BRIDGFORD FOODS CORP

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; 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; the impact of the COVID-19 pandemic on our production facilities, 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 or which we do not currently view as material to our business.

Previous wording

Current accounting principles require that our pension benefit obligation be measured using an internal rate of return (“IRR”) analysis to be included in the discount rate selection process. The IRR calculation for the Retirement Plan for Employees of Bridgford Foods Corporation is measured annually and based on the Citigroup Pension Discount Rate. The Citigroup Pension Discount Rate as of January 31, 2025, was 5.57% as compared to 5.16% as of November 1, 2024. The discount rate applied can significantly affect the value of the projected benefit obligation as well as the net periodic benefit cost.

Current wording

Current accounting principles require that our pension benefit obligation be measured using an internal rate of return (“IRR”) analysis to be included in the discount rate selection process. The IRR calculation for the Retirement Plan for Employees of Bridgford Foods Corporation is measured annually and based on the Citigroup Pension Discount Rate. The Citigroup Pension Discount Rate as of April 30, 2025, was 5.62% as compared to 5.16% as of November 1, 2024. The discount rate applied can significantly affect the value of the projected benefit obligation as well as the net periodic benefit cost.

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 (“ERISA”) 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 regulations pertaining thereto.

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 twelve weeks ended January 24, 2025, and January 26, 2024, respectively.

Current 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.

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 first 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 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.

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 products to our customers. We also provide the service of setting up and maintaining the display 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 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 for the Frozen Food Products segment increased slightly 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, increased 3% and retail dollar sales volume decreased by 3% resulting in relatively consistent net sales compared to the same period last year. Consumers continue to be willing to visit foodservice establishments despite inflationary conditions. Returns activity increased slightly compared to the same twelve-week period in the 2024 fiscal year. Promotional activity was lower during the fiscal year 2025 period.

Current 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.

Previous wording

Net sales of Snack Food Products decreased due to lower unit sales volume in pounds through our direct-store-delivery distribution channel partially offset by higher selling prices per pound during the first quarter of fiscal year 2025. We believe demand decreased primarily due to inflationary pressures on consumer spending habits as consumers have pulled back on snack foods including meat product purchases. 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 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 due to lower 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 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.

Previous wording

Cost of products sold from continuing operations increased on a consolidated basis by $856 (2.2%) to $39,660 in the first twelve-week period of the 2025 fiscal year compared to the same twelve-week period in fiscal year 2024. The gross margin decreased to 24.5% in the first twelve-weeks of fiscal year 2025 compared to 29.2% 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 $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.

Previous wording

Cost of products sold in the Frozen Food Products segment increased by $298 (2.9%) to $10,584 in the first 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 $65 based on global economic conditions in the first 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 $33 compared to the prior year period due to concerns over the avian influenza and available inventory from suppliers. The gross margin decreased to 27.2% in the first twelve-weeks of fiscal year 2025 compared to 28.6% in the same twelve-week period in fiscal year 2024. Gross overhead increased as a result of higher healthcare expenses and temporary labor costs.

Current 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.

Previous wording

Cost of products sold in the Snack Food Products segment increased by $558 (2.0%) to $29,076 in the first 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 significant meat commodities increased partially due to a limited supply of cattle ready for market by approximately $845 in the first twelve-week period of fiscal year 2025 compared to the same period in fiscal year 2024. The gross margin decreased to 23.5% in the first twelve-weeks of fiscal year 2025 compared to 29.5% in the same twelve-week period in fiscal year 2024. We decreased our net realizable value reserve by $54 during the twelve weeks ended January 24, 2025, in consideration of changes in product mix to meet customer orders. We maintain a net realizable reserve of $1,413 on products as of January 24, 2025, after determining that the market value on some meat products could not cover the costs associated with completion and sale of the product. Freight costs increased by $492 during the first 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 $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.

