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Item 7. Management’s Discussion and Analysis

2026-01-28 compared with 2025-01-29 · 292 added, 318 removed, 41 unchanged (94% of the section changed)

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)

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 October 31, 2025 (52 weeks) Compared to Fiscal Year Ended November 1, 2024 (52 weeks)

Sales-Consolidated

sales in fiscal year 2025 increased $7,341 (3.3%) when compared to the prior fiscal year.

The changes in net sales were comprised as

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

Selling price per pound

2 unchanged sentences

Promotional activity

Decrease in net sales

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

Sales-Frozen Food Products Segment

sales in the Frozen Food Products segment in fiscal year 2025 decreased $363 (0.6%) compared to the prior fiscal year.

The changes in

net sales were comprised as follows:

Net Sales-Frozen Food Products

Selling price per pound

2 unchanged sentences

Promotional activity

Increase in net sales

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

slight decrease in net sales of frozen food products in fiscal year 2025 primarily relates to lower unit sales volume in pounds partially

offset by higher selling prices per pound.

Institutional frozen food products dollar sales, including sheet dough and rolls, decreased

2.1% resulting in lower net sales compared to last year, which was not fully offset by a retail dollar sales volume increase of 1.8%.

Consumers are purchasing more from retail stores while visits to foodservice establishments have decreased compared to the 2024 fiscal

In addition, production of frozen food products was temporarily reduced to accommodate necessary repairs on a spiral freezer that

has since been completed.

Returns activity remained consistent compared to the prior fiscal year.

Promotional activity was higher as

a percentage of sales and higher in dollars during fiscal year 2025.

Sales-Snack Food Products Segment

sales in the Snack Food Products segment in fiscal year 2025 increased $7,704 (4.7%) compared to the prior fiscal year.

The changes in

net sales were comprised as follows:

Net Sales-Snack Food Products

Selling price per pound

2 unchanged sentences

Promotional activity

Decrease in net sales

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 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

sales of snack food products increased in fiscal year 2025 due to higher selling prices per pound and to a lesser extent higher unit

sales volume in pounds.

The weighted average selling price per pound increased compared to fiscal year 2024 due to price increases on

select products with negative or lower margins.

We believe demand increased primarily due to a shift in consumer spending habits toward

purchasing less expensive private-label snack foods including meat product purchases in order to reduce their expenses.

Returns activity

increased compared to the prior fiscal year.

Promotional activity was lower than in fiscal year 2024.

of Products Sold and Gross Margin-Consolidated

of products sold from continuing operations increased on a consolidated basis by $19,106 (11.4%) during fiscal year 2025 compared to

the prior fiscal year.

The gross margin decreased from 25.2% to 19.3% during fiscal year 2025 compared to the prior fiscal year.

Cost of Products Sold by Segment

(Decrease) Increase

1 unchanged sentence

Snack Food Products Segment

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

November 3, 2023

Expense (Decrease)

Wages and bonus

of Products Sold and Gross Margin–Frozen Food Products Segment

of products sold in the Frozen Food Products segment increased by $1,398 (3.3%) in fiscal year 2025 compared to the prior fiscal year.

Higher gross overhead, including increased costs for temporary labor and utilities, were the primary contributing factors to this increase.

The cost of purchased flour decreased approximately $208 compared to the prior fiscal year.

However, this decline was not enough to offset

the increase in gross overhead and direct distribution costs.

The gross margin percentage decreased from 27.4% to 24.5% during fiscal

year 2025 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 increased by $17,708 (14.2%) in fiscal year 2025 compared to the prior fiscal year

with approximately $6,261 of this increase attributable to higher meat commodity costs resulting from higher pressure on the commodity

We increased our net realizable value reserve by $170 during the fiscal year 2025 in consideration of pending price increases

to customers to help mitigate the record increases in meat commodity costs.

We maintain a net realizable reserve of $1,637 on products

as of October 31, 2025, after determining that the market value on some meat products could not cover the costs associated with completion

and sale of the product.

We also faced increased utilities, labor and insurance costs further contributing to the growth in costs.

gross margin percentage decreased from 24.4% to 17.5% during fiscal year 2025 compared to the prior fiscal year.

General and Administrative Expenses-Consolidated

general and administrative expenses (“SG&A”) in fiscal year 2025 increased $1,012 (1.6%) 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:

Product advertising

Healthcare cost

Outside consultants

Vehicle repairs and maintenance

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.

Outside consultants

Provision for bad debt

Healthcare cost

Travel expenses

Insurance expenses

Outside storage

advertising decreased mainly due to renegotiation of commission percentages with brokers in the Frozen Food Products segment and decreased

fees paid under brand licensing agreements in the Snack Food Products segment during fiscal year 2025.

