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Item 7. Management’s Discussion and Analysis

2025-01-29 compared with 2024-01-29 · 300 added, 294 removed, 59 unchanged (91% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

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.

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 (refer to Part I., Item 1.

Business for more information).

of Operations (dollars in thousands)

Year Ended November 3, 2023 (53 weeks) Compared to Fiscal Year Ended October 28, 2022 (52 weeks)

Sales-Consolidated

sales in fiscal year 2023 decreased $14,262 (5.4%) when compared to the prior fiscal year.

The changes in net sales were comprised as

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 (refer to Part I, Item 1.

for more information).

Results of Operations (dollars in thousands)

Fiscal Year Ended November 1, 2024 (52 weeks)

Compared to Fiscal Year Ended November 3, 2023 (53 weeks)

Net Sales-Consolidated

Net sales in fiscal year 2024 decreased $27,991

(11.1%) when compared to the prior fiscal year.

The changes in net sales were comprised as follows:

Impact on Net Sales-Consolidated

4 unchanged sentences

Decrease in net sales

Sales-Frozen Food Products Segment

sales in the Frozen Food Products segment in fiscal year 2023 increased $1,384 (2.5%) compared to the prior fiscal year.

in net sales were comprised as follows:

Net Sales-Frozen Food Products Segment

Net sales in the Frozen Food Products segment

in fiscal year 2024 increased $770 (1.3%) compared to the prior fiscal year.

The changes in net sales were comprised as follows:

Impact on Net Sales-Frozen Food Products

4 unchanged sentences

Increase in net sales

increase in net sales for fiscal year 2023 primarily relates to higher selling prices per pound partially offset by lower unit sales

volume in pounds.

The increase in net sales was primarily driven by a significant increase in volume to institutional customers and an

increase in selling price per pound due to price increases implemented during the fourth quarter of fiscal year 2023.

Other institutional

Frozen Food Products sales, including sheet dough and rolls, increased 8% by volume and retail sales volume increased 2%.

Returns activity

increased compared to the 2022 fiscal year.

Promotional activity was higher in fiscal year 2023 as a percentage of sales due to increased

sales to high promotion customers.

Sales-Snack Food Products Segment

sales in the Snack Food Products segment in fiscal year 2023 decreased $15,646 (7.5%) compared to the prior fiscal year.

in net sales were comprised as follows:

The increase in net sales for fiscal year 2024

primarily relates to higher selling prices per pound partially offset by lower unit sales volume in pounds.

The increase in net sales

was primarily driven by a significant increase in volume to institutional customers and an increase in selling price per pound due to

price increases implemented during the fourth quarter of fiscal year 2023.

Other institutional Frozen Food Products sales, including sheet

dough and rolls, increased 8% by volume and retail sales volume decreased 8%.

Returns activity decreased compared to the 2023 fiscal year.

Promotional activity was higher in fiscal year 2024 as a percentage of sales due to increased sales to high promotion customers.

Net Sales-Snack Food Products Segment

Net sales in the Snack Food Products segment in

fiscal year 2024 decreased $28,761 (14.8%) compared to the prior fiscal year.

The changes in net sales were comprised as follows:

Impact on Net Sales-Snack Food Products

4 unchanged sentences

Decrease in net sales

sales of Snack Food Products decreased due to lower sales through our direct-store-delivery distribution channel during the fiscal year

The weighted average selling price per pound increased compared to fiscal year 2022 due to price increases implemented in response

to increased meat commodity input costs experienced in fiscal year 2022.

Unit sales volume in pounds was lower as compared to the prior

Net sales of Snack Food Products decreased due

to lower sales through our direct-store-delivery distribution channel during the fiscal year 2024.

The weighted average selling price

per pound decreased compared to fiscal year 2023 due to changes in product mix.

Unit sales volume in pounds was lower compared to the

prior fiscal year.

We believe demand decreased primarily due to inflationary pressure on consumer spending habits as consumers have pulled

back on meat product purchases.

Returns activity was higher compared to the 2022 fiscal year.

Promotional offers increased slightly compared

to fiscal year 2022.

of Products Sold and Gross Margin-Consolidated

of products sold from continuing operations decreased by $12,558 (6.5%) during fiscal year 2023 compared to the prior fiscal year.

gross margin increased from 27.1% to 28.0% during fiscal year 2023 compared to the prior fiscal year.

