BRIDGFORD FOODS CORP

Item 1. a.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

Item 1. b.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

Item 1. c.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

24 weeks ended April 18, 2025, and April 17, 2026

(in thousands, except shares)

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

12 weeks ended April 18, 2025 and April 17, 2026

(in thousands, except shares)

Item 1. d.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Item 1. e.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands)

Note 1 –Summary of Significant Accounting Policies:

The unaudited Condensed Consolidated Financial Statements of Bridgford Foods Corporation (the “Company”, “we”, “our”, “us”) for the twelve and twenty-four weeks ended April 17, 2026 and April 18, 2025 have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X, and include all adjustments considered necessary by management for a fair presentation of the interim periods. This Quarterly Report on Form 10-Q for our second fiscal quarter ended April 17, 2026 (this “Report”) should be read in conjunction with the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2025 (the “Annual Report”). Due to seasonality and other factors, interim results are not necessarily indicative of the results for the full year.

The October 31, 2025, balance sheet amounts within these interim Condensed Consolidated Financial Statements were derived from the audited fiscal year 2025 consolidated financial statements included in the Company’s Annual Report.

The preparation of Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of 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. Management determines the amounts to record based on historical experience and various other assumptions that we view as reasonable under the circumstances and considers all relevant available information. Actual results could materially differ from these estimates. 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. Market conditions and the volatility in stock markets may cause significant changes in the measurement of our pension fund liabilities and the performance of our life insurance policies in future periods.

Financial instruments that subject the Company to credit risk consist primarily of cash and cash equivalents, accounts receivable, accounts payable, accrued payroll, and notes payable. The carrying amount of these instruments approximate fair market value due to their short-term maturity or market interest rates. The Company has accounts with nationally recognized financial institutions in excess of the Federal Deposit Insurance Corporation insurance coverage limit. The Company has not experienced any losses in these accounts and believes it is not exposed to any significant credit risk with regard to its cash and cash equivalents. The Company grants payment terms to a significant number of customers that are diversified over a wide geographic area. The Company monitors the payment histories of its customers and maintains an allowance for doubtful accounts which is reviewed for adequacy on a quarterly basis. The Company does not require collateral from its customers.

Cash and cash equivalents totaled $830 as of April 17, 2026, all of which were held at Wells Fargo Bank N.A. (“Wells Fargo”), except for $100 with Bank of America. Cash and cash equivalents totaled $876 as of October 31, 2025, all of which were held at Wells Fargo, except for $100 with Bank of America.

Comprehensive income or loss

Comprehensive income or loss consists of net loss and additional minimum pension liability adjustments. There were no differences between net loss and comprehensive loss during each of the twelve and twenty-four weeks ended April 17, 2026, and April 18, 2025, respectively.

Customer Concentration > 20% of AR or >10% of Sales

The table below shows customers that accounted for more than 20% of consolidated accounts receivables (“AR”) or 10% of consolidated sales for the twenty-four weeks ended April 17, 2026, and April 18, 2025, respectively.

The table below shows customers that accounted for more than 20% of consolidated AR or 10% of consolidated sales for the twelve weeks ended April 17, 2026, and April 18, 2025, respectively.

Revenue recognition

Revenues are recognized in accordance with Accounting Standards Codification (“ASC”) Topic 606 –Revenue from Contracts with Customersupon passage of title to the customer. Products are delivered to customers primarily through common carrier, or through a Company-owned direct-store-delivery system.

The Company recognizes revenue for the sale of the product at the point in time when our performance obligation has been satisfied and control of the product has transferred to our customer, which generally occurs upon product shipment, pickup or delivery to a customer based on terms of the sale. Contracts with customers are typically short-term in nature with completion of a single performance obligation. Products are sold to foodservice, retail, institutional and other distribution channels. Shipping and handling that occurs after the customer has obtained control of the product is recorded as a fulfillment cost rather than an additional performance obligation. Costs paid to third party brokers to obtain contracts are recognized as part of selling expenses. Other sundry items in context of the contract are also recognized as selling expenses. Any taxes collected on behalf of the government are excluded from net revenue.

