Bridgford Foods (BRID) - 2026 Q1 - Quarterly Report

Sales Performance - Net sales increased by $2,767 (5.3%) to $55,312 in the first twelve-week period of fiscal year 2026 compared to the same period in fiscal year 2025[98] - The Frozen Food Products segment net sales decreased by $174 (1.2%) to $14,355 in the first twelve-week period of fiscal year 2026 compared to the same period in fiscal year 2025[99] - The increase in consolidated net sales was driven by a 10.8% increase in selling price per pound, offset by a 6.3% decrease in unit sales volume[98] - Net sales in the Snack Food Products segment increased by $2,941 (7.7%) to $40,957 in the first twelve-week period of fiscal year 2026 compared to the same period in fiscal year 2025[100] Sales Volume and Distribution - Institutional Frozen Food Products sales volume decreased by 3%, while retail sales volume decreased by 15%[99] - The promotional activity in the Frozen Food Products segment was lower in absolute dollars and as a percentage of sales compared to the previous year[99] - The Snack Food Products segment sold approximately 180 different items through customer-owned distribution centers and a direct-store-delivery network serving around 19,000 retail stores[96] Financial Performance - Cost of products sold from continuing operations increased by $2,283 (5.8%) to $41,943 in the first twelve-week period of fiscal year 2026 compared to the same period in fiscal year 2025[101] - Selling, general and administrative expenses decreased by $297 (2.0%) to $14,616 in the first twelve-week period of fiscal year 2026 compared to the same period in the prior fiscal year[106] - SG&A expenses in the Frozen Food Products segment decreased by $363 (10.8%) to $3,007 in the first twelve-week period of fiscal year 2026 compared to the same period in the prior fiscal year[107] Cash Flow and Working Capital - Net cash provided by operating activities was $4,269 for the twelve weeks ended January 23, 2026, which was $8,873 more than during the same period in fiscal year 2025[113] - The cash conversion cycle decreased from 74 days to 64 days for the twelve-week period ended January 23, 2026, due to acceleration of select trade receivables[114] - As of January 23, 2026, the company had $1,131 of current debt on equipment loans and $41,195 of net working capital[111] Debt and Financing - The company has a revolving credit facility with a borrowing limit of $7,500, with an outstanding balance of $2,000 as of January 23, 2026[119] - The total debt as of January 23, 2026, is $3,482, down from $3,794 on October 31, 2025[122] - Total long-term debt is $351 as of January 23, 2026, compared to $673 on October 31, 2025[122] - Current debt amounts to $3,131 as of January 23, 2026, compared to $3,121 on October 31, 2025[122] - The company is in violation of the net income covenant of the amended credit agreement, which was waived by Wells Fargo on March 2, 2026[119] - The company has an unused commitment fee of 0.35% on the available loan amount, payable quarterly[119] - The interest rate on the revolving credit facility is the daily simple secured overnight financing rate plus 2.5%[119] - The equipment note payable includes a 3.68% note due on April 16, 2027, with an outstanding balance of $1,482 as of January 23, 2026[122] Future Outlook - The company anticipates that future legislative actions will impact health plans offered to active and retired participants, although the potential future effects are not currently determinable[90] - The company has begun production of customer products under private-label arrangements to increase product sales volume[110] - The company expects to remain in compliance with all other covenants for the remainder of fiscal year 2026[119] - The company is not engaged in any off-balance sheet arrangements[125] Customer Concentration - Walmart accounted for 32.9% of consolidated sales and 6.9% of accounts receivable as of January 23, 2026, compared to 28.2% and 25.9% respectively in the prior year[92] - Dollar General represented 14.0% of consolidated sales and 26.1% of accounts receivable as of January 23, 2026, compared to 12.6% and 17.9% respectively in the prior year[92] Transportation and Logistics - The company has shifted away from company-leased long-haul vehicles toward less costly transportation methods such as common carriers[95]