BRIDGFORD FOODS CORP

Previous wording

Certain statements included within in this Report, and the information and documents incorporated by reference with this Report, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Report or incorporated by reference into this Report are forward-looking statements. These statements include, among other things, any predictions of earnings, revenues, expenses or other financial items; plans or expectations with respect to our business strategy; statements concerning industry trends; statements regarding anticipated demand for our products, or the products of our competitors; statements relating to manufacturing forecasts; statements relating to forecasts of our liquidity position or available cash resources; statements regarding operational challenges, including as a result of global supply chain disruptions and labor shortages; statements regarding inflationary pressures, including increased costs for labor and freight, and the resulting impact on our results of operations; statements regarding new regulations related to federal income tax and the impact on our financial statements and cash flow; statements regarding the impact of the adoption of recent accounting pronouncements on our business; and statements relating to the assumptions underlying any of the foregoing. Throughout this Report, we have attempted to identify forward-looking statements by using words such as “may,” “believe,” “will,” “could,” “project,” “anticipate,” “expect,” “estimate,” “should,” “continue,” “potential,” “plan,” “forecasts,” “goal,” “seek,” “intend,” other forms of these words or similar words or expressions or the negative thereof (although not all forward-looking statements contain these words).

Current wording

Certain statements included within this Report, and the information and documents incorporated by reference with this Report, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Report or incorporated by reference into this Report are forward-looking statements. These statements include, among other things, any predictions of earnings, revenues, expenses or other financial items; plans or expectations with respect to our business strategy; statements concerning industry trends; statements regarding anticipated demand for our products, or the products of our competitors; statements relating to manufacturing forecasts; statements relating to forecasts of our liquidity position or available cash resources; statements regarding operational challenges, including as a result of global supply chain disruptions and labor shortages; statements regarding inflationary pressures, including increased costs for labor and freight, and the resulting impact on our results of operations; statements regarding new regulations related to federal income tax and the impact on our financial statements and cash flow; statements regarding the impact of the adoption of recent accounting pronouncements on our business; and statements relating to the assumptions underlying any of the foregoing. Throughout this Report, we have attempted to identify forward-looking statements by using words such as “may,” “believe,” “will,” “could,” “project,” “anticipate,” “expect,” “estimate,” “should,” “continue,” “potential,” “plan,” “forecasts,” “goal,” “seek,” “intend,” other forms of these words or similar words or expressions or the negative thereof (although not all forward-looking statements contain these words).

Previous wording

Such forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions; macroeconomic conditions, including global financial pressures, inflation, market volatility, and recessionary concerns; fluctuations in commodity costs, including as a result of political and economic conditions and current or prospective tariffs; success of operating initiatives; development and operating costs; trends impacting the purchasing behavior of our customers and consumers; advertising and promotional efforts; adverse publicity; acceptance of new product offerings; consumer trial and frequency; changes in business strategy or development plans; availability, terms and deployment of capital; availability of qualified personnel; commodity, labor, and employee benefit costs; changes in, or failure to comply with, government regulations; weather conditions, including the effects of climate change and changes in the regulatory environment and consumer demand to mitigate these effects; construction schedules; supply chain, consumer demand, and cost of products sold; the impact of competitive products and pricing, and other factors referenced in this Report as well as in our other filings with the Securities and Exchange Commission (the “SEC”). In addition, actual results may differ as a result of additional risks and uncertainties of which we are currently unaware or which we do not currently view as material to our business.

Current wording

Such forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions; macroeconomic conditions, including global financial pressures, inflation, market volatility, and recessionary concerns; fluctuations in commodity costs, including as a result of political and economic conditions and current or prospective tariffs; success of operating initiatives; development and operating costs; trends impacting the purchasing behavior of our customers and consumers; advertising and promotional efforts; adverse publicity; acceptance of new product offerings; consumer trial and frequency; changes in business strategy or development plans; availability, terms and deployment of capital; availability of qualified personnel; commodity, labor, and employee benefit costs; changes in, or failure to comply with, government regulations; weather conditions, including the effects of climate change and changes in the regulatory environment and consumer demand to mitigate these effects; construction schedules; supply chain, consumer demand, and cost of products sold; the impact of competitive products and pricing, and other factors referenced in this Report as well as in our other filings with the Securities and Exchange Commission (the “SEC”). In addition, actual results may differ as a result of additional risks and uncertainties of which we are currently unaware of or which we do not currently view as material to our business.

Previous wording

The preparation of our Condensed Consolidated Financial Statements in conformity with generally accepted accounting principles in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the respective reporting periods. Some of the estimates needed to be made by management include the allowance for doubtful accounts, promotional and returns allowances, inventory reserves, the estimated useful lives of property and equipment, and the valuation allowance for the Company’s deferred tax assets. Actual results could materially differ from these estimates. We determine the amounts to record based on historical experience and various other assumptions that we view as reasonable under the circumstances and consider all relevant available information. The results of this analysis form the basis for our conclusion as to the value of assets and liabilities that are not readily available from other independent sources. Amounts estimated related to liabilities for self-insured workers’ compensation, employee healthcare and pension benefits are especially subject to inherent uncertainties and these estimated liabilities may ultimately settle at amounts which vary from our current estimates.

