October 28, 2016 and October 30, 2015
Consolidated Statements of Shareholders’ Equity for years ended October 28, 2016 and October 30, 2015
Consolidated Statements of Cash Flows for years ended October 28, 2016 and October 30, 2015
Notes to Consolidated Financial Statements
(cid:51)(cid:68)(cid:74)(cid:72)
17
21
22
23
24
24
25
26
(2) Financial Statement Schedules
Not applicable for smaller reporting company.
(3) Exhibits
(a) The exhibits below are filed or incorporated herein by reference.
(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)
(cid:49)(cid:88)(cid:80)(cid:69)(cid:72)(cid:85)
3.5
3.6
3.7
3.8
10.1
10.2
10.3
21.1
24.1
31.1
31.2
32.1
32.2
(cid:39)(cid:72)(cid:86)(cid:70)(cid:85)(cid:76)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)
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).
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).
By-laws, as amended (filed as Exhibit 2 to Form 10-K on January 28, 1993 and incorporated herein by reference).
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).*
Subsidiaries of the Registrant.
Power of Attorney (included as part of the signature page)
Certification of Principal Executive Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification of Principal Financial Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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).
101.INS XBRL Instance Document.
101.SCH XBRL Taxonomy Extension Schema Document.
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB XBRL Taxonomy Extension Label Linkbase Document.
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document.
* Each of these Exhibits constitutes a management contract, compensatory plan or arrangement.
19
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.
SIGNATURES
BRIDGFORD FOODS CORPORATION
By: /s/ WILLIAM L. BRIDGFORD
(cid:58)(cid:76)(cid:79)(cid:79)(cid:76)(cid:68)(cid:80)(cid:3)(cid:47)(cid:17)(cid:3)(cid:37)(cid:85)(cid:76)(cid:71)(cid:74)(cid:73)(cid:82)(cid:85)(cid:71)
Chairman of the Board
Date: January 13, 2017
(cid:51)(cid:50)(cid:58)(cid:40)(cid:53)(cid:3)(cid:50)(cid:41)(cid:3)(cid:36)(cid:55)(cid:55)(cid:50)(cid:53)(cid:49)(cid:40)(cid:60)
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.
(cid:54)(cid:76)(cid:74)(cid:81)(cid:68)(cid:87)(cid:88)(cid:85)(cid:72)
(cid:55)(cid:76)(cid:87)(cid:79)(cid:72)
/s/ WILLIAM L.
BRIDGFORD
(cid:58)(cid:76)(cid:79)(cid:79)(cid:76)(cid:68)(cid:80)(cid:3)(cid:47)(cid:17)(cid:3)(cid:37)(cid:85)(cid:76)(cid:71)(cid:74)(cid:73)(cid:82)(cid:85)(cid:71)
/s/ BRUCE H.
BRIDGFORD
(cid:37)(cid:85)(cid:88)(cid:70)(cid:72)(cid:3)(cid:43)(cid:17)(cid:3)(cid:37)(cid:85)(cid:76)(cid:71)(cid:74)(cid:73)(cid:82)(cid:85)(cid:71)
Chairman of the Board
(Principal Executive Officer)
Director
/s/ JOHN V. SIMMONS
(cid:45)(cid:82)(cid:75)(cid:81)(cid:3)(cid:57)(cid:17)(cid:3)(cid:54)(cid:76)(cid:80)(cid:80)(cid:82)(cid:81)(cid:86)
President & Director
/s/ RAYMOND F.
LANCY
(cid:53)(cid:68)(cid:92)(cid:80)(cid:82)(cid:81)(cid:71)(cid:3)(cid:41)(cid:17)(cid:3)(cid:47)(cid:68)(cid:81)(cid:70)(cid:92)
Chief Financial Officer, Vice President, Treasurer & Director
(Principal Financial and Accounting Officer)
/s/ TODD C. ANDREWS Director
(cid:55)(cid:82)(cid:71)(cid:71)(cid:3)(cid:38)(cid:17)(cid:3)(cid:36)(cid:81)(cid:71)(cid:85)(cid:72)(cid:90)(cid:86)
/s/ ALLAN BRIDGFORD
JR.
(cid:36)(cid:79)(cid:79)(cid:68)(cid:81)(cid:3)(cid:37)(cid:85)(cid:76)(cid:71)(cid:74)(cid:73)(cid:82)(cid:85)(cid:71)(cid:3)(cid:45)(cid:85)(cid:17)
Director
/s/ D. GREGORY SCOTT Director
(cid:39)(cid:17)(cid:3)(cid:42)(cid:85)(cid:72)(cid:74)(cid:82)(cid:85)(cid:92)(cid:3)(cid:54)(cid:70)(cid:82)(cid:87)(cid:87)
/s/ KEITH A. ROSS
(cid:46)(cid:72)(cid:76)(cid:87)(cid:75)(cid:3)(cid:36)(cid:17)(cid:3)(cid:53)(cid:82)(cid:86)(cid:86)
Director
(cid:39)(cid:68)(cid:87)(cid:72)
January 13, 2017
January 13, 2017
January 13, 2017
January 13, 2017
January 13, 2017
January 13, 2017
January 13, 2017
January 13, 2017
20
(cid:3)
(cid:53)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:50)(cid:73)(cid:3)(cid:44)(cid:81)(cid:71)(cid:72)(cid:83)(cid:72)(cid:81)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:53)(cid:72)(cid:74)(cid:76)(cid:86)(cid:87)(cid:72)(cid:85)(cid:72)(cid:71)(cid:3)(cid:51)(cid:88)(cid:69)(cid:79)(cid:76)(cid:70)(cid:3)(cid:36)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:41)(cid:76)(cid:85)(cid:80)
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,
2016 and October 30, 2015 and the related consolidated statements of operations, comprehensive income, 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 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, 2016 and October 30, 2015 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 LLP
Newport Beach, California
January 13, 2017
21
(cid:3)
(cid:3) (cid:3)
$
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:3)
(cid:3) (cid:3)
(cid:3) (cid:3) (cid:3)
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:3)
(cid:3)
(cid:3)
6,985 $
5,842
16,582
24,081
937
48,585
10,362
13,775
14,532
87,254 $
14,619
19,977
319
40,757
10,235
13,666
10,644
75,302
(cid:3)
(cid:3) (cid:3) (cid:3)
(cid:3)
(cid:3)
4,085 $
4,089
130
3,918
12,222
36,123
48,345
6,087
5,203
96
2,825
14,211
25,446
39,657
-
-
9,134
8,298
48,073
(26,596 )
38,909
87,254 $
9,138
8,334
40,303
(22,130 )
35,645
75,302
(cid:3)
(cid:3)
(cid:37)(cid:53)(cid:44)(cid:39)(cid:42)(cid:41)(cid:50)(cid:53)(cid:39)(cid:3)(cid:41)(cid:50)(cid:50)(cid:39)(cid:54)(cid:3)(cid:38)(cid:50)(cid:53)(cid:51)(cid:50)(cid:53)(cid:36)(cid:55)(cid:44)(cid:50)(cid:49)
(cid:38)(cid:50)(cid:49)(cid:54)(cid:50)(cid:47)(cid:44)(cid:39)(cid:36)(cid:55)(cid:40)(cid:39)(cid:3)(cid:37)(cid:36)(cid:47)(cid:36)(cid:49)(cid:38)(cid:40)(cid:3)(cid:54)(cid:43)(cid:40)(cid:40)(cid:55)(cid:54)
(cid:50)(cid:70)(cid:87)(cid:82)(cid:69)(cid:72)(cid:85)(cid:3)(cid:21)(cid:27)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:50)(cid:70)(cid:87)(cid:82)(cid:69)(cid:72)(cid:85)(cid:3)(cid:22)(cid:19)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:24)
(cid:11)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:82)(cid:88)(cid:86)(cid:68)(cid:81)(cid:71)(cid:86)(cid:15)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:83)(cid:87)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:72)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:12)
Current assets:
(cid:36)(cid:54)(cid:54)(cid:40)(cid:55)(cid:54)
Cash and cash equivalents
Accounts receivable, less allowance for doubtful accounts of $17 and $146, respectively and
promotional allowances of $2,271 and $3,061, respectively
Inventories, less reserves of $308, and $381, respectively
Prepaid expenses
Total current assets
Property, plant and equipment, net of accumulated depreciation and amortization of $62,330 and
$60,454, respectively
Other non-current assets
Deferred income taxes
Total assets
(cid:47)(cid:44)(cid:36)(cid:37)(cid:44)(cid:47)(cid:44)(cid:55)(cid:44)(cid:40)(cid:54)(cid:3)(cid:36)(cid:49)(cid:39)(cid:3)(cid:54)(cid:43)(cid:36)(cid:53)(cid:40)(cid:43)(cid:50)(cid:47)(cid:39)(cid:40)(cid:53)(cid:54)(cid:182)(cid:3)(cid:40)(cid:52)(cid:56)(cid:44)(cid:55)(cid:60)
Current liabilities:
Accounts payable
Accrued payroll, advertising and other expenses
Income taxes payable
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 –
9,076 and 9,080
Capital in excess of par value
Retained earnings
Accumulated other comprehensive loss
Total shareholders’ equity
Total liabilities and shareholders’ equity
$
(cid:3) (cid:3)
$
$
See accompanying notes to consolidated financial statements.
