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Summary of Significant Accounting Policies (Policies)
 6 Months Ended
Apr. 17, 2020
Accounting Policies [Abstract]  
Revenue Recognition

Revenue recognition

 

Revenues are recognized in accordance with Accounting Standards Codification (“ASC”) 606 – Contracts with Customers upon passage of title to the customer, typically upon product pick-up, shipment or delivery to customers. Products are delivered to customers primarily through our own long-haul fleet or through a Company owned direct store delivery system.

 

The Company recognizes revenue for the sale of the product at the point in time when our performance obligation has been satisfied and control of the product has transferred to our customer, which generally occurs upon shipment, pickup or delivery to a customer based on terms of the sale. Contracts with customers are typically short-term in nature with completion of a single performance obligation. Product is sold to foodservice, retail, institutional and other distribution channels. Products are delivered to customers primarily through our own long-haul fleet, common carrier or through a Company owned direct store delivery system. Shipping and handling that occurs after the customer has obtained control of the product is recorded as a fulfillment cost rather than an additional performance obligation. Costs paid to third party brokers to obtain contracts are recognized as part of selling expenses. Other sundry items in context of the contract are also recognized as selling expense. Any taxes collected on behalf of the government are excluded from net revenue.

 

We record revenue at the transaction price which is measured as the amount of consideration we anticipate to receive in exchange for providing product to our customers. Revenue is recognized as the net amount estimated to be received after deducting estimated or known amounts including variable consideration for discounts, trade allowances, consumer incentives, coupons, volume-based incentives, cooperative advertising, product returns and other such programs. Promotional allowances, including customer incentive and trade promotion activities, are recorded as a reduction to sales based on amounts estimated being due to customers, based primarily on historical utilization and redemption rates. Estimates are reviewed regularly until incentives or product returns are realized and the result of any such adjustments are known.
Leases

Leases

 

Leases are recognized in accordance with Accounting Standards Update (“ASU”) 2016-02 Leases (ASC 842) which requires a lessee to recognize assets and liabilities with lease terms of more than 12 months. We lease or rent property for such operations as storing inventory, packaging or processing product, renting equipment and parking vehicles. We analyze our agreements to evaluate whether or not a lease exists by determining what assets exist for which we control for a period of time in exchange for consideration. In the event a lease exists, we classify it as a finance or operating lease and record a right-of-use (“ROU”) asset and the corresponding lease liability at the inception of the lease. In the case of month-to-month lease or rental agreements with terms of 12 months or less, we made an accounting policy election to not recognize lease assets and liabilities and record them on a straight-line basis over the lease term. The storage units rented for use by our Snack Food Product Segment direct store delivery route system are not costly to relocate, contain no significant leasehold improvements, no degree of integration over leased assets, orders can be fulfilled by another route storage unit interchangeable, no specialized assets exist, market price is paid for storage units and there is no guarantee of debt.

 

Finance lease assets are recorded within property, plant and equipment, net of accumulated depreciation and amortization. The Company’s lease of long-haul trucks used in its Frozen Food Products Segment qualifies as a finance lease. Finance lease liabilities are recorded as a separate line item on the Condensed Consolidated Balance Sheets reflecting both the current and long-term obligation. The classification of a finance or operating lease determines whether the recognition, measurement and presentation of expenses and cash flows are part of cash flow from operations or financing arrangements.
Subsequent Events

Subsequent events

 

Management has evaluated events subsequent to April 17, 2020 through the date that the accompanying condensed consolidated financial statements were filed with the Securities and Exchange Commission for transactions and other events which may require adjustments of and/or disclosure in such financial statements.

 

The Company repaid its line of credit with Wells Fargo Bank, N.A. on May 13, 2020 for $4,500 with the proceeds from the fifth borrowing of $7,200 under the Fifth Wells Fargo Loan Agreement (as defined in Note 6). The proceeds under the fifth borrowing were received on April 17, 2020. A total of $33,450 was borrowed for equipment financing under the Wells Fargo Agreement (as defined in Note 6). Refer to Note 6 “Equipment Notes Payable and Financial Arrangements” for more information on the equipment financing.

 

Based on Management’s review, no other material events were identified that require adjustment to the financial statements or additional disclosure.

 

On March 16, 2020, Bridgford Food Processing Corporation (“BFPC”), a wholly-owned subsidiary of Bridgford Foods Corporation, entered into a Purchase and Sale Agreement with CRG Acquisition, LLC (“CRG”), pursuant to which BFPC agreed to sell to CRG, pursuant to the the terms and conditions set forth in the Purchase Agreement, a parcel of land including an approximate 156,000 square foot four-story industrial food processing building located at 170 N. Green Street in Chicago, Illinois (the “Property”).  The purchase price for the Property is $60,000,000, subject to a due diligence period and certain closing adjustments and prorations, and  is conditioned upon, among other customary closing conditions, CRG receiving zoning and other governmental approvals necessary for the construction and development of a mixed use project on the Property in accordance with certain development plans to be approved by the City of Chicago.  The cost basis of the Property was insignificant.

 

On May 12, 2020, the Company executed the second amendment dated as of June 1, 2020 of the Purchase and Sale Agreement with CRG Acquisition, LLC. Under the original terms and conditions of the Purchase Agreement, the closing of the sale of the Property to CRG would occur on the date that is thirty (30) days after CRG’s receipt of the necessary zoning approvals, but in any event no earlier than October 31, 2020 and no later than March 31, 2021. The second amendment extends the inspection period to July 31, 2020, closing date and zoning period from December 31, 2020 to January 31, 2021 and earnest money shall begin August 1, 2020.
Basic Earnings Per Share

Basic earnings per share

 

Basic earnings per share are calculated based on the weighted average number of shares outstanding for all periods presented. No stock options, warrants, or convertible securities were outstanding as of April 17, 2020 or April 19, 2019.