Returns activity was lower in dollars but higher as a percentage of sales compared to the 2023 fiscal

Promotional offers increased due to higher promotional deductions and billbacks by customers compared to fiscal year 2023.

Cost of Products Sold and Gross Margin-Consolidated

Cost of products sold from continuing operations

decreased on a consolidated basis by $13,962 (7.7%) during fiscal year 2024 compared to the prior fiscal year.

The gross margin decreased

from 28.0% to 25.2% during fiscal year 2024 compared to the prior fiscal year.

Change in Cost of Products Sold by Segment

(Decrease) Increase

Frozen Food Products Segment

Snack Food Products Segment

of Products Sold and Gross Margin–Frozen Food Products Segment

of products sold in the Frozen Food Products segment increased by $2,080 (5.1%) in fiscal year 2023 compared to the prior fiscal year.

Increased volume and changes in the product mix were the primary contributing factors to this increase.

The cost of purchased flour decreased

approximately $164, which partially offset the increase in costs of goods sold.

The gross margin percentage decreased from 26.9% to 25.1%

during fiscal year 2023 compared to the prior fiscal year.

of Products Sold and Gross Margin–Snack Food Products Segment

of products sold in the Snack Food Products segment decreased by $14,638 (9.6%) during fiscal year 2023 compared to the prior fiscal

year due primarily to lower unit sales volume in our direct-store-delivery distribution channel.

The cost of meat commodities decreased

approximately $7,737 during fiscal year 2023 compared to the prior fiscal year due to favorable fluctuations in commodity markets.

increased our net realizable value reserve by $161 during fiscal year 2023 after determining that the market value on some meat products

was less than the costs associated with production and sale of the product.

We maintained a net realizable reserve of $513 on products

as of November 3, 2023.

The gross margin earned in this segment increased from 27.1% to 28.8% during fiscal year 2023.

General and Administrative Expenses-Consolidated

general and administrative expenses (“SG&A”) in fiscal year 2023 increased $332 (0.5%) when compared to the prior fiscal

The increase in this category did not directly correspond to the change in sales.

table below summarizes the primary expense variances in this category:

Cost of Products Sold and Gross Margin–Frozen

Food Products Segment

Cost of products sold in the Frozen Food Products

segment decreased by $776 (1.8%) in fiscal year 2024 compared to the prior fiscal year.

Lower unit sales volume in pounds and changes

in the product mix were the primary contributing factors to this decrease.

The cost of purchased flour decreased approximately $522 contributing

to the decrease in costs of goods sold.

The gross margin percentage increased from 25.1% to 27.4% during fiscal year 2024 compared to

the prior fiscal year.

Cost of Products Sold and Gross Margin–Snack

Food Products Segment

Cost of products sold in the Snack Food Products

segment decreased by $13,186 (9.5%) during fiscal year 2024 compared to the prior fiscal year due primarily to lower unit sales volume

in our direct-store-delivery distribution channel.

The cost of meat commodities increased approximately $4,900 during fiscal year 2024

compared to the prior fiscal year due to unfavorable fluctuations in commodity markets.

We increased our net realizable value reserve

by $1,174 during fiscal year 2024 after determining that the market value on some meat products was less than the costs associated with

production and sale of the product.

We maintained a net realizable reserve of $1,467 on products as of November 1, 2024.

The gross margin

earned in this segment decreased from 28.8% to 24.4% during fiscal year 2024.

Selling, General and Administrative Expenses-Consolidated

Selling, general and administrative expenses (“SG&A”)

in fiscal year 2024 decreased $3,118 (4.8%) when compared to the prior fiscal year.

The decrease in this category did not directly correspond

to the change in sales.

The table below summarizes the primary expense

variances in this category:

November 1, 2024

October 28, 2022

Expense Increase

November 3, 2023

Expense (Decrease)

Wages and bonus

Outside storage

Insurance expenses

Product advertising

Healthcare cost

Travel expenses

Fuel expenses

Postage expenses

Storage unit rent

Outside consultants

Vehicle repairs and maintenance

sales commissions resulted in lower wages and bonus expenses in the 2023 fiscal year compared to the 2022 fiscal year.

Outside storage

increased primarily as a result of the need for additional warehouse capacity to store products.

The increase in insurance expenses was

driven by higher premiums on property insurance and increased reserves on aged claims.

Healthcare costs have decreased due to favorable

Lower sales commissions paid on reduced sales

resulted in lower wages and bonus expenses in the 2024 fiscal year compared to the 2023 fiscal year.

