BRID 10-K & 10-Q changes, risk factors and insider trading

The food industry, and the markets within the food industry in which we compete, are subject to various risks, including the following: evolving consumer preferences, nutritional and health-related concerns, federal, state, and local food inspection and processing controls, consumer product liability claims, risks of product tampering, and the availability and expense of liability insurance. The meat and poultry industries are subject to scrutiny due to the association of meat and poultry products with recent outbreaks of illness, and on rare occasions even death, caused by food borne pathogens. Outbreaks of disease and other events, which may be beyond our control, could significantly affect demand for and consumer perception of our food products and result in negative publicity that may have an adverse effect on our ability to market our products successfully. Product recalls are also sometimes required in the food industry to withdraw contaminated or mislabeled products products from the market. Additionally, the failure to identify and react appropriately to changes in consumer trends, demands and preferences could lead to, among other things, reduced demand, and price reduction for our products. Changes in consumer eating habits may also result in the enactment or amendment of laws and regulations that impact the sourcing, ingredients, and nutritional content of our food products. Finally, we may be adversely affected by changes in domestic or foreign economic conditions, including tariffs, inflation or deflation, interest interest rates, availability of capital markets, consumer spending rates, and energy availability and costs (including fuel surcharges). We have been experiencing high levels of inflations thesethe past few years, which has had varying impacts on our business. Such prolonged periods periods of inflation decrease consumers’ discretionary spending, which negatively impacts our results of operations. These and other general risks related to the food industry, if realized by us, could have a significant adverse effect on demand for our products, as well as the costs and availability of raw materials, ingredients, and packaging materials, thereby negatively affecting our operating results and financial position.

Further, such requirements may obligate us to make certain climate-related disclosures and set goals for reducing our carbon footprint. While we are committed to mitigating our impact on the environment and managing greenhouse gas emissions, there can be no assurance that we will accomplish such such goals. If we fail to achieve any such goals related to climate change or the related expectations from stakeholders and consumers are not met, the resulting negative publicity could adversely impact our results of operations in part as a consequence of changes in consumer preferences for our products.

We purchase large quantities of commodity pork, beef, and flour. Historically, market prices for products we process have fluctuated in response to a number of factors, including changes in the United States government farm support programs, changes in international agricultural and trading policies, weather, and other conditions during the growing and harvesting seasons. Our operating results are heavily dependent upon the prices paid for raw materials, as well as the available supply of commodities. Commodity costs have and may continue to fluctuate due to political and economic conditions, including the ongoing conflictconflicts between Ukraine and Russia.Russia, Isreal and Palestine as well as increased tariffs. The marketing of our value-added products does not lend itself to instantaneous changes in selling prices. In addition, if we increase prices to offset higher costs, we could experience lower demand for our products and sales volumes. Conversely, decreases in our commodity and other input costs may create pressure on us to decrease our prices. Changes in selling prices are relatively infrequent and do not compare with the volatility of commodity markets. If there is a lag between when costs increase and when we are able to increase selling prices, our profits margins may suffer. Production and pricing of commodities, on the other hand, are determined by constantly changing market forces of supply and demand over which we have limited or no control. Such factors include, among other things, weather patterns throughout the world, outbreaks of disease, the global level of supply inventories and demand for grains and other feed ingredients, as well as agricultural and energy policies of domestic and foreign governments. While fluctuations in significant cost structure components, such as ingredient commodities and fuel prices, have had a significant impact on profitability over the last threetwo years, the impact of general price inflation on our financial position and results of operations has been significant. However, current inflationary market conditions may have a negative impact on future earnings. Future volatility of general price inflation or deflation and raw material cost and availability could adversely affect our financial results.

We are subject to extensive government regulations and a failure to comply with such regulations could negatively impact our financial results.

Our operations are subject to extensive inspection and regulation by the USDA, FDA and by other federal, state, and local authorities regarding the processing, packaging, storage, transportation, distribution, and labeling of products that are manufactured, produced, and processed by us. Our processing facilities and products are subject to continuous inspection by the USDA and/or other federal, state, and local authorities. The USDA has issued strict regulations concerning the control of listeria monocytogenes in ready-to-eat meat and poultry products and contamination by food borne pathogens such as E. coli and salmonella and implemented a system of regulation known as the HACCP program. The HACCP program requires all meat and poultry processing plants to develop and implement sanitary operating procedures and other program requirements. OSHA oversees safety compliance and establishes certain employer responsibilities to help “assure safe and healthful working conditions” and keep the workplace free of recognized hazards or practices likely to cause death or serious injury. We believe that we are currently in compliance with governmental laws and regulations and that we maintain necessary permits and licenses relating to our operations.

Our executive officers and certain other key employees have been primarily responsible for the development and expansion of our business, and the loss of the services of one or more of these individuals could adversely affect us. Our success will be dependent in part upon our continued ability to recruit, motivate, and retain qualified personnel. We cannot assure that we will be successful in this regard. We have no employment or non-competition agreements with key personnel. However, we have consulting agreements with each of (1) our former Vice President and current director Allan L. Bridgford Sr., (2) our former Chief Financial Officer and current director Raymond F. Lancy, (3) our former directorDirector and President of Bridgford Food Processing Corporation Allan Bridgford Jr.Jr, (4) our former President and current director John V. Simmons, and (5) our former President of Dallas-Superior Foods Division Blaine K. Bridgford.

We depend on our major customers customers, and any loss of such customers could have a negative impact on our profitability.

