What changed in this filing

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Item 1. Business

2023-01-26 compared with 2022-01-27 · 95 added, 101 removed, 248 unchanged (44% of the section changed)

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commodity, labor, and employee benefit costs;

supply chain constraints and resulting cost pressures, changes in, or failure to comply with, government regulations;

supply chain constraints and resulting cost pressures;

changes in, or failure to comply with, government regulations;

weather conditions;

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are monitoring and responding to the evolving nature of state and local government actions related to the 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 maintaining the health and safety of our team members, ensuring our ability to operate our processing facilities, and maintaining

the liquidity of our business.

on each of our production plant locations and our customer base.

We coordinate with our local managers for the primary purpose of maintaining

the health and safety of our team members, ensuring our ability to operate our processing facilities, and maintaining the liquidity of

our business.

We continue to experience multiple challenges related to the pandemic.

These challenges may continue to

increase our operating costs and negatively impact our sales volumes.

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

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

During the second, third and fourth

quarters of fiscal year 2021, the Frozen Food Products segment has seen a lessening of pandemic related restrictions on food service

In our Frozen Food Products segment, the recent sales volume increases in foodservice have not been sufficient to offset

the losses in retail and as a result, we experienced decreased unit sales volume during fiscal 2021 in this segment.

we were able to implement price increases on our products to cover higher input costs.

Our Snack Food Products segment has experienced

significant sales volume increases and commodity cost increases caused in part by supply and demand constraints related to reopening

the economy from pandemic restrictions.

The cost of significant meat commodities increased approximately $12,692 and the cost of purchased

flour increased approximately $445 during fiscal year 2021 compared to fiscal year 2020.

These challenges may continue to increase our operating

costs and negatively impact our sales volumes.

fiscal year 2022, the Frozen Food Products segment has continued to see a lessening of pandemic related restrictions on food service

In our Frozen Food Products segment, the recent sales volume increases in foodservice have been sufficient to offset the losses

in retail and as a result, we experienced increased unit sales volume during fiscal year 2022 in this segment.

Our Snack Food Products

segment has experienced continued commodity cost increases caused in part by supply and demand constraints related to reopening the economy

from pandemic restrictions.

The cost of significant meat commodities increased approximately $7,949 and the cost of purchased flour increased

approximately $1,844 during fiscal year 2022 compared to fiscal year 2021.

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 implemented 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.

safety measures recommended by the Centers for Disease Control and Prevention and the Occupational Safety and Health Administration in

our facilities and have implemented 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

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our products to customers.

During the last three quarters of fiscal 2021, we have started to see a shift in demand from our retail to

our foodservice sales channels as schools and in-dining restaurants begin to reopen 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 retail to foodservice.

In addition, our production facilities were experiencing varying levels of production

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

may continue to experience these impacts.

Since the second quarter of fiscal year 2021, we have continued to see a shift in demand from our retail to

our foodservice sales channels as schools and in-dining restaurants reopened 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 retail to foodservice.

In addition, our production facilities have experienced varying levels of production impacts,

including worker absenteeism, and we may continue to experience these impacts.

Supply Chain – Our supply chain has stayed largely intact.

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which will have a favorable impact on short-term liquidity.

The deferral amount as of October 29, 2021, is approximately $1,511 with

50% due on December 31, 2021, and the remaining amount due on December 31, 2022.

● Liquidity –

Operations used $5,992 in operating cash flows during the fifty-two weeks ended October 29, 2021.

As of that date, we had approximately

$44,638 of net working capital and $3,000 available under our revolving line of credit.

On December 1, 2021, we expanded the revolving

line of credit to $25,000 until June 15, 2022, upon which the credit limit will return to $15,000 for the balance of the term.

Commodity price volatility or increases could adversely impact our business, financial condition including liquidity, and results of

Despite higher commodity costs, we may not be able to increase our product prices in a timely manner or sufficiently to offset

increased commodity costs due to consumer price sensitivity, pricing in relation to competitors and the reluctance of retailers to accept

the price increase.

The remaining deferral amount as of October 28, 2022, is approximately $758

due on December 31, 2022.

Liquidity – Operations used $7,830 in operating cash flows during the fifty-two-weeks ended October 28, 2022.

We received $55,388

in net proceeds on June 1, 2022, from the closing of the sale of real property located at 170 N.

Green Street in Chicago (the “Green

Street Property”) pursuant to the terms of the Purchase and Sale Agreement dated March 16, 2020, as amended, between Bridgford

Food Processing Corporation and CRG Acquisition, LLC (“the CRG Purchase Agreement”).

On December 1, 2021, we expanded the

maximum borrowing under our revolving line of credit with Wells Fargo Bank, N.A.

(“Wells Fargo”) to $25,000 from $15,000.

The credit limit returned to $15,000 on June 15, 2022 for the balance of the term to March 1, 2023.

The line of credit was paid off on

June 7, 2022, using $18,000 in proceeds from the sale of the Green Street Property.

As of October 28, 2022, we had approximately $66,076

of net working capital and $15,000 available under our revolving line of credit with Wells Fargo Bank, N.A.

We entered into a bridge

loan with Wells Fargo Bank, N.A.

on August 30, 2021, for up to $25,000 of which we used $18,653 to pay off a portion of the existing

equipment loans as they came out of the lock out period and could be repaid.