The increase in pension cost was

a result of lower values in pension plan assets caused by the performance of the underlying markets that support them as well as lower

pension discount rates resulting in higher liability.

Costs for product advertising decreased mainly as a result of lower payments under

brand licensing agreements in the Snack Food Products segment during fiscal year 2024.

Healthcare costs have increased due to unfavorable

claim trends.

Travel expenses increased due to participation in food shows and in-person business meetings.

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 and to

a lesser extent due to a reduction in the number of company-owned long-haul trucks.

The decrease in pension cost was a result of an increase

in pension plan assets caused by the performance of the underlying markets that support them as well as higher pension discount rates

resulting in lower liability.

Postage expenses have decreased due to partnering with outside distributors and carriers to transport products

to minimize postage expenses.

Rent for storage units that house inventory increased due to inflationary price pressure.

Vehicle repairs

and maintenance on vehicles have increased compared to the prior year period mainly due to an aging fleet.

None of the changes individually

or as a group of expenses in “Other SG&A” were significant enough to merit separate disclosure.

The major components

comprising the increase of “Other SG&A” expenses were higher product advertising expenses, sales taxes, office supplies

and professional fees.

General and Administrative Expenses-Frozen Food Products Segment

expenses in the Frozen Food Products segment decreased by $171 (1.2%) during fiscal year 2023 compared to the prior fiscal year.

overall decrease in SG&A expenses was due to lower unit sales volume and lower fuel expenses related to a reduction in the number

of company-owned long-haul trucks partially offset by an increase in insurance expenses and broker commissions.

General and Administrative Expenses-Refrigerated and Snack Food Products Segment

expenses in the Snack Food Products segment increased by $503 (1.0%) during fiscal year 2023 compared to the prior fiscal year.

of the increase was due to higher property insurance expense, higher outside storage fees and higher vehicle repairs partially offset

by lower fuel and healthcare costs.

(Gain) on Sale of Property, Plant and Equipment

loss during fiscal year 2023 and gain during fiscal year 2022 was due to ordinary disposal of assets and the sale of real property located

Green Street in Chicago, respectively.

tax for fiscal years 2023 and 2022, respectively, was as follows:

Outside consulting costs increased due to higher legal fees, advisory services, inspection and product testing fees.

repairs and maintenance on vehicles have increased compared to the prior fiscal year period mainly due to an aging fleet.

changes individually or as a group of expenses in “Other SG&A” were significant enough to merit separate disclosure.

major components comprising the decrease of “Other SG&A” expenses were lower provision for doubtful accounts, lower postage

and insurance expenses and higher rental income partially offset by higher travel and business expense.

Selling, General and Administrative Expenses-Frozen Food Products

SG&A expenses in the Frozen Food Products

segment decreased by $241 (1.7%) during fiscal year 2024 compared to the prior fiscal year.

The overall decrease in SG&A expenses

was due to lower unit sales volume in pounds, lower equipment rental and lower fuel expenses related to a reduction in the number of company-owned

long-haul trucks partially offset by an increase in insurance expenses and broker commissions.

Selling, General and Administrative Expenses-Refrigerated

and Snack Food Products Segment

SG&A expenses in the Snack Food Products segment

decreased by $2,877 (5.6%) during fiscal year 2024 compared to the prior fiscal year.

Most of the decrease was due to the significantly

lower unit sales volume in pounds and the corresponding decrease in wages and bonuses, and lower payments under brand licensing agreements.

Loss on Sale of Property, Plant and Equipment

Losses on the sale of property, plant

and equipment were due to the ordinary disposal of assets located in both the Frozen Food Products segment, $96 and $75, for fiscal years

2024 and 2023, respectively, and Snack Food Products segments, $50 and $86, for fiscal years 2024 and 2023, respectively.

Income tax for fiscal years 2024 and 2023, respectively,

was as follows:

November 1, 2024

October 28, 2022

Provision for (benefit on) income taxes

November 3, 2023

(Benefit on) provision for income taxes

Effective tax rate

recorded a tax provision of $1,021 and $16,341, for fiscal years 2023 and 2022, respectively, related to federal and state taxes, based

on the Company’s expected annual effective tax rate.

The effective tax rate was 22.7% and 26.6% for fiscal years 2023 and 2022,

respectively.

In addition, the effective tax rates for fiscal years 2023 and 2022 were impacted by such items as non-deductible meals

and entertainment, non-taxable gains and losses on life insurance policies and state income taxes.