22
(cid:37)(cid:53)(cid:44)(cid:39)(cid:42)(cid:41)(cid:50)(cid:53)(cid:39)(cid:3)(cid:41)(cid:50)(cid:50)(cid:39)(cid:54)(cid:3)(cid:38)(cid:50)(cid:53)(cid:51)(cid:50)(cid:53)(cid:36)(cid:55)(cid:44)(cid:50)(cid:49)
(cid:38)(cid:50)(cid:49)(cid:54)(cid:50)(cid:47)(cid:44)(cid:39)(cid:36)(cid:55)(cid:40)(cid:39)(cid:3)(cid:54)(cid:55)(cid:36)(cid:55)(cid:40)(cid:48)(cid:40)(cid:49)(cid:55)(cid:54)(cid:3)(cid:50)(cid:41)(cid:3)(cid:50)(cid:51)(cid:40)(cid:53)(cid:36)(cid:55)(cid:44)(cid:50)(cid:49)(cid:54)
(cid:41)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:3)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:50)(cid:70)(cid:87)(cid:82)(cid:69)(cid:72)(cid:85)(cid:3)(cid:21)(cid:27)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:50)(cid:70)(cid:87)(cid:82)(cid:69)(cid:72)(cid:85)(cid:3)(cid:22)(cid:19)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:24)
(cid:11)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:82)(cid:88)(cid:86)(cid:68)(cid:81)(cid:71)(cid:86)(cid:15)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:83)(cid:87)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:72)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:12)
(cid:3)
(cid:3)
Net sales
Cost of products sold
Gross margin
Selling, general and administrative expenses
Income before taxes
Provision for (benefit on) income taxes
Net income
Basic earnings per share
(cid:3)
(cid:3)
(cid:24)(cid:21)(cid:3)(cid:58)(cid:72)(cid:72)(cid:78)(cid:86)
(cid:3) (cid:3)
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:3)
(cid:3)
$
140,063 $
130,448
84,850
83,579
55,213
46,869
44,377
38,751
10,836
8,118
3,066
(7,324 )
7,770 $
15,442
0.86 $
1.70
$
$
Shares used to compute basic earnings per common share
9,077,606
9,098,742
See accompanying notes to consolidated financial statements
23
(cid:3)
(cid:3)
(cid:3)
Net income
(cid:37)(cid:53)(cid:44)(cid:39)(cid:42)(cid:41)(cid:50)(cid:53)(cid:39)(cid:3)(cid:41)(cid:50)(cid:50)(cid:39)(cid:54)(cid:3)(cid:38)(cid:50)(cid:53)(cid:51)(cid:50)(cid:53)(cid:36)(cid:55)(cid:44)(cid:50)(cid:49)
(cid:38)(cid:50)(cid:49)(cid:54)(cid:50)(cid:47)(cid:44)(cid:39)(cid:36)(cid:55)(cid:40)(cid:39)(cid:3)(cid:54)(cid:55)(cid:36)(cid:55)(cid:40)(cid:48)(cid:40)(cid:49)(cid:55)(cid:54)(cid:3)(cid:50)(cid:41)(cid:3)(cid:38)(cid:50)(cid:48)(cid:51)(cid:53)(cid:40)(cid:43)(cid:40)(cid:49)(cid:54)(cid:44)(cid:57)(cid:40)(cid:3)(cid:44)(cid:49)(cid:38)(cid:50)(cid:48)(cid:40)
(cid:41)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:3)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:50)(cid:70)(cid:87)(cid:82)(cid:69)(cid:72)(cid:85)(cid:3)(cid:21)(cid:27)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:50)(cid:70)(cid:87)(cid:82)(cid:69)(cid:72)(cid:85)(cid:3)(cid:22)(cid:19)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:24)
(cid:11)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:82)(cid:88)(cid:86)(cid:68)(cid:81)(cid:71)(cid:86)(cid:12)
Other comprehensive (loss) from defined benefit plans
Other postretirement benefit plans:
Actuarial (loss)
Prior service cost (benefit)
Other comprehensive income (loss) from other postretirement benefit plans
Other comprehensive (loss), before taxes
Tax benefit on other comprehensive income/loss
Change in other comprehensive (loss), net of tax
Comprehensive income, net of tax
(cid:3)(cid:3)(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
(cid:3)
$
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:24)(cid:21)(cid:3)(cid:58)(cid:72)(cid:72)(cid:78)(cid:86)
(cid:3) (cid:3)
7,770 $
(7,419 )
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:3)
(cid:3)
15,442
(7,525 )
(103 )
202
99
(170 )
(36 )
(206 )
(7,320 )
(7,731 )
2,854
2,967
(4,466 )
(4,764 )
$
3,304 $
10,678
(cid:38)(cid:50)(cid:49)(cid:54)(cid:50)(cid:47)(cid:44)(cid:39)(cid:36)(cid:55)(cid:40)(cid:39)(cid:3)(cid:54)(cid:55)(cid:36)(cid:55)(cid:40)(cid:48)(cid:40)(cid:49)(cid:55)(cid:54)(cid:3)(cid:50)(cid:41)(cid:3)(cid:54)(cid:43)(cid:36)(cid:53)(cid:40)(cid:43)(cid:50)(cid:47)(cid:39)(cid:40)(cid:53)(cid:54)(cid:182)(cid:3)(cid:40)(cid:52)(cid:56)(cid:44)(cid:55)(cid:60)
(cid:41)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:3)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:50)(cid:70)(cid:87)(cid:82)(cid:69)(cid:72)(cid:85)(cid:3)(cid:21)(cid:27)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:50)(cid:70)(cid:87)(cid:82)(cid:69)(cid:72)(cid:85)(cid:3)(cid:22)(cid:19)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:24)
(cid:11)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:82)(cid:88)(cid:86)(cid:68)(cid:81)(cid:71)(cid:86)(cid:12)
(cid:3)
Balance, October 31, 2014
Shares repurchased and retired
Net income
Net change in defined benefit plans
and other benefit plans
Balance, October 30, 2015
Shares repurchased and retired
Net income
Net change in defined benefit plans
and other benefit plans
Balance, October 28, 2016
(cid:3)
(cid:54)(cid:75)(cid:68)(cid:85)(cid:72)(cid:86)
(cid:3) (cid:3) (cid:36)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)
(cid:3) (cid:3)
(cid:38)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)(cid:76)(cid:81)
(cid:72)(cid:91)(cid:70)(cid:72)(cid:86)(cid:86)(cid:3)(cid:82)(cid:73)
(cid:83)(cid:68)(cid:85)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72) (cid:3) (cid:3)
(cid:53)(cid:72)(cid:87)(cid:68)(cid:76)(cid:81)(cid:72)(cid:71)
(cid:72)(cid:68)(cid:85)(cid:81)(cid:76)(cid:81)(cid:74)(cid:86)
(cid:3) (cid:3)
(cid:36)(cid:70)(cid:70)(cid:88)(cid:80)(cid:88)(cid:79)(cid:68)(cid:87)(cid:72)(cid:71)
(cid:82)(cid:87)(cid:75)(cid:72)(cid:85)
(cid:70)(cid:82)(cid:80)(cid:83)(cid:85)(cid:72)(cid:75)(cid:72)(cid:81)(cid:86)(cid:76)(cid:89)(cid:72)
(cid:79)(cid:82)(cid:86)(cid:86)
(cid:3) (cid:3)
(cid:55)(cid:82)(cid:87)(cid:68)(cid:79)
(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:75)(cid:82)(cid:79)(cid:71)(cid:72)(cid:85)(cid:86)(cid:182)
(cid:72)(cid:84)(cid:88)(cid:76)(cid:87)(cid:92)
9,113 $
(33 )
9,171 $
(33)
8,584 $
(250 )
24,861 $
(17,366 ) $
(cid:3)
25,250
(283 )
15,442
9,080 $
(4 )
9,138 $
(4)
8,334 $
(36 )
15,442
40,303 $
7,770
9,076 $
9,134 $
8,298 $
48,073 $
(4,764 )
(22,130 ) $
(4,466 )
(26,596 ) $
(4,764 )
35,645
(40 )
7,770
(4,466 )
38,909
See accompanying notes to consolidated financial statements.