Sales to Wal-Mart® comprised 27.8% 33.5% of revenues in fiscal year 20242025 and 25.4%8.2% of total accounts receivable was due from Wal-Mart® as of NovemberOctober 1,31, 2024.2025. Sales to Dollar General® comprised 14.2% of revenues in fiscal year 20242025 and 20.2%28.8% of total accounts receivable was due from Dollar General® as of NovemberOctober 1,31, 2024.2025. Many of our customers, such as supermarkets, warehouse clubs, and food distributorsdistributors, have consolidated in recent years. Such consolidation has produced large, sophisticated customers with increased buying power who are more capable of operating with reduced inventories while demanding lower pricing and increased promotional programs. These customers also may use their shelf space for their own private label products. Failure to respond to these trends could reduce our volume and cause us to lower prices or increase promotional spending foron our product lines, which could adversely affect our profitability.

As of NovemberOctober 1,31, 2024,2025, approximately 278 293 of our employees were covered by collective bargaining agreements. We depend on the availability of, and good relations with, our teams’ members. If we fail to maintain good relations, we may experience strikes or work stoppages, which could have a material adverse impact on our operations, results of operations, liquidity, or cash flows.

We are dependent on information technology systems, some of which are managed by third-parties,third parties, to process, transmit, and store electronic information and to manage or support a variety of business processes and activities, including distribution, invoicing, and collection of payment. We also collect and store confidential data from our customers and suppliers in data centers, which are owned by third parties and maintained on their information technology networks. These complex systems are an important part of ongoing operations. Any failure of these systems could disrupt our operations and could have a material adverse effect on our business, results of operations, and financial condition. Further, despite our internal controls and security measures, there can be no assurance that we will be able to evade cyberattacks, disruptions, disruptions, or security breaches. We have implemented cyber-security initiatives to mitigate our exposure to these risks, but these measures may not be adequate Although we have not suffered any significant cyber incidents that resulted in material business impact, we have from time to time been, and expect to continue to be, the target of malicious cyber threat actors.

We participate in “multiemployer” pension plans administered by labor unions on behalf of their employees. We make monthly contributions for healthcare and pension benefit obligations. The contribution amount may change depending upon the ability of participating companies to fund these pension liabilities as well as the actual and expected returns on pension plan assets. Volatility in the capital markets or interest rates can impact the market value of plan assets and cause volatility in the net periodic benefit cost and our future funding requirements. The exact amount of cash contributions made to the pension plans in any year is dependent upon a number of factors, including minimum funding requirements. In addition, should we withdraw from the union and cease participation in a union plan, federal law could impose a penalty for additional contributions to the plan. The penalty would be recorded as an expense in the consolidated statement statements of operations. The ultimate amount of the withdrawal liability is dependent upon several factors including the funded status of the plan and contributions made by other participating companies. We continue to participate in other multiemployer union plans. In the event of a full or partial withdrawal from these plans, the impact on our financial statements could be material.

Fiscal Year Ended October 31, 2025 (52 weeks) Compared to Fiscal Year Ended November 1, 2024 (52 weeks) Compared to Fiscal Year Ended November 3, 2023 (53 weeks)

Net sales in fiscal year 20242025 decreasedincreased $27,991 $7,341 (11.1%3.3%) when compared to the prior fiscal year. The changes in net sales were comprised as follows:

Net sales in the Frozen Food Products segment in fiscal year 20242025 increaseddecreased $770$363 (1.3%0.6%) compared to the prior fiscal year. The changes in net sales were comprised as follows:

Net sales in the Snack Food Products segment in fiscal year 20242025 decreasedincreased $28,761$7,704 (14.8%4.7%) compared to the prior fiscal year. The changes in net sales were comprised as follows:

Cost of products sold from continuing operations decreased increased on a consolidated basis by $13,962$19,106 (7.7%11.4%) during fiscal year 20242025 compared to the prior fiscal year. The gross margin decreased from 28.0%25.2% to 25.2%19.3% during fiscal year 20242025 compared to the prior fiscal year.

Cost of products sold in the Frozen Food Products segment decreasedincreased by $776$1,398 (1.8%3.3%) in fiscal year 20242025 compared to the prior fiscal year. Higher Lowergross unitoverhead, salesincluding volumeincreased incosts poundsfor temporary labor and changes in the product mixutilities, were the primary contributing factors to this decrease. increase. The cost of purchased flour decreased approximately $522$208 contributing compared to the decreaseprior fiscal year. However, this decline was not enough to offset the increase in costsgross ofoverhead goodsand sold.direct distribution costs. The gross margin percentage increaseddecreased from 25.1%27.4% to 27.4%24.5% during fiscal year 20242025 compared to the prior fiscal year.

Cost of Products Sold and Gross Margin–Snack Margin-Snack Food Products Segment

Cost of products sold in the Snack Food Products segment decreasedincreased by $13,186$17,708 (9.5%14.2%) duringin fiscal year 20242025 compared to the prior fiscal year with dueapproximately primarily$6,261 of this increase attributable to lower unit sales volume in our direct-store-delivery distribution channel. The cost ofhigher meat commoditiescommodity increasedcosts approximatelyresulting $4,900from duringhigher fiscalpressure year 2024 compared toon the prior fiscal year due to unfavorable fluctuations in commodity markets. market. We increased our net realizable value reserve by $1,174$170 during the fiscal year 20242025 in consideration of pending price increases to customers to help mitigate the record increases in meat commodity costs. We maintain a net realizable reserve of $1,637 on products as of October 31, 2025, after determining that the market value on some meat products wascould lessnot thancover the costs associated with completion production and sale of the product. We maintainedalso afaced netincreased realizableutilities, reservelabor ofand $1,467insurance oncosts productsfurther ascontributing ofto Novemberthe 1,growth 2024.in costs. The gross margin earned in this segmentpercentage decreased from 28.8%24.4% to 24.4%17.5% during fiscal year 2024.2025 compared to the prior fiscal year.

Selling, general and administrative expenses (“SG&A”) in fiscal year 20242025 decreasedincreased $3,118$1,012 (4.8%1.6%) when compared to the prior fiscal year. The decreaseincrease in this category did not directly correspond to the change in sales.