The Company records revenue at the transaction price which is measured as the amount of consideration the Company anticipates receiving in exchange for providing products to customers. Revenue is recognized as the net amount estimated to be received after deducting estimated or known amounts including variable consideration for discounts, trade allowances, consumer incentives, coupons, volume-based incentives, cooperative advertising, product returns and other such programs. Promotional allowances, including customer incentive and trade promotion activities, are recorded as a reduction in sales based on amounts estimated being due to customers, based primarily on historical utilization and redemption rates. Estimates are reviewed regularly until incentives or product returns are realized and the result of any such adjustments are known. Promotional allowances deducted from sales for the twelve weeks ended April 17, 2026, and April 18, 2025, were $4,008 and $4,219, respectively. Promotional allowances deducted from sales for the twenty-four weeks ended April 17, 2026, and April 18, 2025, were $7,897 and $8,042, respectively.

Leases

Leases are recognized in accordance with ASC Topic 842 Leases (“ASC 842”) which requires a lessee to recognize assets and liabilities with lease terms of more than twelve months. The Company leases or rents property for operations such as storing inventory and equipment. The Company analyzes agreements to evaluate whether a lease exists by determining what assets exist for which it controls usage for a period of time in exchange for consideration. In the event a lease exists, the Company classifies it as a finance or operating lease and records a right-of-use (“ROU”) asset and the corresponding lease liability at the inception of the lease. The classification as a finance or operating lease determines whether the recognition, measurement and presentation of expenses and cash flows are considered operating or financing. In the case of month-to-month lease or rental agreements with terms of twelve months or less, the Company made an accounting policy election to not recognize lease assets and liabilities and instead records them on a straight-line basis over the lease term.

The storage units rented on a month-to-month basis for use by our Snack Food Products segment direct-store-delivery route system are not costly to relocate and contain no significant leasehold improvements or degree of integration over leased assets. Orders can be fulfilled by another route storage unit interchangeably. No specialized assets exist in the rental storage units. Market price is paid for storage units. No guarantee of debt is made.

ROU lease assets are recorded within property, plant and equipment, net of accumulated depreciation and amortization. The Company leases warehouse space which is recognized as a ROU lease asset with a corresponding lease liability. The Company has terminated its leases of long-haul trucks previously used by the Frozen Food Products segment. The Company has, leased one refrigerated truck for use by the Frozen Food Products segment. Finance lease liabilities are recorded under other liabilities. The condensed consolidated balance sheets reflect both the current and long-term obligations.

The Company leased a parking lot to a lessee in accordance with ASC 842 under a 60-month lease contract. Legal ownership does not transfer at the end of the lease. The Company retains ownership of the parking lot. There is no net book value of the underlying asset. The Company recorded a lease receivable, both the current and non-current components, less executory costs including broker’s commissions. The discount rate implicit in the lease is used to calculate the present value of minimum lease payments. Revenue will be deferred until earned and is recorded in current and non-current liabilities.

Subsequent events

Management has evaluated events subsequent to April 17, 2026, through the date that the accompanying Condensed Consolidated Financial Statements were filed with the Securities and Exchange Commission (the “SEC”) for transactions and other events which may require adjustments of and/or disclosure in such financial statements.

Subsequent to April 17, 2026, the Company borrowed additional amounts under the revolving credit facility with Wells Fargo Bank N.A. (“Wells Fargo”) to strategically build inventory. As of June 1, 2026, we have borrowed $6,000 and have $1,500 available under this line. If the Company is unable to increase liquidity through selling down inventory, additional borrowing or mortgaging real estate, or generate positive cash flow necessary to fund operations, we may need to access the line of credit in the future.

No other material events subsequent to April 17, 2026, were identified that require adjustment to the financial statements or additional disclosure.

Basic and diluted net loss per share

Basic and diluted net loss per share is calculated based on the weighted average number of shares outstanding for all periods presented. No stock options, warrants, or other potentially dilutive convertible securities were outstanding as of April 17, 2026, or April 18, 2025.

Liquidity and Capital Resources

As of April 17, 2026, the Company had cash on hand of $830. The Company has incurred recurring losses and generated negative cash flows from operations, and has $500 remaining in borrowing capacity under its line of credit arrangement. These conditions raise liquidity considerations that management continues to actively monitor.