24 (cid:3)
(cid:37)(cid:53)(cid:44)(cid:39)(cid:42)(cid:41)(cid:50)(cid:53)(cid:39)(cid:3)(cid:41)(cid:50)(cid:50)(cid:39)(cid:54)(cid:3)(cid:38)(cid:50)(cid:53)(cid:51)(cid:50)(cid:53)(cid:36)(cid:55)(cid:44)(cid:50)(cid:49)
(cid:38)(cid:50)(cid:49)(cid:54)(cid:50)(cid:47)(cid:44)(cid:39)(cid:36)(cid:55)(cid:40)(cid:39)(cid:3)(cid:54)(cid:55)(cid:36)(cid:55)(cid:40)(cid:48)(cid:40)(cid:49)(cid:55)(cid:54)(cid:3)(cid:50)(cid:41)(cid:3)(cid:38)(cid:36)(cid:54)(cid:43)(cid:3)(cid:41)(cid:47)(cid:50)(cid:58)(cid:54)
(cid:41)(cid:82)(cid:85)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:73)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)(cid:86)(cid:3)(cid:72)(cid:81)(cid:71)(cid:72)(cid:71)(cid:3)(cid:50)(cid:70)(cid:87)(cid:82)(cid:69)(cid:72)(cid:85)(cid:3)(cid:21)(cid:27)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:25)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:50)(cid:70)(cid:87)(cid:82)(cid:69)(cid:72)(cid:85)(cid:3)(cid:22)(cid:19)(cid:15)(cid:3)(cid:21)(cid:19)(cid:20)(cid:24)
(cid:11)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:82)(cid:88)(cid:86)(cid:68)(cid:81)(cid:71)(cid:86)(cid:12)
(cid:3)
(cid:3)
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash provided by operating activities:
(cid:3)
(cid:3)
(cid:24)(cid:21)(cid:3)(cid:58)(cid:72)(cid:72)(cid:78)(cid:86)
(cid:3) (cid:3)
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:3)
(cid:3)
$
7,770 $
15,442
Depreciation
(Recovery) provision for losses on accounts receivable
Provision for promotional allowances
Loss (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
Income taxes payable
Current portion of non-current liabilities
Non-current liabilities
Net cash 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
Payment of capital lease obligations
Net cash used in financing activities
Net increase 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
Transportation equipment returned originally financed by capital lease obligation
3,043
(166 )
790
3
(1,034 )
-
(2,587 )
(4,104 )
(556 )
(62 )
(109 )
(2,002 )
(1,114 )
34
1,105
3,516
4,527
24
(3,265 )
(3,241 )
(40 )
(103 )
(143 )
1,143
5,842
6,985 $
4,267 $
(132 ) $
3,050
24
2,749
(127 )
3,171
(10,848 )
(7,090 )
1,315
27
133
(6 )
307
(826 )
96
365
(322 )
7,460
52
(1,404 )
(1,352 )
(283 )
(175 )
(458 )
5,650
192
5,842
156
(656 )
$
$
$
See accompanying notes to consolidated financial statements.
25
(cid:37)(cid:53)(cid:44)(cid:39)(cid:42)(cid:41)(cid:50)(cid:53)(cid:39)(cid:3)(cid:41)(cid:50)(cid:50)(cid:39)(cid:54)(cid:3)(cid:38)(cid:50)(cid:53)(cid:51)(cid:50)(cid:53)(cid:36)(cid:55)(cid:44)(cid:50)(cid:49)
(cid:49)(cid:50)(cid:55)(cid:40)(cid:54)(cid:3)(cid:55)(cid:50)(cid:3)(cid:38)(cid:50)(cid:49)(cid:54)(cid:50)(cid:47)(cid:44)(cid:39)(cid:36)(cid:55)(cid:40)(cid:39)(cid:3)(cid:41)(cid:44)(cid:49)(cid:36)(cid:49)(cid:38)(cid:44)(cid:36)(cid:47)(cid:3)(cid:54)(cid:55)(cid:36)(cid:55)(cid:40)(cid:48)(cid:40)(cid:49)(cid:55)(cid:54)
(cid:11)(cid:76)(cid:81)(cid:3)(cid:87)(cid:75)(cid:82)(cid:88)(cid:86)(cid:68)(cid:81)(cid:71)(cid:86)(cid:3)(cid:72)(cid:91)(cid:70)(cid:72)(cid:83)(cid:87)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:72)(cid:85)(cid:3)(cid:86)(cid:75)(cid:68)(cid:85)(cid:72)(cid:3)(cid:68)(cid:80)(cid:82)(cid:88)(cid:81)(cid:87)(cid:86)(cid:15)(cid:3)(cid:87)(cid:76)(cid:80)(cid:72)(cid:3)(cid:83)(cid:72)(cid:85)(cid:76)(cid:82)(cid:71)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:83)(cid:72)(cid:85)(cid:70)(cid:72)(cid:81)(cid:87)(cid:68)(cid:74)(cid:72)(cid:86)(cid:12)
(cid:49)(cid:50)(cid:55)(cid:40)(cid:3)(cid:20)(cid:3)(cid:16)(cid:3)The Company and Summary of Significant Accounting Policies:
Bridgford Foods 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.
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.
(cid:56)(cid:86)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:72)(cid:86)(cid:87)(cid:76)(cid:80)(cid:68)(cid:87)(cid:72)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:68)(cid:86)(cid:86)(cid:88)(cid:80)(cid:83)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)
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 of life insurance policies, promotional allowances and the allowance for doubtful
accounts and inventory reserves. Management believes its current estimates are reasonable and based on the best information
available at the time.
We test long-lived assets for recoverability whenever events or changes in circumstances indicate that the carrying amount may
not be recoverable. If an impairment is indicated, we measure the fair value of assets to determine if and when adjustments are
recorded.
(cid:54)(cid:88)(cid:69)(cid:86)(cid:72)(cid:84)(cid:88)(cid:72)(cid:81)(cid:87)(cid:3)(cid:72)(cid:89)(cid:72)(cid:81)(cid:87)(cid:86)
Management has evaluated events subsequent to October 28, 2016 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. Based on its review, no material events were identified that require adjustment to the
financial statements or additional disclosure.
(cid:38)(cid:82)(cid:81)(cid:70)(cid:72)(cid:81)(cid:87)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:82)(cid:73)(cid:3)(cid:70)(cid:85)(cid:72)(cid:71)(cid:76)(cid:87)(cid:3)(cid:85)(cid:76)(cid:86)(cid:78)
Our credit risk is diversified across a broad range of customers and geographic regions. Losses due to credit risk have recently
been immaterial. The carrying amount of cash equivalents, accounts and other receivables, accounts payable and accrued liabilities
approximate fair market value due to the short maturity of these instruments. We maintain cash balances at financial institutions,
which may at times exceed the amounts insured by the Federal Deposit Insurance Corporation. Management does not believe there is
significant credit risk associated with these financial institutions. The provision for doubtful accounts receivable is based on historical
trends and current collectability risk.