SG&A expenses in the Frozen Food Products segment decreased by $241$442 (1.7%3.1%) during fiscal year 20242025 compared to the prior fiscal year. The overall decrease in SG&A expenses was due to lower unitproduct salesadvertising, volumeincluding inbroker pounds, lower equipment rental and lower fuel expenses related to a reduction in the number of company-owned long-haul truckscommissions, partially offset by anhigher healthcare increase in insurance expensescosts and brokertravel commissions.expenses.

Selling, General and Administrative Expenses-Refrigerated andExpenses- Snack Food Products Segment

SG&A expenses in the Snack Food Products segment decreased increased by $2,877$1,454 (5.6%3.0%) during fiscal year 20242025 compared to the prior fiscal year. Most of the decreaseincrease was due to thehigher significantly lowerconsulting unitfees, saleshealthcare volumecosts, inhigher poundsprovision for bad debt and thehigher correspondingtravel decreaseexpenses inpartially offset wages and bonuses, andby lower paymentsproduct under brand licensing agreements.advertising.

Losses(Gain) loss on Sale of Property, Plant and Equipment (Gains) and losses on the sale of property, plant and equipment were due to the ordinary disposal of assets located in both the Frozen Food Products segment, $96($7) and $75,$96, for fiscal years 2024 2025 and 2023,2024, respectively, and Snack Food Products segments, $50($136) and $86,$50, for fiscal years 2024 2025 and 2023,2024, respectively.

Income tax for fiscal years 20242025 and 2023,2024 respectively, was as follows:

All of our operating segments have been impacted by inflation, including higher costs for labor, freight and specific materials related to product manufacturing and deliverydelivery. throughWe expect this trend to continue throughout fiscal year 2024.2026. Additionally, commodity costs, including meat and flour costs, have and may continue to fluctuate due to both political and economic conditions, including the ongoing conflict conflicts between Ukraine and Russia.Russia, and Israel and Palestine, as well as increased tariffs. Despite these higher commodity costs like we experienced in fiscal year 2024,costs, we may not be able to increase our product prices in a timely manner or sufficiently to offset such increased commodity or other costs due to consumer price sensitivity, pricing in relation to competitors and the reluctance of retailers to accept athe price increase. Instances of higher interest rates, general price inflation or deflation, higher raw materials costs, labor shortages or supply chain issues could adversely affect the Company’s financial results and its liquidity. Higher product prices and promotions could potentially lower demand for our product products and decrease volume. Management believes there are various options available to generate additional liquidity to repay debt or fund operations such as mortgaging real estate, should that be necessary. Our ability to increase liquidity will depend upon, among other things, our business plans andplans, the performance of operating divisionsdivisions, and the economic conditions of capital markets. If we are unable to increase liquidity through mortgaging real estate or additional borrowing, or generate positive cash flow necessary to fund operations, we may not be able to compete successfully, which could negatively impact our business, operations, and financial condition. With the cash expected to be generated from the Company’s operations, we anticipate that we will maintain sufficient liquidity or exercise a portion of the line of credit to operate our business for at least the next twelve months. We will continue to monitor the impact of inflation and interest rate volatility on our liquidity and, if necessary, take action to preserve liquidity and ensure that our business can operate during these uncertain times.

Cash flows (used in) providedoperating by operating activities:

For the fifty-two weeks ended NovemberOctober 1,31, 2024, 2025, net cash used in operating activities was $497,$5,692, a decrease of $4,482$5,195 in cash flows compared to the fifty-threefifty-two weeks ended November 3, 2023.1, 2024. The decreaseincrease in net cash providedused byin operating activities primarily relates to a net loss of $13,359, a decrease in deferred income taxes of $3,381,$4,594 and an increase in refundable income taxesinventory of $1,240 and an increase of other non-current assets of $3,320,$3,734, partially offset by a decrease in inventoryaccounts receivable of $7,235$6,493 due to selling downaccelerated inventorypayments finishedfrom goods to adjust to lower consumer demand.customers. During fiscal year 2024,2025, we did not contribute towards our defined benefit pension plan. Plan funding strategies may be adjusted depending upon economic conditions, investment options, tax deductibility, or legislative changes in funding requirements.

Our cash conversion cycle (defined as days of inventory and trade receivables less days of trade payables outstanding) was equal to 68 days for the fifty-two weeks ended October 31, 2025, and 84 days for the fifty-two weeks ended November 1, 2024, and 83 days for the fifty-three weeks ended November 3, 2023.2024.

For the fifty-threefifty-two weeks ended November 3,1, 2023, 2024, net cash providedused byin operating activities was $3,985.$497. The result was primarily related to net loss of $3,381, an increase in refundable income taxes of $3,474$1,240 and aan reduction in accounts receivableincrease of $6,480,other non-current assets of $3,320, partially offset by a decrease in accounts payableinventory of $6,457$7,235 anddue to selling down inventory finished goods to adjust to lower non-currentconsumer liabilities of $1,836.demand. During fiscal year 2023, 2024, we did not contribute towards our defined benefit pension plan.

Additions to property, plant and equipment include the acquisition of equipment, upgrading of facilities to maintain operating efficiency and investments in cost effective technologies to lower costs. In general, we capitalize the cost of additions and improvements and expense the cost for repairs and maintenance. We may also capitalize costs related to improvements that extend the useful life, increase the capacity, or improve the efficiency of existing machinery and equipment. Specifically, capitalization of upgrades of facilities to maintain operating efficiency include acquisitions of machinery and equipment used on packaging lineslines, vehicles and refrigeration equipment used to process food products.

The table below highlights the additions to property, plant and equipment for the fifty-two and fifty-three weeks ended:

Expenditures for additions to property, plant and equipment during the fifty-two weeks ended NovemberOctober 1,31, 2024,2025, include projects in process of $755 $2,683 related to the production facilities in Chicago and Statesville.

