**SECURITIESAND EXCHANGE COMMISSION**

**Washington,D.C.  20549**

**FORM10-Q**

**(Markone)**

| **x**** QUARTERLY REPORT PURSUANT  TO SECTION 13 OR 15(d) OF**  |
|----------------------------------------------------------------------|
| **THE  SECURITIES AND EXCHANGE ACT OF 1934**                         |
| ** **                                                           |
| **For the  quarterly period ended April 20, 2007**                   |
| ** **                                                           |
| **OR**                                                               |
| ** **                                                           |
| **o**** TRANSITION REPORT  PURSUANT TO SECTION 13 OR 15(d) OF** |
| **THE  SECURITIES EXCHANGE ACT OF 1934**                             |

 

**Forthe transition period from               **

**Commissionfile number                    0-2396                    **

**BRIDGFORDFOODS CORPORATION**

(Exact name of Registrantas 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 ofprincipal executive offices-Zip code)

**714-526-5533**

(Registrant’stelephone number, including area code)

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months ( or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements for thepast 90 days.

Yes   x                    No   o

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

Large acceleratedfiler  o                       AcceleratedFiler  o                       Non-acceleratedfiler  x

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

Yes   o                 No   x

As of June 4, 2007the registrant had 9,931,000 shares of common stock outstanding.

 

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**BRIDGFORDFOODS CORPORATION**

FORM 10-QQUARTERLY REPORT

INDEX

References to “BridgfordFoods” or the “Company” contained in this Quarterly Report on Form 10-Q referto Bridgford Foods Corporation.
| Part I. Financial  Information                                                                                                                                 |   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
|                                                                                                                                                           |   |   |
| Item 1. Financial Statements                                                                                                                                   |   |   |
|                                                                                                                                                           |   |   |
| a. Consolidated  Condensed Balance Sheets at April 20, 2007 (unaudited) and November 3, 2006                                                                   |   |   |
|                                                                                                                                                           |   |   |
| b.  Consolidated Condensed Statements of Operations for the twelve and  twenty-four weeks ended April 20, 2007 and April 14, 2006 (unaudited)                  |   |   |
|                                                                                                                                                           |   |   |
| c.  Consolidated Condensed Statements of Shareholders’ Equity and Comprehensive  Income (Loss) for the twenty-four weeks ended April 20, 2007 (unaudited) |   |   |
|                                                                                                                                                           |   |   |
| d. Consolidated  Condensed Statements of Cash Flows for the twenty-four weeks ended April 20,  2007 and April 14, 2006 (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 1. Legal Proceedings                                                                                                                                      |   |   |
|                                                                                                                                                           |   |   |
| Item 1A. Risk Factors                                                                                                                                          |   |   |
|                                                                                                                                                           |   |   |
| 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 3 and 5 ofPart II. have been omitted because they are not applicable with respect to thecurrent reporting period.

2

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**PartI.  Financial Information**

Item 1. a.

