Bridgford Foods (US:BRID)2025-08-22 20:16Part I. Financial Information This section covers the company's financial statements, management's analysis, market risk, and internal controls Item 1. Financial Statements For the 36 weeks ended July 11, 2025, the company reported a net loss of $6.61 million, a reversal to negative operating cash flow, and a slight decrease in total assets Condensed Consolidated Balance Sheets Total assets decreased to $152.7 million as of July 11, 2025, while total liabilities increased, leading to a decline in shareholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | July 11, 2025 (unaudited) ($ thousands) | November 1, 2024 ($ thousands) | | :--- | :--- | :--- | | Total Assets | 152,727 | 157,354 | | Cash and cash equivalents | 3,403 | 10,230 | | Inventories, net | 42,914 | 33,338 | | Total Liabilities | 31,201 | 29,218 | | Revolving credit facility | 2,000 | - | | Total Shareholders' Equity | 121,526 | 128,136 | Condensed Consolidated Statements of Operations For the 36 weeks ended July 11, 2025, net sales increased slightly, but higher costs led to a decreased gross margin and a widened net loss of $6.6 million Statement of Operations Summary (in thousands, except per share data) | Metric | 36 weeks ended July 11, 2025 ($ thousands) | 36 weeks ended July 12, 2024 ($ thousands) | | :--- | :--- | :--- | | Net sales | 155,138 | 151,419 | | Gross margin | 34,585 | 37,988 | | Operating loss | (9,054) | (5,619) | | Net loss | (6,610) | (2,730) | | Basic loss per share | (0.73) ($ per share) | (0.30) ($ per share) | Quarterly Statement of Operations Summary (in thousands, except per share data) | Metric | 12 weeks ended July 11, 2025 ($ thousands) | 12 weeks ended July 12, 2024 ($ thousands) | | :--- | :--- | :--- | | Net sales | 51,954 | 49,263 | | Gross margin | 10,629 | 11,224 | | Operating loss | (3,856) | (3,384) | | Net loss | (1,637) | (1,770) | | Basic loss per share | (0.18) ($ per share) | (0.20) ($ per share) | Condensed Consolidated Statements of Shareholders' Equity Shareholders' equity decreased to $121.5 million as of July 11, 2025, primarily due to the net loss incurred during the 36-week period - For the 36 weeks ended July 11, 2025, total shareholders' equity decreased by $6.61 million, from $128.14 million to $121.53 million, entirely due to the net loss for the period16 Condensed Consolidated Statements of Cash Flows Net cash used in operating activities totaled $5.57 million for the 36 weeks ended July 11, 2025, a reversal from the prior year, driven by net loss and increased inventories Cash Flow Summary (in thousands) | Cash Flow Activity | 36 weeks ended July 11, 2025 ($ thousands) | 36 weeks ended July 12, 2024 ($ thousands) | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | (5,568) | 3,202 | | Net cash used in investing activities | (1,731) | (2,510) | | Net cash provided by (used in) financing activities | 472 | (462) | | Net (decrease) increase in cash | (6,827) | 230 | Notes to Condensed Consolidated Financial Statements The notes detail accounting policies, significant customer concentration, increased inventories, segment performance, and an amended credit facility Customer Concentration (36 weeks ended July 11, 2025) | Customer | % of Sales (%) | % of Accounts Receivable (%) | | :--- | :--- | :--- | | Walmart | 31.4% | 21.6% | | Dollar General | 14.2% | 26.4% | - Inventories increased to $42.9 million as of July 11, 2025, from $33.3 million as of November 1, 2024, primarily driven by increases in finished goods and work in progress50 - On July 23, 2025, the company amended its credit agreement with Wells Fargo, extending the revolving line of credit of up to $7,500 until July 31, 20264276 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses a 2.5% increase in net sales for the 36-week period, offset by declining gross margins due to higher costs, leading to a net loss and negative operating cash flow, addressed by a credit facility amendment Results of Operations Consolidated net sales increased for both the quarter and 36-week period, driven by the Snack Food segment, but gross margins declined due to higher costs, resulting in a wider operating loss Consolidated Net Sales Change (12 Weeks Ended July 11, 2025) | Impact on Net Sales | % Change | ($ thousands) | | :--- | :--- | :--- | | Selling price per pound | 4.0% | 2,141 | | Unit sales volume in pounds | 2.0% | 1,062 | | Total Increase in net sales | 5.5% | 2,691 | Consolidated Net Sales Change (36 Weeks Ended July 11, 2025) | Impact on Net Sales | % Change | ($ thousands) | | :--- | :--- | :--- | | Selling price per pound | 4.0% | 6,727 | | Unit sales volume in pounds | -1.4% | (2,290) | | Total Increase in net sales | 2.5% | 3,719 | - The Snack Food Products segment drove sales growth, with a 9.0% increase in the third quarter, attributed to higher selling prices and unit volume, while the Frozen Food Products segment's sales decreased by 6.3% due to lower prices and volume106108 Liquidity and Capital Resources The company experienced tightened liquidity and negative operating cash flow, addressed by a $7.5 million amended credit facility and ongoing management initiatives for profitability and cash flow - The company's cash conversion cycle improved from 85 days to 68 days year-over-year, primarily due to faster collection of trade receivables139 - The company amended and restated its credit agreement with Wells Fargo, providing access to a $7.5 million revolving line of credit until July 31, 2026, with $2.0 million drawn and $5.5 million available as of July 11, 2025134135143 - Management is implementing price increases on products to offset higher meat commodity costs and is focused on reducing SG&A expenses to improve liquidity135151 Item 3. Quantitative and Qualitative Disclosures about Market Risk This section is not applicable as the company is a smaller reporting company - Disclosure about market risk is not required for smaller reporting companies159 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of the end of the reporting period, the Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective161 - No changes in internal controls over financial reporting occurred during the fiscal quarter that have materially affected, or are reasonably likely to materially affect, these controls166 Part II. Other Information This section covers legal proceedings, risk factors, equity transactions, defaults, and other required disclosures Item 1. Legal Proceedings The company is involved in various legal proceedings in the ordinary course of business, but management does not expect the outcomes to have a material adverse effect on its financial condition or results of operations - The company states that the ultimate disposition of legal actions arising in the ordinary course of business is not expected to have a material adverse effect on its financial position167 Item 1A. Risk Factors No material changes to risk factors were reported, but the company emphasizes the ongoing risk of volatile commodity prices impacting profit margins - The primary risk factor discussed is the fluctuation in commodity prices (pork, beef, flour) and the availability of raw materials, which could negatively impact financial results169 - The company notes a potential lag between when commodity costs increase and when it can implement selling price increases, which may negatively affect profit margins170 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During the third quarter of fiscal year 2025, the company did not sell any unregistered securities nor did it repurchase any of its equity securities - No unregistered securities were sold during the third quarter of fiscal year 2025171 - No equity securities were repurchased by the company during the third quarter of fiscal year 2025172 Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities during the reporting period - The company reports no defaults upon senior securities173 Item 4. Mine Safety Disclosures This item is not applicable to the company - This section is not applicable174 Item 5. Other Information There is no other information to report for the period - The company reports no other information175 Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications from the Principal Executive Officer and Principal Financial Officer, as well as Inline XBRL documents - Exhibits filed include Sarbanes-Oxley Act certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL data files (101 series)176