Previous wording

Selling, general and administrative expenses (“SG&A”) decreased by $114 (0.8%) to $14,913 in the first 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 $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:

Previous wording

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. Lower sales commissions due to lower sales volume in pounds resulted in lower wages and bonus expenses in the first twelve weeks of the 2025 fiscal year compared to the same period in the prior fiscal year. The decrease in insurance expenses was driven by exiting unfavorable insurance policies early to take advantage of more competitive pricing. 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 decrease of “Other SG&A” expenses were lower vehicle repairs and lower product advertising partially offset by higher outside consulting fees.

Current wording

Higher sales volume in pounds resulted in higher wages and bonus expenses in the second twelve weeks of the 2025 fiscal year compared to the same period in the prior fiscal year. Vehicle repairs and maintenance decreased compared to the prior year mainly due to replacing aging vehicles throughout the fiscal year. Healthcare costs have increased due to unfavorable claim trends. Product advertising decreased mainly due to renegotiation of commission percentages with brokers. 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 allowances for doubtful accounts and higher travel expense partially offset by lower telephone expense.

Previous wording

SG&A expenses in the Frozen Food Products segment decreased by $71 (2.1%) to $3,370 in the first 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 insurance expense and lower product advertising partially offset by higher healthcare expenses and outside consulting fees.

Current 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.

Previous wording

We recorded a benefit for income taxes of $453 for the twelve-week period ended January 24, 2025, and a provision for income taxes of $510 for the twelve-week period ended January 26, 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 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.

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 several companies regarding private-label product 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. pursuant to the terms of the credit agreement dated March 1, 2018, as amended to date (the “Credit Agreement”). On November 30, 2024, we entered into a sixth amendment to the Credit Agreement, as amended, and also executed a revolving line of credit note pursuant to the amendment. The revolving line of credit note replaces the existing note that expired by its terms on November 30, 2024. Under the terms of this amendment and the revolving line of credit note, we may borrow up to $7,500 from time to time up to November 30, 2025. 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 January 24, 2025, we had $1,091 of current debt on equipment loans, $59,735 of net working capital and $7,500 available under our revolving line of credit with Wells Fargo Bank, N.A. Additionally as of January 24, 2025, the Company was in violation of the Fixed Charge Coverage Ratio covenant of the Credit Agreement, which was subsequently waived for the fiscal quarter ended January 24, 2025 (per letter dated March 6, 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 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).

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 conflict between Ukraine and Russia and Israel and Palestine. Despite higher commodity costs like we experienced in fiscal year 2022 and again in fiscal year 2024, 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 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.

Previous wording

Cash flows from operating activities for the twelve weeks ended:

Current wording

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

Previous wording

For the twelve weeks ended January 24, 2025, net cash used in operating activities was $4,604, which was $3,901 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 $2,914 and an increase in prepaid expenses and other current assets of $1,760, a decrease in accounts payable of $1,641 and a net loss of $1,113 partially offset by a decrease in accounts receivable of $1,455. During the twelve-week period ended January 24, 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 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.

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 twelve-week period ended January 24, 2025. The decrease in the cash conversion cycle from 84 days to 74 days for the twelve-week period ended January 26, 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 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.

Previous wording

Cash flows from investing activities for the twelve weeks ended:

Current wording

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

Previous wording

The table below highlights additions to property, plant and equipment for the twelve weeks ended:

Current wording

The table below highlights additions to property, plant and equipment for the twenty-four weeks ended:

Previous wording

Cash flows from financing activities for the twelve weeks ended:

Current wording

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

Previous wording

On November 30, 2024, we entered into a sixth amendment to the credit agreement with Wells Fargo Bank, N.A. dated March 1, 2018, as amended, and also executed a revolving line of credit note pursuant to the amendment. The revolving line of credit note replaces the existing note that expired by its terms on November 30, 2024. Under the terms of this amendment and the revolving line of credit note, we may borrow up to $7,500 from time to time up to November 30, 2025, at an interest rate equal to (a) the daily simple secured overnight financing rate plus 2.0%, or if unavailable, (b) the prime rate, in each case as determined by the bank. The line of credit has an unused commitment fee of 0.35% of the available loan amount, payable on a quarterly basis. 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 November 30, 2025.