**BRIDGFORDFOODS CORPORATION**

**CONSOLIDATEDCONDENSED BALANCE SHEETS**

(in thousands, except per share amounts)
| ** **                                                                                                                                                | ** ** | **April 20** | ** ** | **November 3**                     | ** ** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------|------------|-----------------------------------------|------------|
| ** **                                                                                                                                                | ** ** | **2007**          | ** ** | **2006**                                | ** ** |
| ** **                                                                                                                                                | ** ** | **(Unaudited)**   | ** ** | **As restated (Note 2)** | ** ** |
| **ASSETS**                                                                                                                                                |       |              |       |                                    |       |
| Current assets:                                                                                                                                           |       |              |       |                                    |       |
|                                                                                                                                                      |       |              |       |                                    |       |
| Cash and cash  equivalents                                                                                                                                |       | $                 | 15,618     |                                    | $          | 1,180 |   |
| Trading  Securities                                                                                                                                       |       | —            |       | 12,200                                  |       |
| Accounts  receivable, less allowance for doubtful accounts of $476 and $524,  respectively, and promotional allowances of $2,279 and $2,170, respectively |       | 7,890             |       | 10,222                                  |       |
| Inventories  (Note 3)                                                                                                                                     |       | 16,364            |       | 19,544                                  |       |
| Prepaid expenses  and other current assets                                                                                                                |       | 3,498             |       | 2,767                                   |       |
|                                                                                                                                                      |       |              |       |                                    |       |
| Total current  assets                                                                                                                                     |       | 43,370            |       | 45,913                                  |       |
|                                                                                                                                                      |       |              |       |                                    |       |
| Property, plant and  equipment, less  accumulated  depreciation of $55,140  and $53,941,  respectively                                          |       | 12,313            |       | 13,041                                  |       |
|                                                                                                                                                      |       |              |       |                                    |       |
| Other non-current  assets                                                                                                                                 |       | 13,939            |       | 13,977                                  |       |
|                                                                                                                                                      |       | $                 | 69,622     |                                    | $          | 72,931 |   |
|                                                                                                                                                      |       |              |       |                                    |       |
| **LIABILITIES  AND SHAREHOLDERS’ EQUITY**                                                                                                            | ** ** | ** **        | ** ** | ** **                              | ** ** |
|                                                                                                                                                      |       |              |       |                                    |       |
| Current liabilities:                                                                                                                                      |       |              |       |                                    |       |
|                                                                                                                                                      |       |              |       |                                    |       |
| Accounts payable                                                                                                                                          |       | $                 | 3,248      |                                    | $          | 3,923 |   |
| Accrued payroll,  advertising and other expenses                                                                                                          |       | 8,444             |       | 10,308                                  |       |
|                                                                                                                                                      |       |              |       |                                    |       |
| Total current  liabilities                                                                                                                                |       | 11,692            |       | 14,231                                  |       |
|                                                                                                                                                      |       |              |       |                                    |       |
| Non-current liabilities                                                                                                                                   |       | 7,465             |       | 8,514                                   |       |
|                                                                                                                                                      |       |              |       |                                    |       |
| 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 - 9,934 and 9,958 shares                                                                                                          |       | 9,991             |       | 10,015                                  |       |
| Capital in  excess of par value                                                                                                                           |       | 14,083            |       | 14,235                                  |       |
| Retained  earnings                                                                                                                                        |       | 26,897            |       | 27,129                                  |       |
| Accumulated  other comprehensive loss                                                                                                                     |       | (506              | )          | (1,193                                  | )          |
|                                                                                                                                                      |       | 50,465            |       | 50,186                                  |       |
| ** **                                                                                                                                                |       | $                 | 69,622     |                                    | $          | 72,931 |   |

 

See accompanyingnotes to consolidated condensed financial statements.

3

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Item 1. b.

