(Page 2)TO OUR SHAREHOLDERS:
year 2000 was a good year for Bridgford Foods. Sales reached an all-time
record level while profits were the second best in Company history.
Lower profits were due to higher costs for raw materials, energy, transportation,
petroleum based packaging materials and employee health care. New product
and new customer development also contributed to increased expenses.
SALES, EARNINGS AND DIVIDENDS
Sales reached $156,291,805 during the 53 week 2000 fiscal year. This was a new record and exceeded 1999 sales by 12.6%. 2000 marked our fifteenth consecutive year of record high sales gains. Both our frozen food and meat snack divisions recorded strong volume increases. We increased the variety and sizes of products offered to the trade. New offerings of Deli Pack Biscuits, Bake & Serve Rolls and larger packages of Beef Jerky added to our sales volume. Exciting new sandwich items like Chicken Fried Steak with Gravy and Biscuit and lunch packs including drinks, cookies and chips were recently introduced.
Bridgfords direct store distribution route customer count has continued to grow and reached a total of 37,367 accounts during fiscal 2000. Net income in 2000 was $8,766,469, a 12.5% decline from the record income of $10,024,505 set in 1999. Meat raw material costs were higher in 2000 and reduced our operating margins. Pork raw materials used for meat processing averaged 40% higher in cost during fiscal 2000 than in 1999. We estimate that national energy costs have also increased at a 40% annual rate since the spring of 1999.
Quarterly cash dividends
paid in 2000 were 7¢ per quarter and totaled 28¢ per common
share. This represents an increase of 17% over dividends paid in the
prior fiscal year. The 7¢ per share quarterly cash dividend was
continued during the first quarter of our 2001 fiscal year.
The Company recognized a $675,000 pretax gain in the first quarter of fiscal year 2000 on the sale of a parcel of land in San Diego, California as a result of eminent domain action. Management does not anticipate any transactions of a similar nature in our 2001 fiscal year.
The Company purchased 754,500 shares of its outstanding common stock on the open market during the 2000 fiscal year at an average cost of $10.13. Subsequent to November 3, 2000, the Company has purchased an additional 17,900 shares at an average cost of $12.62. The shares were purchased in connection with the stock repurchase plan approved by the Board of Directors in November, 1999 to purchase up to 1,000,000 shares of the Companys common stock.
Shareholders equity decreased by $1,938,538 (3.3%) during the year to $56,196,327, due primarily to the cost of shares acquired by the stock repurchase program. On a per share basis, however, shareholders equity actually increased 3.5% to $5.29 per share.
declined 12.1% for the year to $38,469,237. The stock repurchases ($7,642,876)
contributed to this change in working capital. The Company invested
$5,123,710 in additions to property, plant and equipment during the
year, 4.5% more than in the prior year. Cash dividends increased 12.1%
for the year to $3,062,131. The working capital ratio (3.63 to 1) remained
strong as of year-end. At November 3, 2000, the Company had $18,179,000
invested in interest-bearing securities. The Company remained debt-free
for the 14th consecutive year.
During 2000 we purchased two parcels of land behind our Superior Foods plant in Dallas and your board approved a $2,500,000 freezer construction project at that site. We also developed a production line at the Frozen-Rite Dallas plant for manufacture of our new Bake & Serve Rolls. At our Chicago meat processing plant we invested in a new high speed slicing line to add capacity and efficiency to the production of popular Bridgford Sliced Pepperoni. Your board also approved the purchase and installation of state of the art hardware and software for a new company-wide management information system that will cost approximately $3,000,000.
John V. Simmons
and Daniel R. Yost were elected Vice Presidents of the Company at our
March 2000 board of directors meeting. Both men have been employed by
the Company for more than 20 years and they concentrate their efforts
on frozen food sales and marketing.
We appreciate the loyalty and hard work of our officers, directors and associates during 2000 and thank our customers and suppliers for their support. Your Company expects 2001 to be an excellent year for sales and profits.
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