Current wording

The preparation of our Condensed Consolidated Financial Statements in conformity with generally accepted accounting principles in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting periods. Some of the estimates made by management include the allowance for doubtful accounts, promotional and returns allowances, inventory reserves, the estimated useful lives of property, plant and equipment, and the valuation allowance for the Company’s deferred tax assets. Actual results could materially differ from these estimates. We determine the amounts to record based on historical experience and various other assumptions that we view as reasonable under the circumstances and consider all relevant available information. The results of this analysis form the basis for our conclusion as to the value of assets and liabilities that are not readily available from other independent sources. Amounts estimated related to liabilities for self-insured workers’ compensation, employee healthcare and pension benefits are especially subject to inherent uncertainties and these estimated liabilities may ultimately settle at amounts which vary from our current estimates.

Previous wording

Our credit risk is diversified across a broad range of customers and geographic regions. Losses due to credit risk have recently been immaterial. The allowance for credit losses on accounts receivable is based on historical trends and current collection risk. We have significant receivables with a couple of large, well-known customers which, although historically secure, could be subject to material risk should these customers’ operations suddenly deteriorate. We monitor these customers closely to minimize the risk of loss.

Current wording

Our credit risk is diversified across a broad range of customers and geographic regions. Losses due to credit risk have recently been immaterial. The allowance for credit losses on accounts receivable is based on historical trends and current collection risk. We have significant receivables with a couple of large, well-known customers which, although historically secure, could be subject to material risk should these customers’ operations deteriorate. We monitor these customers closely to minimize the risk of loss.

Previous wording

We participate in “multiemployer” pension plans administered by labor unions on behalf of their employees. We pay monthly contributions to union trust funds, a portion of which is used to fund pension benefit obligations to plan participants. The contribution amount may change depending upon the ability of participating companies to fund these pension liabilities as well as the actual and expected returns on pension plan assets. Should we withdraw from the union and cease participation in a union plan, federal law could impose a penalty for additional contributions to the plan. The penalty would be recorded as an expense in the consolidated statement of operations. The ultimate amount of the withdrawal liability is dependent upon several factors including the funded status of the plan and contributions made by other participating companies.

Current wording

We participate in “multiemployer” pension plans administered by labor unions on behalf of their members. We pay monthly contributions to union trust funds, a portion of which is used to fund pension benefit obligations to plan participants. The contribution amount may change depending upon the ability of participating companies to fund these pension liabilities as well as the actual and expected returns on pension plan assets. Should we withdraw from the union and cease participation in a union plan, federal law could impose a penalty for additional contributions to the plan. The penalty would be recorded as an expense in the consolidated statement of operations. The ultimate amount of withdrawal liability is dependent upon several factors including the funded status of the plan and contributions made by other participating companies.

Previous wording

On May 22, 2024, we transitioned our pension plan assets held with Morgan Stanley Smith Barney LLC to align with our updated investment policy statement to shift away from equities to fixed income. This derisking strategy helps establish a basis for our investment results as well as helping to ensure that assets of the Plan are managed in accordance with the Employment Retirement Income Security Act of 1974 and regulations pertaining thereto.

Current wording

On May 22, 2024, we transitioned our pension plan assets held with Morgan Stanley Smith Barney LLC to align with our updated investment policy statement to shift away from equities to fixed income. This derisking strategy helps establish a basis for our investment results as well as helping to ensure that assets of the plan are managed in accordance with the Employment Retirement Income Security Act of 1974 and related regulations.

Previous wording

We are subject to the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “PPACA”). Requirements of the law include the removal of the lifetime limits on active and retiree medical coverage, expanding dependent coverage to age 26 and the elimination of pre-existing conditions that may impact other postretirement benefits costs. The PPACA law also includes a potential excise tax on the value of benefits that exceed a pre-defined limit. Fortunately, this potential tax has been indefinitely deferred and we do not see significant financial exposure. Finally, the PPACA includes provisions that require employers to offer health benefits to all full-time employees (defined as 30 hours per week). The health coverage must meet minimum standards for the actuarial value of the benefits offered and employee affordability. We believe that the current administration seems more likely to enhance the scope and coverage associated with PPACA than to repeal or significantly change this law. The recent legislative packages related to pandemic relief included some minor provisions that will impact health benefits in the future. These changes most prominently focus on the impact of surprise balance bills from out-of-network providers. Our health care plans as they exist in 2025 are compliant with all applicable regulations that currently exist. As we look to the future, we anticipate that future legislative action will impact the plans offered to active and retired participants. As we have done in the past, our executive team will continue to assess the accounting implications of the PPACA and potential future legislation to determine the impact on our financial position and results of operations. The potential future effects and cost of complying with the legislative changes are not currently determinable.

Current wording

We are subject to the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the “PPACA”). Requirements of the law include the removal of the lifetime limits on active and retiree medical coverage, expanding dependent coverage to age 26 and the elimination of pre-existing conditions that may impact other postretirement benefits costs. The PPACA law also includes a potential excise tax on the value of benefits that exceed a pre-defined limit. Fortunately, this potential tax has been indefinitely deferred, and we do not see significant financial exposure. Finally, the PPACA includes provisions that require employers to offer health benefits to all full-time employees (defined as 30 hours per week). The health coverage must meet minimum standards for the actuarial value of the benefits offered and employee affordability. The legislative packages related to pandemic relief included some minor provisions that impact health benefits in the future. These changes most prominently focus on the impact of surprise balance bills from out-of-network providers. Our health care plans as they exist in 2025 are compliant with all applicable regulations that currently exist. As we look to the future, we anticipate that future legislative action will impact the plans offered to active and retired participants. As we have done in the past, our executive team will continue to assess the accounting implications of the PPACA and potential future legislation to determine the impact on our financial position and results of operations. The potential future effects and cost of complying with the legislative changes are not currently determinable.