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 against our 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 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. We are reorganizing our direct-store-delivery route system in response to lower sales volume through that distribution channel, including reducing the number of routes, storage units and vehicles while maintaining superior service to our customers. We are also seeking bids for production materials to drive increased competition among our vendors while maintaining quality inputs at the best possible price.

We have implemented multiple price increases on our products to help offset some of the higher costs for meat commodities and other expenses, and we are focused on reducing selling, general and administrative expenses. Certain factors including but not limited to increased commodity costs, tariffs, the 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. As of April 17, 2026, we had $1,960 of current debt on equipment loans, $37,423 of net working capital and $4,250 available under our revolving credit facility with Wells Fargo described below.

Recently Issued Accounting Pronouncements and Regulations

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting – Improvements to Reportable Segments Disclosures. ASU No. 2023-07 enhances disclosures of significant segment expenses by requiring disclosure of significant segment expenses regularly provided to the chief operating decision maker (“CODM”), extending certain annual disclosures to interim periods, and permitting more than one measure of segment profit or loss to be reported under certain conditions. ASU No. 2023-07 is effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The adoption of ASU No. 2023-07 did not have a material impact on the Company’s Consolidated Financial Statements as we have historically disclosed financial data at the operating segment level.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, enhances the transparency and decision usefulness of income tax disclosures by requiring additional information about specific categories in the rate reconciliation and income taxes paid by jurisdiction. The guidance is effective for annual reporting periods beginning after December 15, 2024, and will therefore apply to the Company’s annual reporting period ending after December 15, 2025. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial statements

In March 2024, the SEC adopted rules to develop standardized climate-related disclosures by publicly traded companies, including the emission of greenhouse gases which are expected to take effect in the fiscal year beginning in 2027. However, as a result of pending legal challenges, the actual timing of effectiveness of the rules and applicable phase-in periods, as well as whether portions of the rules will remain in effect after the legal challenges, are uncertain. The Company is currently evaluating the guidance and its impact on the financial statements.

In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law in the U.S. The OBBBA includes numerous provisions that affect corporate taxation, including changes to bonus depreciation, the expensing of domestic research costs, and modifications to certain U.S. international tax rules. The Company has analyzed the impacts of the OBBBA and reflected them in the current period. These impacts did not have a material effect on the tax rate for the quarter ended April 17, 2026. The majority of the tax law changes will take effect in future years. The Company continues to evaluate the long-term impacts of the OBBBA on its financial statements.

Note 2 –Inventories, net:

Inventories are comprised of the following at the respective period ends:

Inventories are valued at the lower of cost (which approximates actual cost on a first-in, first-out basis) or net realizable value. Inventories include the cost of raw materials, labor, and manufacturing overhead. We regularly review inventory quantities on hand and write down any estimated excess, obsolete inventories, or impaired balances to net realizable value. An inventory reserve is created when potentially slow-moving or obsolete inventories are identified in order to reflect the appropriate inventory value. Changes in economic conditions, production requirements, and lower than expected customer demand could result in additional obsolete or slow-moving inventory that cannot be sold or must be sold at reduced prices and could result in additional reserve provisions. The reserve for slow moving and obsolete inventory was $1,224 as of April 17, 2026 and $1,061 as of October 31, 2025. The company maintains a net realizable value reserve of $463 as of April 17, 2026, and $1,637 as of October 31, 2025, on products in inventory after determining that the market value on some meat products could not cover the costs associated with completion and sale of the product.

Note 3 –Contingencies and Commitments:

The Company generally leases warehouses throughout the United States through month-to-month rental agreements. For month-to-month leases or rental agreements with terms of 12 months or less, the Company has elected an accounting policy to not recognize lease assets and liabilities, instead recording lease expenses on a straight-line basis over the lease term. For further information regarding our lease accounting policy, please refer to Note 1 – Summary of Significant Accounting Policies — Leases.

The Company leased one refrigerated truck received on May 10, 2024, for a net present value of $166. The seven-year lease for this truck will expire in fiscal year 2031. Amortization of equipment as a finance lease was $12 during the twenty-four weeks ended April 17, 2026.

