Bridgford Foods (BRID) - 2021 Q4 - Annual Report

Sales Performance - Net sales for fiscal year 2021 increased by $42,460 (21.4%) compared to the prior fiscal year, driven by a 3.2% increase in selling price per pound and a 17.5% increase in unit sales volume [82]. - The Frozen Food Products segment saw a slight increase in net sales of $269 (0.7%), primarily due to higher selling prices, despite a 1.3% decrease in unit sales volume [83]. - The Snack Food Products segment experienced a significant increase in net sales of $42,191 (26.9%), attributed to a 22.6% rise in unit sales volume and a 3.1% increase in selling price per pound [84]. Cost and Expenses - Cost of products sold increased by $50,594 (36.5%), with gross margin decreasing from 30.1% to 21.4% [86]. - SG&A expenses increased by $4,961 (9.0%) in fiscal year 2021, with notable increases in product advertising and wages [90]. - The gross margin for the Snack Food Products segment decreased from 29.3% to 19.8% due to higher commodity costs, particularly in meat [89]. Tax and Cash Flow - The effective tax rate for fiscal year 2021 was 24.4%, compared to -42.7% in fiscal year 2020, influenced by non-deductible expenses and state income taxes [96]. - Net cash used in operating activities was $5,992 for the fifty-two weeks ended October 29, 2021, a decrease of $15,909 compared to the previous year [100]. - Net cash provided by operating activities was $9,917 for the fifty-two weeks ended October 30, 2020, primarily due to higher net income and an increase in accounts payable [102]. Financing and Debt - The company borrowed $12,000 under its line of credit during fiscal year 2021 to fund operations, with a book overdraft of $469 as of October 29, 2021 [97]. - Total debt as of October 29, 2021, was $37,069, an increase from $29,122 as of October 30, 2020 [108]. - The company has a line of credit with Wells Fargo Bank, N.A. allowing borrowing up to $15,000 at an interest rate equal to the bank's prime rate or LIBOR plus 2.0% [110]. Investment and Capital Expenditures - Net cash used in investing activities was $(6,469) for the fifty-two weeks ended October 29, 2021, compared to $(23,318) for the fifty-two weeks ended October 30, 2020 [103]. - Additions to property, plant, and equipment totaled $6,239 for the fifty-two weeks ended October 29, 2021, down from $24,482 for the same period in 2020 [105]. - The company expects future liabilities related to the construction of a new Chicago processing facility to be approximately $3,006 as of October 29, 2021 [120]. Compliance and Management Outlook - The company was in violation of the capital expenditure covenant and fixed charge coverage ratio, which were subsequently waived [114]. - Management believes the company's strong financial position is sufficient to provide for operating needs and capital expenditures for fiscal year 2022 [118].