Current wording

On November 30, 2024, we entered into a sixth amendment to the credit agreement with Wells Fargo Bank, N.A. dated March 1, 2018, as amended, and also executed a revolving line of credit note pursuant to the amendment. The revolving line of credit note replaced the then-existing note that expired by its terms on November 30, 2024. Under the terms of this amendment and the revolving line of credit note, we may borrow up to $7,500 from time to time up to November 30, 2025, at an interest rate equal to (a) the daily simple secured overnight financing rate plus 2.0%, or if unavailable, (b) the prime rate, in each case as determined by the bank. The line of credit has an unused commitment fee of 0.35% of the available loan amount, payable on a quarterly basis. 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 November 30, 2025.

Previous wording

As of January 24, 2025, the Company was in violation of the Fixed Charge Coverage Ratio covenant which was subsequently waived for the fiscal quarter ended January 24, 2025 (per letter dated March 6, 2025).

Current wording

As of April 18, 2025, the Company was in violation of the Fixed Charge Coverage Ratio covenant which was waived for the fiscal quarter ended April 18, 2025 (per letter dated June 2, 2025).

Previous wording

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes – Improvements to Income Tax Disclosures. ASU 2023-09 is designed to strengthen the clarity and interpretation of income tax disclosures in order to better assess and understand the impact of taxes on an entity’s operations including risk and opportunities. ASU 2023-09 is effective for the Company in fiscal years beginning after December 15, 2024, our fiscal year 2026, and will be applied prospectively. The Company is currently evaluating the guidance and its impact to the financial statements.

Current wording

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes – Improvements to Income Tax Disclosures. ASU No. 2023-09 is designed to strengthen the clarity and interpretation of income tax disclosures in order to better assess and understand the impact of taxes on an entity’s operations including risk and opportunities. ASU No. 2023-09 is effective for the Company in fiscal years beginning after December 15, 2024, our fiscal year 2026, and will be applied prospectively. The Company is currently evaluating the guidance and its impact to the financial statements.

Previous wording

In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures – Disaggregation of Income Statement Expenses. ASU 2024-03 seeks to separately disaggregate expenses on inventory, employee compensation, depreciation and other items included within each income statement line item that contains these expenses. ASU 2024-03 is effective for the Company in fiscal years beginning after December 15, 2026, our fiscal year 2027, and will be applied prospectively. The Company is currently evaluating the guidance and its impact to the financial statements.

Current wording

In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures – Disaggregation of Income Statement Expenses. ASU No. 2024-03 seeks to separately disaggregate expenses on inventory, employee compensation, depreciation and other items included within each income statement line item that contains these expenses. ASU No. 2024-03 is effective for the Company in fiscal years beginning after December 15, 2026, our fiscal year 2027, and will be applied prospectively. The Company is currently evaluating the guidance and its impact to the financial statements.

Previous wording

In January 2025, the FASB issued ASU No. 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures – Disaggregation of Income Statement Expenses. ASU 2025-01 seeks to separately disaggregate expenses on inventory, employee compensation, depreciation and other items included within each income statement line item that contains these expenses. ASU 2025-01 is effective for the Company in fiscal years beginning after December 15, 2026, our fiscal year 2027, and will be applied prospectively. The Company is currently evaluating the guidance and its impact to the financial statements.

Current wording

In January 2025, the FASB issued ASU No. 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures – Disaggregation of Income Statement Expenses. ASU No. 2025-01 seeks to separately disaggregate expenses on inventory, employee compensation, depreciation and other items included within each income statement line item that contains these expenses. ASU No. 2025-01 is effective for the Company in fiscal years beginning after December 15, 2026, our fiscal year 2027, and will be applied prospectively. The Company is currently evaluating the guidance and its impact to the financial statements.