Previous wording

The table below shows customers that accounted for more than 20% of consolidated accounts receivable (“AR”) or 10% of consolidated sales for the twenty-four weeks ended April 18, 2025, and April 19, 2024, respectively.

Current wording

The table below shows customers that accounted for more than 20% of consolidated accounts receivable (“AR”) or 10% of consolidated sales for the thirty-six weeks ended July 11, 2025, and July 12, 2024, respectively.

Previous wording

The table below shows customers that accounted for more than 20% of consolidated accounts receivable or 10% of consolidated sales for the twelve weeks ended April 18, 2025, and April 19, 2024, respectively.

Current wording

The table below shows customers that accounted for more than 20% of consolidated AR or 10% of consolidated sales for the twelve weeks ended July 11, 2025, and July 12, 2024, respectively.

Previous wording

Our Frozen Food Products segment primarily manufactures and distributes biscuits, bread dough items, roll dough items and shelf stable sandwiches. All items within this segment are considered similar products and have been aggregated at this level. Our frozen food business covers the United States. We have shifted away from Company-leased long-haul vehicles toward less costly transportation methods such as common carriers. Products produced by the Frozen Food Products segment are generally supplied to food service and retail distributors who take title to the product upon shipment receipt through third-party logistic providers/carriers. We leverage relationships with regional sales managers, and we maintain a network of independent food service and retail brokers covering most of the United States. Brokers are compensated on a commission basis. We believe that our brokers, in close cooperation with our regional sales managers, are a valuable asset providing significant new products and customer opportunities. Regional sales managers perform several significant functions for us, including identifying and developing new business opportunities and providing customer service and support to our distributors and end purchasers often with the assistance of our broker partners.

Current wording

Our Frozen Food Products segment primarily manufactures and distributes biscuits, bread dough items, roll dough items and shelf stable sandwiches. All items within this segment are considered similar products and have been aggregated at this level. Our frozen food business covers the United States. We have shifted away from Company-leased long-haul vehicles toward less costly transportation methods such as common carriers. Products produced by the Frozen Food Products segment are generally supplied to food service and retail distributors who take title to the product upon shipment receipt through third-party logistic providers/carriers. We leverage relationships with regional sales managers, and we maintain a network of independent food service and retail brokers throughout the United States. Brokers are compensated on a commission basis. We believe that our brokers, in close cooperation with our regional sales managers, are a valuable asset providing significant new products and customer opportunities. Regional sales managers perform several significant functions for us, including identifying and developing new business opportunities and providing customer service and support to our distributors and end purchasers often with the assistance of our broker partners.

Previous wording

Our Snack Food Products segment primarily distributes products manufactured by us. All items within this segment are considered similar products and have been aggregated at this level. The dry sausage division includes products such as jerky, meat snacks, salami, sausage, and pepperoni products. During the second quarter of fiscal year 2025, our snack food products division sold approximately 170 different items through customer-owned distribution centers and a direct-store-delivery network serving approximately 21,000 supermarkets, mass merchandise and convenience retail stores located in all 50 states.

Current wording

Our Snack Food Products segment primarily distributes products manufactured in-house. All items within this segment are considered similar products and have been aggregated at this level. The dry sausage division includes products such as jerky, meat snacks, salami, sausage, and pepperoni products. During the third quarter of fiscal year 2025, our Snack Food Products segment sold approximately 170 different items through customer-owned distribution centers and a direct-store-delivery network serving approximately 21,000 supermarkets, mass merchandise and convenience retail stores located in all 50 states.

Previous wording

Products produced or distributed by the Snack Food Products segment are supplied to customers through either direct delivery to customer warehouses or direct-store-delivery to retail locations. We utilize customer managed warehouse distribution centers to lower distribution cost. Products delivered to the customer’s warehouse are then distributed to the store where they are resold to the end consumer. Our direct-store-delivery system focus emphasizes high quality service and supply of our premium branded and private label products to our customers. We also provide the service of setting up and maintaining the display of and restocking our products.

Current wording

Products produced or distributed by the Snack Food Products segment are supplied to customers through either direct delivery to customer warehouses or direct-store-delivery to retail locations. We utilize customer managed warehouse distribution centers to lower distribution cost. Products delivered to the customer’s warehouse are then distributed to the store where they are resold to the end consumer. Our direct-store-delivery system focus emphasizes high quality service and the supply of our premium branded and private label products to our customers. We also provide the service of setting up and maintaining the display of and restocking our products.

Previous wording

Net sales increased by $3,325 (7.0%) to $50,639 in the second twelve-week period of the 2025 fiscal year compared to the same twelve-week period in fiscal year 2024. The changes in net sales were comprised as follows:

Current wording

Net sales increased by $2,691 (5.5%) to $51,954 in the third twelve-week period of the 2025 fiscal year compared to the same twelve-week period in fiscal year 2024. The changes in net sales were comprised as follows:

Previous wording

Net sales for the Frozen Food Products segment increased due to higher selling prices per pound partially offset by lower unit sales volume in pounds compared to the same period in the prior year. Other institutional Frozen Food Products dollar sales, including sheet dough and rolls, decreased 5% and retail dollar sales volume increased by 27% resulting in higher net sales compared to the same period last year. Consumers are purchasing more from retail stores while visits to foodservice establishments have decreased slightly compared to the prior year period. Returns activity remained consistent compared to the same twelve-week period in the 2024 fiscal year. Promotional activity was lower as a percentage of sales but higher in dollars during the fiscal year 2025 period.