We have significant accounts 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 Wal-Mart® comprised 34.8% of revenues in
fiscal 2016 and 35.6% of total accounts receivable was due from Wal-Mart® at October 28, 2016. Sales to Dollar General®
comprised 7.8% of revenues in fiscal 2016 and 24.5% of total accounts receivable was due from Dollar General® at October 28, 2016.
Sales to Wal-Mart® comprised 31.4% of revenues in fiscal 2015 and 42.6% of total accounts receivable was due from Wal-Mart® at
October 30, 2015.
(cid:37)(cid:88)(cid:86)(cid:76)(cid:81)(cid:72)(cid:86)(cid:86)(cid:3)(cid:86)(cid:72)(cid:74)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)
Our company and its subsidiaries operate in two business segments - the processing and distribution of frozen foods products,
and the processing and distribution of snack food products. See Note 7 to the Consolidated Financial Statements for further
information.
(cid:41)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:92)(cid:72)(cid:68)(cid:85)
We maintain our accounting records on a 52-53 week fiscal basis ending on the Friday closest to October 31. As part of the
regular accounting cycle, fiscal years 2016 and 2015 each included 52 weeks.
26
(cid:53)(cid:72)(cid:89)(cid:72)(cid:81)(cid:88)(cid:72)(cid:86)
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, $3,456 and $3,663 for fiscal years 2016 and 2015, respectively, are included in selling, general
and administrative expenses in the accompanying consolidated financial statements.
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 returns. 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 2016 and 2015 were $8,578 and $8,881, respectively.
(cid:36)(cid:71)(cid:89)(cid:72)(cid:85)(cid:87)(cid:76)(cid:86)(cid:76)(cid:81)(cid:74)(cid:3)(cid:72)(cid:91)(cid:83)(cid:72)(cid:81)(cid:86)(cid:72)(cid:86)
(cid:3)
Advertising and other promotional expenses are recorded as selling, general and administrative expenses. Advertising expenses
for fiscal years 2016 and 2015 were $2,055 and $1,861, respectively.
(cid:38)(cid:68)(cid:86)(cid:75)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:70)(cid:68)(cid:86)(cid:75)(cid:3)(cid:72)(cid:84)(cid:88)(cid:76)(cid:89)(cid:68)(cid:79)(cid:72)(cid:81)(cid:87)(cid:86)
We consider all investments with original maturities of three months or less to be cash equivalents. Cash equivalents include
money market funds and treasury bills. Cash equivalents totaled $6,985 at October 28, 2016 and $5,842 at October 30, 2015. All
material cash and cash equivalents at October 28, 2016 were held at Wells Fargo Bank N.A.
(cid:41)(cid:68)(cid:76)(cid:85)(cid:3)(cid:89)(cid:68)(cid:79)(cid:88)(cid:72)(cid:3)(cid:80)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)
We classify levels of inputs to measure the fair value of financial assets as follows:
(cid:404) 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:404) 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:404) Level 3 inputs: Level 3 inputs are unobservable and should be used to measure fair value to the extent that observable inputs are not
available.
The hierarchy noted above requires us to minimize the use of unobservable inputs and to use observable market data, if
available, when determining fair value.
The Company does not have any assets or liabilities measured at fair value on a recurring or non-recurring basis for the years
ended October 28, 2016 and October 30, 2015.
(cid:3)
(cid:44)(cid:81)(cid:89)(cid:72)(cid:81)(cid:87)(cid:82)(cid:85)(cid:76)(cid:72)(cid:86)
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.
(cid:51)(cid:85)(cid:82)(cid:83)(cid:72)(cid:85)(cid:87)(cid:92)(cid:15)(cid:3)(cid:83)(cid:79)(cid:68)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:72)(cid:84)(cid:88)(cid:76)(cid:83)(cid:80)(cid:72)(cid:81)(cid:87)
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.
(cid:38)(cid:68)(cid:83)(cid:76)(cid:87)(cid:68)(cid:79)(cid:3)(cid:79)(cid:72)(cid:68)(cid:86)(cid:72)(cid:86)
Leased property and equipment that meet capital lease criteria are capitalized at the lower of the present value of the minimum
payments required under the lease or the fair value of the asset at inception of the lease and are included within property, plant and
equipment on the consolidated balance sheet. Obligations under capital leases are accounted for as current and noncurrent liabilities
on the consolidated balance sheet. Amortization is calculated on a straight-line method based upon the shorter of the estimated useful
life of the asset or the lease term.
27
(cid:47)(cid:76)(cid:73)(cid:72)(cid:3)(cid:76)(cid:81)(cid:86)(cid:88)(cid:85)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:83)(cid:82)(cid:79)(cid:76)(cid:70)(cid:76)(cid:72)(cid:86)
We record the cash surrender value or contract value for life insurance policies as an adjustment of premiums paid in
determining the expense or income to be recognized under the contract for the period. The cash surrender value is included in other
non-current assets in the accompanying consolidated balance sheets.
(cid:44)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)(cid:3)(cid:87)(cid:68)(cid:91)(cid:72)(cid:86)
Deferred taxes are provided for items whose financial and tax bases differ. A valuation allowance is provided against deferred
tax assets when it is expected that it is more likely than not that the related asset will not be fully realized. The determination as to
whether or not a deferred tax asset can be fully realized is subject to a significant degree of judgment, based at least partially upon a
projection of future taxable income, which takes into consideration past and future trends in profitability, customer demand, supply
costs, and multiple other factors, none of which are predictable.
We provide tax accruals for federal, state and local exposures relating to audit results, tax planning initiatives and compliance
responsibilities. The development of these accruals requires judgments about tax issues, potential outcomes and timing. (See Note 4 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.
(cid:54)(cid:87)(cid:82)(cid:70)(cid:78)(cid:16)(cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:70)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)
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.
(cid:38)(cid:82)(cid:80)(cid:83)(cid:85)(cid:72)(cid:75)(cid:72)(cid:81)(cid:86)(cid:76)(cid:89)(cid:72)(cid:3)(cid:76)(cid:81)(cid:70)(cid:82)(cid:80)(cid:72)
Comprehensive income consists of net income and additional minimum pension liability adjustments.
(cid:53)(cid:72)(cid:70)(cid:72)(cid:81)(cid:87)(cid:79)(cid:92)(cid:3)(cid:76)(cid:86)(cid:86)(cid:88)(cid:72)(cid:71)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:83)(cid:85)(cid:82)(cid:81)(cid:82)(cid:88)(cid:81)(cid:70)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:86)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:85)(cid:72)(cid:74)(cid:88)(cid:79)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)
In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers” to supersede previous revenue
recognition guidance under current U.S. GAAP. The guidance presents steps for comprehensive revenue recognition that requires an
entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance becomes effective for
annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period.
In July 2015, the FASB issued ASU 2015-11 “Simplifying the Measurement of Inventory”. The guidance is part of the
“Simplification Initiative” to identify and re-evaluate areas where the generally accepted accounting principles may be complex and
cumbersome to apply. The guidance will require that inventory be stated at the lower of cost and net realizable value as opposed to
the lower of cost or market. Net realizable value is the estimated selling price for the inventory less completion, disposal and
transportation costs. The guidance becomes effective for fiscal years beginning after December 15, 2016. The Company already
values inventory by the proposed method.
In November 2015, the FASB issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes”. The guidance requires
that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet.
The guidance becomes effective for annual reporting periods beginning after December 6, 2016 with early adoption permitted. The
Company applied this guidance to its current fiscal year ending October 28, 2016. Adoption of this guidance had no material impact
on the results of operations or financial position.
In February 2016, the FASB issued ASU 2016-02, “Leases”. The guidance requires both operating and capital leases to be
recognized on the balance sheet. The guidance becomes effective for annual reporting periods beginning after December 15, 2018
with early adoption permitted. The adoption of this guidance is not expected to have a material impact on consolidated financial
statements.