Our stock repurchase program was approved by the Board of Directors in November 1999 and was expanded in June 2005. Under the stock repurchase program, program we were authorized, at the discretion of management and the Board of Directors, to purchase up to an aggregate of 2,000,000 shares of our common stock on the open market. As of the end of fiscal year 2024,2025, 120,113 shares remained authorized for repurchase under the program.

The Company leased three long-haul trucks received during fiscal year 2019. The six-year leases for these trucks would have expired in fiscal year 2025. We returned one long-haul truck on June 22, 2023, for a loss of $12 and returned the remaining two long-haul trucks on July 11, 2024, for a loss of $90, in an effort to reduce the overall cost of delivering products as we transitioned deliveries to common carriers. All long-haul trucks under this lease agreement have been returned as of NovemberOctober 1,31, 2024. The Company leased one box truck for a market value of $27 on April 17, 2023, and that lease term is two years.2025.

The Company leased one refrigerated truck received on May 10, 2024, for a net present value of $166. The seven-year lease for this truck will expire in fiscal year 2031. Amortization of equipment as a finance lease was $44$24 during the fifty-two weeks ended NovemberOctober 1,31, 2024.2025.

The following table reflects major components of our line of credit and borrowing agreements as of October 31, 2025, and November 1, 2024, and November 3, 2023, respectively.

On July November23, 30, 2023,2025, we entered into athe fifthAmended Credit Agreement with Wells Fargo. The Amended Credit Agreement amended, restated and amendmentsuperseded toour theprior credit agreement with Wells Fargo Bank,that N.A.was dated March 1, 2018, as amended, and also executed a revolving line of credit note pursuantset to the amendment. The revolving line of credit note replaces the existing note that expiredexpire by its terms on November 30, 2023. 2025. Under the terms of the thisAmended amendmentCredit Agreement and the revolving line of credit note,note it established, we may borrow up to $7,500 from time to time up until toJuly November 30,31, 2024,2026, at an interest rate equal to (a) the daily simple secured overnight financing rate plus 2.0%,2.5% (6.77% at October 31, 2025), or if unavailable, (b) the prime rate, in each case as determined by the bank. The revolving line of credit has an unused commitment fee of 0.35% of the available loan amount, payable on a quarterly basis. We borrowed $2,000 under this line of credit on May 20, 2025, which remained unpaid as of October 31, 2025. Amounts may be repaid and reborrowed during the term of the note. Accrued interest is payable on the first day of each month and the outstanding principal balance and remaining interest are due and payable on NovemberJuly 30, 2024. Refer to Subsequent31, Events under Note 1 to the Consolidated Financial Statements included within this Report for further information.2026.

The Wells Fargo Loan Agreements and the credit agreementAmended Credit Agreement contain various affirmative and negative covenants that limit the use of funds and define other provisions of the loans. Material financial covenants are listed below, and the capitalized terms are defined in the applicable agreements:

As of October 31, 2025, the Company was in violation of the quick ratio covenant which was subsequently waived by Wells Fargo (per letter dated December 12, 2025). As of NovemberOctober 1,31, 2024,2025, the Company was in compliance with all other covenants under the Wells Fargo Loan Agreements and the credit agreement.Agreements.

Aggregate contractual maturities of debt in future fiscal years are as follows as of NovemberOctober 1,31, 20242025:

Except as described above, we had no other debt or other contractual obligations within the meaning of Item 303(b) of Regulation S-K, as of October November31, 1, 2024.2025.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported revenues and expenses during the respective reporting periods. Actual results could differ from those estimates. Amounts estimated related to liabilities for self-insured workers’ compensation, employee healthcare and pension benefits are especially subject to inherent uncertainties and these estimated liabilities may ultimately settle at amounts not originally estimated. We record promotions, returns return allowances, bad debt and inventory allowances based on recent and historical trends. Management believes its current estimates are reasonable and based on the best information available at the time. To the extent there are material differences between the estimates and the actual results, future results of operations could be affected.

Such forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions; macroeconomic conditions, including global financial pressures, inflation, market volatility, and recessionary concerns; fluctuations in commodity costs, including as a result of political and economic conditions and current or prospective tariffs; success of operating initiatives; development and operating costs; trends impacting the purchasing behavior of our customers and consumers; advertising and promotional efforts; adverse publicity; acceptance of new product offerings; consumer trial and frequency; changes in business strategy or development plans; availability, terms and deployment of capital; availability of qualified personnel; commodity, labor, and employee benefit costs; changes in, or failure to comply with, government regulations; weather conditions, including the effects of climate change and changes in the regulatory environment and consumer demand to mitigate these effects; construction schedules; supply chain, consumer demand, and cost of products sold; the impact of competitive products and pricing, and other factors referenced in this Report as well as in our other filings with the Securities and Exchange Commission (the “SEC”). In addition, actual results may differ as a result of additional risks and uncertainties of which we are currently unaware of or which we do not currently view as material to our business.

Current accounting principles require that our pension benefit obligation be measured using an internal rate of return (“IRR”) analysis to be included in the discount rate selection process. The IRR calculation for the Retirement Plan for Employees of Bridgford Foods Corporation is measured annually and based on the Citigroup Pension Discount Rate. The Citigroup Pension Discount Rate as of AprilJuly 30,31, 2026, was 6.14% 5.79% as compared to 5.16% as of October 31, 2025. The discount rate applied can significantly affect the value of the projected benefit obligation obligation as well as the net periodic benefit cost.

We record the cash surrender value or contract value for life insurance policies as an adjustment of premiums paid in determining the expense or income to be recognized under the contract for the period. The cash surrender value is included in other non-current assets in the accompanying Condensed Consolidated Balance Sheets. Expected proceeds from life insurance are recorded under prepaid expenses and other current assets. Pension income from overfunded pension plans arises when plan assets exceed the projected pension obligation and are also recorded under other non-current assets.

