Bridgford's Investor
 

2008 Annual Report Page 38

We are subject to income tax in California and various other state taxing jurisdictions. Our state income tax returns are open to audit under the statute of limitations for the fiscal years ended October 31, 2005 through 2009.
 
We do not anticipate a significant change to the total amount of unrecognized tax benefits within the next 12 months.

NOTE 5- Line of Credit:

Under the terms of a revolving line of credit with Bank of America, we may borrow up to $2,000 through April 30, 2010. The interest rate is at the bank’s reference rate unless we elect an optional interest rate. The borrowing agreement contains various covenants, the more significant of which require us to maintain certain levels of shareholders’ equity and working capital. We are currently in compliance with all provisions of the agreement.  There were no borrowings under this line of credit during the years ended October 30, 2009 or October 31, 2008.

NOTE 6- Contingencies and Commitments:

We lease certain transportation under operating leases through 2011. The terms of the transportation leases 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 $425 in fiscal year 2009 and $425 in fiscal year 2008. Contingent payments were approximately $56  in fiscal year 2009 and $124 in fiscal year 2008. Future minimum lease payments are approximately $425 in the each of the years 2010 through 2011.

NOTE 7- Segment Information:

We have two reportable operating segments, Frozen Food Products (the processing and distribution of frozen products), and Refrigerated and Snack Food Products (the processing and distribution of refrigerated meat and other convenience foods).

We evaluate each segment’s performance based on revenues and operating income. Selling and general administrative expenses include corporate accounting, information systems, human resource and marketing management at the corporate level. These activities are allocated to each operating segment based on revenues and/or actual usage.

The following segment information is for the years ended October 30, 2009 and October 31, 2008:

2009
 
Frozen Food
Products
 
Refrigerated
and Snack Food
Products
 
Other
 
Elimination
 
Totals
 
Sales
 
$
54,740
 
$
67,925
 
$
   
$
   
$
122,665
 
Intersegment sales
     
902
     
(902
)
 
Net sales
 
54,740
 
68,827
     
(902
)
122,665
 
Cost of products sold, excluding depreciation
 
31,079
 
40,993
     
(902
)
71,170
 
Selling, general and administrative expenses
 
16,727
 
24,993
         
41,720
 
Depreciation
 
704
 
1,859
 
170
     
2,733
 
   
48,510
 
67,845
 
170
 
(902
)
115,623
 
Income (loss) before taxes
 
6,230
 
982
 
(170
   
7,042
 
Provision for taxes on income
 
224
 
31
         
255
 
Net income (loss)
 
$
6,006
 
$
951
 
$
(170
)
$
   
$
6,787
 
                                 
Total assets
 
$
11,416
 
$
22,520
 
$
24,963
 
$
 
$
58,899
 
Additions to property, plant and equipment
 
$
730
 
$
283
 
$
290
 
$
 
$
1,303
 


 
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