Current wording

Net sales for the Frozen Food Products segment decreased due to lower selling prices per pound and by lower unit sales volume in pounds compared to the same period in the prior year. Institutional frozen food products dollar sales, including sheet dough and rolls, decreased 3% resulting in lower net sales compared to the same period last year which was not offset by a retail dollar sales volume increase of 9%. Consumers are purchasing more from retail stores while visits to foodservice establishments have decreased slightly compared to the prior year period. In addition, production was temporarily reduced to accommodate necessary repairs on a spiral freezer that have since been completed. Returns activity remained consistent compared to the same twelve-week period in the 2024 fiscal year. Promotional activity was higher as a percentage of sales and higher in dollars during the fiscal year 2025 period.

Previous wording

Net sales of Snack Food Products increased due to both higher selling prices per pound and higher unit sales volume in pounds during the second quarter of fiscal year 2025. We believe demand increased primarily due to a shift in consumer spending habits toward purchasing less expensive private-label snack foods including meat product purchases in order to reduce their expenses. The weighted average selling price per pound increased compared to the same twelve-week period in the prior fiscal year due to price increases on select products with lower or negative margins. Returns activity decreased compared to the same twelve-week period in the 2024 fiscal year. Promotional activity was higher than the same twelve-week period in fiscal year 2024 due to higher sales volume in pounds.

Current wording

Net sales of snack food products increased due to both higher selling prices per pound and higher unit sales volume in pounds during the third quarter of fiscal year 2025. We believe demand increased primarily due to a shift in consumer spending habits toward purchasing less expensive private-label snack foods including meat product purchases in order to reduce their expenses. The weighted average selling price per pound increased compared to the same twelve-week period in the prior fiscal year due to price increases on select products with lower or negative margins. Returns activity increased compared to the same twelve-week period in the 2024 fiscal year. Promotional activity was lower than the same twelve-week period in fiscal year 2024.

Previous wording

Cost of products sold from continuing operations increased on a consolidated basis by $2,980 (8.1%) to $39,568 in the second twelve-week period of the 2025 fiscal year compared to the same twelve-week period in fiscal year 2024. The gross margin decreased to 21.9% in the second twelve-weeks of fiscal year 2025 compared to 22.7% in the same twelve-week period in fiscal year 2024.

Current wording

Cost of products sold from continuing operations increased on a consolidated basis by $3,286 (8.6%) to $41,325 in the third twelve-week period of the 2025 fiscal year compared to the same twelve-week period in fiscal year 2024. The gross margin decreased to 20.5% in the third twelve-weeks of fiscal year 2025 compared to 22.8% in the same twelve-week period in fiscal year 2024.

Previous wording

Cost of products sold in the Frozen Food Products segment increased by $374 (3.9%) to $9,870 in the second twelve-week period of the 2025 fiscal year compared to the same twelve-week period in fiscal year 2024. The cost of purchased flour decreased by approximately $44 based on global economic conditions in the second twelve-week period of fiscal year 2025 compared to the same twelve-week period in fiscal year 2024. The cost of eggs has increased by $56 compared to the prior year period due to limited available inventory from suppliers as a result of the avian influenza. The gross margin decreased to 25.9% in the second twelve-weeks of fiscal year 2025 compared to 26.4% in the same twelve-week period in fiscal year 2024. Gross overhead increased as a result of higher healthcare expenses, temporary labor costs and repairs and maintenance on buildings and processing equipment.

Current wording

Cost of products sold in the Frozen Food Products segment decreased by $176 (2.0%) to $8,494 in the third twelve-week period of the 2025 fiscal year compared to the same twelve-week period in fiscal year 2024. The cost of purchased flour decreased by approximately $46 based on global economic conditions in the third twelve-week period of fiscal year 2025 compared to the same twelve-week period in fiscal year 2024. The gross margin decreased to 21.3% in the third twelve-weeks of fiscal year 2025 compared to 24.7% in the same twelve-week period in fiscal year 2024 due to higher gross overhead. Gross overhead increased as a result of higher healthcare expenses, temporary labor costs and repairs and maintenance on buildings and processing equipment.

Previous wording

Cost of products sold in the Snack Food Products segment increased by $2,606 (9.6%) to $29,698 in the second twelve-week period of the 2025 fiscal year compared to the same twelve-week period in fiscal year 2024 due to higher meat commodity costs. The cost of meat commodities increased by approximately $1,435 due to a limited supply of cattle ready for market and other unfavorable market conditions in the second twelve-week period of fiscal year 2025 compared to the same period in fiscal year 2024. The gross margin decreased to 20.4% in the second twelve-weeks of fiscal year 2025 compared to 21.3% in the same twelve-week period in fiscal year 2024. We maintain a net realizable reserve of $1,804 on products as of April 18, 2025, after determining that the market value on some meat products could not cover the costs associated with completion and sale of the product. We increased our net realizable value reserve by $391 during the twelve weeks ended April 18, 2025. Freight costs increased by $339 during the second twelve-week period of the 2025 fiscal year compared to the same twelve-week period in the prior year.

Current wording

Cost of products sold in the Snack Food Products segment increased by $3,462 (11.8%) to $32,831 in the third twelve-week period of the 2025 fiscal year compared to the same twelve-week period in fiscal year 2024 due to higher meat commodity costs. The cost of meat commodities increased by approximately $1,705 due to a limited supply of cattle ready for market and other unfavorable market conditions (including inflation and tariffs) in the third twelve-week period of fiscal year 2025 compared to the same period in fiscal year 2024. The gross margin decreased to 20.2% in the third twelve-weeks of fiscal year 2025 compared to 22.2% in the same twelve-week period in fiscal year 2024. We maintain a net realizable reserve of $1,532 on products as of July 11, 2025, after determining that the market value on some meat products could not cover the costs associated with completion and sale of the product. We decreased our net realizable value reserve by $272 during the twelve weeks ended July 11, 2025 in consideration of pending price increases to customers to help mitigate the record increases in meat commodity costs. Freight costs increased by $221 during the third twelve-week period of the 2025 fiscal year compared to the same twelve-week period in the prior year.