The table below shows customers that accounted for more than 20% of consolidated AR or 10% of consolidated sales for the twenty-fourthirty-six weeks ended AprilJuly 17,10, 2026, and AprilJuly 18,11, 2025, respectively.2025.

The table below shows customers that accounted for more than 20% of consolidated AR or 10% of consolidated sales for the twelve weeks ended AprilJuly 17,10, 2026, and AprilJuly 18,11, 2025, respectively.2025.

Our Snack Food Products segment primarily distributes products manufactured in-house. All items within this segment are considered similar products and have been aggregated at this level. The dry sausage division includes products such as jerky, meat snacks, salami, sausage, and pepperoni products. During the secondthird quarter of fiscal year 2026, our Snack Food Products segment sold approximately 180 different items through customer-owned distribution centers and a direct-store-delivery network serving approximately 19,000 supermarkets, mass merchandise and convenience retail stores located in all 50 states.

Results of Operations for the Twelve Weeks Ended AprilJuly 17,10, 2026, and AprilJuly 18,11, 2025

Net sales decreased by $595$4,939 (1.3%9.5%) to $50,044$47,015 in the secondthird twelve-week period of the 2026 fiscal year compared to the same twelve-week period period in fiscal year 2025. The changes in net sales were comprised as follows:

Net sales in the Frozen Food Products segment decreased by $208$850 (1.2%8.0%) to $13,105$9,942 in the secondthird twelve-week period of the 2026 fiscal year compared to the same twelve-week period in fiscal year 2025. The changes in net sales were comprised as follows:

The decrease in net sales for the twelve-week period ended AprilJuly 17,10, 2026,2026 primarily relates to lower unit sales volume in pounds, partially offset by higher selling prices per poundpound. dueThe to changes in product mix partially offset by an increasedecrease in sales volume inwas pounds.due a to single customer’s non-recurring order from the prior year. Returns activity was lowersimilar compared to the same twelve-week period in the 2025 fiscal year. Promotional activity was lowerhigher in absolute dollars and higher as a percentage of sales.

Net sales in the Snack Food Products segment decreased by $387$4,089 (1.0%9.9%) to $36,939$37,073 in the secondthird twelve-week period of the 2026 fiscal year compared to the same twelve-week period in fiscal year 2025. The changes in net sales were comprised as follows:

Net sales of snack food products decreased due to lower unit sales volume in pounds despitebecause of higher selling prices per pound during the secondthird quarter of fiscal year 2026. Price increases implemented during the prior fiscal year have been partially successful in combatting the margin reductions we saw from unprecedented commodity price increases during the preceding twenty-four months. Returns activity increased compared to the same twelve-week period in the 2025 fiscal year due to non-recurring shifts in product mix. As we transition to higher margin items returns for lower margin items were temporarily elevated to accommodate the product change.year. Promotional activity decreased increased as a percentage of sales but increased inand absolute dollars compared to the same twelve-week period in fiscal year 2025.

Cost of products sold from continuing operations increaseddecreased on a consolidated basis by $1,695$5,172 (4.3%12.5%) to $41,263$36,153 in the secondthird twelve-week period of the 2026 fiscal year compared to the same twelve-week period in fiscal year 2025. The gross margin decreasedincreased to 17.5%23.1% in the secondthird twelve-weekstwelve-week period of fiscal year 2026 compared to 21.9%20.5% in the same twelve-week period in fiscal year 2025.

Cost of products sold in the Frozen Food Products segment increaseddecreased by $334$728 (3.4%8.6%) to $10,204$7,766 in the secondthird twelve-week period of the 2026 fiscal fiscal year compared to the same twelve-week period in fiscal year 2025. The cost of purchased flour decreased by approximately $93$48 based on on global economic conditions in the secondthird twelve-week period of fiscal year 2026 compared to the same twelve-week period in fiscal year year 2025. The gross margin decreasedincreased to 22.1%21.9% in the secondthird twelve-weekstwelve-week period of fiscal year 2026 compared to 25.9%21.3% in the same twelve-week period in fiscal year 2025 due to higherlower commodity costs and reduced gross overhead. Gross overhead increaseddecreased as a result of higherlower healthcare expenses,insurance costs and repairslower wage and maintenancebonus on buildings and processing equipment.expenses.

Cost of products sold in the Snack Food Products segment increaseddecreased by $1,361$4,444 (4.6%13.5%) to $31,059$28,387 in the secondthird twelve-week period of the 2026 fiscal year compared to the same twelve-week period in fiscal year 2025 due to higher meat commodity costs.2025. The cost of meat commodities increased by approximately $2,306 $2,482 due to a limited supply of cattle ready for market and other unfavorable market conditions (including inflation and tariffs) in the second third twelve-week period of fiscal year 2026 compared to the same period in fiscal year 2025. The gross margin decreasedincreased to 15.9%23.4% in the secondthird twelve-week twelve-weeksperiod of fiscal year 2026 compared to 20.4%20.2% in the same twelve-week period in fiscal year 2025. WeGross maintainmargin increases were driven by higher selling prices per pound despite a net realizable reservecontinuation of $440elevating oncommodity products as of April 17, 2026, after determining that the market value on some meat products could not cover the costs associated with completion and sale of the product.prices.

