SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES AND EXCHANGE ACT OF 1934

For the quarterly period ended April 14, 2006

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission file number 0-2396

BRIDGFORD FOODS CORPORATION

(Exact name of Registrant as specified in its charter)

California		95-1778176
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		identification number)

1308 N. Patt Street, Anaheim, CA 92801

(Address of principal executive offices-Zip code)

714-526-5533

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months ( or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated Filer o Non-accelerated filer ý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No ý

As of May 30, 2006 the registrant had 9,964,000 shares of common stock outstanding.

BRIDGFORD FOODS CORPORATION

FORM 10-Q QUARTERLY REPORT

INDEX

References to “Bridgford Foods” or the “Company” contained in this Quarterly Report on Form 10-Q refer to Bridgford Foods Corporation.

Part I. Financial Information

Item 1. Financial Statements

a. Consolidated Condensed Balance Sheets at April 14, 2006 (unaudited) and October 28, 2005

b. Consolidated Condensed Statements of Operations for the twelve and twenty-four weeks ended April 14, 2006 and April 15, 2005 (unaudited)

c. Consolidated Condensed Statements of Shareholders’ Equity and Comprehensive Income (Loss) for the twenty-four weeks ended April 14, 2006 (unaudited)

d. Consolidated Condensed Statements of Cash Flows for the twenty-four weeks ended April 14, 2006 and April 15, 2005 (unaudited)

e. Notes to Consolidated Condensed Financial Statements (unaudited)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Item 4. Controls and Procedures

Part II. Other Information

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Item 4. Submission of Matters to Vote of Security Holders

Item 6. Exhibits

Signatures

Items 1, 3 and 5 of Part II. have been omitted because they are not applicable with respect to the current reporting period.

Part I. Financial Information

Item 1. a.

BRIDGFORD FOODS CORPORATION

CONSOLIDATED CONDENSED BALANCE SHEETS

(in thousands, except per share amounts)

	April 14			October 28
	2006			2005
	(Unaudited)
ASSETS
Current assets:

Cash and cash equivalents	$	17,567		$	10,355
Accounts receivable, less allowance for doubtful accounts of $477 and $468, respectively, and promotional allowances of $1,664 and $2,092, respectively	7,981			9,508
Inventories (Note 2)	16,090			21,324
Prepaid expenses and other current assets	2,591			2,551

Total current assets	44,229			43,738

Property, plant and equipment, less accumulated depreciation of $52,515 and $50,731, respectively	13,750			14,519

Other non-current assets	14,729			14,706
	$	72,708		$	72,963

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable	$	3,062		$	3,806
Accrued payroll, advertising and other expenses	8,325			8,035

Total current liabilities	11,387			11,841

Non-current liabilities	12,807			12,860

Commitments (Note 6)

Shareholders’ equity:
Preferred stock, without par value Authorized - 1,000 shares Issued and outstanding - none	—			—

Common stock, $1.00 par value Authorized - 20,000 shares Issued and outstanding - 9,966 and 9,986 shares	10,023			10,043
Capital in excess of par value	14,268			14,394
Retained earnings	25,824			25,889
Accumulated other comprehensive loss	(1,601		)	(2,064		)
	48,514			48,262
	$	72,708		$	72,963

See accompanying notes to consolidated condensed financial statements.

Item 1. b.

BRIDGFORD FOODS CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

	(in thousands, except per share amounts)						(in thousands, except per share amounts)
	12 weeks ended			12 weeks ended			24 weeks ended			24 weeks ended
	April 14			April 15			April 14			April 15
	2006			2005			2006			2005

Net sales	$	28,305		$	27,714		$	62,880		$	61,305

Cost of products sold, excluding depreciation	17,510			17,860			41,063			40,431

Selling, general and administrative expenses	9,841			9,874			20,211			20,182
Depreciation	892			1,029			1,784			2,057
Gain on sale of equity securities	(106		)	—			(106		)	—
	28,137			28,763			62,952			62,670

Income (loss) before taxes	168			(1,049		)	(72		)	(1,365		)

Income tax provision (benefit)	96			(399		)	(7		)	(519		)

Net income (loss)	$	72		$	(650	)	$	(65	)	$	(846	)

Basic and diluted income (loss) per share	$	.01		$	(.07	)	$	0.00		$	(.08	)

Basic and diluted shares computed	9,966			9,998			9,970			9,999

Cash dividends paid per share	$	.00		$	.00		$	.00		$	.00

Item 1. c.

CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS’ EQUITY AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(in thousands, except per share amounts)

												Accumulated
						Capital						other
	Common Stock					in excess			Retained			comprehensive
	Shares		Amount			of par			earnings			income (loss)			Total
October 28, 2005	9,986		$	10,043		$	14,394		$	25,889		$	(2,064	)	$	48,262
Shares repurchased	(20	)	(20		)	(126		)							(146		)
Net loss									(65		)				(65		)
Other comprehensive income (loss):
Reclassification adjustment for gain included in net income												(56		)	(56		)
Minimum pension liability												519			519
Comprehensive income															398
April 14, 2006	9,966		$	10,023		$	14,268		$	25,824		$	(1,601	)	$	48,514

See accompanying notes to consolidated condensed financial statements.

Item 1. d.

BRIDGFORD FOODS CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	24 weeks ended			24 weeks ended
	April 14			April 15
	2006			2005
	(in thousands)			(in thousands)

Cash flows from operating activities:

Net loss	$	(65	)	$	(846	)

Income charges not affecting cash:
Depreciation	1,784			2,057
Recovery on losses on accounts receivable	(339		)	(192		)
Effect on cash of changes in assets and liabilities:
Accounts receivable, net	1,866			3,124
Inventories	5,234			4,586
Prepaid expenses and other current assets	(98		)	(774		)
Other non-current assets	(355		)	(131		)
Accounts payable	(744		)	(1,399		)
Accrued payroll, advertising and other expenses	290			(737		)
Income taxes payable	—			(913		)
Non-current liabilities	800			748

Net cash provided by operating activities	8,373			5,523

Cash used in investing activities:
Additions to property, plant and equipment	(1,015		)	(695		)

Cash used in financing activities:
Shares repurchased	(146		)	(32		)

Net cash used in financing activities	(146		)	(32		)

Net increase in cash and cash equivalents	7,212			4,796

Cash and cash equivalents at beginning of period	10,355			7,972

Cash and cash equivalents at end of period	$	17,567		$	12,768

Cash paid for income taxes	$	22		$	684

See accompanying notes to consolidated condensed financial statements.

Item 1. e.

BRIDGFORD FOODS CORPORATION

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)

(in thousands, except share and per share amounts)

Note 1 - The Company and Summary of Significant Accounting Policies:

The unaudited consolidated condensed financial statements of Bridgford Foods Corporation (the “Company”) for the twelve and twenty-four weeks ended April 14, 2006 and April 15, 2005 have been prepared in conformity with the accounting principles described in the Company’s Annual Report on Form 10-K for the fiscal year ended October 28, 2005 (the “Annual Report”) and include all adjustments considered necessary by management for a fair statement of the interim periods. Such adjustments consist only of normal recurring items. This report should be read in conjunction with the Annual Report. Due to seasonality and other factors, interim results are not necessarily indicative of the results to be expected for the full year.

On February 22, 2006 the Company sold 5,028 shares of common stock of Sears Holdings Corporation received as the result of the bankruptcy of a significant customer. This transaction resulted in a pre-tax gain of $106 and a reduction in other comprehensive income of $67.

