Bridgford Foods Corporation 2024 10-K Review

Introduction

Bridgford Foods Corporation, a company with a rich history dating back to 1932, has evolved from a retail meat market into a significant player in the frozen and snack food industry. This review delves into their 2024 10-K filing, providing insights into their business operations, financial performance, and potential investment risks.

Warren.AI 💰 5.5 / 10

Business Overview

Bridgford Foods operates in two primary segments: Frozen Food Products and Snack Food Products. The company manufactures and distributes a wide range of products, including biscuits, bread dough, dry sausage, and beef jerky. Their distribution network spans across the United States, serving both retail and food service customers.

Frozen Food Products

This segment caters to both food service and retail customers, offering approximately 130 unique products. The growth in this segment is driven by the increasing demand for pre-cooked and prepared foods, especially in non-traditional food service outlets like convenience stores and supermarkets.

Snack Food Products

The snack food segment is more extensive, with around 170 different items sold through a direct-store-delivery network. This segment faces intense competition, requiring aggressive marketing and strategic product placement.

Financial Performance

Net Sales

In fiscal year 2024, Bridgford Foods reported a decrease in net sales by 11.1% compared to the previous year. The Frozen Food Products segment saw a slight increase in sales, while the Snack Food Products segment experienced a significant decline.

Cost of Products Sold and Gross Margin

The cost of products sold decreased by 7.7%, but the gross margin also fell from 28.0% to 25.2%. This indicates a reduction in profitability, primarily due to increased costs in the Snack Food Products segment.

Selling, General, and Administrative Expenses

SG&A expenses decreased by 4.8%, reflecting cost-saving measures. However, the decrease did not correspond proportionally to the decline in sales, indicating potential inefficiencies.

Net Income

The company reported a net loss of $3.381 million for fiscal year 2024, a significant downturn from the previous year's net income of $3.474 million.

Cash Flow and Liquidity

Bridgford Foods experienced a decrease in cash flow from operating activities, primarily due to the net loss and changes in working capital. The company maintains a revolving line of credit with Wells Fargo Bank, providing some financial flexibility.

Risk Factors

Market and Economic Risks

The company faces risks related to changes in consumer preferences, commodity price fluctuations, and economic conditions. Inflation and supply chain disruptions have impacted their operations and could continue to pose challenges.

Regulatory and Compliance Risks

Bridgford Foods is subject to extensive regulations by the USDA and FDA. Compliance with these regulations is critical, and any lapses could result in significant financial penalties.

Dependence on Key Customers

A substantial portion of the company's revenue comes from major customers like Wal-Mart and Dollar General. The loss of any key customer could adversely affect their financial performance.

Conclusion

Bridgford Foods Corporation presents a mixed investment opportunity. While the company has a strong market presence and a diverse product line, recent financial performance and market risks pose challenges. Potential investors should weigh these factors carefully, considering both the company's historical resilience and current economic pressures.

Investment Score

Based on the analysis of Bridgford Foods Corporation's 2024 10-K filing, the company receives an investment score of 5.5 out of 10. This score reflects moderate investment potential, with significant room for improvement in financial performance and risk management.