Selling, general and administrative expenses (“SG&A”) increaseddecreased by $364$414 (2.5%2.8%) to $14,650$14,194 in the secondthird twelve-week period of fiscal fiscal year 2026 compared to the same twelve-week period in the prior fiscal year. The table below summarizes the significant expense increases increases (decreases) included in this category:

Repairs and maintenance have increased due to a large spiral freezer repair in the Frozen Food Products segment. Insurance costs have increased due to market pressure from insurance companies. Outside consulting costs have increased due to higher advisory services including cost analysis and reduction assistance. Storage unit costs have decreased due to lower property insurance premiums and decreased claims activity. Wages and bonus expenses are down after a reduction in headcount resulting from a reorganization of ourthe direct storedirect-store delivery route system. HealthcareProvision costsfor havecredit losses on accounts receivable increased due to highera health insurancenon-recurring claimsreversal andof premiums.a credit reserve in the prior year. None of the changes individually or as a group of expenses in “Other SG&A” were significant enough to merit separate disclosure. The major components comprising the decrease of “Other SG&A” were lower wagepension and bonusbenefits, expensesproduct advertising, and reducedstorage travel expensesfees, partially offset by higher productfuels advertisingcosts and fleetoutside expenses.consultant fees.

SG&A expenses in the Frozen Food Products segment increaseddecreased by $43$47 (1.3%1.7%) to $3,244$2,784 in the secondthird twelve-week period of fiscal year 2026 compared to the same twelve-week period in the prior fiscal year. The overall increasedecrease in SG&A expenses was due to ana increasedecrease in healthcareinsurance costs, insurance costs, higher repair and maintenance costs and depreciation expenses.costs, lower fleet expenses and reduced promotional activities.

SG&A expenses in the Snack Food Products segment increaseddecreased by $321$367 (2.9%3.5%) to $11,406$11,410 in the secondthird twelve-week period of fiscal year 2026 compared compared to the same twelve-week period in the prior fiscal year. Most of the increasedecrease was due to higher healthcare costs,lower insurance costs premiums and outsideclaims, consultants,reduced freight partiallycharges offset byand decreased storage units.unit rents.

Income tax for the twelve weeks ended AprilJuly 17,10, 2026, and AprilJuly 18,11, 2025, was as follows:

We recorded a benefit on income taxes of $1,190$746 for the twelve-week period ended AprilJuly 17,10, 2026, and a benefit on income taxes of $915 for the twelve-week period ended AprilJuly 18,11, 2025, related to federal and state taxes, based on the Company’s expected annual effective tax rate. The effective income tax rate differed from the applicable mixed statutory rate of approximately 26.4% due to non-deductible meals and entertainment, non-taxable gains and losses on life insurance policies, and state income taxes.

Results of Operations for the Twenty-fourThirty-six Weeks Ended AprilJuly 17,10, 2026, and AprilJuly 18,11, 2025

Net sales increaseddecreased by $2,172$2,767 (2.1%1.8%) to $105,356$152,371 in the twenty-four-weekthirty-six-week period of the 2026 fiscal year compared to the same twenty-four-weekthirty-six-week period in fiscal year 2025. The changes in net sales were comprised as follows:

Net sales in the Frozen Food Products segment decreased by $382$1,232 (1.4%3.2%) to $27,460$37,402 in the twenty-four-weekthirty-six-week period of the 2026 fiscal year compared to the same twenty-four-weekthirty-six-week period in fiscal year 2025. The changes in net sales were comprised as follows:

The decrease in net sales for the twenty-four-weekthirty-six-week period ended AprilJuly 17,10, 2026,2026 primarily relates to lower unit sales by volume in pounds partially offset by a lowerhigher selling price per poundpound. due toThe changesdecrease in productsales mixvolume andwas due to a lessersingle extent,customer’s anon-recurring lowerorder unitfrom the volume.prior year. Returns activity decreased compared to the same twenty-four-week thirty-six-week period in the 2025 fiscal year. Promotional activity was both lower in absolute dollars and higher as a percentage of sales.

Net sales in the Snack Food Products segment increaseddecreased by $2,554$1,535 (3.4%1.34%) to $77,896$114,969 in the twenty-four-weekthirty-six-week period of the 2026 fiscal year compared to the same twenty-four-weekthirty-six-week period in fiscal year 2025. The changes in net sales were comprised as follows:

Net sales of snack food products increaseddecreased due to higher selling prices per pound despite lower unit sales volume in pounds offset by higher selling prices per pound during the second third quarter of fiscal year 2026. Price increases implemented during the prior fiscal year have been partially successful in combatting the the margin reductions we saw from unprecedented commodity price increases during the preceding twenty-four months. Returns activity increased compared to the same twelve-weekthirty-six-week period in the 2025 fiscal year due to non-recurring shifts in product mix. As we transition to higher margin items returns for lower margin items were temporarily elevated to accommodate the product change. Promotional activity was alsosimilar lowerbut slightly higher in both absolute dollars and as a percentage of sales compared to the same twenty-four-weekthirty-six-week period in fiscal year 2025.

Cost of products sold from continuing operations increaseddecreased on a consolidated basis by $3,978$1,194 (5.0%1.0%) to $83,206$119,359 in the twenty-four-weekthirty-six-week period of the 2026 fiscal year compared to the same twenty-four-weekthirty-six-week period in fiscal year 2025. The gross margin decreased to 21.0%21.7% in the thirty-six-weeks twenty-four-weeks of fiscal year 2026 compared to 23.2%22.3% in the same twenty-four-weekthirty-six-week period in fiscal year 2025.

Cost of products sold in the Frozen Food Products segment increaseddecreased by $415$313 (2.0%1.1%) to $20,869$28,635 in the twenty-four-weekthirty-six-week period of the 2026 fiscal year compared to the same twenty-four-weekthirty-six-week period in fiscal year 2025. The cost of purchased flour decreased by approximately $181$229 based on global economic conditions in the twenty-four-weekthirty-six-week period of fiscal year 2026 compared to the same twenty-four-weekthirty-six-week period in fiscal year 2025. The gross margin decreased to 24.0%23.4% in the twenty-four-weeksthirty-six-weeks of fiscal year 2026 compared to 26.5%25.1% in the same twenty-four-weekthirty-six-week period in fiscal year 2025 due to highersimilar overhead costs on lower gross overhead. Gross overhead increased as a result of higher healthcare expenses, temporary labor costs and repairs and maintenance on buildings and processing equipment.sales.