Note 2 - Inventories:

Inventories are comprised as follows at the respective periods:

	April 14		October 28
	2006		2005
Meat, ingredients and supplies	$	6,031	$	6,433
Work in progress	1,556		2,293
Finished goods	8,503		12,598
	$	16,090	$	21,324

In November 2004, the FASB issued Statement of Financial Accounting Standards No. 151, “Inventory Costs”. The Statement requires abnormal amounts of inventory costs related to amounts of idle freight, handling costs and spoilage be recognized as current period expenses. The standard is effective for fiscal years beginning after June 15, 2005 with early application permitted. The Company’s policy has always been to handle inventory costs in a manner consistent with the provisions of this Statement, and, therefore, the adoption had no impact.

Note 3 - Basic and diluted earnings per share:

The Company had 250,000 employee stock options outstanding during the twelve and twenty-four week periods ended April 14, 2006 and April 15, 2005. The effect of the employee stock options outstanding for the twelve and twenty-four weeks ended April 14, 2006 and April 15, 2005 was not included in the calculation of diluted shares and diluted earnings per share as to do so would be anti-dilutive.

Note 4 - Retirement and Other Benefit Plans:

The Company has noncontributory-trusteed defined benefit retirement plans for sales, administrative, supervisory and certain other employees. The benefits under these plans are primarily based on years of service and compensation levels. The Company’s funding policy is to contribute annually the maximum amount deductible for federal income tax purposes, without regard to the plans’ unfunded current liability. The measurement date for the plans is the Company’s fiscal year end.

Net pension cost consisted of the following:

	24 weeks ended			24 weeks ended
	April 14 2006			April 15 2005

Service cost	$	811		$	784
Interest cost	896			861
Expected return on plan assets	(720		)	(655		)
Amortization of unrecognized transition liability or (asset)	0			0
Amortization of net loss from earlier periods	123			0
Amortization of transition asset (15.2 years)	0			200
Amortization of unrecognized prior service cost	16			19

Net pension cost	$	1,126		$	1,209

The Company intends to contribute $1,800 to the plans during July of 2006.

Note 5 - Stock-Based Compensation:

In December 2004, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 123R, “Share-Based Payment”. SFAS No. 123R requires public companies to measure and recognize compensation expense for all share-based payments to employees, including grants of employee stock options, in the financial statements based on the fair value at the date of the grant. The Statement also clarifies and expands SFAS No. 123’s guidance in several areas, including measuring fair value, classifying an award as equity or as a liability, and attributing compensation cost to reporting periods. SFAS No. 123R became effective for the Company’s fiscal year ending November 3, 2006. The Company has not issued, awarded, granted or entered into any stock-based payment agreements since April 29, 1999. The modified prospective adoption of SFAS No. 123R did not have any impact on the Company’s financial condition or results of operations for the first twenty-four weeks ended April 14, 2006.

Prior to adoption of SFAS No. 123R, the Company adopted SFAS No. 123 ‘“Accounting for Stock-Based Compensation” which allowed the Company to apply the provisions of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations in accounting for stock-based compensation and, therefore, no compensation expense was recognized for its fixed stock option plans as options are generally granted at fair market value based upon the closing price on the date immediately preceding the grant date. On December 31, 2002 the FASB issued SFAS No. 148, “Accounting for Stock Based Compensation- Transition and Disclosure”, which amended SFAS No. 123. SFAS No. 148 requires more prominent and frequent disclosures about the effects of stock-based compensation. Accordingly, if compensation expense for the Company’s stock options had been recognized, based upon the fair value of awards granted, there would have been no impact on the Company’s net income and earnings per share for the first twenty-four weeks ending April 15, 2005.

No options were granted during the first twenty-four weeks of the fiscal year ending November 3, 2006 and during the first twenty-four weeks of the fiscal year ended October 28, 2005.

Note 6 - Commitments:

The Company leases certain transportation and computer equipment under operating leases. 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. No material changes have been made to these contracts during the first twenty-four weeks of fiscal 2006.

Note 7 - Segment Information:

The Company has 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).

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

The following segment information is presented for the twelve and twenty-four week periods ended April 14, 2006 and April 15, 2005.