In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus
Agent Considerations (Reporting Revenue Gross versus Net)”, providing guidance regarding the application of ASU 2014-09 when
another party, along with the reporting entity, is involved in providing a good or a service to a customer. In April 2016, the FASB
issued ASU No. 2016-10, “Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing”, which
clarifies the identification of performance obligations and the licensing implementation guidance. In May 2016, the FASB further
issued ASU No. 2016-12, “Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients”
providing guidance in certain narrow areas and adding some practical expedients. The effective dates for these updates are the same as
the effective date for ASU No. 2014-09, which is the Company’s fiscal year 2019 and interim periods therein. The Company is
currently evaluating these statements and their impact on the Company’s results of operations, financial position, and disclosures.
28
In October 2016, the FASB issued ASU 2016-16, “Income Taxes – Classification of Certain Cash Receipts and Cash
Payments”. The guidance involves eight specific cash flow issues and aims to unify accounting for these transactions. The guidance
becomes effective for annual reporting periods beginning after December 15, 2017 with early adoption permitted. The Company is
currently evaluating this guidance and its impact on its results of operations or financial position.
(cid:49)(cid:50)(cid:55)(cid:40)(cid:3)(cid:21)(cid:3)(cid:16)(cid:3)Composition of Certain Financial Statement Captions:
(cid:3)
$
$
$
$
$
$
$
$
$
$
$
$
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:3) (cid:3)
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:3)
5,401 $
1,206
17,474
24,081 $
1,802 $
14,394
48,498
1,060
5,860
1,078
72,692
(62,330 )
10,362 $
13,769 $
6
13,775 $
2,912 $
471
352
354
4,089 $
1,099 $
75
2,574
150
9
11
3,918 $
25,317 $
5,379
404
4,524
499
36,123 $
5,268
1,125
13,584
19,977
1,802
14,272
47,687
1,192
5,219
517
70,689
(60,454 )
10,235
13,660
6
13,666
3,589
704
356
554
5,203
1,150
277
1,196
162
-
40
2,825
17,362
4,630
563
1,929
962
25,446
(cid:3)
Inventories, net:
Meat, ingredients and supplies
Work in process
Finished goods
Property, plant and equipment, net:
Land
Buildings and improvements
Machinery and equipment
Capital leased trucks
Transportation equipment
Construction in process
Accumulated depreciation and amortization
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
Other
Current portion of non-current liabilities (Note 3):
Defined benefit retirement plan
Executive retirement plans
Incentive compensation
Capital lease obligation
Customer deposits
Postretirement healthcare benefits
Non-current liabilities (Note 3):
Defined benefit retirement plan
Executive retirement plans
Capital lease obligation
Incentive compensation
Postretirement healthcare benefits
29
(cid:49)(cid:50)(cid:55)(cid:40)(cid:3)(cid:22)(cid:3)(cid:16)(cid:3)Retirement and Other Benefit Plans:
(cid:49)(cid:82)(cid:81)(cid:70)(cid:82)(cid:81)(cid:87)(cid:85)(cid:76)(cid:69)(cid:88)(cid:87)(cid:82)(cid:85)(cid:92)(cid:16)(cid:55)(cid:85)(cid:88)(cid:86)(cid:87)(cid:72)(cid:72)(cid:71)(cid:3)(cid:39)(cid:72)(cid:73)(cid:76)(cid:81)(cid:72)(cid:71)(cid:3)(cid:37)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:3)(cid:53)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:54)(cid:68)(cid:79)(cid:72)(cid:86)(cid:15)(cid:3)(cid:36)(cid:71)(cid:80)(cid:76)(cid:81)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:15)(cid:3)(cid:54)(cid:88)(cid:83)(cid:72)(cid:85)(cid:89)(cid:76)(cid:86)(cid:82)(cid:85)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:72)(cid:85)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:50)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)
(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:86)
We have noncontributory-trusteed defined benefit retirement plans for sales, administrative, supervisory and certain other
employees. In the third quarter of fiscal year 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:
(cid:3)
(cid:3)
Service cost
Interest cost
Expected return on plan assets
Amortization of unrecognized loss
Amortization of unrecognized prior service costs
Net pension cost
(cid:3)
(cid:3)
$
$
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:24)(cid:21)(cid:3)(cid:58)(cid:72)(cid:72)(cid:78)(cid:86)
(cid:3) (cid:3)
130 $
2,448
(2,871 )
1,927
-
1,634 $
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:3)
(cid:3)
113
2,176
(3,346)
1,244
-
187
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:
(cid:3)
Discount rate
Rate of increase in salary levels
Expected return on plan assets
(cid:3)
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:3)
(cid:3)
3.40 %
N/A
7.00 %
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:3)
4.15%
N/A
8.00%
The benefit obligation, plan assets, and funded status of these plans as of the fiscal years ended are as follows:
(cid:3)
(cid:3)
Change in plan assets:
Fair value of plan assets - beginning of year
Employer contributions
Actual return (depreciation) 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
(cid:3)
(cid:3)
$
$
$
$
(cid:24)(cid:21)(cid:3)(cid:58)(cid:72)(cid:72)(cid:78)(cid:86)
(cid:3) (cid:3)
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:3)
(cid:3)
41,419 $
1,150
790
(1,488 )
41,871 $
59,931 $
130
2,448
7,266
(1,488 )
68,287
(26,416 )
-
33,264
6,848 $
42,320
1,157
(640)
(1,418)
41,419
54,277
113
2,176
4,783
(1,418)
59,931
(18,512)
-
25,844
7,332
We perform an internal rate of return analysis when making the discount rate selection. The discount rates were based on
Citigroup Pension Liability Index as of September 30, 2016 and October 31, 2015 respectively.
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 2017 is $1,109.
30
During fiscal year 2015, our actuary updated mortality tables from the IRS 2014 Combined Static Mortality assumptions to the
SOA RP 2014 Total Dataset Adjusted to 2006 with Scale MP-2015. The change in mortality table resulted in a significant liability
increase in fiscal year 2015 as well as an increased net periodic pension cost (NPPC) projection for fiscal year 2016. The expected rate
of return on plan assets decreased from 8.00% to 7.00% effective for fiscal year 2016. The lower expected rate of return increases net
pension costs in future fiscal years.
The actual and target allocation for plan assets are as follows:
(cid:3)
(cid:36)(cid:86)(cid:86)(cid:72)(cid:87)(cid:3)(cid:38)(cid:79)(cid:68)(cid:86)(cid:86)
Large Cap Equities
Mid Cap Equities
Small Cap Equities
International (equities only)
Fixed Income
Other (Government/Corporate, Bonds)
Cash
Total
(cid:55)(cid:68)(cid:85)(cid:74)(cid:72)(cid:87)
(cid:36)(cid:86)(cid:86)(cid:72)(cid:87)
(cid:36)(cid:79)(cid:79)(cid:82)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81) (cid:3)
(cid:3)
32.0 %
0.0 %
12.0 %
21.0 %
31.0 %
2.0 %
2.0 %
100.0 %
(cid:55)(cid:68)(cid:85)(cid:74)(cid:72)(cid:87)
(cid:36)(cid:86)(cid:86)(cid:72)(cid:87)
(cid:36)(cid:79)(cid:79)(cid:82)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81) (cid:3)
32.0%
0.0%
12.0%
21.0%
31.0%
2.0%
2.0%
100.0%
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:3)
(cid:3)
31.1 %
0 %
13.3 %
20.3 %
30.8 %
1.9 %
2.6 %
100.0
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:3)
(cid:3)
32.0%
0%
12.1%
21.3%
30.7%
2.0%
1.9%
100.0
The fair value of our pension plan assets as of October 28, 2016 and the level under which fair values were determined, using
the hierarchy described in Note 1, is as follows:
(cid:3)
Total plan assets
(cid:3)
(cid:47)(cid:72)(cid:89)(cid:72)(cid:79)(cid:3)(cid:20)
(cid:3) (cid:3)
(cid:47)(cid:72)(cid:89)(cid:72)(cid:79)(cid:3)(cid:21)
$
41,871
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:3) (cid:3)
-
(cid:47)(cid:72)(cid:89)(cid:72)(cid:79)(cid:3)(cid:22)
(cid:3) (cid:3)
(cid:55)(cid:82)(cid:87)(cid:68)(cid:79)
(cid:3)
- $
41,871
Expected payments for the pension benefits are as follows:
(cid:41)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:60)(cid:72)(cid:68)(cid:85)(cid:86)
2017
2018
2019
2020
2021
2022-2026
(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:53)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:86)
(cid:49)(cid:82)(cid:81)(cid:16)(cid:52)(cid:88)(cid:68)(cid:79)(cid:76)(cid:73)(cid:76)(cid:72)(cid:71)(cid:3)(cid:39)(cid:72)(cid:73)(cid:72)(cid:85)(cid:85)(cid:72)(cid:71)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)
(cid:3) (cid:3)
$
$
$
$
$
$
(cid:51)(cid:72)(cid:81)(cid:86)(cid:76)(cid:82)(cid:81)
(cid:37)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)
(cid:3)
2,277
2,197
2,124
2,466
2,663
15,888
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
2016 and 2015.
