What changed in this filing

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Item 1. Business

2024-01-29 compared with 2023-01-26 · 45 added, 146 removed, 197 unchanged (49% 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 27A

of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, 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.

of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),

and Bridgford Foods Corporation intends that such forward-looking statements be subject to the safe harbors created thereby.

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:

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success of operating initiatives;

development and operating costs;

advertising and promotional

and operating costs;

advertising and promotional efforts;

adverse publicity;

acceptance of new product offerings;

consumer trial and frequency;

changes in business strategy or development

consumer trial and

changes in business strategy or development plans;

availability, terms and deployment of capital;

availability of qualified personnel;

availability of qualified

commodity, labor, and employee benefit costs;

supply chain constraints and resulting cost pressures;

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

changes in, or failure

to comply with, government regulations;

weather conditions;

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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.

factors referenced in this Report.

forward-looking statements included herein are based on current expectations that involve a number of risks and uncertainties.

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speak as of the date of this Report and we undertake no obligation to update such statements after the date hereof.

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 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.

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 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

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.

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.

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 costs.

costs increased approximately $9,794 during fiscal year 2022 compared to fiscal year 2021.

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, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”)

was enacted in response to the COVID-19 pandemic.

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 provisions.

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 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.

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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contractual or other material relationships.

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 our annual reports on Form 10-K, quarterly

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, as amended, filed with the Securities and Exchange Commission.

Our Code of Conduct is also available on the website.

Distribution Methods

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distributors, many of which are long-standing customers.

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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and retail distributors who take title to the product upon shipment receipt through Company-leased long-haul vehicles.

The Company plans

to shift away from Company-leased long-haul vehicles toward less costly transportation methods such as common carriers.

In addition to

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Our direct-store-delivery

system focus emphasizes high quality service and supply of our premium branded product to our customers.

system focus emphasizes high quality service and supply of our premium branded products to our customers.

We also provide the service

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

We sponsor a fishing team which participates

at the highest levels of both the Fishing League Worldwide (also known as the “FLW”) and Wild West Bass Trail.

Bridgford is the primary sponsor for

several professional anglers that compete at the highest level of competitive bass fishing.

Planning and Research and Development

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Historically, the addition or deletion of any individual product has not had a material effect

on our operations at fiscal yearend.

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.

in new product introductions in the past several years has been on 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.

on our operations at the end of the 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 on single-serve items.

We are constantly striving 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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necessary permits and licenses relating to our operations.

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.

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.

of Key Customers

to Wal-Mart® comprised 29.1% of revenues in fiscal year 2023 and 26.5% of total accounts receivable was due from Wal-Mart® as

of October 28, 2022.

of November 3, 2023.

Sales to Wal-Mart® comprised 29.8% of revenues in fiscal year 2022 and 26.1% of total accounts receivable was

due from Wal-Mart® as of October 28, 2022.

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.

Sales to Dollar General® comprised 16.3% of revenues in fiscal year 2023 and 20.5%

of total accounts receivable was due from Dollar General® as of November 3, 2023.

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.

and Availability of Raw Materials

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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

had 688 employees (671 full-time employees) as of November 3, 2023, approximately 44% 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

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

These agreements either “are currently”, “have expired” or “will expire”

between September 2023 and March 2027.

We believe that our relationship with all of our employees is favorable and that any pending contracts

will be settled favorably.

of SEC Filings and Code of Conduct on Internet Website

maintain a website at www.bridgford.com.

Available through the “Investors” link on this website, free of charge, are our

annual reports on Form 10-K, quarterly 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, filed with the Securities and Exchange Commission.

Our Code of Conduct is also available on

the website through the “Governance” link.

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