**BRIDGFORDFOODS 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 20**                                                     | ** ** | **April 14**                                                     | ** ** | **April 20** | ** ** | **April 14** | ** ** |
| ** **                                          | ** ** | **2007**                                                              | ** ** | **2006**                                                              | ** ** | **2007** | ** ** | **2006** | ** ** |
|                                                |       |                                                                  |       |                                                                  |       |   |   |   |   |
| Net sales                                           |       | $                                                                     | 27,894     |                                                                  | $          | 28,305 |   | $ | 60,207 |   | $ | 62,880 |   |
|                                                |       |                                                                  |       |                                                                  |       |   |   |   |   |
| Cost of products  sold, excluding depreciation      |       | 17,944                                                                |       | 17,510                                                                |       | 39,500 |   | 41,063 |   |
|                                                |       |                                                                  |       |                                                                  |       |   |   |   |   |
| Selling, general  and administrative expenses       |       | 9,524                                                                 |       | 9,841                                                                 |       | 19,444 |   | 20,211 |   |
| Depreciation                                        |       | 782                                                                   |       | 892                                                                   |       | 1,563 |   | 1,784 |   |
| Gain on sale of  equity securities                  |       | —                                                                |       | (106                                                                  | )          | — |   | (106 | ) |
|                                                |       | 28,250                                                                |       | 28,137                                                                |       | 60,507 |   | 62,952 |   |
|                                                |       |                                                                  |       |                                                                  |       |   |   |   |   |
| Income (loss)  before taxes                         |       | (356                                                                  | )          | 168                                                                   |       | (300 | ) | (72 | ) |
|                                                |       |                                                                  |       |                                                                  |       |   |   |   |   |
| Income tax  provision (benefit)                     |       | (83                                                                   | )          | 96                                                                    |       | (68 | ) | (7 | ) |
|                                                |       |                                                                  |       |                                                                  |       |   |   |   |   |
| Net income  (loss)                                  |       | $                                                                     | (273       | )                                                                     | $          | 72 |   | $ | (232 | ) | $ | (65 | ) |
|                                                |       |                                                                  |       |                                                                  |       |   |   |   |   |
| Basic and  diluted income (loss) per share (Note 4) |       | $                                                                     | (.03       | )                                                                     | $          | .01 |   | $ | (.02 | ) | $ | (.01 | ) |
|                                                |       |                                                                  |       |                                                                  |       |   |   |   |   |
| Basic and  diluted shares computed                  |       | 9,940                                                                 |       | 9,966                                                                 |       | 9,948 |   | 9,970 |   |

 

Item 1. c.

**CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS’ EQUITY ANDCOMPREHENSIVE INCOME (LOSS)**

**(Unaudited)**

(in thousands)
| ** **                       | ** ** | ** **            | ** ** | ** **         | ** ** | ** **      | ** ** | ** **        | ** ** | **Accumulated**        | ** ** | ** ** | ** ** |
|----------------------------------|------------|-----------------------|------------|--------------------|------------|-----------------|------------|-------------------|------------|------------------------|------------|------------|------------|
| ** **                       | ** ** | ** **            | ** ** | ** **         | ** ** | **Capital**     | ** ** | ** **        | ** ** | **other**              | ** ** | ** ** | ** ** |
| ** **                       | ** ** | **Common Stock** | ** ** | **in excess** | ** ** | **Retained**    | ** ** | **comprehensive** | ** ** | ** **             | ** ** |
| ** **                       | ** ** | **Shares**            | ** ** | **Amount**         | ** ** | **of par** | ** ** | **earnings**      | ** ** | **income (loss)** | ** ** | **Total**  | ** ** |
| November 3, 2006                 |       | 9,958                 |       | $                  | 10,015     |            | $          | 14,235            |       | $                      | 27,129     |       | $          | (1,193 | ) | $ | 50,186 |   |
| Shares repurchased               |       | (24                   | )          | (24                | )          | (152            | )          |              |       |                   |       | (176       | )          |
| Net loss                         |       |                  |       |               |       |            |       | (232              | )          |                   |       | (232       | )          |
| Other comprehensive income:      |       |                  |       |               |       |            |       |              |       |                   |       |       |       |
| Unrealized income on investments |       |                  |       |               |       |            |       |              |       | 24                     |       | 24         |       |
| Minimum pension liability        |       |                  |       |               |       |            |       |              |       | 663                    |       | 663        |       |
| Comprehensive income             |       |                  |       |               |       |            |       |              |       |                   |       | 455        |       |
| April 20, 2007                   |       | 9,934                 |       | $                  | 9,991      |            | $          | 14,083            |       | $                      | 26,897     |       | $          | (506 | ) | $ | 50,465 |   |

 

See accompanyingnotes to consolidated condensed financial statements.

4

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Item 1. d.