Cost of products sold in the Snack Food Products segment increaseddecreased by $3,563$881 (6.1%1.0%) to $62,337$90,724 in the twenty-four-weekthirty-six-week period of the 2026 fiscal fiscal year compared to the same twenty-four-weekthirty-six-week period in fiscal year 2025 due to highera meatreduction commodityin costs.unit sales volume in pounds. The cost of meat commodities commodities increased by approximately $5,405$7,887 due to a limitedstrategic supplybuildup of cattleinventory readyto fortake marketadvantage of favorable pricing and other unfavorable market conditions (includingsustained inflation and tariffs)increases in the twenty-four-week period of fiscal year 2026price compared to the same period in fiscal year 2025. The gross margin decreased slightly to 20.0%21.1% in the twenty-four-weeks thirty-six-weeks of fiscal year 2026 compared to 22.0%21.4% in the same twenty-four-weekthirty-six-week period in fiscal year 2025. We maintain a net realizable reserve of $440 on products as of April 17, 2026, after determining that the market value on some meat products could not cover the costs associated with completion and sale of the product.

Selling, general and administrative expenses (“SG&A”) increaseddecreased by $68$347 (0.2%4.1%) to $29,266$43,459 in the twenty-four-weekthirty-six-week period of fiscal year 2026 compared to the same twenty-four-weekthirty-six-week period in the prior fiscal year. The table below summarizes the significant expense increases (decreases) included in this category:

Outside consulting costs have increased due to higher advisory services including cost analysis and reduction assistance. Wages and bonuses, storage units and travel expenses all decreased due to the ongoing reorganization of our direct-store delivery system. Vehicle repairs increased due to maintenance costs for direct-store delivery vehicles. The provision for credit losses on accounts receivable was lower for the twenty-fourthirty-six weeks ended AprilJuly 17,10, 20262026, as the comparative period ended April 18, 2025 had credit losses relatedcompared to the same prior year period ended July 11, 2025. The decrease was caused by a bankruptcy filing of one of our customers, in the amount of $364,$364 in the prior year, which did not recur. Outside consulting costs have increased due to higher advisory services including cost analysis and reduction assistance. Vehicle repairs increased due to maintenance costs for direct store delivery vehicles. Insurance costs increased due to higher annual premiums. Healthcare costs increased as a result of higher premiums and increased claims activity. WagesPension and bonuses, storage units and travel expenses all benefits decreased due to theinvestment ongoing reorganization of our direct store delivery system.returns. None of the changes individually or as a group of expenses in “Other SG&A” were significant significant enough to merit separate disclosure. The major components comprising the decrease of “Other SG&A” were lower office equipmentpostage/shipping expenses, decreased legal feesexpense and recoverynon-deductible of sales taxes.penalties.

SG&A expenses in the Frozen Food Products segment decreased by $319$365 (4.9%3.9%) to $6,252$9,036 in the twenty-four-weekthirty-six-week period of fiscal year 2026 compared to the same twenty-four-weekthirty-six-week period in the prior fiscal year. The overall decrease in SG&A expenses was mostly due to a decrease in intravel expense and product advertising, including broker commission.

SG&A expenses in the Snack Food Products segment increased by $387$18 (1.7%0.1%) to $23,014$34,423 in the twenty-four-weekthirty-six-week period of fiscal year 2026 compared to the same twenty-four-weekthirty-six-week period in the prior fiscal year. Most of the increasedecrease was due to higherlower vehicle repair costs, insurance premiumswages and outsidebonuses, consultants,storage units and travel expenses due to the ongoing reorganization of our direct-store delivery-system partially offset by decreasedhigh provisionsoutside forconsultant creditfee and lossesvehicle on accounts receivable.repairs.

Income tax for the twenty-fourthirty-six weeks ended AprilJuly 17,10, 2026, and AprilJuly 18,11, 2025, was as follows:

We recorded a benefit on income taxes of $1,435$2,180 for the twenty-four-weekthirty-six-week period ended AprilJuly 17,10, 2026, and a benefit on income taxes of $1,368$2,283 for the twenty-four-weekthirty-six-week period ended AprilJuly 18,11, 2025, related to federal and state taxes, based on the Company’s expected annual effective tax rate. The effective income tax rate differed from the applicable mixed statutory rate of approximately 26.4% due to non-deductible meals and entertainment, non-taxable gains and losses on life insurance policies, and state income taxes.

The principal source of operating cash flows is cash receipts from the sale of our products, net of costs to manufacture, store, market and deliver such products. We evaluate cash and cash equivalents against our borrowing capacity and short-term and long-term investments. We normally fund our operations from cash balances and cash flow generated from operations. Recent losses may necessitate short-term or long-term borrowing to fund inventory purchases to meet customer orders. We are focused on restoring profitability to the Company by driving top-line revenue growth and reducing costs. In line with this focus, the Company has begunexpanded production of customer products under private-label arrangements with the goal of increasing product sales volume. Market data indicates that due to higher inflation and rising costs for basic needs, consumers are increasingly turning to private-label products to reduce their expenses. We are reorganizing reorganized our direct-store-delivery route system in response to lower sales volume through that distribution channel, including reducing the number of routes, storage units and vehicles while maintaining superior service to our customers. We are also seeking bids for production materials to drive increased competition among our vendors while maintaining quality inputs at the best possible price.

We have implemented multiple price increases on our products to help offset some of the higher costs for meat commodities and other expenses, and we are focused on reducing selling, general and administrative expenses. Certain factors including but not limited to increased commodity costs, tariffs, the willingness of customers to accept price increases and inflation of input costs, to name a few, may cause future outcomes to differ materially from those foreseen in forward-looking statements. As of AprilJuly 17,10, 2026, we had $1,960 $1,548 of current debt on equipment loans, $37,423$34,967 of net working capital and $4,250$1,500 available under our revolving credit facility with Wells Fargo Bank, N.A. (“Wells Fargo”) described below.