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.

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.

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

Vehicle repairs

and maintenance have decreased compared to the prior fiscal year period mainly due to regularly replacing fleet vehicles as they age.

Outside consulting costs increased due to higher advisory services including cost analysis and reduction assistance, legal fees, inspection

and product testing fees.

The increase in the provision for bad debt was mainly the result of recent slowing in certain customer payments

beyond terms.

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 insurance expenses was driven by exiting unfavorable insurance policies early

to take advantage of more competitive pricing.

Outside storage decreased primarily as a result of the need for less warehouse capacity

to store products before shipment to the direct-store-delivery warehouses and customers.

The decrease in fuel expense was driven by per

gallon fuel price decreases compared to the prior fiscal year as a result of lower cost trends in petroleum markets.

None of the changes

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

components comprising the increase of “Other SG&A” expenses were higher workers’ compensation costs, computer

maintenance and office supplies.

General and Administrative Expenses-Frozen Food Products Segment

expenses in the Frozen Food Products segment decreased by $442 (3.1%) during fiscal year 2025 compared to the prior fiscal year.

overall decrease in SG&A expenses was due to lower product advertising, including broker commissions, partially offset by higher

healthcare costs and travel expenses.

General and Administrative Expenses- Snack Food Products Segment

expenses in the Snack Food Products segment increased by $1,454 (3.0%) during fiscal year 2025 compared to the prior fiscal year.

of the increase was due to higher consulting fees, healthcare costs, higher provision for bad debt and higher travel expenses partially

offset by lower product advertising.

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

November 3, 2023

(Benefit on) provision for income taxes

Effective tax rate

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

and 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, ($7) and $96, for fiscal years 2025 and 2024, respectively, and Snack Food Products segments, ($136) and $50, for fiscal years

2025 and 2024, respectively.

tax for fiscal years 2025 and 2024 was as follows:

on income taxes

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.

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

November 3, 2023

Net (loss) income

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

recorded a tax benefit of $4,692 and tax provision of $1,311, for fiscal years 2025 and 2024, respectively, related to federal and state

taxes, based on the Company’s expected annual effective tax rate.

The effective tax rate was 26.0% and 27.9% for fiscal years 2025

and 2024, respectively.

In addition, the effective tax rates for fiscal years 2025 and 2024 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).

and Capital Resources (dollars in thousands)

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 evaluate cash and cash equivalents related to borrowing capacity and short-term and long-term investments.

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

Recent losses may necessitate short-term

or long-term borrowing to fund inventory purchases to meet customer orders.

We are focused on restoring profitability to the Company

by driving topline revenue growth and reducing costs.

In line with this focus, the Company is in discussions with and has begun production

of customer products under private-label arrangements with the goal of increasing product sales volume.

We have implemented multiple

price increases on our products to help offset some of the higher costs for meat commodities and are focused on reducing selling, general

and administrative expenses.

Market data indicates that due to higher inflation and rising costs for basic needs, consumers are increasingly

turning to private-label products to reduce their expenses.

The Company intends to reorganize its direct-store-delivery route system

in response to lower sales volume through that distribution channel, including reducing the number of routes, storage units and vehicles

while maintaining superior service to our customers.

The Company is also seeking bids for its production materials to drive increased

competition among its vendors while maintaining quality inputs at the best possible price.

As of October 31, 2025, we had $1,121 of current

debt on equipment loans, $42,277 of net working capital and $5,500 available under our revolving line of credit with Wells Fargo Bank,

(“Wells Fargo”) described below.

July 23, 2025, we entered into an amended and restated credit agreement (the “Amended Credit Agreement”), with Wells Fargo.

The Amended Credit Agreement amended, restated and superseded our prior credit agreement, dated November 30, 2024, with Wells Fargo that

was set to expire by its terms on November 30, 2025.

Under the terms of the Amended Credit Agreement and the revolving line of credit

note established thereby, we may borrow up to $7,500 from time to time until July 31, 2026.

As of October 31, 2025, the Company was in

violation of the quick ratio covenant of the Amended Credit Agreement which was waived by Wells Fargo on December 12, 2025.

is otherwise in compliance with all other covenants under the Amended Credit Agreement.

If we are unable to meet the financial covenant

requirements of the Amended Agreement, it may impact our liquidity.

Refer to Note 5 - Line of Credit and Borrowing Agreements to the

Consolidated Financial Statements included within this Report for further information.

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

product manufacturing and delivery.

We expect this trend to continue throughout fiscal year 2026.

