Bridgford Foods (BRID) - 2019 Q1 - Quarterly Report

Part I. Financial Information This section presents the company's financial performance and position for the twelve weeks ended January 25, 2019 Financial Statements Presents unaudited condensed consolidated financial statements for the twelve weeks ended January 25, 2019, and January 26, 2018, covering balance sheets, operations, equity, cash flows, and notes Condensed Consolidated Balance Sheets Total assets increased to $107.7 million from $101.5 million, primarily due to property, plant, and equipment, with corresponding increases in liabilities and equity Condensed Consolidated Balance Sheets (in thousands) | | January 25, 2019 (unaudited) | November 2, 2018 | | :--- | :--- | :--- | | ASSETS | | | | Total current assets | $53,184 | $53,216 | | Property, plant and equipment, net | $38,869 | $32,638 | | Other non-current assets | $11,620 | $11,630 | | Deferred income taxes | $4,010 | $4,010 | | Total assets | $107,683 | $101,494 | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | Total current liabilities | $18,408 | $18,367 | | Long-term notes payable - equipment | $6,556 | $- | | Non-current liabilities | $21,719 | $17,447 | | Total liabilities | $40,127 | $35,814 | | Total shareholders' equity | $67,556 | $65,680 | | Total liabilities and shareholders' equity | $107,683 | $101,494 | Condensed Consolidated Statements of Operations Net sales increased to $45.0 million, resulting in a net income of $1.9 million or $0.21 per share, a turnaround from a prior-year loss Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | | 12 weeks ended Jan 25, 2019 | 12 weeks ended Jan 26, 2018 | | :--- | :--- | :--- | | Net sales | $45,041 | $41,192 | | Gross margin | $15,654 | $13,959 | | Income before taxes | $2,567 | $2,095 | | Provision for income taxes | $691 | $3,722 | | Net income (loss) | $1,876 | $(1,627) | | Basic earnings (loss) per share | $0.21 | $(0.18) | Condensed Consolidated Statements of Shareholders' Equity Shareholders' equity increased to $67.6 million from $65.7 million, solely due to the $1.876 million net income for the quarter - Shareholders' equity increased by $1.876 million during the 12 weeks ended January 25, 2019, driven entirely by net income[15] Condensed Consolidated Statements of Cash Flows Net cash provided by operating activities was $0.7 million, with $7.2 million used in investing and $7.5 million provided by financing, leading to a $1.0 million net cash increase Condensed Consolidated Statements of Cash Flows (in thousands) | | 12 weeks ended Jan 25, 2019 | 12 weeks ended Jan 26, 2018 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $713 | $(1,240) | | Net cash used in investing activities | $(7,191) | $(3,613) | | Net cash provided by (used in) financing activities | $7,500 | $(35) | | Net increase (decrease) in cash | $1,022 | $(4,888) | | Cash and cash equivalents at end of period | $9,201 | $7,221 | Notes to Condensed Consolidated Financial Statements Details significant accounting policies, including ASC 606 adoption, customer concentration, segment performance, a new $7.5 million equipment loan, and tax rate impacts Customer Concentration (as of Jan 25, 2019) | Customer | % of Sales | % of Accounts Receivable | | :--- | :--- | :--- | | Wal-Mart | 35.6% | 33.4% | | Dollar General | 9.7% | 23.6% | Segment Performance (12 weeks ended Jan 25, 2019, in thousands) | Segment | Sales | Income before taxes | | :--- | :--- | :--- | | Frozen Food Products | $11,872 | $110 | | Snack Food Products | $33,169 | $2,457 | | Total | $45,041 | $2,567 | - On December 26, 2018, the company entered into a loan agreement with Wells Fargo for $7.5 million to purchase equipment for its new Chicago facility, with a seven-year term at a fixed rate of 4.13%[53] - The company adopted the new revenue recognition standard (ASC 606) in the first quarter of fiscal 2019 using the modified retrospective method, which did not have a material impact on the financial statements[101] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses a strong start to fiscal 2019, with 9.3% net sales growth to $45.0 million, improved gross margin, and $1.9 million net income, supported by positive operating cash flow and a new $7.5 million equipment loan Consolidated Net Sales Change Analysis (Q1'19 vs Q1'18) | Factor | % Change | $ Change (in thousands) | | :--- | :--- | :--- | | Selling price per pound | 1.6% | $702 | | Unit sales volume in pounds | 8.6% | $3,787 | | Returns activity | -0.9% | $(452) | | Total Increase in net sales | 9.3% | $3,849 | - Snack Food Products segment sales increased 8.4% to $33.2 million, driven by new product offerings like smokehouse sausage sticks, while Frozen Food Products segment sales grew 12.1% to $11.9 million, primarily from increased volume in the shelf-stable sandwich business[74][76] - Consolidated SG&A expenses increased by 10.2% ($1.2 million), mainly due to higher profit-sharing accruals, increased product advertising, and a substantial decrease in the cash surrender value of life insurance policies[81][82] - The company's cash conversion cycle improved to 57 days from 67 days in the prior-year period, indicating better working capital management[91] - Capital expenditures totaled $7.2 million, a significant increase from $3.6 million in the prior year, with the majority ($7.0 million) allocated to projects in process, primarily for the new Chicago facility[93][94] Quantitative and Qualitative Disclosures about Market Risk This section is not applicable as the company qualifies as a smaller reporting company - The company is a smaller reporting company and is therefore not required to provide disclosures under this item[113] Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes in internal controls over financial reporting during the quarter - The principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures are effective[114] - There were no changes in internal controls over financial reporting during the fiscal quarter that materially affected, or are reasonably likely to materially affect, these controls[119] Part II. Other Information Presents other information not covered in the financial statements, including risk factors, equity sales, and exhibits Risk Factors No material changes to risk factors have occurred since the previous disclosure in the Annual Report on Form 10-K - There have been no material changes to the risk factors as previously disclosed in the Annual Report[120] Unregistered Sales of Equity Securities and Use of Proceeds The company did not sell or repurchase any equity securities during the reporting period - The company has not sold or repurchased any equity securities during the period covered by this Report[122] Exhibits Lists exhibits filed with Form 10-Q, including CEO and CFO certifications and XBRL data files - Filed exhibits include CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906, and various XBRL documents[123]