What changed in this filing

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Item 1. Business

2021-01-15 compared with 2020-01-24 · 152 added, 47 removed, 220 unchanged (47% of the section changed)

Business (dollars in thousands)

Annual Report on Form 10-K (this “Report”) contains certain forward-looking statements within the meaning of Section

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relationships with customers and suppliers;

statements regarding the anticipated impact

of the COVID-19 pandemic;

and other factors referenced in this Report.

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statements after the date hereof.

are monitoring and responding to the evolving nature of state and local government actions related to the global novel coronavirus

(“COVID-19”) pandemic and its impact on each of our production plant locations as well as our customer base.

We coordinate

with our local managers for the primary purpose of protecting the health and safety of our team members, ensuring our ability

to operate our processing facilities and maintaining the liquidity of our business.

We are experiencing multiple challenges related

to the pandemic.

These challenges increased our operating costs and negatively impacted our volumes during fiscal year 2020 and

may continue to do so into fiscal year 2021.

Operationally,

we have faced temporary idling of production facilities to ensure team member safety.

As a result, we have experienced lower levels

of productivity and higher costs of production.

This will likely continue at least for the short term until the effects of the

pandemic diminish.

Both of our business segments have experienced a shift in demand from foodservice to retail.

In our Frozen

Food Products segment, the volume increases in retail have not been sufficient to offset the losses in foodservice and as a result,

we expect continued decreased volume into fiscal year 2021 in this segment.

Our Snack Food Products segment has experienced significant

volume increases in the short-term.

Team Members –

The health and safety of our team members is our top priority.

To protect our team members, we have implemented

safety measures recommended by the Centers for Disease Control and Prevention (“CDC”) and the Occupational Safety

and Health Administration (“OSHA”) in our facilities and have employed social distancing, temperature checks of team

members, increased efforts to deep clean and sanitize facilities, the use of protective face coverings in certain environments

and making protective face coverings and other protective equipment available to team members.

We encourage team members who feel

sick to stay at home and provide relaxed attendance policies in some instances.

We continue to explore and implement additional

ways to promote social distancing in our production facilities by creating additional breakroom space and allowing extra time

between shifts to reduce interaction of team members, as well as erecting dividers between workstations or increasing the space

between workers on the production floor.

Customers and Production –

The most significant impact from business shutdowns relates to channel shifts and lower production

in our Frozen Food Products segment.

We are committed to doing our best to ensure the continuity of our business and the availability

of our products to customers.

We have seen a shift in demand from our foodservice to our retail sales channels as schools and

in-dining restaurants have closed across the country.

Our production capabilities, including our large scale and geographic proximities,

allow us to adapt some of our facilities to the changing demand by shifting certain amounts of production from foodservice to

Not all of our facilities can be modified and as a result we expect a net negative impact on our foodservice volumes into

fiscal year 2021.

In addition, our production facilities are experiencing varying levels of production impacts, including reduced

volumes, worker absenteeism and temporary COVID-19-related closures at some of our production facilities.

Additionally, we are

anticipating the temporary idling of certain production lines that service the foodservice channel as we balance the shifting

demand between foodservice and retail sales channels.

Supply Chain –

Our supply chain has stayed largely intact.

Although we have experienced some minor disruptions, these events

have not significantly impacted our production to date.

We have experienced volatility in commodity inputs, in part due to impacts

caused by COVID-19 related business disruptions, and we expect this volatility to continue, which may impact our future input

April 28, 2020, President Trump issued an Executive Order stating the importance of the continued operation of meat and poultry

processing facilities and directing the Secretary of Agriculture to issue rules and orders to ensure the continued supply of meat

and poultry, consistent with the guidance for the operations of meat and poultry processing facilities jointly issued by the CDC

Insurance and CARES Act –

Although we maintain insurance policies for various risks, we believe most COVID-19 impacts will

not be covered by these policies.

On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic

Security Act (the “CARES Act”).

The CARES Act, among other things, includes provisions relating to refundable payroll

tax credits, deferral of the employer portion of social security payments, and expanded income tax net operating loss carryback

While we continue to examine the potential impacts of these actions, we anticipate new regulations related to federal

income tax will have a significant impact on our financial statements and cash flow.

Late in the second quarter of fiscal 2020

we began implementing the deferral of the employer portion of social security payments and intend to continue this deferral for

the duration of its availability which will have a favorable impact on short-term liquidity.

The deferral amount as of October

30, 2020 will be approximately $1,103.

We did not utilize the refundable payroll tax credit provision.

Liquidity –

Operations provided $9,914 in operating cash flows during the fifty-two weeks ended October 30, 2020.

that date we had approximately $42,774 of net working capital, which included availability under our revolving line of credit

and $4,302 of cash and cash equivalents.

We have $4,430 of current debt.