We repaid and terminated the bridge loan on June 2, 2022,

using $18,653 in proceeds from the sale of the Green Street Property.

As of October 28, 2022, we have $1,089 of current debt remaining

on equipment loans.

Refer to Note 5 – Line of Credit and Borrowing Agreements of the Notes to the Condensed Consolidated Financial

Statements included within this Report for further information.

Commodity price volatility or increases could adversely impact our business,

financial condition including liquidity, and results of operations.

Despite higher commodity costs, we may not be able to increase our

product prices in a timely manner or sufficiently to offset increased commodity costs due to consumer price sensitivity, pricing in relation

to competitors and the reluctance of retailers to accept the price increase.

We received $2,205 from a life insurance receivable during

the second quarter of fiscal year 2022.

Higher product prices could potentially lower demand for our product and decrease volume.

As of October 29,

2021, we have $1,065 of current debt on equipment loans.

We entered into a bridge loan on August 30, 2021, for up to $25,000 which we

plan to use to pay off the existing equipment loans as they come out of the lock out period and may be prepaid.

As of October 29, 2021,

we paid off $10,328 in equipment loans utilizing proceeds from the new bridge loan.

Management believes there are various options available

to generate additional liquidity to repay debt or fund operations such as mortgaging real estate, should that be necessary.

Our ability to increase liquidity will depend upon, among other things, our business plans, performance of operating divisions, economic

conditions of capital markets, or circumstances related to the COVID-19 global pandemic.

If we are unable to increase liquidity through

mortgaging real estate, or generate positive cash flow necessary to fund operations, we may not be able to compete successfully, which

could negatively impact our business, operations, and financial condition.

Combined with the cash expected to be generated from the Company’s

operations, income tax refunds of $6,156, receivable on life insurance of $2,205 partially offset by payment on deferral of social

security taxes, we anticipate that we will maintain sufficient liquidity to operate our business for a reasonable period of time.

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.

believes there are various options available to generate additional liquidity to repay debt or fund operations such as mortgaging real

estate, should that be necessary.

Our ability to increase liquidity will depend upon, among other things, our business plans, performance

of operating divisions, economic conditions of capital markets, or circumstances related to the COVID-19 global pandemic.

If we are unable

to increase liquidity through mortgaging real estate, or generate positive cash flow necessary to fund operations, we may not be able

to compete successfully, which could negatively impact our business, operations, and financial condition.

From the cash expected to be

generated from the Company’s operations, we anticipate that we will maintain sufficient liquidity to operate our business for at

least the next twelve months.

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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During the last fiscal year, we did not enter into any new markets or any significant

contractual or other material relationships other than amendments to the March 16, 2020 Purchase and Sale Agreement with CRG Acquisition,

LLC on each of February 1, 2021, April 28, 2021 and July 30, 2021 , relating to the sale of a parcel of land including

an approximate 156,000 square foot four-story industrial building in Chicago, Illinois.

contractual or other material relationships.

of SEC Filings and Code of Conduct on Internet Website

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reports on Form 10-Q, current reports on Form 8-K and amendments thereto, and reports filed under Section 16 of the Securities Exchange

Act of 1934 filed with the Securities and Exchange Commission.

Act of 1934, as amended, filed with the Securities and Exchange Commission.

Our Code of Conduct is also available on the website.

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distributors, many of which are long-standing customers.

Orders from food service customers have started to increase as schools and in-dining

restaurants start to reopen across the United States in response to the COVID-19 pandemic restriction changes.

Orders from food service customers have continued to increase as schools and

in-dining restaurants have reopened across the United States in response to the COVID-19 pandemic restriction changes.

Food Products – Retail Customers

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research and testing of our products to ensure high quality and that each product matches an identified market opportunity.

in new product introductions in the past several years has been in single-serve items.

in new product introductions in the past several years has been on single-serve items.

We are constantly searching to develop new products

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due from Wal-Mart® as of October 29, 2021.

Sales to Dollar General® comprised 14.5% of revenues in fiscal year 2021 and 35.9%

of total accounts receivable was due from Dollar General® as of October 29, 2021.

Sales to Dollar General® comprised 13.6% of

revenues in fiscal year 2020 and 31.1% of total accounts receivable was due from Dollar General® as of October 30, 2020.

The increase in accounts receivable from Wal-Mart® as of October 28, 2022 versus October

29, 2021 is attributable to the Company no longer accelerating payments from Wal-Mart®.

Sales to Dollar General® comprised 16.9%

of revenues in fiscal year 2022 and 19.9% of total accounts receivable was due from Dollar General® as of October 28, 2022.

to Dollar General® comprised 14.5% of revenues in fiscal year 2021 and 35.9% of total accounts receivable was due from Dollar General®

as of October 29, 2021.

and Availability of Raw Materials

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trends in seasonal prices or anticipated supply limitations.

flour purchases are made at market price without contracts.

We also purchase 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.

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

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 699 employees (675 full-time employees) as of October 29, 2021, approximately 47% of whose employment relationship is governed

by collective bargaining agreements.

These agreements currently expire between March 2022 and February 2024.

purchase bulk flour under short-term fixed price contracts at current market prices.

The contracts are usually effective for and settle

within three months or less.

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.

had 705 employees (695 full-time employees) as of October 28, 2022, approximately 45% of whose employment relationship is governed by

collective bargaining agreements.

These agreements currently expire between September 2023 and March 2027.

We believe that our relationship

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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