Twelve Weeks Ended April 14, 2006	Frozen Food Products		Refrigerated and Snack Food Products			Other			Elimination		Totals
Sales	$	11,994	$	16,311		$	—		$	—	$	28,305
Intersegment sales	—		484			—			484		—
Net sales	11,994		16,795			—			484		28,305
Cost of products sold, excluding depreciation	6,570		11,424			—			484		17,510
Selling, general and administrative expenses	3,349		6,492			—			—		9,841
Depreciation	291		502			99			—		892
Gain on sale of equity securities	—		(106		)	—			—		(106		)
	10,210		18,312			99			484		28,137
Income (loss) before taxes	1,784		(1,517		)	(99		)	—		168
Income tax provision (benefit)	676		(580		)	—			—		96
Net income (loss)	$	1,108	$	(937	)	$	(99	)	$	—	$	72

Total assets	$	11,757	$	26,226		$	34,725		$	—	$	72,708
Additions to property, plant and equipment	$	178	$	266		$	52		$	—	$	496

Twelve Weeks Ended April 15, 2005	Frozen Food Products		Refrigerated and Snack Food Products			Other			Elimination		Totals
Sales	$	10,331	$	17,383		$	—		$	—	$	27,714
Intersegment sales	—		884			—			884		—
Net sales	10,331		18,267			—			884		27,714
Cost of products sold, excluding depreciation	5,707		13,037			—			884		17,860
Selling, general and administrative expenses	2,954		6,920			—			—		9,874
Depreciation	395		531			103			—		1,029
	9,056		20,488			103			884		28,763
Income (loss) before taxes	1,275		(2,221		)	(103		)	—		(1,049		)
Income tax provision (benefit)	471		(870		)	—			—		(399		)
Net income (loss)	$	804	$	(1,351	)	$	(103	)	$	—	$	(650	)

Total assets	$	11,981	$	28,697		$	30,872		$	—	$	71,550
Additions to property, plant and equipment	$	38	$	292		$	24		$	—	$	354

Note 7 - Segment Information Continued:

Twenty-Four Weeks Ended April 14, 2006	Frozen Food Products		Refrigerated and Snack Food Products			Other			Elimination		Totals
Sales	$	24,098	$	38,782		$	—		$	—	$	62,880
Intersegment sales	—		1,201			—			1,201		—
Net sales	24,098		39,983			—			1,201		62,880
Cost of products sold, excluding depreciation	14,200		28,064			—			1,201		41,063
Selling, general and administrative expenses	6,870		13,341			—			—		20,211
Depreciation	581		1,005			198			—		1,784
Gain on sale of equity securities	—		(106		)	—			—		(106		)
	21,651		42,304			198			1,201		62,952
Income (loss) before taxes	2,447		(2,321		)	(198		)	—		(72		)
Income tax provision (benefit)	912		(919		)	—			—		(7		)
Net income (loss)	$	1,535	$	(1,402	)	$	(198	)	$	—	$	(65	)

Total assets	$	11,757	$	26,226		$	34,725		$	—	$	72,708
Additions to property, plant and equipment	$	250	$	692		$	73		$	—	$	1,015

Twenty-Four Weeks Ended April 15, 2005	Frozen Food Products		Refrigerated and Snack Food Products			Other			Elimination		Totals
Sales	$	21,345	$	39,960		$	—		$	—	$	61,305
Intersegment sales	—		1,385			—			1,385		—
Net sales	21,345		41,345			—			1,385		61,305
Cost of products sold, excluding depreciation	12,080		29,736			—			1,385		40,431
Selling, general and administrative expenses	5,988		14,194			—			—		20,182
Depreciation	794		1,058			205			—		2,057
	18,862		44,988			205			1,385		62,670
Income (loss) before taxes	2,483		(3,643		)	(205		)	—		(1,365		)
Income tax provision (benefit)	918		(1,437		)	—			—		(519		)
Net income (loss)	$	1,565	$	(2,206	)	$	(205	)	$	—	$	(846	)

Total assets	$	11,981	$	28,697		$	30,872