**BRIDGFORDFOODS CORPORATION**

**CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS**

**(Unaudited)**
| ** **                                           | ** ** | **24 weeks ended** | ** ** | **24 weeks ended**            | ** ** |
|------------------------------------------------------|------------|------------------------------|------------|-----------------------------------------|------------|
| ** **                                           | ** ** | **April 20**            | ** ** | **April 14**                       | ** ** |
| ** **                                           | ** ** | **2007**                     | ** ** | **2006**                                | ** ** |
| ** **                                           | ** ** | **(in thousands)**      | ** ** | **As restated (Note 2)** | ** ** |
| ** **                                           | ** ** | ** **                   | ** ** | **(in thousands)**                 | ** ** |
| Cash flows from  operating activities:               |       |                         |       |                                    |       |
|                                                 |       |                         |       |                                    |       |
| Net loss                                             |       | $                            | (232       | )                                       | $          | (65 | ) |
|                                                 |       |                         |       |                                    |       |
| Income charges not affecting cash:                   |       |                         |       |                                    |       |
| Depreciation                                         |       | 1,563                        |       | 1,784                                   |       |
| Recovery on losses on accounts receivable            |       | (329                         | )          | (339                                    | )          |
| Gain on sale of property, plant and equipment        |       | (5                           | )          | —                                  |       |
| Effect on cash of changes in assets and liabilities: |       |                         |       |                                    |       |
| Trading securities                                   |       | 12,200                       |       | 1,300                                   |       |
| Accounts receivable, net                             |       | 2,661                        |       | 1,866                                   |       |
| Inventories                                          |       | 3,180                        |       | 5,234                                   |       |
| Prepaid expenses and other current assets            |       | (707                         | )          | (98                                     | )          |
| Other non-current assets                             |       | (359                         | )          | (355                                    | )          |
| Accounts payable                                     |       | (675                         | )          | (744                                    | )          |
| Accrued payroll, advertising and other expenses      |       | (1,864                       | )          | 290                                     |       |
| Non-current liabilities                              |       | 11                           |       | 800                                     |       |
|                                                 |       |                         |       |                                    |       |
| Net cash provided by operating activities            |       | 15,446                       |       | 9,673                                   |       |
|                                                 |       |                         |       |                                    |       |
| Cash used in  investing activities:                  |       |                         |       |                                    |       |
| Proceeds from sale of property, plant and equipment  |       | 5                            |       | —                                  |       |
| Additions to property, plant and equipment           |       | (835                         | )          | (1,015                                  | )          |
|                                                 |       |                         |       |                                    |       |
| Net cash used in investing activities                |       | (830                         | )          | (1,015                                  | )          |
|                                                 |       |                         |       |                                    |       |
| Cash used in  financing activities:                  |       |                         |       |                                    |       |
| Shares repurchased                                   |       | (176                         | )          | (146                                    | )          |
|                                                 |       |                         |       |                                    |       |
| Net cash used in financing activities                |       | (176                         | )          | (146                                    | )          |
|                                                 |       |                         |       |                                    |       |
| Net increase in  cash and cash equivalents           |       | 14,438                       |       | 8,512                                   |       |
|                                                 |       |                         |       |                                    |       |
| Cash and cash  equivalents at beginning of period    |       | 1,180                        |       | 5,855                                   |       |
|                                                 |       |                         |       |                                    |       |
| Cash and cash  equivalents at end of period          |       | $                            | 15,618     |                                    | $          | 14,367 |   |
|                                                 |       |                         |       |                                    |       |
| Cash paid for  income taxes                          |       | $                            | 0          |                                    | $          | 22 |   |

 

See accompanying notes toconsolidated condensed financial statements.

5

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Item 1. e.

**BRIDGFORDFOODS CORPORATION**

**NOTESTO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)**

(in thousands, except share and per share amounts)

Note 1 - TheCompany and Summary of Significant Accounting Policies:

Theunaudited consolidated condensed financial statements of Bridgford FoodsCorporation (the “Company”) for the twelve and twenty-four weeks ended April20, 2007 and April 14, 2006 have been prepared in conformity with theaccounting principles described in the Company’s Annual Report on Form 10-K/Afor the fiscal year ended November 3, 2006 (the “Annual Report”) and includeall adjustments considered necessary by management for a fair statement of theinterim periods.  Such adjustmentsconsist only of normal recurring items. This report should be read in conjunction with the Annual Report.  Due to seasonality and other factors, interimresults are not necessarily indicative of the results to be expected for thefull year.  New accounting pronouncementsand their affect on the Company are included in Management’s Discussion andAnalysis of Financial Condition and Results of Operations in this Form 10-Q.

