Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in BRID over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking ...

Financial Position - Cash and cash equivalents totaled $4,659 as of January 24, 2025, down from $10,230 as of November 1, 2024[27] - The Company had total assets of $153,376 as of January 24, 2025, down from $166,755 as of January 26, 2024[61] - As of January 24, 2025, the Company had total long-term debt of $1,518, down from $1,702 as of November 1, 2024[73] Inventory Management - Total inventories increased to $36,252 as of January 24, 2025, compared to $33,338 as of November 1, 2024, with finished goods rising from $20,391 to $22,646[47] - The reserve for slow-moving and obsolete inventory was $1,166 as of January 24, 2025, compared to $1,115 as of November 1, 2024[47] Sales Performance - The Company reported total sales of $52,545 for the twelve weeks ended January 24, 2025, compared to $54,842 for the same period in 2024, representing a decrease of approximately 4.2%[61] - Promotional allowances deducted from sales were $3,823 for the twelve weeks ended January 24, 2025, compared to $4,179 for the same period in 2024[34] - Walmart accounted for 28.2% of sales and 25.9% of accounts receivable as of January 24, 2025, while Dollar General represented 12.6% of sales and 17.9% of accounts receivable[30] Operating Results - The gross margin for the Frozen Food Products segment was $3,945, while the Snack Food Products segment reported a gross margin of $8,940, leading to a total gross margin of $12,885 for the twelve weeks ended January 24, 2025[61] - The operating loss for the Snack Food Products segment was $(2,587), contributing to a total operating loss of $(2,012) for the Company during the same period[61] Tax and Compliance - The effective tax rate for the first quarter of fiscal year 2025 was 28.9%, reflecting a tax benefit of $453[67] - The Company is in violation of the Fixed Charge Coverage Ratio covenant as of January 24, 2025, which was subsequently waived for that fiscal quarter[74] Lease and Debt Obligations - Future minimum lease payments total $3,243, with the present value of future minimum lease payments calculated at $3,295 as of January 24, 2025[54] - The Company has a revolving credit facility allowing borrowing up to $7,500, with an interest rate based on the daily simple secured overnight financing rate plus 2.0%[70] Recent Developments - The Company returned two long-haul trucks on July 11, 2024, for a loss of $90, as part of efforts to reduce delivery costs[49] - The Company leased one refrigerated truck with a net present value of $166, which will expire in fiscal year 2031[50] - Management has evaluated subsequent events through the filing date and identified no material events requiring adjustments to the financial statements[39] - The Company has not experienced any losses in cash accounts held at financial institutions exceeding FDIC insurance limits[26] - The Company is currently evaluating the impact of recently issued accounting pronouncements on its financial statements[42] Receivables - The Company recorded current and non-current receivables of $170 and $649, respectively, related to a parking lot lease in Anaheim, California[53]

Financial Performance - Net sales in fiscal year 2024 decreased by $27,991 (11.1%) compared to the prior fiscal year, driven by a decline in unit sales volume and promotional activity[83]. - Net sales in the Frozen Food Products segment increased by $770 (1.3%) in fiscal year 2024, primarily due to higher selling prices per pound despite a decrease in unit sales volume[84]. - Net sales in the Snack Food Products segment decreased by $28,761 (14.8%) in fiscal year 2024, attributed to lower sales through the direct-store-delivery distribution channel and inflationary pressures on consumer spending[85]. - The company recorded a net loss of $3,381 for the fiscal year 2024, compared to a net income of $3,474 in the prior fiscal year[99]. Cost and Expenses - Cost of products sold decreased by $13,962 (7.7%) during fiscal year 2024, while gross margin decreased from 28.0% to 25.2%[87]. - Selling, general and administrative expenses decreased by $3,118 (4.8%) in fiscal year 2024, primarily due to lower wages and bonuses related to reduced sales[91]. Cash Flow and Liquidity - Cash flows from operating activities resulted in a net cash used of $497 in fiscal year 2024, a decrease of $4,482 compared to the previous year[99]. - The cash conversion cycle was 84 days for the fiscal year 2024, slightly up from 83 days in the prior fiscal year[100]. - The company maintained a revolving line of credit with Wells Fargo Bank, allowing borrowing up to $7,500 until November 30, 2025, with $1,084 of current debt on equipment loans as of November 1, 2024[96]. Investment Activities - Net cash used in investing