The Company performed a detailed analysis and determined that other than the refrigerated truck lease described above, no other long-term leases were in effect as of April 17, 2026.

The Company’sfive-year term lease with Racine Partners 4333 LLC, was effective June 1, 2022. A ROU asset of $900 and corresponding liability for warehouse storage space leased by the Company of $942 as of April 17, 2026, was recorded for Racine Partners 4333 LLC for 43 rd Street in Chicago, Illinois. This lease does not provide an implicit rate, and the Company estimated its incremental interest rate to be approximately 3.68%. The Company used its estimated incremental borrowing rate and other information available at the lease commencement date in determining the present value of the lease payments.

The Company, as lessor, leases a parking lot in Anaheim, California with a five-year term effective May 29, 2024, to a tenant. Both current and non-current receivables, less executory costs including broker’s commissions were recorded in current and non-current assets in the amount of $187 and $402, respectively, as of April 17, 2026. Unearned revenue was also recorded in current and non-current liabilities in the amount of $191 and $429, respectively, in the consolidated balance sheets as of April 17, 2026. This lease does not provide an implicit rate, and the Company estimated its incremental borrowing rate to be approximately 7.34%. The Company used the estimated incremental borrowing rate and other information available at the lease commencement date in determining the present value of the lease payments. Legal ownership does not transfer at the end of the lease. The Company retains ownership of the parking lot. There is no net book value of the underlying asset.

The following is a schedule by years of future minimum lease payments for transportation leases and ROU assets:

The Company purchases large quantities of pork, beef, and flour. These ingredients are generally available from a number of different suppliers although the availability of these ingredients is subject to seasonal variation. The Company builds ingredient inventories to take advantage of downward trends in seasonal prices or anticipated supply limitations.

The Company purchases bulk flour under short-term fixed price contracts at current market prices. The contracts are usually effective for and settle within three months or less at a fixed price and quantity. The Company monitors and manages its ingredient costs to help negate volatile daily swings in market prices when possible. The Company does not participate in the commodity futures market or hedging to limit commodity exposure.

The Company is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters is not expected to have a material adverse effect on the Company’s consolidated financial position or results of operations.

Note 4 –Segment Information:

The Company hastwo reportable operating segments, Frozen Food Products (the processing and distribution of frozen food products) and Snack Food Products (the processing and distribution of meat and other convenience foods).

The Company’s Executive Committee functions as the CODM. The Company utilizes an Executive Committee to serve in the capacity of Chief Executive Officer. The Company believes this structure is appropriate because it requires a full committee of officers, each of whom brings their own experiences and perspectives to bear on their decision making, to discuss and vote on important decisions affecting the Company. The Executive Committee is responsible for the day-to-day management of risk. The Executive Committee regularly assesses the operating segment’s performance and is responsible for allocating resources to each operating segment.

The CODM is regularly provided and reviews financial data based on the two operating segments mentioned and defined above, the Frozen Food Product Segment and the Snack Food Products Segment. The financial data provided to the CODM includes sales, cost of goods sold, gross margin and selling, general and administrative expenses as well as total assets and additions to property, plant and equipment. Sales data involves sales to customers as well as promotional advertising and return analysis. Cost of goods sold encompasses the cost of raw materials, direct and indirect plant overhead, production labor and product safety including quality control and assurance. Selling, general and administrative expenses include the cost of selling, marketing, advertising and delivery to the customer. The Company allocates corporate management expenses to the segments based on sales while certain assets including cash remain in Other in the accompanying segment information.

The following segment information is presented for the twelve weeks ended April 17, 2026, and April 18, 2025, respectively.

The following segment information is presented for the twenty-four weeks ended April 17, 2026, and April 18, 2025, respectively.

The following information further disaggregates our sales to customers by major distribution channel and customer type for the twelve weeks ended April 17, 2026, and April 18, 2025, respectively.

Twelve weeks Ended April 17, 2026

Twelve weeks Ended April 18, 2025

The following information further disaggregates our sales to customers by major distribution channel and customer type for the twenty-four weeks ended April 17, 2026, and April 18, 2025, respectively.