Note 2 - TradingSecurities

AtApril 20, 2007 the Company held no auction rate securities.  The Company elected to sell all auction rate securitiesduring the second quarter of fiscal 2007 and invest in 90-day treasury billswhich are classified as cash and cash equivalents on the accompanyingconsolidated condensed balance sheet.

AtNovember 3, 2006 the Company held $12,200 of auction rate securities, which areshown as a separately stated current asset in the accompanying consolidatedcondensed balance sheet in accordance with SFAS 115, “Accounting for CertainDebt and Equity Securities.”  The auctionrate securities as of November 3, 2006 have been reclassified from that whichwas originally presented in the Company’s Annual Report on Form 10-K.  Auction rate securities are variable-ratebonds tied to short-term interest rates with maturities on the face of thesecurities in excess of 90 days.  TheCompany’s investments in these auction rate securities are classified astrading securities under SFAS 115, “Accounting for Certain Investments in Debtand Equity Securities”.  The securitiesare recorded at cost, which approximates fair market value because of theirvariable interest rates, which typically resets every 7 to 35 days.  Despite the long-term nature of their statedcontractual maturities, the Company has the intent and ability to quicklyliquidate these securities; therefore, the Company has no cumulative grossunrealized holding gains or losses, or gross unrealized gains or losses fromthese investments.  All income generatedfrom these investments was recorded as interest income.

The consolidatedcondensed statement of cash flow for the twenty-four weeks ended April 14, 2006has been reclassified to give effect to auction rate securities activityclassified as trading securities.

Note 3 -Inventories:

Inventoriesare comprised as follows at the respective periods:
|                                 | ** ** | **April 20** | ** ** | **November 3** | ** ** |
|---------------------------------|------------|-------------------|------------|---------------------|------------|
| ** **                      | ** ** | **2007**          | ** ** | **2006**            | ** ** |
|                            |       |              |       |                |       |
| Meat,  ingredients and supplies |       | $            | 4,726      |                | $     | 3,748 |   |
| Work in progress                |       | 1,734             |       | 2,228               |       |
| Finished goods                  |       | 9,904             |       | 13,568              |       |
|                            |       | $                 | 16,364     |                | $          | 19,544 |   |

 

Inventories are valued at the lower of cost (atstandard cost, which approximates actual cost on a first-in, first-out basis)or market.  Costs related to warehousing,transportation and distribution to customers are considered when computingmarket value.  Inventories include thecost of raw materials, labor and manufacturing overhead.  The Company regularly reviews inventoryquantities on hand and writes down any excess or obsolete inventories to net realizablevalue.  An inventory reserve is createdwhen potentially slow-moving or obsolete inventories are identified in order toreflect the appropriate inventory value. Changes in economic conditions, production requirements, and lower thanexpected customer demand could result in additional obsolete or slow-movinginventory that cannot be sold or can be sold at reduced prices and could resultin additional reserve provisions.

6

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Note 4 - Basic anddiluted earnings per share:

The Company had 250,000employee stock options outstanding during the twenty-four week periods ended April20, 2007 and April 14, 2006.  The effectof the employee stock options outstanding for the twenty-four weeks ended April20, 2007 and April 14, 2006 was not included in the calculation of dilutedshares and diluted earnings per share as to do so would be anti-dilutive.  No options were granted during the firsttwenty-four weeks of the fiscal year ending November 2, 2007.