(Refer to Note 4 of Notes to Consolidated

Financial Statements for more information).

and Capital Resources (dollars in thousands)

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 such products.

We normally fund our operations from cash balances and cash flow generated from operations.

However, on June

1, 2022, we received approximately $60,000 in gross proceeds, from the closing of the sale of real property located at 170 N.

in Chicago 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”).

Additionally, we have maintained a revolving line of

credit with Wells Fargo Bank, N.A.

We recorded a tax benefit of $1,311 and tax provision

of $1,021, for fiscal years 2024 and 2023, respectively, related to federal and state taxes, based on the Company’s expected annual

effective tax rate.

The effective tax rate was 27.9% and 22.7% for fiscal years 2024 and 2023, respectively.

In addition, the effective

tax rates for fiscal years 2024 and 2023 were impacted by such items as non-deductible meals and entertainment, non-taxable gains and

losses on life insurance policies and state income taxes.

(Refer to Note 4 of Notes to Consolidated Financial Statements included within

this Report for more information).

Liquidity and Capital Resources (dollars in

The principal source of operating cash flows is

cash receipts from the sale of our products, net of costs to manufacture, store, market and deliver such products.

We normally fund our

operations from cash balances and cash flow generated from operations.

Additionally, we have maintained a revolving line of credit with

Wells Fargo Bank, N.A.

pursuant to the terms of the credit agreement dated March 1, 2018, as amended to date.

an aggregate of $18,000 under such revolving line of credit from inception through January 24, 2022.

The line of credit was paid off

on June 7, 2022, using $18,000 in proceeds from the sale of real property at 170 N.

Green Street.

The revolving line of credit continued

in effect per its terms until November 30, 2023, when it was replaced with a new revolving line of credit as described below.

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 our existing equipment loans as they came out of the lock out period and could be prepaid.

We prepaid and terminated the

bridge loan on June 2, 2022, using $18,653 in proceeds from the sale of real property at 170 N.

Green Street.

November 30, 2023, we entered into a fifth amendment to the credit agreement with Wells Fargo Bank, N.A., and also executed a new revolving

line of credit note pursuant to the amendment.

Under the terms of this amendment and the revolving line of credit note, we may borrow

up to $7,500 from time to time up to November 30, 2024.

As of November 3, 2023, we had $1,045 of current debt on equipment loans, $69,496

of net working capital and $7,500 available under our revolving line of credit with Wells Fargo Bank, N.A.

Refer to the Notes to the

Condensed Consolidated Financial Statements included within this Report for further information.

The Company was in compliance with all

loan covenants as of November 3, 2023.

higher commodity costs like we experienced in fiscal year 2022, we may not be able to increase our product prices in a timely manner

or sufficiently to offset such increased commodity costs due to consumer price sensitivity, pricing in relation to competitors and the

reluctance of retailers to accept the price increase.

Instances of higher interest rates, labor shortages or supply chain issues could

result in material changes in the Company’s liquidity.

Higher product prices could potentially lower demand for our product and

decrease volume.

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 and the performance of operating divisions and economic conditions of capital markets.

If we are unable to increase liquidity

through mortgaging real estate or additional borrowing, 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.

With 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 inflation and interest rate volatility on our liquidity and,

if necessary, take action to preserve liquidity and ensure that our business can operate during these uncertain times.

flows provided by (used in) operating activities:

On November 30, 2024, we

entered into a sixth amendment to the credit agreement with Wells Fargo Bank, N.A., and also executed a new revolving line of credit note

pursuant to the amendment.

Under the terms of this amendment and the revolving line of credit note, we may borrow up to $7,500 from time

to time up to November 30, 2025.

As of November 1, 2024, we had $1,084 of current debt on equipment loans, $61,536 of net working capital

and $7,500 available under our revolving line of credit with Wells Fargo Bank, N.A.

Refer to Note 5 to the Consolidated Financial Statements

and the “Revolving Credit Facility” and “Loan Covenants” included within this Report for further information.

The Company was in compliance with all loan covenants as of November 1, 2024.

All of our operating segments have been impacted

by inflation, including higher costs for labor, freight and specific materials related to product manufacturing and delivery through fiscal

Additionally, commodity costs, including meat and flour costs, have and may continue to fluctuate due to both political and

economic conditions, including the ongoing conflict between Ukraine and Russia.