Twenty-four weeks Ended April 17, 2026

Twenty-four weeks Ended April 18, 2025

Note 5 –Income Taxes:

The Company’s effective tax rate was 19.5% and 19.2% for the second quarter of fiscal years 2026 and 2025, respectively. The effective tax rate for the second quarter of fiscal year 2026 reflects the impact of $1,190 of tax benefit.

As of April 17, 2026, the Company did not have any valuation allowance against its federal net deferred tax assets. Management reevaluated the need for a valuation allowance at the end of 2022 and determined that some of its California net operating losses (“NOL”) may not be utilized. Therefore, a valuation allowance of $99 has been retained for such portion of the California NOL. As of April 17, 2026, the Company had NOL carryforwards of approximately $0 for federal and $5,000 for state purposes. The state loss carryforwards will expire at various dates through 2040.

Our federal income tax returns are open to audit under the statute of limitations for the fiscal years 2022 through 2025. We are subject to income tax in Texas and various other state taxing jurisdictions. Our state income tax returns are open to audit under the statute of limitations for the fiscal years 2021 through 2025.

Note 6 –Equipment Notes Payable and Financial Arrangements:

Revolving Credit Facility

The Company maintains a revolving credit facility with Wells Fargo pursuant to a credit agreement dated November 30, 2024, as amended and restated on July 23, 2025. Pursuant to the amended and restated credit agreement and the revolving line of credit note, we may borrow up to $7,500 from time to time up until July 31, 2026, atan interest rate equal to (a) the daily simple secured overnight financing rate plus 2.5% (increased from 2.0% in the July 2025 amended and restatement), or if unavailable, (b) the prime rate, in each case as determined by the bank. The revolving credit facility has an unused commitment fee of 0.35% of the available loan amount, payable on a quarterly basis. We borrowed $2,000 under this line of credit as of April 17, 2026. Amounts may be repaid and reborrowed during the term of the note. Accrued interest is payable on the first day of each month and the outstanding principal balance and remaining interest are due and payable on July 31, 2026.

Equipment Notes Payable

On February 19, 2026, we entered into a master equipment lease agreement with First National Capital (“FNC”) for $2,000 in equipment financing. On December 26, 2018, we entered into a master collateral loan and security agreement with Wells Fargo Bank (the “Original Wells Fargo Loan Agreement”) for up to $15,000 in equipment financing which was amended and expanded as detailed below. We subsequently entered into additional master collateral loan and security agreements with Wells Fargo, on each of April 18, 2019, December 19, 2019, March 5, 2020, and April 17, 2020 (the Original Wells Fargo Loan Agreement and the subsequent agreements collectively referred to as the “Wells Fargo Loan Agreements”).

The following table reflects major components of our revolving credit facility and equipment notes payable as of April 17, 2026, and October 31, 2025, respectively.

Loan Covenants

The Wells Fargo Loan Agreements and the amended and restated credit agreement contain various covenants that limit the use of funds and define other provisions of the loans. Material financial covenants are listed below, and the capitalized terms are defined in the applicable agreements:

The amended and restated credit agreement eliminated the fixed charge coverage ratio covenant contained in the original credit agreement. Since the amended and restated agreement superseded and replaced the prior agreement, covenant reporting under the original credit agreement was no longer required and all covenant reporting will be pursuant to the amended and restated credit agreement. As of April 17, 2026, the Company was in violation of the net income covenant and quick ration covenant which were waived by Wells Fargo (per letter dated May 28, 2026). As of April 17, 2026, the Company was in compliance with all other covenants under the Wells Fargo Loan Agreements and the amended and restated credit agreement. As of October 31, 2025, the Company was in violation of the quick ratio covenant which was waived by Wells Fargo (per letter dated December 12, 2025). As of October 31, 2025, the Company was in compliance with all other covenants under the Wells Fargo Loan Agreements and the amended and restated credit agreement.

Our inability to meet financial covenant requirements in future quarters while subject to the Wells Fargo Loan Agreements and the amended and restated credit agreement may impact our liquidity. We have implemented price increases on our products to help offset some of the higher costs for meat commodities and other expenses, and we 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.