activities for the 52 weeks ended November 1, 2024, was $(3,833) million, compared to $(2,376) million for the 53 weeks ended November 3, 2023[102]. - Additions to property, plant, and equipment totaled $3,902 million for the 52 weeks ended November 1, 2024, up from $2,603 million for the 53 weeks ended November 3, 2023[103]. - The company incurred $755 million in expenditures related to projects in process for production facilities in Chicago and Statesville during the 52 weeks ended November 1, 2024[104]. Financing Activities - Net cash used in financing activities was $(1,148) million for the 52 weeks ended November 1, 2024, compared to $(2,234) million for the 53 weeks ended November 3, 2023[105]. - Total long-term debt decreased to $1,702 million as of November 1, 2024, from $2,786 million as of November 3, 2023[109]. - The company has a revolving credit facility allowing borrowing up to $7,500 million, with an interest rate based on the daily simple secured overnight financing rate plus 2.0%[110]. - As of November 1, 2024, the company was in compliance with all covenants under the Wells Fargo Loan Agreements[112]. Economic Outlook - The effective tax rate increased to 27.9% in fiscal year 2024 from 22.7% in fiscal year 2023, influenced by various non-deductible items[95]. - The company expects inflation trends to continue impacting operating results through fiscal year 2025, affecting costs for labor, freight, and materials[113]. - The company has no off-balance sheet arrangements as of November 1, 2024[114]. - There were no other debt or contractual obligations reported as of November 1, 2024[115].

Core Insights - Bridgford Foods reported a loss of 20 cents per share for the third quarter of 2024 [1] - The company's revenue for the same period was $49.26 million [1] Financial Performance - Earnings per share: -20 cents [1] - Revenue: $49.26 million [1]

Financial Performance - Total sales for the twelve weeks ended July 12, 2024, reached $49,263 million, a decrease from $54,189 million in the same period last year, representing a decline of approximately 9.4%[46] - The gross margin for the twelve weeks ended July 12, 2024, was $11,224 million, down from $15,291 million in the prior year, indicating a decrease of about 26.5%[46] - Operating loss for the twelve weeks ended July 12, 2024, was $(3,384) million, compared to an operating income of $597 million for the same period in 2023[46] - For the thirty-six weeks ended July 12, 2024, total sales were $151,419 million, compared to $171,321 million for the same period in 2023, reflecting a decrease of approximately 11.6%[52] - The gross margin for the thirty-six weeks ended July 12, 2024, was $37,988 million, down from $47,814 million in the previous year, a decline of about 20.6%[52] - Consolidated net sales decreased by $4,926 (9.1%) to $49,263 for the twelve weeks ended July 12, 2024, compared to the same period in 2023[81] - For the thirty-six weeks ended July 12, 2024, consolidated net sales decreased by $19,902 (11.6%) to $151,419[92] - Net loss for the thirty-six weeks ended July 12, 2024, was $2,730, compared to a net income of $1,765 for the same period in fiscal year 2023[106] Inventory and Assets - As of July 12, 2024, total inventories amounted to $34,912, down from $40,573 as of November 3, 2023, indicating a decrease of 14.5%[33] - The net realizable value reserve for inventory increased to $1,343 as of July 12, 2024, from $513 as of November 3, 2023, showing a significant rise of 161.4%[33] - Total assets as of July 12, 2024, amounted to $163,861 million, slightly down from $171,433 million as of July 7, 2023[46] Debt and Financing - The company entered into a revolving credit facility allowing borrowing up to $7,500 at an interest rate of the daily simple secured overnight financing rate plus 2.0%[56] - As of July 12, 2024, total long-term debt was $2,068, a decrease from $2,786 as of November 3, 2023[59] - Total debt as of July 12, 2024, was $3,143 million, down from $3,831 million on November 3, 2023[113] - The company was in compliance with all covenants under the Wells Fargo Loan Agreements as of July 12, 2024[58] Revenue Recognition and Accounting - The Company’s revenue recognition policy follows ASC Topic 606, recognizing revenue upon the transfer of control of products to customers[24] - Revenue recognition follows ASC 606, with revenues recognized upon passage of title to the customer, typically at product pick-up, shipment, or delivery[75] - The company is currently evaluating the impact of recently issued accounting pronouncements on its financial statements, including ASU No. 2023-07 related to segment reporting[31] - The company is currently evaluating the impact of new accounting pronouncements and regulations on its financial statements[115] Customer and Market Risks - Customer concentration