Despite higher commodity costs like we experienced in

fiscal year 2024, we may not be able to increase our product prices in a timely manner or sufficiently to offset such increased commodity

or other costs due to consumer price sensitivity, pricing in relation to competitors and the reluctance of retailers to accept a price

Instances of higher interest rates, general price inflation or deflation, raw materials costs, labor shortages or supply chain

issues could adversely affect the Company’s financial results and its liquidity.

Higher product prices and promotions could potentially

lower demand for our product and decrease volume.

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 and the performance of operating divisions and economic conditions of capital markets.

we are unable to increase liquidity through mortgaging real estate or additional borrowing, 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.

With the cash expected to be generated from the Company’s operations, we anticipate that we will maintain sufficient liquidity or

exercise a portion of the line of credit to operate our business for at least the next twelve months.

We will continue to monitor the

impact of inflation and interest rate volatility on our liquidity and, if necessary, take action to preserve liquidity and ensure that

our business can operate during these uncertain times.

Cash flows (used in) provided by operating

November 1, 2024

October 28, 2022

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

November 3, 2023

Net (loss) income

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:

Depreciation and amortization

Provision for losses on accounts receivable

(Reduction in) provision for promotional allowances

Loss (gain) on sale of property, plant and equipment

(Recoveries on) provision for losses on accounts receivable

Provision for (reduction in) promotional allowances

Loss on sale of property, plant and equipment

Deferred income taxes, net

Changes in assets and liabilities

Net cash provided by (used in) operating activities

the fifty-three weeks ended November 3, 2023, net cash provided by operating activities was $3,985, an increase of $11,815 compared to

the fifty-two weeks ended October 28, 2022.

The increase in net cash provided by operating activities primarily relates to net income

of $3,474 and a reduction in accounts receivable of $6,480, partially offset by a decrease in accounts payable of $6,457 and lower non-current

liabilities of $1,836.

During fiscal year 2023, we did not contribute 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.

cash conversion cycle (defined as days of inventory and trade receivables less days of trade payables outstanding) was equal to 83 days

for the fifty-three weeks ended November 3, 2023, and 83 days for the fifty-two weeks ended October 28, 2022.

the fifty-two weeks ended October 28, 2022, net cash used in operating activities was $7,830.

The result was primarily related to a gain

on sale of property, plant, and equipment of $57,745, an increase in accounts receivable of $10,116 and an increase in inventory of $3,762,

partially offset by a decrease in refundable income taxes of $4,955 and an increase in deferred taxes of $5,070.

During fiscal year 2022,

we did not contribute towards our defined benefit pension plan.

flows (used in) provided by investing activities:

Net cash (used in) provided by operating activities

For the fifty-two weeks ended November 1, 2024,

net cash used in operating activities was $497, a decrease of $4,482 in cash flows compared to the fifty-three weeks ended November 3,

The decrease in net cash provided by operating activities primarily relates to a net loss of $3,381, an increase in refundable income

taxes of $1,240 and an increase of other non-current assets of $3,320, partially offset by a decrease in inventory of $7,235 due to selling

down inventory finished goods to adjust to lower consumer demand.

During fiscal year 2024, we did not contribute 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 84 days for the fifty-two weeks ended November 1,

2024, and 83 days for the fifty-three weeks ended November 3, 2023.

For the fifty-three weeks ended November 3, 2023,

net cash provided by operating activities was $3,985.

The result was primarily related to net income of $3,474 and a reduction in accounts

receivable of $6,480, partially offset by a decrease in accounts payable of $6,457 and lower non-current liabilities of $1,836.

fiscal year 2023, we did not contribute towards our defined benefit pension plan.

Cash flows used in investing activities:

November 1, 2024

October 28, 2022

November 3, 2023

Proceeds from sale of property, plant and equipment

Additions to property, plant and equipment

Net cash (used in) provided by investing activities

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 received $60,000 in gross sales proceeds on June 1, 2022, from the closing of the real estate

transaction for the real property located at 170 N.

Green Street, pursuant to the terms of the CRG Purchase Agreement.

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.

table below highlights the additions to property, plant and equipment for the fifty-three and fifty-two weeks ended:

Net cash used in investing activities

Additions to 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.

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 and fifty-three weeks ended:

November 1, 2024

October 28, 2022

November 3, 2023

Building and leasehold improvements

8 unchanged sentences

Additions to property, plant and equipment

for additions to property, plant and equipment during the fifty-three weeks ended November 3, 2023, include projects in process of $837

related to the production facility in Chicago.

flows used in financing activities:

Expenditures for additions to property, plant

and equipment during the fifty-two weeks ended November 1, 2024, include projects in process of $755 related to the production facilities

in Chicago and Statesville.