(cid:54)(cid:88)(cid:83)(cid:83)(cid:79)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:68)(cid:79)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:53)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)
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 consolidated financial statements were $5,454 and
$4,907 at October 28, 2016 and October 30, 2015, 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 $13,769 and $13,660 at October 28, 2016 and October 30, 2015, respectively.
31
Expected payments for executive postretirement benefits are as follows:
(cid:41)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:60)(cid:72)(cid:68)(cid:85)(cid:86)
2017
2018
2019
2020
2021
2022-2026
(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)
(cid:51)(cid:82)(cid:86)(cid:87)(cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)
(cid:37)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)
(cid:3)
75
121
287
521
521
2,603
(cid:3) (cid:3)
$
$
$
$
$
$
(cid:44)(cid:81)(cid:70)(cid:72)(cid:81)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:38)(cid:82)(cid:80)(cid:83)(cid:72)(cid:81)(cid:86)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:38)(cid:72)(cid:85)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:46)(cid:72)(cid:92)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:86)
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 $7,098
and $3,125 at October 28, 2016 and October 30, 2015, respectively. Future payments are approximately $2,574, $2,541, $1,785, $129
and $69 for fiscal years 2017 through 2021, respectively.
(cid:51)(cid:82)(cid:86)(cid:87)(cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:43)(cid:72)(cid:68)(cid:79)(cid:87)(cid:75)(cid:70)(cid:68)(cid:85)(cid:72)(cid:3)(cid:37)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:54)(cid:72)(cid:79)(cid:72)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:86)
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:
(cid:3)
(cid:3)
Service cost
Interest cost
Amortization of prior service cost
Amortization of actuarial gain
Net periodic postretirement healthcare (benefit) cost
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:3)
(cid:3)
$
$
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:24)(cid:21)(cid:3)(cid:58)(cid:72)(cid:72)(cid:78)(cid:86)
(cid:3) (cid:3)
13 $
28
(132 )
(106 )
(197 ) $
(cid:3)
(cid:3)
20
36
-
(37)
19
Weighted average assumptions for the fiscal years ended October 28, 2016 and October 30, 2015 are as follows:
(cid:3)
Discount rate
Medical trend rate next year
Ultimate trend rate
Year ultimate trend rate is achieved
(cid:3)
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:3)
(cid:3)
3.38 %
8.50 %
5.00 %
2021
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:3)
3.94%
8.50%
5.00%
2021
The table below shows the estimated effect of a 1% increase in healthcare cost trend rate on the following:
(cid:3)
Interest cost plus service cost
Accumulated postretirement healthcare obligation
(cid:3)
$
$
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:3) (cid:3)
6 $
59 $
(cid:21)(cid:19)(cid:20)(cid:24)
The table below shows the estimated effect of a 1% decrease in healthcare cost trend rate on the following:
(cid:3)
Interest cost plus service cost
Accumulated postretirement healthcare obligation
(cid:3)
$
$
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:3) (cid:3)
(5 ) $
(49 ) $
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:3)
5
80
(cid:3)
(4)
(66)
32
The healthcare obligation and funded status of this plan as of the fiscal years ended are as follows:
(cid:3)
Change in accumulated postretirement healthcare obligation:
Healthcare obligation - beginning of year
Service cost
Interest cost
Eliminate FSA
Actuarial (gain) loss
Benefits paid
Healthcare obligation – end of year
Funded status of the plans
Unrecognized prior service costs
Unrecognized net actuarial gain
Unrecognized amounts recorded in other comprehensive income
Postretirement healthcare liability
Expected payments for the postretirement benefits are as follows:
(cid:41)(cid:76)(cid:86)(cid:70)(cid:68)(cid:79)(cid:3)(cid:60)(cid:72)(cid:68)(cid:85)(cid:86)
2017
2018
2019
2020
2021-2025
(cid:3)
$
$
$
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:3) (cid:3)
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:3)
1,003 $
13
28
(441 )
(89 )
(3 )
511 $
511
(308 )
(156 )
464
511 $
(cid:51)(cid:82)(cid:86)(cid:87)(cid:85)(cid:72)(cid:87)(cid:76)(cid:85)(cid:72)(cid:80)(cid:72)(cid:81)(cid:87)
(cid:43)(cid:72)(cid:68)(cid:87)(cid:75)(cid:70)(cid:68)(cid:85)(cid:72)
(cid:37)(cid:72)(cid:81)(cid:72)(cid:73)(cid:76)(cid:87)(cid:86)
$
$
$
$
$
965
20
36
-
1
(19)
1,003
1,003
-
(174)
174
1,003
(cid:3)
13
13
53
76
396
(cid:3)
(cid:23)(cid:19)(cid:20)(cid:11)(cid:46)(cid:12)(cid:3)(cid:51)(cid:79)(cid:68)(cid:81)(cid:3)(cid:73)(cid:82)(cid:85)(cid:3)(cid:54)(cid:68)(cid:79)(cid:72)(cid:86)(cid:15)(cid:3)(cid:36)(cid:71)(cid:80)(cid:76)(cid:81)(cid:76)(cid:86)(cid:87)(cid:85)(cid:68)(cid:87)(cid:76)(cid:89)(cid:72)(cid:15)(cid:3)(cid:54)(cid:88)(cid:83)(cid:72)(cid:85)(cid:89)(cid:76)(cid:86)(cid:82)(cid:85)(cid:92)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:72)(cid:85)(cid:87)(cid:68)(cid:76)(cid:81)(cid:3)(cid:50)(cid:87)(cid:75)(cid:72)(cid:85)(cid:3)(cid:40)(cid:80)(cid:83)(cid:79)(cid:82)(cid:92)(cid:72)(cid:72)(cid:86)
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 2016 and 2015, we made total employer contributions to
the Plan in the amounts of $549 and $515, respectively.(cid:3)
(cid:49)(cid:50)(cid:55)(cid:40)(cid:3)(cid:23)(cid:3)(cid:16)(cid:3)Income Taxes:
The provision (benefit) for taxes on income includes the following:
(cid:3)
(cid:3)
Current:
Federal
State
Deferred:
Federal
State
(cid:3)
(cid:3)
$
$
(cid:24)(cid:21)(cid:3)(cid:58)(cid:72)(cid:72)(cid:78)(cid:86)
(cid:3) (cid:3)
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:3)
(cid:3)
3,874 $
226
4,100
(883 )
(151 )
(1,034 )
3,066 $
253
100
353
(6,335)
(1,342)
(7,677)
(7,324)
33
The total tax provision differs from the expected amount computed by applying the statutory federal income tax rate to income
before income taxes as follows:
(cid:3)
(cid:3)
(cid:3)
(cid:3)
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
Domestic Production Activities Deduction
Change in valuation allowance
Other, net
$
(cid:24)(cid:21)(cid:3)(cid:58)(cid:72)(cid:72)(cid:78)(cid:86)
(cid:3) (cid:3)
(cid:21)(cid:19)(cid:20)(cid:25)
3,684 $
49
-
(37 )
(429 )
-
(201 )
3,066 $
Deferred income taxes result from differences in the bases of assets and liabilities for tax and accounting purposes.