Previous wording

Selling, general and administrative expenses (“SG&A”) increased by $312 (2.2%) to $14,286 in the second twelve-week period of fiscal year 2025 compared to the same twelve-week period in the prior fiscal year. The table below summarizes the significant expense increases (decreases) included in this category:

Current wording

Selling, general and administrative expenses (“SG&A”) increased by $163 (1.1%) to $14,608 in the third twelve-week period of fiscal year 2025 compared to the same twelve-week period in the prior fiscal year. The table below summarizes the significant expense increases (decreases) included in this category:

Previous wording

SG&A expenses in the Frozen Food Products segment decreased by $23 (0.7%) to $3,201 in the second twelve-week period of fiscal year 2025 compared to the same twelve-week period in the prior fiscal year. The overall decrease in SG&A expenses was due to a decrease in product advertising, including broker commission, partially offset by higher healthcare costs and hourly wages.

Current wording

SG&A expenses in the Frozen Food Products segment decreased by $232 (7.6%) to $2,831 in the third twelve-week period of fiscal year 2025 compared to the same twelve-week period in the prior fiscal year. The overall decrease in SG&A expenses was due to a decrease in product advertising, including broker commission, partially offset by higher healthcare costs and hourly wages.

Previous wording

SG&A expenses in the Snack Food Products segment increased by $335 (3.1%) to $11,085 in the second twelve-week period of fiscal year 2025 compared to the same twelve-week period in the prior fiscal year. Most of the increase was due to higher wages and bonuses on increased sales volume and higher healthcare expenses.

Current wording

SG&A expenses in the Snack Food Products segment increased by $395 (3.5%) to $11,777 in the third twelve-week period of fiscal year 2025 compared to the same twelve-week period in the prior fiscal year. Most of the increase was due to higher wages and bonuses on increased sales volume and higher healthcare expenses.

Previous wording

We recorded a benefit on income taxes of $915 for the twelve-week period ended April 18, 2025, and a benefit on income taxes of $877 for the twelve-week period ended April 19, 2024, related to federal and state taxes, based on the Company’s expected annual effective tax rate. The effective income tax rate differed from the applicable mixed statutory rate of approximately 26.4% due to non-deductible meals and entertainment, non-taxable gains and losses on life insurance policies, and state income taxes.

Current wording

We recorded a benefit on income taxes of $915 for the twelve-week period ended July 11, 2025, and a benefit on income taxes of $752 for the twelve-week period ended July 12, 2024, related to federal and state taxes, based on the Company’s expected annual effective tax rate. The effective income tax rate differed from the applicable mixed statutory rate of approximately 26.4% due to non-deductible meals and entertainment, non-taxable gains and losses on life insurance policies, and state income taxes.

Previous wording

Results of Operations for the Twenty-Four Weeks Ended April 18, 2025, and April 19, 2024

Current wording

Results of Operations for the Thirty-Six Weeks Ended July 11, 2025, and July 12, 2024

Previous wording

Net sales increased by $1,028 (1.0%) to $103,184 in the twenty-four-week period ended April 18, 2025, compared to the same twenty-four-week period in fiscal year 2024. The changes in net sales were comprised as follows:

Current wording

Net sales increased by $3,719 (2.5%) to $155,138 in the thirty-six-week period ended July 11, 2025, compared to the same thirty-six-week period in fiscal year 2024. The changes in net sales were comprised as follows:

Previous wording

The increase in net sales for the twenty-four-week period ended April 18, 2025, primarily relates to higher selling prices per pound partially offset by lower unit sales volume in pounds. Other institutional Frozen Food Products sales, including sheet dough and rolls, decreased 1% by volume while retail sales volume increased by 7%. Returns activity was even as a percentage of sales and slightly higher in absolute dollars compared to the same twenty-four-week period in the 2024 fiscal year. Promotional activity was both lower in absolute dollars and as a percentage of sales.

Current wording

The decrease in net sales for the thirty-six-week period ended July 11, 2025, primarily relates to higher promotional activity and related expenses. Higher selling prices per pound partially were offset by lower unit sales volume in pounds. Institutional Frozen Food Products sales, including sheet dough and rolls, decreased 2% by volume while retail sales volume increased by 8%. Returns activity was even as a percentage of sales and in absolute dollars compared to the same thirty-six-week period in the 2024 fiscal year. Promotional activity was both higher in absolute dollars and as a percentage of sales.

Previous wording

Net sales of Snack Food Products increased due to higher selling price per pound partially offset by lower unit sales volume in pounds during the twenty-four weeks ended April 18, 2025. We believe demand decreased primarily due to inflationary pressures on consumer spending habits as consumers have pulled back on meat product purchases. The weighted average selling price per pound increased compared to the same twenty-four-week period in the prior fiscal year due to changes in product mix. Returns activity was higher compared to the same twenty-four-week-period in the 2024 fiscal year. Promotional activity during the first twenty-four weeks of fiscal year 2025 period was higher compared to the same period in the prior fiscal year.