showed that significant customers accounted for more than 20% of consolidated accounts receivable or 10% of consolidated sales for the thirty-six weeks ended July 12, 2024[74] - The company has significant receivables from a couple of large customers, which could pose material risk if their operations deteriorate[66] Operational Costs and Expenses - SG&A expenses decreased by $212 (1.4%) to $14,445, with lower wages and bonuses due to decreased sales volume[88] - Selling, general and administrative expenses decreased by $1,946 (4.3%) to $43,446 for the thirty-six weeks ended July 12, 2024, compared to the same period in the prior fiscal year[100] - Cost of products sold decreased by $859 (2.2%) to $38,039, with a notable decrease in the Frozen Food Products segment by $139 (1.6%)[84][86] - Cost of products sold decreased by $10,076 (8.2%) to $113,431 for the thirty-six weeks ended July 12, 2024, compared to the same period in fiscal year 2023[96] Tax and Legal Matters - The effective tax rate for the third quarter of fiscal year 2024 was 29.1%, down from 31.7% in the same quarter of fiscal year 2023, reflecting a tax benefit of $1,119[54] - The company recorded a benefit for income taxes of $1,119 for the thirty-six weeks ended July 12, 2024, compared to a provision for income taxes of $820 for the same period in fiscal year 2023[103] - The company believes that the final outcome of ordinary legal proceedings will not have a material adverse effect on its business or financial condition[123] Internal Controls and Risk Management - The company does not expect that its disclosure controls and internal controls will prevent all errors and fraud, acknowledging inherent limitations[119] - There have been no changes in internal controls over financial reporting that materially affected the company during the fiscal quarter ended July 12, 2024[122] - The Company has not experienced any losses in cash accounts exceeding the Federal Deposit Insurance Corporation insurance coverage limit, indicating effective credit risk management[20] - The Company maintains an allowance for doubtful accounts, which is reviewed quarterly for adequacy, reflecting proactive credit management practices[20] Segment Performance - The company operates two reportable segments: Frozen Food Products and Snack Food Products, with performance evaluated based on revenues and operating income[44] - Net sales in the Frozen Food Products segment increased by $665 (6.1%) to $11,517, driven by higher selling prices per pound[82] - Net sales in the Snack Food Products segment decreased by $5,591 (12.9%) to $37,746, primarily due to lower unit sales volume and selling prices[83] - Net sales in the Frozen Food Products segment increased by $1,665 (4.5%) to $38,821, attributed to higher selling prices and unit sales volume[93] - Net sales in the Snack Food Products segment decreased by $21,567 (16.1%) to $112,598 for the thirty-six weeks ended July 12, 2024, compared to the same period in fiscal year 2023[94] Cash Flow and Cycle - Net cash provided by operating activities was $3,202 for the thirty-six weeks ended July 12, 2024, a decrease of $3,107 compared to the same period in fiscal year 2023[106] - The cash conversion cycle was 85 days for the thirty-six weeks ended July 12, 2024, showing a minimal increase from 84 days in the prior fiscal year[107]

Financial Performance - For the twelve weeks ended April 19, 2024, total sales amounted to $47,314, a decrease from $55,510 for the same period in 2023, representing a decline of approximately 14.8%[74] - The gross margin for the twelve weeks ended April 19, 2024, was $10,726, down from $15,457 in the prior year, indicating a decrease of about 30.5%[74] - Operating loss for the twelve weeks ended April 19, 2024, was $(3,246), compared to an operating income of $284 for the same period in 2023, reflecting a significant decline in profitability[74] - For the twenty-four weeks ended April 19, 2024, total sales were $102,156, a decrease from $117,132 in the same period of 2023, representing a decline of approximately 12.8%[74] - The cost of products sold for the twenty-four weeks ended April 19, 2024, was $75,392, compared to $84,609 in the prior year, indicating a decrease of about 10.9%[74] - Total Snack Food Products revenue for the twenty-four weeks ended April 19, 2024, was $74,852, an increase from $43,606 for the same period in 2023, representing a growth of 71.5%[76] - Total Frozen Food Products revenue for the twenty-four weeks ended April 19, 2024, was $27,304, up from $11,904 in the prior year, indicating a growth of 128.5%[77] - Net sales in the Snack Food Products segment decreased by $15,977 (17.6%) to $74,852 for the twenty-four weeks ended April 19, 2024, compared to the same period in fiscal year 2023[180] - Selling, General and Administrative (SG&A) expenses