(cid:3)
Receivables allowance
Returns allowance
Inventory packaging reserve
Inventory overhead capitalization
Employee benefits
Other
State taxes
Incentive compensation
Pension and health care benefits
Depreciation
Net operating loss carry-forward and credits
Non-current tax assets, net
(cid:3)
$
$
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:3) (cid:3)
7 $
166
100
524
552
1
(655 )
2,140
12,438
(837 )
96
14,532 $
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:3)
(cid:3)
2,772
641
(3)
(2)
-
(10,848)
116
(7,324)
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:3)
58
201
125
400
793
1
(515)
925
9,202
(816)
271
10,645
Accounting Standards Codification ("ASC") 740 requires that an entity's deferred tax assets be reduced by a valuation
allowance to the extent its management determines that it is more likely than not that such deferred tax asset, or portion thereof, will
not be realized. Management evaluated the realizability of its deferred tax assets to determine the need and appropriateness of a
valuation allowance. In its determinations, Management considers items of evidence, both positive and negative, including those
items outlined in ASC 740. The Company policy outlines measurable objective criteria that must be met before a release of the
valuation allowance will occur. The three criteria set forth in the policy must all be satisfied before the valuation allowance can be
reversed. The three criteria were met and the valuation allowance was reversed in its entirety during fiscal year 2015. The Company
continues to measure the realizability of its deferred tax assets against the preset criteria. The criteria are as follows: first, the
Company’s available federal tax net operating loss ("NOL") must be zero; second, the prior thirty-six month cumulative book basis
pre-tax income (loss), after considering “one-time” events, is positive; third, the Company considers its outlook of near term
continued profitable operations and assesses any material negative and positive trends or events on the immediate horizon. As of
October 28, 2016, the Company (1) has utilized its entire federal net operating loss, (2) has positive thirty-six month cumulative book
income and (3) positive economic factors including lower and more stable commodity markets and current profitable operations are
present. Management has concluded that the deferred tax assets are more likely than not to be realized as of October 28, 2016.
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 unrealizable, materially decreasing net income in one or more periods. Following
recognition, management could reinstate a full valuation allowance should operating performance decline.
As of October 28, 2016, all federal and state net operating loss carryforwards were fully utilized.
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 provisions of this
guidance have been incorporated into ASC 740-10.
In November 2015, the FASB issued guidance in ASU 2015-17 concerning the balance sheet classification of deferred taxes in
an initiative to reduce complexity in accounting standards. All deferred tax liabilities and assets should now be classified as
noncurrent in the statement of financial position to simplify presentation of deferred tax assets. The guidance is effective for financial
statements issued for annual periods beginning after December 15, 2016. We have already adopted this guidance and the change is
reflected as of October 30, 2015.
34
As of October 28, 2016, we have provided a liability of $130 for unrecognized tax benefits related to various federal and state
income tax matters. A significant portion of this amount would generally reduce our effective income tax rate if recognized in future
reporting periods. We have not identified any new unrecognized tax benefits.
As of October 30, 2015, we have provided a liability of $112 for unrecognized tax benefits related to various federal and state
income tax matters. A significant portion of this amount would generally reduce our effective income tax rate if 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:
(cid:3)
(cid:3)
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
Balance at end of year
(cid:3)
(cid:3)
$
$
(cid:24)(cid:21)(cid:3)(cid:58)(cid:72)(cid:72)(cid:78)(cid:86)
(cid:3) (cid:3)
(cid:21)(cid:19)(cid:20)(cid:25)
(cid:21)(cid:19)(cid:20)(cid:24)
(cid:3)
(cid:3)
112 $
16
2
-
-
130 $
100
12
2
(2)
-
112
We recognize any future accrued interest and penalties related to unrecognized tax benefits in income tax expense. As of
October 28, 2016, we had approximately $12 in accrued interest and penalties which is included as a component of the $130
unrecognized tax benefit noted above.
Our federal income tax returns are open to audit under the statute of limitations for the years ended October 31, 2013 through
2015.
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, 2009 through 2014.
We do not anticipate a significant change to the total amount of unrecognized tax benefits within the next 12 months.
(cid:49)(cid:50)(cid:55)(cid:40)(cid:3)(cid:24)(cid:3)(cid:16)(cid:3)Line of Credit:
We maintain a line of credit with Wells Fargo Bank, N.A. that expires on March 1, 2018. Under the terms of this line of credit,
we may borrow up to $4,000 at an interest rate equal to the bank’s prime rate or Libor plus 1.75%. The borrowing agreement contains
various covenants, the more significant of which require us to maintain a minimum tangible net worth, a minimum quick ratio, a
minimum net income after tax and total capital expenditures of less than $3,000. We were in compliance with all covenants as of
October 28, 2016 except for the capital expenditure maximum which was waived by a letter dated December 19, 2016. There have
been no borrowings under this line of credit during fiscal 2016 or 2015.
35
(cid:49)(cid:50)(cid:55)(cid:40)(cid:3)(cid:25)(cid:3)(cid:16)(cid:3)Contingencies and Commitments:
We lease warehouse and/or office facilities throughout the United States through month-to-month rental agreements.
We returned all semi-truck trailers on operating leases before the end of fiscal 2016. Six year leases for OTR (over-the-road)
tractors expire in 2018 and are classified as capital leases. After reevaluating our fleet delivery needs, we returned six OTR tractors
financed by the capital lease arrangement with a remaining liability of $656 and $69 during the second quarter of fiscal 2015 and third
quarter of fiscal year 2016, respectively. Rental payments including prior leases were $316 in fiscal year 2016 and $448 in fiscal
year 2015. Amortization of equipment under capital lease was $177 and $225 in 2016 and 2015, respectively.
The following is a schedule by years of future minimum lease payments for transportation leases:
Fiscal Year
2017
2018
Total Minimum Lease Payments(a)
Less: Amount representing executory costs
Less: Amount representing interest(b)
Present value of future minimum lease payments(c)
Capital
Leases
Operating
Leases
Financing
Obligations
219
447
666 $
(103 )
(9 )
554
$
$
-
-
- $
219
447
666
(a) Minimum payments exclude contingent rentals based on actual mileage and adjustments of rental payments based on the
Consumer Price Index. Contingent rentals amounted to $66 in fiscal year 2016 and $93 in fiscal year 2015 including prior lease
arrangements.
(b) Amount necessary to reduce net minimum lease payments to present value calculated at our incremental borrowing rate at the
inception of the leases.
(c) Reflected in Note 2, as current and noncurrent obligations under capital leases of $150 and $403, respectively.
36
(cid:49)(cid:50)(cid:55)(cid:40)(cid:3)(cid:26)(cid:3)(cid:16)(cid:3)Segment Information:
We have two reportable operating segments, Frozen Food Products (the processing and distribution of frozen products) and
Snack Food Products (the processing and distribution of meat and other convenience foods).