Cash flows used in financing activities:

November 1, 2024

October 28, 2022

November 3, 2023

Payment of capital lease obligations

Proceeds from bank borrowings

Repayments of bank borrowings

Net cash used in financing activities

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 were 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 2023, 120,113 shares remained authorized for repurchase under

Company leases three long-haul trucks pursuant to six-year leases that expire in 2025.

Amortization of equipment under capital lease

was $96 in 2023.

The Company also leased one long-haul truck for $75 during fiscal year 2022, and that lease term is two years.

following table reflects major components of our line of credit and borrowing agreements as of November 3, 2023, and October 28, 2022,

respectively.

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 were 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.

of the end of fiscal year 2024, 120,113 shares remained authorized for repurchase under the program.

The Company leased three long-haul trucks received

during fiscal year 2019.

The six-year leases for these trucks would have expired in fiscal year 2025.

We returned one long-haul truck

on June 22, 2023, for a loss of $12 and returned remaining two long-haul trucks on July 11, 2024, for a loss of $90, in an effort to reduce

the overall cost of delivering products as we transitioned deliveries to common carriers.

All long-haul trucks under this lease agreement

have been returned as of November 1, 2024.

The Company leased one box truck for a market value of $27 on April 17, 2023, and that lease

term is two years.

The Company leased one refrigerated truck received

on May 10, 2024, for a net present value of $166.

The seven-year lease for this truck will expire in fiscal year 2031.

Amortization of

equipment as a finance lease was $44 during the fifty-two weeks ended November 1, 2024.

Equipment Note Payable

The following table reflects major components

of our line of credit and borrowing agreements as of November 1, 2024, and November 3, 2023, respectively.

November 1, 2024

October 28, 2022

November 3, 2023

Revolving credit facility

1 unchanged sentence

3.68% note due 04/16/27, out of lockout 04/17/22

3.29% note due 03/05/27, out of lockout 03/06/22

3.68% note due 04/16/27, out of lockout 04/17/22

SOFR plus 2.00% bridge loan due 03/01/23

Less current debt

Total long-term debt

Credit Facility

November 30, 2023, we entered into a fifth amendment to the credit agreement with Wells Fargo Bank, N.A.

dated March 1, 2018, as

amended, and also executed a revolving line of credit note pursuant to the amendment.

The revolving line of credit note replaces the

existing note that expired by its terms on November 30, 2023.

Under the terms of this amendment and the revolving line of

credit note, we may borrow up to $7,500 from time to time up to November 30, 2024, at an interest rate equal to (a) the daily simple

secured overnight financing rate plus 2.0%, or if unavailable, (b) the prime rate, in each case as determined by the bank.

of credit has an unused commitment fee of 0.35% of the available loan amount, payable on a quarterly basis.

Amounts may be repaid

and reborrowed during the term of the note.

Accrued interest is payable on the first day of each month and the outstanding principal

balance and remaining interest are due and payable on November 30, 2024.

Notes Payable

each of December 26, 2018, April 18, 2019, December 19, 2019, March 5, 2020, and April 17, 2020 (collectively referred to as the “Wells

Fargo Loan Agreements”), we entered into master collateral loan and security agreements with Wells Fargo Bank, N.A.

the Wells Fargo Loan Agreements, we owe the amounts as stated as equipment notes in the table on the previous page.

August 30, 2021, we entered into a loan commitment note for a bridge loan of up to $25,000 to obtain capital to pay off the existing

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

The outstanding principal balances of the bridge loan became

due and payable in full one Federal Reserve business day after the closing of the real estate transactions contemplated under the CRG

Purchase Agreement.

We prepaid $18,653 in equipment loans utilizing proceeds from the new bridge loan.

The Company evaluated the

exchange under ASC 470 and determined that the exchange should be treated as a debt modification prospectively.

The Company accounted

for this transaction as a debt modification and did not incur any gain or loss relating to the modification.

The debt modification did

not meet the greater than ten percent test and was deemed not substantial.

We prepaid and terminated the bridge loan and related loan

commitment note on June 2, 2022, using $18,653 in proceeds from the gain on the sale of a land parcel in Chicago pursuant to the CRG

Purchase Agreement.