Additionally, commodity costs, including

meat and flour costs, have and may continue to fluctuate due to both political and economic conditions, including the ongoing conflicts

between Ukraine and Russia, and Israel and Palestine, as well as increased tariffs.

Despite these higher commodity costs, 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 the price increase.

Instances of higher

interest rates, general price inflation or deflation, higher raw materials costs, labor shortages or supply chain issues could adversely

affect the Company’s financial results and its liquidity.

Higher product prices could potentially lower demand for our products

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, the performance of operating divisions, and the 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 (used in) operating activities:

Adjustments to reconcile net loss to net cash

used in operating activities:

Depreciation and amortization

(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 (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.

Provision for (recoveries

on) losses on accounts receivable

(Reduction in) provision

for promotional allowances

(Gain) loss on sale of

property, plant and equipment

Deferred income taxes,

Changes in assets and

Net cash used in operating

the fifty-two weeks ended October 31, 2025, net cash used in operating activities was $5,692, a decrease of $5,195 in cash flows compared

to the fifty-two weeks ended November 1, 2024.

The increase in net cash used in operating activities primarily relates to a net loss

of $13,359, a decrease in deferred income taxes of $4,594 and an increase in inventory of $3,734, partially offset by a decrease in accounts

receivable of $6,493 due to accelerated payments from customers.

During fiscal year 2025, we did not contribute towards our defined benefit

2 unchanged sentences

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

November 3, 2023

Proceeds from sale of property, plant and equipment

Additions to property, plant and equipment

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

November 3, 2023

cash conversion cycle (defined as days of inventory and trade receivables less days of trade payables outstanding) was equal to 68 days

for the fifty-two weeks ended October 31, 2025, and 84 days for the fifty-two weeks ended November 1, 2024.

the fifty-two weeks ended November 1, 2024, net cash used in operating activities was $497.

The result was primarily related to 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.

flows used in investing activities:

Proceeds from sale of property,

plant and equipment

Additions to property,

plant and equipment

cash used in investing activities

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.

We may also capitalize costs related to improvements that extend the useful life, increase 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, vehicles and refrigeration equipment used to process food products.

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

Building and leasehold improvements

6 unchanged sentences

Computer software and hardware

Change in projects in process

Additions to property, plant and equipment

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

November 3, 2023

Payment of capital lease obligations

Change in projects in

to property, plant and equipment

for additions to property, plant and equipment during the fifty-two weeks ended October 31, 2025, include projects in process of $2,683

related to the production facilities in Chicago and Statesville.

flows used in financing activities:

Payment of financing lease obligations

Proceeds from bank borrowings

Repayments of bank borrowings

Net cash used in financing activities

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

November 3, 2023

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 2025, 120,113 shares remained authorized for repurchase under the

Company leased three long-haul trucks received during fiscal year 2019.

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

We returned one long-haul truck on June 22, 2023, for a loss of $12 and returned the 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 October 31, 2025.

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 $24 during the fifty-two weeks ended October 31, 2025.

following table reflects major components of our line of credit and borrowing agreements as of October 31, 2025, and November 1, 2024,

respectively.

Revolving credit facility

3 unchanged sentences

Total long-term debt

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.

Credit Facility

July 23, 2025, we entered into the Amended Credit Agreement with Wells Fargo.

The Amended Credit Agreement amended, restated and

superseded our prior credit agreement with Wells Fargo that was set to expire by its terms on November 30, 2025.

Under the terms of

the Amended Credit Agreement and the revolving line of credit note it established, we may borrow up to $7,500 from time to time up

until July 31, 2026, at an interest rate equal to the daily simple secured overnight financing rate plus 2.5% (6.77% at October 31, 2025), or if unavailable,

the prime rate, in each case as determined by the bank.

The revolving line of credit has an unused commitment fee of 0.35% of the

available loan amount, payable on a quarterly basis.

We borrowed $2,000 under this line of credit on May 20, 2025, which remained

unpaid as of October 31, 2025.

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.

Accrued interest is payable on the

first day of each month and the outstanding principal balance and remaining interest are due and payable on July 31,

Wells Fargo Loan Agreements and the Amended 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 agreements:

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,

income after taxes of not less than $1.00 on a quarterly basis, determined as of each fiscal quarter end, commencing on January 30,

of October 31, 2025, the Company was in violation of the quick ratio covenant which was subsequently waived by Wells Fargo (per letter

dated December 12, 2025).

As of October 31, 2025, the Company was in compliance with all other covenants under the Wells Fargo Loan Agreements.

contractual maturities of debt in future fiscal years are as follows as of October 31, 2025:

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

October 31, 2025.

Accounting Policies and Estimates

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, return 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.

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.

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 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