decreased by $1,734 (5.6%) to $29,001 in the twenty-four-week period ended April 19, 2024, compared to the same period in the prior fiscal year[183] - Cost of products sold in the Snack Food Products segment decreased by $8,776 (13.6%) to $55,610 in the first twenty-four weeks of fiscal year 2024 compared to the same period in fiscal year 2023[182] Assets and Liabilities - Total assets as of April 19, 2024, were $164,393, compared to $170,859 as of April 14, 2023, showing a decrease of about 3.8%[74] - Total long-term debt as of April 19, 2024, was $2,340 million, down from $2,786 million as of November 3, 2023[192] - Total liabilities divided by tangible net worth was not greater than 2.0 to 1.0 at each fiscal quarter end, indicating compliance with financial covenants[192] Tax and Valuation - The effective tax rate for the second quarter of fiscal year 2024 was 29.1%, down from 34.2% in the same quarter of fiscal year 2023, reflecting a tax benefit of $367[107] - The effective tax rate for the twelve weeks ended April 19, 2024, was 27.7%, down from 34.2% for the same period in the prior year[185] - The company has a valuation allowance of $99 retained for California net operating losses, with state loss carryforwards of approximately $5,000 expiring through 2040[79] Cash Flow and Liquidity - Cash provided by operating activities was $1,002 million for the twenty-four weeks ended April 19, 2024, a decrease of $295 million compared to the same period in fiscal year 2023[188] - The company anticipates maintaining sufficient liquidity to operate its business for at least the next twelve months despite inflationary pressures and commodity cost fluctuations[186] Operational Segments - The company has two reportable operating segments: Frozen Food Products and Snack Food Products, with sales of $27,304 and $74,852 respectively for the twenty-four weeks ended April 19, 2024[72] - The company evaluates segment performance based on revenues and operating income, with selling, general and administrative expenses allocated based on revenues[96] Lease and Financing - The estimated incremental interest rate for the lease with Hogshed Ventures, LLC, was approximately 5.49%[69] - Total minimum lease payments for the fiscal year 2024 are projected to be $3,052[70] - The company entered into a revolving line of credit agreement allowing borrowing up to $7,500 at an interest rate based on the daily simple secured overnight financing rate plus 2.0%[80] Inventory and Reserves - As of April 19, 2024, the company maintained a net realizable value reserve of $385 for inventory, down from $513 as of November 3, 2023[91] - The company increased its net realizable value reserve by $60 during the twenty-four weeks ended April 19, 2024, due to higher meat commodity costs and lower gross margins[182] Compliance and Controls - The company was in compliance with all covenants under the Wells Fargo Loan Agreements as of April 19, 2024[82] - No changes in internal controls over financial reporting during the fiscal quarter ended April 19, 2024, that materially affected internal controls[199]

Financial Position - For the twelve weeks ended January 26, 2024, total liabilities amounted to $3,660 million, a decrease from $3,831 million as of November 3, 2023[75]. - The Company has a total long-term debt of $2,608 million as of January 26, 2024, compared to $2,786 million as of November 3, 2023, indicating a reduction of about 6.4%[75]. - The Company maintains compliance with loan covenants, with total liabilities divided by tangible net worth not exceeding 2.0 to 1.0 as of January 26, 2024[76]. Inventory Management - The Company reported total inventories of $39,275 million as of January 26, 2024, down from $40,573 million on November 3, 2023, reflecting a decrease of approximately 3.2%[62]. - The Company’s finished goods inventory was valued at $25,067 million as of January 26, 2024, down from $26,822 million on November 3, 2023, representing a decrease of about 6.5%[62]. - The Company’s work in progress inventory increased to $2,347 million as of January 26, 2024, compared to $1,507 million on November 3, 2023, reflecting an increase of approximately 55.5%[62]. Revenue Recognition - The Company’s revenue recognition occurs at the point of product shipment, pickup, or delivery, with contracts typically being short-term in nature[56]. Tax Benefits - The Company recognized an income tax benefit of $358 million from the release of research and development credits recorded in the income tax provision for fiscal year 2020[72]. Lease Obligations - The Company’s ROU lease assets and corresponding lease liabilities are recorded within property, plant, and equipment, reflecting both current and long-term obligations[58]. - The Company’s estimated incremental interest rate for leases is approximately 5.49%[65].