Current wording

Net sales of Snack Food Products increased due to higher selling price per pound partially offset by lower unit sales volume in pounds during the thirty-six weeks ended July 11, 2025. We believe demand decreased primarily due to inflationary pressures on consumer spending habits as consumers have pulled back on meat product purchases. The weighted average selling price per pound increased compared to the same thirty-six-week period in the prior fiscal year due to changes in product mix and to a lesser extent by selling price increases. Returns activity was higher compared to the same thirty-six-week-period in the 2024 fiscal year. Promotional activity during the thirty-six weeks of fiscal year 2025 period was lower compared to the same period in the prior fiscal year.

Previous wording

Cost of products sold from continuing operations increased on a consolidated basis increased by $3,836 (5.1%) to $79,228 in the twenty-four-week period ended April 18, 2025, compared to the same twenty-four-week period in fiscal year 2024. The gross margin decreased to 23.2% during the fiscal year 2025 period compared to 26.2% in the same period in the prior fiscal year.

Current wording

Cost of products sold from continuing operations increased on a consolidated basis by $7,122 (6.3%) to $120,553 in the thirty-six-week period ended July 11, 2025, compared to the same thirty-six-week period in fiscal year 2024. The gross margin decreased to 22.3% during the fiscal year 2025 period compared to 25.1% in the same period in the prior fiscal year.

Previous wording

Cost of products sold in the Frozen Food Products segment increased by $672 (3.4%) to $20,454 in the first twenty-four-week period of the 2025 fiscal year compared to the same twenty-four-week period in fiscal year 2024. Higher gross overhead and distribution costs were the primary contributing factors to this increase. The cost of purchased flour decreased approximately $108 in the first twenty-four-week period of fiscal year 2025 compared to the same twenty-four-week period in fiscal year 2024. However, the cost of eggs has increased by $89 in the first twenty-four weeks of fiscal year 2025 compared to the prior year period due to limited available inventory from suppliers as a result of the avian influenza.

Current wording

Cost of products sold in the Frozen Food Products segment increased by $495 (1.7%) to $28,948 in the thirty-six-week period of the 2025 fiscal year compared to the same thirty-six-week period in fiscal year 2024. Higher gross overhead and distribution costs were the primary contributing factors to this increase. The cost of purchased flour decreased approximately $154 in the thirty-six week period of fiscal year 2025 compared to the same thirty-six-week period in fiscal year 2024. However, the cost of eggs has increased by $89 in the thirty-six weeks of fiscal year 2025 compared to the prior year period due to limited available inventory from suppliers as a result of an avian influenza outbreak.

Previous wording

Cost of products sold in the Snack Food Products segment increased by $3,164 (5.7%) to $58,774 in the first twenty-four-week period of the 2025 fiscal year compared to the same twenty-four-week period in fiscal year 2024 due to higher meat commodity costs of approximately $2,280 due to higher pressure on the commodity market. We increased our net realizable value reserve by $338 during the twenty-four weeks ended April 18, 2025, in consideration of higher meat commodity costs and lower gross margins. We maintain a net realizable reserve of $1,804 on products as of April 18, 2025, after determining that the market value on some meat products could not cover the costs associated with completion and sale of the product.

Current wording

Cost of products sold in the Snack Food Products segment increased by $6,627 (7.8%) to $91,605 in the thirty-six-week period of the 2025 fiscal year compared to the same thirty-six-week period in fiscal year 2024 due to higher meat commodity costs of approximately $3,984 resulting from higher pressure on the commodity market. We decreased our net realizable value reserve by $65 during the thirty-six weeks ended July 11, 2025 in consideration of pending price increases to customers to help mitigate the record increases in meat commodity costs. We maintain a net realizable reserve of $1,532 on products as of July 11, 2025, after determining that the market value on some meat products could not cover the costs associated with completion and sale of the product.

Previous wording

Selling, general and administrative expenses increased by $197 (0.7%) to $29,198 in the twenty-four-week period ended April 18, 2025, compared to the same twenty-four-week period in the prior fiscal year. The table below summarizes the significant expense increases (decreases) included in this category:

Current wording

Selling, general and administrative expenses increased by $360 (0.8%) to $43,806 in the thirty-six-week period ended July 11, 2025, compared to the same thirty-six-week period in the prior fiscal year. The table below summarizes the significant expense increases (decreases) included in this category:

Previous wording

Product advertising decreased mainly due to renegotiation of commission percentages with brokers in the Frozen Food Products segment and decreased fees paid under brand licensing agreements in the Snack Food Products segment during the twenty-four weeks ended April 18, 2025. Vehicle repairs and maintenance decreased compared to the prior year mainly due to replacing aging vehicles throughout the fiscal year. The provision for bad debt increased due to the credit losses related to the bankruptcy filing of one of our customers, Big Lots, in the amount of $364. Healthcare costs have increased due to unfavorable claim trends. Wages and bonus increased due to increases in hourly wages. Outside storage decreased primarily as a result of the need for less warehouse capacity to store products. Travel expenses increased due to participation in food shows and in-person business meetings. None of the changes individually or as a group of expenses in “Other SG&A” were significant enough to merit separate disclosure. The major components comprising the increase of “Other SG&A” expenses were higher outside consulting fees and office supplies.

Current wording

Healthcare costs have increased due to unfavorable claim trends. Vehicle repairs and maintenance decreased compared to the prior year mainly due to replacing aging vehicles throughout the fiscal year. Outside storage decreased primarily as a result of the need for less warehouse capacity to store products before shipment to the directly store delivery warehouses and customers. Wages and bonus increased due to increases in hourly wages. Travel expenses increased due to participation in food shows and in-person business meetings. Product advertising decreased mainly due to renegotiation of commission percentages with brokers in the Frozen Food Products segment and decreased fees paid under brand licensing agreements in the Snack Food Products segment during the thirty-six weeks ended July 11, 2025. None of the changes individually or as a group of expenses in “Other SG&A” were significant enough to merit separate disclosure. The major components comprising the increase of “Other SG&A” expenses were higher provisions for bad debt and; higher shipping expense, offset by lower insurance and fuel costs.