Combined with the cash expected to be generated from

the Company’s operations, income tax refunds and deferral of social security taxes, we anticipate that we will maintain

sufficient liquidity to operate our business into fiscal year 2021 and for completion of the major plant expansion in Chicago,

We will continue to monitor the impact of COVID-19 on our liquidity and, if necessary, take action to preserve liquidity

and ensure that our business can operate during these uncertain times.

Foods Corporation (collectively with its subsidiaries, “Bridgford”, the “Company”, “we”, “our”),

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packer of meat, and a manufacturer and distributor of frozen food products for sale on a retail and wholesale basis.

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 other than those discussed in Item 7 of this Report.

Substantially all of our assets have been acquired

in the ordinary course of business.

Foods Corporation currently operates in two business segments - the processing and distribution of frozen food products and the

processing and distribution of snack food products.

For information regarding the separate financial performance of the business

segments refer to Note 7 of the Notes to Consolidated Financial Statements included in this Report.

we 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 other than those discussed in Item 7 of this Report.

Substantially all of our assets have been acquired in the ordinary

course of business.

currently operates in two business segments - the processing and distribution of frozen food products and the processing and distribution

of snack food products.

For information regarding the separate financial performance of the business segments refer to Note 7

of the Notes to Consolidated Financial Statements included in this Report.

following table shows sales, as a percentage of consolidated sales, for each business segment during the last two fiscal years:

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for fiscal year 2020 with the exception of smokehouse sausage sticks introduced in the second quarter of fiscal year 2018.

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.

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 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 other than the March 16, 2020 Purchase and Sale Agreement with CRG Acquisition, LLC

(“CRG”) and amendments thereto on each of April 10, 2020, June 1, 2020 and November 2, 2020.

Refer to Note 1 –

Subsequent Events of Notes to Consolidated Financial Statements included in this Report for further information.

of SEC Filings and Code of Conduct on Internet Website

maintain an Internet website at www.bridgford.com.

Available on this website, free of charge, are annual reports on Form 10-K,

quarterly reports on Form 10-Q, current reports on Form 8-K, 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.

Available on this website, free of charge, our annual reports on Form 10-K,

quarterly reports on Form 10-Q, current reports on Form 8-K and amendments thereto as well as, and reports filed under Section

16 of the Securities Exchange Act of 1934 filed with the Securities and Exchange Commission.

Our Code of Conduct is also available

on the website.

Distribution Methods

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of broadline and specialty food service distributors, many of which are long-standing customers.

Orders from food service customers

have decreased as schools and in-dining restaurants have closed across the United States in response to the COVID-19 pandemic.

Food Products –

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with certain selected leading retailers in this market.

Demand from retail customers has increased as consumers opt to buy food

from retail establishments for home consumption in response to the COVID-19 pandemic.

Food Products –

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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.

in various newspapers, periodicals 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.

Food Products

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the services of brokers, where appropriate, to support efficient product distribution and customer satisfaction.

fishing team which participates at the highest levels of both the FLW and B.A.S.S.

Planning and Research and Development

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effect on our operations in such 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.

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.

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-serve 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.

products are sold under highly competitive conditions.

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enter or increase their focus on our markets, resulting in greater competition for us.

We believe that our products compete

favorably with those of our competitors.

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.

products compete against ours for retail shelf space, institutional distribution

and customer preference.

of Government Regulations

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comprised 36.9% of revenues in fiscal year 2020 and 19.8% of total accounts receivable was due from Wal-Mart®

as of November 1, 2019.

as of October 30, 2020.

Sales to Wal-Mart®

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and 31.1% of total accounts receivable was due from Dollar General®

as of November 1, 2019.

as of October 30, 2020.

Sales to Dollar General®

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in the commodity futures market or hedging to limit commodity exposure.

had 564 employees as of November 1, 2019, approximately 38% of whose employment relationship is governed by collective bargaining

These agreements currently expire between May 2019 and March 2022.

We believe that our relationship with all of our

employees is favorable and contracts will be settled favorably.

continue to monitor the development of the COVID-19 pandemic and its impact on our operations including our supply chain and labor

The pandemic could potentially cause disruptions to our supply chain.

Global supply may be restricted causing price pressure

on certain ingredients and raw materials used in our products which could disrupt our operations.

We are unable to accurately

predict the uncertainties related to the future course of the COVID-19 pandemic including overall economic stability, the spread,

length and severity of the virus and any future governmental actions.

had 563 employees as of October 30, 2020, approximately 35% of whose employment relationship is governed by collective bargaining

These agreements currently expire between March 2022 and February 2024.

We believe that our relationship with all

of our employees is favorable and that contracts will be settled favorably.

Officers of the Registrant

names, ages, and positions of all our executive officers as of January 15, 2021 are listed below.

Bridgford is the

nephew of Allan L.

is the nephew of Allan L.

Officers are normally appointed annually by the Board of Directors at their meeting immediately

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worked 50% of full time during fiscal year 2020.

There are no agreements or understandings pursuant to which any of the executive

officers was or is selected to serve as an executive officer.

with our company

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business