Internal Control and Compliance - Management assessed the effectiveness of internal control over financial reporting as effective as of November 3, 2023[15]. - A material weakness in internal control was identified at the end of fiscal year 2022, related to lease term reporting[44]. - Remediation steps included quarterly verbal communication with plant managers and expanded notifications to the Operating Committee[45]. - No changes in internal control over financial reporting occurred during the last quarter of fiscal year ended November 3, 2023, that materially affected controls[16]. - The company centralized most accounting and administrative functions to control costs of maintaining control systems[12]. - Disclosure controls and procedures were evaluated as effective as of the end of the reporting period[38]. - The Audit Committee regularly meets with financial management and independent registered public accounting firm to discuss internal controls[43]. - As of November 3, 2023, the company has remediated material weaknesses in internal controls, but future compliance with Section 404 of the Sarbanes-Oxley Act remains uncertain[46]. Financial Performance - Net sales in fiscal year 2023 decreased by $14,262 (5.4%) compared to the prior fiscal year, with a significant decline in the Snack Food Products segment, which saw a decrease of $15,646 (7.5%) in net sales[130][155]. - The Frozen Food Products segment experienced an increase in net sales of $1,384 (2.5%) due to higher selling prices per pound, despite a decrease in unit sales volume[130][154]. - Cost of products sold decreased by $12,558 (6.5%) during fiscal year 2023, while the gross margin increased from 27.1% to 28.0%[157]. - Selling, general and administrative expenses (SG&A) increased by $332 (0.5%) in fiscal year 2023, with notable increases in property insurance and outside storage fees[135][159]. - The effective tax rate for fiscal year 2023 was 22.7%, down from 26.6% in fiscal year 2022, reflecting changes in non-deductible expenses and state income taxes[161]. - The company recorded a tax provision of $1,021 for fiscal year 2023, significantly lower than the $16,341 recorded in fiscal year 2022[161]. - The gross margin percentage in the Frozen Food Products segment decreased from 26.9% to 25.1% during fiscal year 2023[158]. - The gross margin for the Snack Food Products segment increased from 27.1% to 28.8% during fiscal year 2023[177]. - The cost of products sold in the Snack Food Products segment decreased by $14,638 (9.6%) due to lower unit sales volume[177]. Debt and Financial Obligations - The company has no other debt or contractual obligations as of November 3, 2023[29]. - As of November 3, 2023, total long-term debt was $2,786, down from $3,824 in the previous year[170]. - The company has a new revolving line of credit allowing borrowing up to $7,500 until November 30, 2024[181]. - Total liabilities for fiscal year 2024 are projected to be $1,044 million, increasing to $1,083 million in 2025, $1,124 million in 2026, and decreasing to $580 million in 2027[197]. - The company prepaid $18,653 million in equipment loans using proceeds from a new bridge loan[195]. Market and Operational Insights - The company operates in two business segments: processing and distribution of frozen food products and snack food products[67]. - The company has not entered new markets or significant contractual relationships during the last fiscal year[56]. - The company plans to shift from company-leased long-haul vehicles to less costly transportation methods, enhancing operational efficiency[59]. - The company has focused on developing new products, particularly single-serve items, to complement existing product lines[76]. - The company’s advertising strategy includes