Previous wording

SG&A expenses in the Frozen Food Products segment decreased by $95 (1.4%) to $6,571 in the first twenty-four-week period of fiscal year 2025 compared to the same twenty-four-week period in the prior fiscal year. The overall decrease in SG&A expenses was due to lower product advertising, including broker commissions, partially offset by higher travel expenses.

Current wording

SG&A expenses in the Frozen Food Products segment decreased by $328 (3.4%) to $9,401 in the thirty-six-week period of fiscal year 2025 compared to the same thirty-six-week period in the prior fiscal year. The overall decrease in SG&A expenses was due to lower product advertising, including broker commissions, partially offset by higher travel expenses.

Previous wording

SG&A expenses in the Snack Food Products segment increased by $292 (1.3%) to $22,627 in the first twenty-four-week period of fiscal year 2025 compared to the same twenty-four-week period in the prior fiscal year. Most of the increase was due to higher healthcare costs, higher provision for bad debt and higher travel expense partially offset by lower vehicle repairs.

Current wording

SG&A expenses in the Snack Food Products segment increased by $688 (2.0%) to $34,405 in the thirty-six-week period of fiscal year 2025 compared to the same thirty-six-week period in the prior fiscal year. Most of the increase was due to higher healthcare costs, higher provision for bad debt and higher travel expenses partially offset by lower vehicle repairs.

Previous wording

Income tax for the twenty-four weeks ended April 18, 2025, and April 19, 2024, respectively, was as follows:

Current wording

Income tax for the thirty-six weeks ended July 11, 2025, and July 12, 2024, respectively, was as follows:

Previous wording

We recorded a benefit on income taxes of $1,368 for the twenty-four-week period ended April 18, 2025, and a benefit on income taxes of $367 for the twenty-four-week period ended April 19, 2024, related to federal and state taxes, based on the Company’s expected annual effective tax rate. The effective income tax rate differed from the applicable mixed statutory rate of approximately 26.4% due to non-deductible meals and entertainment, non-taxable gains and losses on life insurance policies and state income taxes.

Current wording

We recorded a benefit on income taxes of $2,283 for the thirty-six-week period ended July 11, 2025, and a benefit on income taxes of $1,119 for the thirty-six-week period ended July 12, 2024, related to federal and state taxes, based on the Company’s expected annual effective tax rate. The effective income tax rate differed from the applicable mixed statutory rate of approximately 26.4% due to non-deductible meals and entertainment, non-taxable gains and losses on life insurance policies and state income taxes.

Previous wording

The principal source of operating cash flows is cash receipts from the sale of our products, net of costs to manufacture, store, market and deliver such products. We evaluate cash and cash equivalents related to borrowing capacity and short-term and long-term investments. We normally fund our operations from cash balances and cash flow generated from operations. Recent losses may necessitate short-term or long-term borrowing to fund inventory purchases to meet customer orders. We are most focused on restoring profitability to the Company by driving top-line revenue growth and reducing costs. In line with this focus, the Company is in discussions with and has begun production of customer products under private-label arrangements with the goal of increasing product sales volume. Market data indicates that due to higher inflation and rising costs for basic needs, consumers are increasingly turning to private-label products to reduce their expenses. The Company is also seeking bids on its production materials to drive increased competition among its vendors while maintaining quality inputs at the best possible price. Additionally, we have maintained a revolving line of credit with Wells Fargo Bank, N.A. which has a borrowing capacity of up to $7,500 through November 30, 2025. We do not anticipate being in compliance with the Fixed Charge Coverage Ratio covenant of the Credit Agreement during the third and fourth fiscal quarters of 2025. Our inability to meet financial covenant requirements of the Credit Agreement may impact our liquidity. We are discussing potential solutions with Wells Fargo Bank, N.A., regarding amendment or renewal of the revolving line of credit. We have reclassified $1,239 of equipment note payable from a long-term notes payable - equipment to a current notes payable – equipment in compliance with ASC 470 Debt. We plan to implement a price increase on our products to help offset some of the higher costs for meat commodities and are focused on reducing selling, general and administrative expenses. Certain factors such as increased commodity costs, tariffs, willingness of customers to accept price increases and inflation of input costs, to name a few, may cause future outcomes to differ materially from those foreseen in forward-looking statements. Refer to Note 6 – Equipment Notes Payable and Financial Arrangements to the Condensed Consolidated Financial Statements included within this Report for further information. As of April 18, 2025, we had $2,340 of current debt on equipment loans, $56,123 of net working capital and $7,500 available under our revolving line of credit with Wells Fargo Bank, N.A. Additionally as of April 18, 2025, the Company was in violation of the Fixed Charge Coverage Ratio covenant of the Credit Agreement, which was waived for the fiscal quarter ended April 18, 2025 (per letter dated June 2, 2025).

Current wording

The principal source of operating cash flows is cash receipts from the sale of our products, net of costs to manufacture, store, market and deliver such products. We evaluate cash and cash equivalents related to borrowing capacity and short-term and long-term investments. We normally fund our operations from cash balances and cash flow generated from operations. Recent losses may necessitate short-term or long-term borrowing to fund inventory purchases to meet customer orders. We are focused on restoring profitability to the Company by driving top-line revenue growth and reducing costs. In line with this focus, the Company is in discussions with and has begun production of customer products under private-label arrangements with the goal of increasing product sales volume. Market data indicates that due to higher inflation and rising costs for basic needs, consumers are increasingly turning to private-label products to reduce their expenses. The Company is also seeking bids for its production materials to drive increased competition among its vendors while maintaining quality inputs at the best possible price.