All of our operating segments have been impacted by inflation, including higher costs for labor, freight and specific materials related to product manufacturing and delivery. We expect this trend to continue throughout the remainder of fiscal year 2026. Additionally, commodity costs, including meat and flour costs, have and may continue to fluctuate due to both political and economic conditions. Despite these higher commodity costs, we may not be able to increase our product prices in a timely manner or sufficiently to offset such increased commoditycommodities or other costs due to consumer price sensitivity, pricing in relation to competitors and the reluctance of retailers to accept the price increase. Instances of higher interest rates, general price inflation or deflation, higher raw materials costs, labor shortages or supply chain issues could adversely affect the Company’s financial results and its liquidity. Higher product prices could potentially lower demand for our products and decrease volume. Management believes there are various options available to generate additional liquidity to repay debt or fund operations such as mortgaging real estate, should that be necessary. Our ability to increase liquidity will depend upon, among other things, our business plans, the performance of operating divisions, and the economic conditions of capital markets. If we are unable to increase liquidity through mortgaging real estate or additional borrowing, or generate positive cash flow necessary to fund operations, we may not be able to compete successfully, which could negatively impact our business, operations, and financial condition. With the cash expected to be generated from the Company’s operations, we anticipate that we will maintain sufficient liquidity to operate our business for at least the next twelve months. We will continue to monitor the impact of inflation and interest rate volatility on our liquidity and, if necessary, take action to preserve liquidity and ensure that our business can operate during these uncertain times.

Cash flows from operating activities for the twenty-fourthirty-six weeks ended:

For the twenty-fourthirty-six weeks ended AprilJuly 17,10, 2026, net cash used in operating activities was $1,813,$3,973, which was $3,613$1,595 less cash used than during the same period in fiscal year 2025. The decrease in net cash used in operating activities primarily relates to a decrease in promotional allowance of $614,$505, and a decrease of accounts receivable of $1,815,$3,813, partially offset by an increase in inventories of $1,467.$10,682. During the twenty-four-weekthirty-six-week period ended AprilJuly 17,10, 2026, we did not contribute towards our defined benefit pension plan. Plan funding strategies may be adjusted depending upon economic conditions, investment options, tax deductibility, or recent legislative changes in funding requirements.

Our cash conversion cycle (defined as days of inventory and trade receivables less days of trade payables outstanding) was equal to 9860 days for the twenty-four-weekthirty-six-week period ended AprilJuly 17,10, 2026. The increasedecrease in the cash conversion cycle from 7468 days to 9860 days foras compared to the twenty-four-weekthirty-six-week period ended AprilJuly 18,11, 2025, was caused by ana increasedecrease in inventory.

Cash flows from investing activities for the twenty-fourthirty-six weeks ended:

The table below highlights additions to property, plant and equipment for the twenty-fourthirty-six weeks ended:

Cash flows from financing activities for the twenty-fourthirty-six weeks ended:

Our stock repurchase program was approved by our Board of Directors in November 1999 and was expanded in June 2005. Under the stock repurchase program, we are authorized, at the discretion of management and our Board of Directors, to purchase up to an aggregate of 2,000,000 shares of our common stock on the open market. As of AprilJuly 17,10, 2026, 120,113 shares remained authorized for repurchase under the program.

On July 23, 2025, we entered into an amended and restated credit agreement dated November(as 30,further 2024,amended, the “Amended and Restated Credit Agreement”), with Wells Fargo that amends, restates and supersedes our existing credit agreement with Wells Fargo dated November 30, 2024, that was set to expire by its terms on November 30, 2025. Under the terms of the amendedAmended and restatedRestated credit agreementCredit Agreement and the associated revolving line of credit note, we may borrow up to $7,500 from time to time until JulySeptember 31,29, 2026, at an interest rate equal to (a) the daily simple secured overnight financing rate plus 2.5%, or if unavailable, (b) the prime rate, in each case as determined by theWells bank.Fargo. The revolving credit facility has an unused commitment fee of 0.35% of the available loan amount, payable on a quarterly basis. Amounts may be repaid and reborrowed during the term of the note. Accrued interest is payable on the first day of each month and the outstanding principal balance and remaining interest are due and payable on JulySeptember 31, 29, 2026. As of AprilJuly 17,10, 2026, thewe Company waswere in violation of the net income covenant and the quick ratio covenant of the amendedAmended and restatedRestated Credit credit agreement.Agreement. Wells Fargo waived these breaches by letter dated MayAugust 28,13, 2026. The Company is otherwise in compliance with all other covenants under the amendedAmended and restatedRestated creditCredit agreement, and we expect to remain in compliance for the remainder of fiscal year 2026. If we are unable to meet the financial covenant requirements of the amended and restated credit agreement, it may impact our liquidity.Agreement Refer to Note 1 – Summary of Significant Accounting Policies – Subsequent Events and Note 6 – Equipment Notes Payable and Financial Arrangements of the Notes to the Condensed Consolidated Financial Statements included within this Report for further information.

On February 19, 2026, we entered into a master equipment lease agreement with First National Capital (“FNC”) for $2,000 in equipment financing. On December 26, 2018, we entered into a master collateral loan and security agreement with Wells Fargo Bank (the “Original Wells Fargo Loan Agreement”) for up to $15,000 in equipment financing which was amended and expanded as detailed below. We subsequently entered into additional master collateral loan and security agreements with Wells Fargo Bank on each of April 18, 2019, December 19, 2019, March 5, 2020, and April 17, 2020 (the Original Wells Fargo Loan Agreement and the subsequent agreements collectively referred to as the “Wells Fargo Loan Agreements”).

The following table reflects major components of our revolving credit facility and equipment notes payable as of AprilJuly 17,10, 2026, and October 31, 2025, respectively.2025.