We evaluate each segment’s performance based on revenues and operating income. Selling, general and administrative
expenses include corporate accounting, information systems, human resource 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 fiscal years ended October 28, 2016 (52 weeks) and October 30, 2015 (52 weeks):
(cid:54)(cid:72)(cid:74)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:44)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)
(cid:3)
(cid:21)(cid:19)(cid:20)(cid:25)
Sales
Cost of products sold
Gross margin
SG&A
Income before taxes
Total assets
Additions to PP&E
(cid:21)(cid:19)(cid:20)(cid:24)
Sales
Cost of products sold
Gross margin
SG&A
Income before taxes
Total assets
Additions to PP&E
(cid:41)(cid:85)(cid:82)(cid:93)(cid:72)(cid:81)(cid:3)(cid:41)(cid:82)(cid:82)(cid:71)
(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)
(cid:54)(cid:81)(cid:68)(cid:70)(cid:78)(cid:3)(cid:41)(cid:82)(cid:82)(cid:71)
(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)
(cid:3) (cid:3)
(cid:3) (cid:3)
(cid:50)(cid:87)(cid:75)(cid:72)(cid:85)
46,589 $
29,271
17,318
14,477
2,841 $
93,474 $
55,579
37,895
29,900
7,995 $
(cid:3) (cid:3)
- $
-
-
-
-
(cid:55)(cid:82)(cid:87)(cid:68)(cid:79)(cid:86)
(cid:3)
140,063
84,850
55,213
44,377
10,836
10,748 $
420 $
40,525 $
2,845 $
35,981 $
- $
87,254
3,265
(cid:54)(cid:72)(cid:74)(cid:80)(cid:72)(cid:81)(cid:87)(cid:3)(cid:44)(cid:81)(cid:73)(cid:82)(cid:85)(cid:80)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)
(cid:3)
(cid:41)(cid:85)(cid:82)(cid:93)(cid:72)(cid:81)(cid:3)(cid:41)(cid:82)(cid:82)(cid:71)
(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)
(cid:54)(cid:81)(cid:68)(cid:70)(cid:78)(cid:3)(cid:41)(cid:82)(cid:82)(cid:71)
(cid:51)(cid:85)(cid:82)(cid:71)(cid:88)(cid:70)(cid:87)(cid:86)
(cid:3) (cid:3)
(cid:3) (cid:3)
(cid:50)(cid:87)(cid:75)(cid:72)(cid:85)
50,549 $
30,372
20,177
14,625
5,552 $
79,899 $
53,207
26,692
24,126
2,566 $
(cid:3) (cid:3)
- $
-
-
-
-
(cid:55)(cid:82)(cid:87)(cid:68)(cid:79)(cid:86)
(cid:3)
130,448
83,579
46,869
38,751
8,118
11,206 $
182 $
33,853 $
1,222 $
30,243 $
- $
75,302
1,404
(cid:3)
$
$
$
$
(cid:3)
$
$
$
$
(cid:49)(cid:50)(cid:55)(cid:40)(cid:3)(cid:27)(cid:16)(cid:3)Unaudited Interim Financial Information:
Not applicable to smaller reporting company
37
(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:21)(cid:20)(cid:17)(cid:20)
(cid:37)(cid:53)(cid:44)(cid:39)(cid:42)(cid:41)(cid:50)(cid:53)(cid:39)(cid:3)(cid:41)(cid:50)(cid:50)(cid:39)(cid:54)(cid:3)(cid:38)(cid:50)(cid:53)(cid:51)(cid:50)(cid:53)(cid:36)(cid:55)(cid:44)(cid:50)(cid:49)
(cid:54)(cid:56)(cid:37)(cid:54)(cid:44)(cid:39)(cid:44)(cid:36)(cid:53)(cid:44)(cid:40)(cid:54)(cid:3)(cid:50)(cid:41)(cid:3)(cid:53)(cid:40)(cid:42)(cid:44)(cid:54)(cid:55)(cid:53)(cid:36)(cid:49)(cid:55)
(cid:49)(cid:68)(cid:80)(cid:72)(cid:3)(cid:82)(cid:73)(cid:3)(cid:54)(cid:88)(cid:69)(cid:86)(cid:76)(cid:71)(cid:76)(cid:68)(cid:85)(cid:92)
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.
(cid:54)(cid:87)(cid:68)(cid:87)(cid:72)(cid:3)(cid:76)(cid:81)(cid:3)(cid:90)(cid:75)(cid:76)(cid:70)(cid:75)(cid:3)(cid:44)(cid:81)(cid:70)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:72)(cid:71)
California
California
California
Texas
California
Delaware
Delaware
Illinois
Illinois
(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:22)(cid:20)(cid:17)(cid:20)
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, 2017
/s/ WILLIAM L. BRIDGFORD
(cid:58)(cid:76)(cid:79)(cid:79)(cid:76)(cid:68)(cid:80)(cid:3)(cid:47)(cid:17)(cid:3)(cid:37)(cid:85)(cid:76)(cid:71)(cid:74)(cid:73)(cid:82)(cid:85)(cid:71)(cid:15)(cid:3)(cid:38)(cid:75)(cid:68)(cid:76)(cid:85)(cid:80)(cid:68)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:37)(cid:82)(cid:68)(cid:85)(cid:71)
(cid:11)(cid:51)(cid:85)(cid:76)(cid:81)(cid:70)(cid:76)(cid:83)(cid:68)(cid:79)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:12)
(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:22)(cid:20)(cid:17)(cid:21)
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, 2017
/s/ RAYMOND F. LANCY
(cid:53)(cid:68)(cid:92)(cid:80)(cid:82)(cid:81)(cid:71)(cid:3)(cid:41)(cid:17)(cid:3)(cid:47)(cid:68)(cid:81)(cid:70)(cid:92)
(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:50)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:15)(cid:3)(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:15)
(cid:55)(cid:85)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:86)(cid:86)(cid:76)(cid:86)(cid:87)(cid:68)(cid:81)(cid:87)(cid:3)(cid:54)(cid:72)(cid:70)(cid:85)(cid:72)(cid:87)(cid:68)(cid:85)(cid:92)
(cid:11)(cid:51)(cid:85)(cid:76)(cid:81)(cid:70)(cid:76)(cid:83)(cid:68)(cid:79)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:50)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:12)
(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:22)(cid:21)(cid:17)(cid:20)
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)
(2)
the Annual Report on Form 10-K of the Company for the fiscal year ended October 28, 2016 (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
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, 2017
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.
/s/ WILLIAM L. BRIDGFORD
(cid:58)(cid:76)(cid:79)(cid:79)(cid:76)(cid:68)(cid:80)(cid:3)(cid:47)(cid:17)(cid:3)(cid:37)(cid:85)(cid:76)(cid:71)(cid:74)(cid:73)(cid:82)(cid:85)(cid:71)
(cid:38)(cid:75)(cid:68)(cid:76)(cid:85)(cid:80)(cid:68)(cid:81)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:37)(cid:82)(cid:68)(cid:85)(cid:71)
(cid:11)(cid:51)(cid:85)(cid:76)(cid:81)(cid:70)(cid:76)(cid:83)(cid:68)(cid:79)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:12)
(cid:40)(cid:91)(cid:75)(cid:76)(cid:69)(cid:76)(cid:87)(cid:3)(cid:22)(cid:21)(cid:17)(cid:21)
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)
(2)
the Annual Report on Form 10-K of the Company for the fiscal year ended October 28, 2016 (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
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, 2017
/s/ RAYMOND F. LANCY
(cid:53)(cid:68)(cid:92)(cid:80)(cid:82)(cid:81)(cid:71)(cid:3)(cid:41)(cid:17)(cid:3)(cid:47)(cid:68)(cid:81)(cid:70)(cid:92)
(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:50)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:15)(cid:3)(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)
(cid:55)(cid:85)(cid:72)(cid:68)(cid:86)(cid:88)(cid:85)(cid:72)(cid:85)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:86)(cid:86)(cid:76)(cid:86)(cid:87)(cid:68)(cid:81)(cid:87)(cid:3)(cid:54)(cid:72)(cid:70)(cid:85)(cid:72)(cid:87)(cid:68)(cid:85)(cid:92)
(cid:11)(cid:51)(cid:85)(cid:76)(cid:81)(cid:70)(cid:76)(cid:83)(cid:68)(cid:79)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:36)(cid:70)(cid:70)(cid:82)(cid:88)(cid:81)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:50)(cid:73)(cid:73)(cid:76)(cid:70)(cid:72)(cid:85)(cid:12)
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.
BRIDGFORD FOODS CORPORATION
STATUS OF 2017 PROXY AND ANNUAL SHAREHOLDER MEETING
To the Shareholders of BRIDGFORD FOODS CORPORATION:
The 2017 Proxy Statement is pending review by the Securities and Exchange Commission to be completed by
March 15, 2017.
By order of the Board of Directors
/s/ Cindy Matthews-Morales
Cindy Matthews-Morales
Secretary
Anaheim, California
February 23, 2017
DIRECTORS
OFFICERS
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
Raymond F. Lancy
Executive Vice President,
Chief Financial Officer,
Treasurer and member of
the Executive Committee
Keith A. Ross
Executive Vice President,
CT Realty
D. Gregory Scott
Managing Director,
Peak Holdings, LLC
John Simmons
President
Allan L. Bridgford
Vice President
and member of
the Executive Committee
Bruce H. Bridgford
Vice President
Hugh Wm. Bridgford
Chairman of the
Executive Committee
and Vice President
Michael Bridgford
Assistant Secretary
and Vice President
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
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
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
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 LLP
Newport Beach, California
Our partner, BJ’s Restaurants’ Monkey Bread Pizookie® dessert,
featuring Bridgford Monkey Bites.
©2017 Bridgford Foods Corp. YW 048-1293