Previous wording

All of our operating segments have been impacted by inflation, including higher costs for labor, freight and specific materials related to product manufacturing and delivery. We expect this trend to continue through the remainder of fiscal year 2025. Additionally, commodity costs, including meat and flour costs, have and may continue to fluctuate due to both political and economic conditions, including the ongoing conflicts between Ukraine and Russia and Israel and Palestine. Despite higher commodity costs like we are experiencing currently and in recent history, we may not be able to increase our product prices in a timely manner or sufficiently to offset such increased commodity or other costs due to consumer price sensitivity, pricing in relation to competitors and the reluctance of retailers to accept the price increase. Instances of higher interest rates, general price inflation or deflation, higher raw materials costs, labor shortages or supply chain issues could adversely affect the Company’s financial results and its liquidity. Higher product prices could potentially lower demand for our products and decrease volume. Management believes there are various options available to generate additional liquidity to repay debt or fund operations such as mortgaging real estate, should that be necessary. Our ability to increase liquidity will depend upon, among other things, our business plans, the performance of operating divisions, and economic conditions of capital markets. If we are unable to increase liquidity through mortgaging real estate or additional borrowing, or generate positive cash flow necessary to fund operations, we may not be able to compete successfully, which could negatively impact our business, operations, and financial condition. With the cash expected to be generated from the Company’s operations, we anticipate that we will maintain sufficient liquidity to operate our business for at least the next twelve months. We will continue to monitor the impact of inflation and interest rate volatility on our liquidity and, if necessary, take action to preserve liquidity and ensure that our business can operate during these uncertain times.

Current wording

All of our operating segments have been impacted by inflation, including higher costs for labor, freight and specific materials related to product manufacturing and delivery. We expect this trend to continue throughout the remainder of fiscal year 2025. Additionally, commodity costs, including meat and flour costs, have and may continue to fluctuate due to both political and economic conditions, including the ongoing conflicts between Ukraine and Russia, and Israel and Palestine, as well as increased tariffs. Despite these higher commodity costs, we may not be able to increase our product prices in a timely manner or sufficiently to offset such increased commodity or other costs due to consumer price sensitivity, pricing in relation to competitors and the reluctance of retailers to accept the price increase. Instances of higher interest rates, general price inflation or deflation, higher raw materials costs, labor shortages or supply chain issues could adversely affect the Company’s financial results and its liquidity. Higher product prices could potentially lower demand for our products and decrease volume. Management believes there are various options available to generate additional liquidity to repay debt or fund operations such as mortgaging real estate, should that be necessary. Our ability to increase liquidity will depend upon, among other things, our business plans, the performance of operating divisions, and the economic conditions of capital markets. If we are unable to increase liquidity through mortgaging real estate or additional borrowing, or generate positive cash flow necessary to fund operations, we may not be able to compete successfully, which could negatively impact our business, operations, and financial condition. With the cash expected to be generated from the Company’s operations, we anticipate that we will maintain sufficient liquidity to operate our business for at least the next twelve months. We will continue to monitor the impact of inflation and interest rate volatility on our liquidity and, if necessary, take action to preserve liquidity and ensure that our business can operate during these uncertain times.

Previous wording

Cash flows from operating activities for the twenty-four weeks ended:

Current wording

Cash flows from operating activities for the thirty-six weeks ended:

Previous wording

For the twenty-four weeks ended April 18, 2025, net cash used in operating activities was $5,426, which was $6,428 more cash used than during the same period in fiscal year 2024. The increase in net cash used by operating activities primarily relates to an increase in inventory of $6,717, an increase in prepaid expenses and other current assets of $1,396, and a net loss of $4,973 partially offset by a decrease in accounts receivable of $2,965 and increase in accounts payable of $2,030. During the twenty-four-week period ended April 18, 2025, we did not contribute towards our defined benefit pension plan. Plan funding strategies may be adjusted depending upon economic conditions, investment options, tax deductibility, or recent legislative changes in funding requirements.

Current wording

For the thirty-six weeks ended July 11, 2025, net cash used in operating activities was $5,568, which was $8,770 more cash used than during the same period in fiscal year 2024. The increase in net cash used by operating activities primarily relates to an increase in inventory of $9,576, an increase in other non-current assets of $2,298, and a net loss of $6,906 partially offset by a decrease in accounts receivable of $7,267 and increase in accounts payable of $1,638. During the thirty-six-week period ended July 11, 2025, we did not contribute towards our defined benefit pension plan. Plan funding strategies may be adjusted depending upon economic conditions, investment options, tax deductibility, or recent legislative changes in funding requirements.

Previous wording

Our cash conversion cycle (defined as days of inventory and trade receivables less days of trade payables outstanding) was equal to 74 days for the twenty-four-week period ended April 18, 2025. The decrease in the cash conversion cycle from 91 days to 74 days for the twenty-four-week period ended April 19, 2024, was due to lower average days in inventory compared to the same period in the prior year.

Current wording

Our cash conversion cycle (defined as days of inventory and trade receivables less days of trade payables outstanding) was equal to 68 days for the thirty-six-week period ended July 11, 2025. The decrease in the cash conversion cycle from 85 days to 68 days for the thirty-six-week period ended July 12, 2024, was due to lower average days sales outstanding compared to the same period in the prior year caused by acceleration of select trade receivables from customers at a discount.