social media presence and participation in trade shows to reach food service customers[72]. - The company’s products are distributed through various channels, emphasizing relationships with large food service distributors[57]. - The company has maintained a competitive edge through careful research and testing of products to ensure quality and market fit[76]. - The company has not been involved in any mergers or acquisitions in the past five years, maintaining a stable operational structure[55]. - Sales to Wal-Mart® comprised 29.1% of revenues in fiscal year 2023, with 26.5% of total accounts receivable due from Wal-Mart® as of November 3, 2023[80]. - Sales to Dollar General® accounted for 16.3% of revenues in fiscal year 2023, with 20.5% of total accounts receivable due from Dollar General® as of November 3, 2023[80]. - The company sold approximately 160 different snack food items through a direct-store-delivery network serving around 20,000 retail stores across 50 states during fiscal year 2023[103]. - The frozen food products division serves both food service and retail customers, selling approximately 140 unique products through about 780 wholesalers and distributors[99]. Labor and Regulatory Challenges - Labor shortages and increased turnover rates have led to higher costs, including increased overtime and wage rates, which could negatively affect operational efficiency[89]. - The company is subject to extensive inspection and regulation by the USDA and FDA, ensuring compliance with safety and sanitary operating procedures[116]. - Approximately 44% of the company's 688 employees are governed by collective bargaining agreements, which may affect labor costs and operational stability[109]. - The company has experienced a decrease in sales to key customers due to increased buying power and consolidation in the retail sector, potentially affecting profitability[119]. - Future volatility in commodity prices and labor costs may adversely affect the company's financial results and operational performance[115]. - Commodity prices for pork, beef, and flour have fluctuated significantly, impacting profitability and operational costs due to external market forces[86]. Shareholder Information - The company has 969 shareholders of record as of January 11, 2024[127]. - The company did not repurchase any shares of common stock during fiscal years 2023 and 2022, with 120,113 shares remaining authorized for repurchase[150]. - As of the end of fiscal year 2023, 120,113 shares remained authorized for repurchase under the stock repurchase program[190]. Cash Flow and Financial Ratios - For 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 previous fiscal year[184]. - The net income for the same period was $3,474, with a reduction in accounts receivable of $6,480[184]. - The cash conversion cycle was 83 days for both the fifty-three weeks ended November 3, 2023, and the fifty-two weeks ended October 28, 2022[166]. - The company did not contribute to its defined benefit pension plan during fiscal years 2022 and 2023[184]. - The company’s Quick Ratio is required to be not less than 1.25 to 1.0 at each fiscal quarter end[196]. - The Fixed Charge Coverage Ratio must not be less than 1.25 to 1.0 at each fiscal quarter end[196].

Editor's note: Seeking Alpha is proud to welcome William Walsh as a new contributor. It's easy to become a Seeking Alpha contributor and earn money for your best investment ideas. Active contributors also get free access to SA Premium. Click here to find out more » LauriPatterson/E+ via Getty Images Investment Thesis I assess a buy rating for Bridgford Foods Corp. (NASDAQ:BRID). BRID is trading at a deep discount, below tangible book value. Additionally, BRID has a real estate portfolio that does not come c ...