Wells Fargo Loan Agreements and the credit agreement contain various affirmative and negative covenants that limit the use of funds and

define other provisions of the loans.

Material financial covenants are listed below, and the capitalized terms are defined in the applicable

Liabilities divided by Tangible Net Worth not greater than 2.0 to 1.0 at each fiscal quarter end,

Ratio not less than 1.25 to 1.0 at each fiscal quarter end,

Charge Coverage Ratio not less than 1.25 to 1.0 at each fiscal quarter end.

As of November 3, 2023, the Company was in compliance with all covenants under the Wells Fargo Loan Agreements and the credit agreement.

contractual maturities of debt in future fiscal years are as follows as of November 3, 2023:

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.

All of our operating segments have been impacted by inflation, including higher costs for labor, freight, and specific

We expect this trend to continue through fiscal year 2024.

Management is of the opinion that the Company’s financial

position and its capital resources are sufficient to provide for its operating needs and capital expenditures for fiscal year 2024.

future volatility of general price inflation or deflation and raw material cost and availability could adversely affect our financial

Sheet Arrangements

do not currently have any off-balance sheet arrangements within the meaning of Item 303(b) of Regulation S-K.

as described above, we had no other debt or other contractual obligations within the meaning of Item 303(b) of Regulation S-K, as of

November 3, 2023.

Accounting Policies

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

Management believes its current estimates are reasonable and based on the best information available at the time.

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 the Notes to the Consolidated Financial Statements.

Issued Accounting Pronouncements and Regulations

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.

Revolving Credit Facility

On November 30, 2023, we entered into a fifth

amendment to the credit agreement with Wells Fargo Bank, N.A.

dated March 1, 2018, as amended, and also executed a revolving line of credit

note pursuant to the amendment.

The revolving line of credit note replaces the existing note that expired by its terms on November 30,

Under the terms of this amendment and the revolving line of credit note, we may borrow up to $7,500 from time to time up to November

30, 2024, at an interest rate equal to (a) the daily simple secured overnight financing rate plus 2.0%, or if unavailable, (b) the prime

rate, in each case as determined by the bank.

The line of credit has an unused commitment fee of 0.35% of the available loan amount, payable

on a quarterly basis.

Amounts may be repaid and reborrowed during the term of the note.

Accrued interest is payable on the first day of

each month and the outstanding principal balance and remaining interest are due and payable on November 30, 2024.

Refer to Subsequent

Events under Note 1 to the Consolidated Financial Statements included within this Report for further information.

Loan Covenants

The Wells Fargo Loan Agreements and the credit

agreement contain various affirmative and negative covenants that limit the use of funds and define other provisions of the loans.

financial covenants are listed below, and the capitalized terms are defined in the applicable agreements:

Total Liabilities divided by Tangible Net Worth not greater than 2.0 to 1.0 at each fiscal quarter end,

Quick Ratio not less than 1.25 to 1.0 at each fiscal quarter end,

Fixed Charge Coverage Ratio not less than 1.25 to 1.0 at each fiscal quarter end.

As of November 1, 2024, the Company was in compliance

with all covenants under the Wells Fargo Loan Agreements and the credit agreement.

Aggregate contractual maturities

of debt in future fiscal years are as follows as of November 1, 2024:

Impact of Inflation

Our operating results are heavily dependent upon

the prices paid for raw materials.

The marketing of our value-added products does not lend itself to instantaneous changes in selling

Changes in selling prices are relatively infrequent and do not compare with the volatility of commodity markets.

All of our operating

segments have been impacted by inflation, including higher costs for labor, freight, and specific materials.

We expect this trend to continue

through fiscal year 2025.

Management is of the opinion that the Company’s financial position and its capital resources are sufficient

to provide for its operating needs and capital expenditures for fiscal year 2025.

However, future volatility of general price inflation

or deflation and raw material cost and availability could adversely affect our financial results.

Off-Balance Sheet Arrangements

We do not currently have any off-balance sheet

arrangements within the meaning of Item 303(b) of Regulation S-K.

Contractual Obligations

Except as described above, we had no other debt

or other contractual obligations within the meaning of Item 303(b) of Regulation S-K, as of November 1, 2024.

Critical Accounting Policies and Estimates

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.

To the extent there are material differences between the estimates and the actual

results, future results of operations could be affected.

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

Recently Issued Accounting Pronouncements and

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

included within this Report.

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 7. Management’s Discussion and Analysis