Bridgford Foods (BRID) - 2019 Q4 - Annual Report

Sales Performance - Net sales in fiscal year 2019 increased by $14,528 (8.3%) compared to the prior fiscal year, driven by a 6.8% increase in unit sales volume and a 2.7% increase in selling price per pound [77]. - Net sales in the Frozen Food Products segment increased by $3,968 (8.4%) in fiscal year 2019, primarily due to a 5.3% increase in unit sales volume and a 4.5% increase in selling price per pound [78]. - Net sales in the Snack Food Products segment increased by $10,560 (8.3%) in fiscal year 2019, attributed to significant new product offerings and a 7.3% increase in unit sales volume [80]. Cost and Expenses - Cost of products sold increased by $9,370 (8.0%) in fiscal year 2019, with the gross margin improving from 32.4% to 32.7% [81]. - Selling, general and administrative expenses (SG&A) increased by $2,908 (5.8%) in fiscal year 2019, with higher wages and bonuses being a significant factor [85]. - SG&A expenses in the Frozen Food Products segment increased by $641 (4.5%) to $14,867, driven by higher unit sales volume and advertising costs [89]. - SG&A expenses in the Snack Food Products segment increased by $2,267 (6.3%) to $37,970, primarily due to higher unit sales volume and increased wages and bonuses [90]. Tax and Cash Flow - The effective income tax rate decreased to 24.0% in fiscal year 2019 from 49.1% in fiscal year 2018, primarily due to tax reform adjustments [92]. - Net cash provided by operating activities was $7,247 for the fifty-two weeks ended November 1, 2019, a decrease of $1,018 compared to the prior year [96]. - The cash conversion cycle increased to 67 days for the fifty-two weeks ended November 1, 2019, compared to 64 days for the prior year [97]. Investment Activities - Cash used in investing activities totaled $(25,678) for the fifty-two weeks ended November 1, 2019, compared to $(12,112) for the same period in 2018, indicating a significant increase in investment outflows [99]. - Additions to property, plant, and equipment were $25,739 for the fifty-two weeks ended November 1, 2019, up from $18,147 in the previous year, reflecting a 42.1% increase [100]. - The company invested $13,723 in projects related to a new facility in Chicago during the fiscal year ended November 1, 2019 [100]. Financing Activities - The company reported net cash provided by financing activities of $(3,253) for the fifty-two weeks ended November 1, 2019, compared to $(83) in the previous year [101]. - The company has a line of credit with Wells Fargo Bank, N.A. allowing borrowing up to $7,500, with a waiver for a capital expenditure covenant violation received on December 16, 2019 [104]. - The company has no off-balance sheet arrangements as of November 1, 2019, and no other debt or contractual obligations [109]. Future Liabilities and Compliance - Future liabilities related to the construction of the new Chicago processing facility are estimated at approximately $13,900 as of January 8, 2020 [110]. - The company maintains compliance with all covenants under its master collateral loan and security agreement as of November 1, 2019 [106]. Economic Impact - The impact of inflation on the company's financial position and results of operations has not been significant, although future volatility could adversely affect results [107]. - The company believes its strong financial position and capital resources are sufficient to meet operating needs and capital expenditures for fiscal year 2020 [108].