Sales Performance - Net sales decreased by $5,330 (9.0%) to $54,189 in the third twelve-week period of the 2023 fiscal year compared to the same period in fiscal year 2022[32]. - Net sales decreased by $12,270 (6.7%) to $171,321 for the thirty-six weeks ended July 7, 2023, compared to the same period in fiscal year 2022[81]. - Net sales in the Snack Food Products segment decreased by $12,870 (8.8%) to $134,165 for the thirty-six weeks ended July 7, 2023[82]. - Net sales in the Frozen Food Products segment increased by $600 (1.6%) to $37,156 for the thirty-six weeks ended July 7, 2023[81]. - Total sales for the twelve weeks ended July 7, 2023, were $54,189 million, a decrease of 8.4% from $59,519 million in the same period in 2022[214]. - For the thirty-six weeks ended July 7, 2023, total sales were $171,321 million, compared to $183,591 million for the same period in 2022, reflecting a decline of 6.7%[214]. Financial Position - Total long-term debt as of July 7, 2023, was $3,139, down from $3,824 as of October 28, 2022[48]. - The total debt as of July 7, 2023, was $4,171 million, with total long-term debt amounting to $3,139 million[165]. - The company had $68,173 of net working capital as of July 7, 2023[119]. - The company maintains a revolving line of credit with Wells Fargo Bank, N.A., with a borrowing limit of up to $15,000 million[145]. - The company is in discussions to amend its line of credit with Wells Fargo Bank, decreasing it to $7,500 from $15,000, with an expiration date of August 31, 2024[85]. Income and Expenses - As of July 7, 2023, the company reported a net income of $1,765 compared to $42,410 for the same period in 2022, reflecting a significant decrease[119]. - The company recorded a provision for income taxes of $258 for the twelve-week period ended July 7, 2023, based on the expected annual effective tax rate[80]. - The effective tax rate for the third quarter of fiscal year 2023 was 31.7%, compared to 29.0% in the same quarter of fiscal year 2022, reflecting a tax expense of $820[89]. - The company recorded a tax provision of $820 for the thirty-six-week period ended July 7, 2023, based on the expected annual effective tax rate[115]. - Operating income significantly dropped to $2.2 million for the 36 weeks ended July 7, 2023, compared to $62.6 million for the same period in 2022, reflecting a decline of approximately 96.5%[195]. - Net income for the 36 weeks ended July 7, 2023, was $1.8 million, a substantial decrease from $42.4 million in the previous year, marking a decline of about 95.8%[195]. Cost of Goods Sold - Cost of products sold in the Frozen Food Products segment increased by $57 (0.7%) to $8,809 in the third twelve-week period of fiscal year 2023 compared to the same period in fiscal year 2022[97]. - Cost of products sold in the Snack Food Products segment decreased by $3,657 (10.8%) to $30,089 in the third twelve-week period of fiscal year 2023 compared to the same period in fiscal year 2022[98]. - Cost of products sold decreased by $9,988 (7.5%) to $123,507 in the thirty-six-week period ended July 7, 2023, compared to the same period in fiscal year 2022, with gross margin increasing from 27.3% to 27.9%[108]. - The cost of products sold in the Frozen Food Products segment increased by $2,780 (10.6%) to $29,032 in the first thirty-six-week period of fiscal year 2023 compared to the same period in fiscal year 2022[132]. - The cost of products sold in the Snack Food Products segment decreased by $12,768 (11.9%) to $94,475 in the first thirty-six-week period of fiscal year 2023 compared to the same period in fiscal year 2022[133]. Customer Concentration - Walmart accounted for 29.6% of consolidated sales and 27.4% of accounts receivable as of July 7, 2023, compared to 30.8% and 19.8% respectively as of July 8, 2022[26]. - Major customers included Walmart and Dollar General, with sales percentages of 27.8% and 17.9% respectively for the period ended July 7, 2023[201]. - Dollar General represented 16.8% of sales as of July 7, 2023, down from 18.2% in the prior year[219]. Operational Challenges - The business disruptions associated with the COVID-19 pandemic had a minimal impact on the company’s financial statements for the fiscal year ended October 28, 2022, and during the twelve and thirty-six weeks ended July 7, 2023[53]. - Management expects inflation trends, including higher costs for labor, freight, and specific materials, to continue through the remainder of fiscal year 2023[166]. - The company has implemented remediation steps to address a material weakness in internal control over financial reporting, which is expected to be resolved before the end of fiscal year 2023[154]. Market Strategy - The company plans to focus on market expansion and new product development to drive future growth[215]. - The company maintains a network of independent food service and retail brokers, which is considered a valuable asset for new product opportunities[29].