Bridgford | Investor Service

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - LINE OF CREDIT (in thousands):
Under the terms of a revolving line of credit with Bank of America, the Company may borrow up to $2,000 through April 30, 2004. The interest rate is at the bank’s reference rate unless the Company elects an optional interest rate. The borrowing agreement contains various covenants, the more significant of which require the Company to maintain certain levels of shareholders’ equity and working capital. The Company was in compliance with all provisions of the agreement during the year. There were no borrowings under this line of credit during the year.

NOTE 6 - CONTINGENCIES AND COMMITMENTS (in thousands):
The Company leases certain transportation equipment under an operating lease expiring in 2009. The terms of the lease provide for annual renewal options and contingent rental payments based upon mileage and adjustments of rental payments based on the Consumer Price Index. Minimum rental payments were $358 in fiscal year 2002, $340 in fiscal year 2001 and $320 in fiscal year 2000. Contingent payments were $130 in fiscal year 2002, and $110 in fiscal years 2001 and 2000. Future minimum lease payments are approximately $368 in the years 2003 and 2004, $298 in 2005, $49 in 2006, $29 in 2007 and 2008 and $10 in 2009.

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of Bridgford Foods Corporation

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of income, shareholders’ equity and cash flows present fairly, in all material respects, the financial position of Bridgford Foods Corporation and its subsidiaries at November 1, 2002 and November 2, 2001, and the results of their operations and their cash flows for each of the three years in the period ended November 1, 2002, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above.

Orange County, California
December 20, 2002

2002 Annual Report: 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13