Note 5 -Retirement and Other Benefit Plans:

The Company hasnoncontributory-trusteed defined benefit retirement plans for sales, administrative,supervisory and certain other employees. The benefits under these plans areprimarily based on years of service and compensation levels. The Company’sfunding policy is to contribute annually the maximum amount deductible forfederal income tax purposes, without regard to the plans’ unfunded currentliability. The measurement date for the plans is the Company’s fiscal year end.

Net pension costconsisted of the following: 
| ** **                                       | ** ** | **24 weeks ended** | ** ** | **24 weeks ended** | ** ** |
|--------------------------------------------------|------------|------------------------------|------------|------------------------------|------------|
| ** **                                       | ** ** | **April 20**            | ** ** | **April 14**            | ** ** |
| ** **                                       | ** ** | **2007**                     | ** ** | **2006**                     | ** ** |
|                                             |       |                         |       |                         |       |
| Service cost                                     |       | $                            | 120        |                         | $          | 811 |   |
| Interest cost                                    |       | 842                          |       | 896                          |       |
| Expected return  on plan assets                  |       | (908                         | )          | (720                         | )          |
| Amortization of  net loss from earlier periods   |       | —                       |       | 123                          |       |
| Amortization of  unrecognized prior service cost |       | 1                            |       | 16                           |       |
| Curtailment Cost                                 |       | 47                           |       | —                       |       |
|                                             |       |                         |       |                         |       |
| Net pension cost                                 |       | $                            | 102        |                         | $          | 1,126 |   |

 

The expected Companycontribution to the plans in fiscal year 2007 is $3,476. The Company has fundedthe plans in the amount of $1,833 through the second quarter of fiscal 2007.

In the third quarter offiscal 2006, the Company froze the defined benefit pension plan accruedbenefits for members employed by the Company with administration, sales orsupervisory job classification or within a non- bargaining class.  This action was defined as a curtailmentunder SFAS No. 88 “Employers’ Accounting for Settlements and Curtailments ofDefined Benefit Pension Plans and for Termination Benefits” and, therefore, theCompany recognized a curtailment loss of approximately $8

In the fourth quarter offiscal 2006, the Company froze the defined pension benefits for employeesclassified in the “Dallas Union Group” effective January 1, 2007. This actionis defined as a curtailment under SFAS No. 88 and, therefore, the Companyrecognized a curtailment loss of approximately $47. As a result of theseactions, net pension costs will be reduced in future periods.

Note 6 -Commitments:

The Company leasescertain transportation and computer equipment under operating leases.  The terms of the transportation leasesprovide for annual renewal options and contingent rental payments based uponmileage and adjustments of rental payments based on the Consumer PriceIndex.   No material changes have beenmade to these contracts during the first twenty-four weeks of fiscal 2007. 

Note 7 - SegmentInformation:

The Company has tworeportable operating segments, Frozen Food Products (the processing anddistribution of frozen products) and Refrigerated and Snack Food Products (theprocessing and distribution of refrigerated meat and other convenience foods).

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

7

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The following segmentinformation is presented for the twelve and twenty-four week periods endedApril 20, 2007 and April 14, 2006.
| ** **                                     | ** ** | ** **           | ** ** | **Refrigerated**    | ** ** | ** ** | ** ** | ** **      | ** ** | ** ** | ** ** |
|------------------------------------------------|------------|----------------------|------------|---------------------|------------|------------|------------|-----------------|------------|------------|------------|
| ** **                                     | ** ** | ** **           | ** ** | **and**             | ** ** | ** ** | ** ** | ** **      | ** ** | ** ** | ** ** |
| **Twelve Weeks Ended**               | ** ** | **Frozen Food** | ** ** | **Snack Food** | ** ** | ** ** | ** ** | ** **      | ** ** | ** ** | ** ** |
| **April 20, 2007**                   | ** ** | **Products**         | ** ** | **Products**        | ** ** | **Other**  | ** ** | **Elimination** | ** ** | **Totals** | ** ** |
| Sales from  external customers                 |       | $                    | 11,506     |                | $          | 16,388     |       | $               | —     |       | $          | — |   | $ | 27,894 |   |
| Intersegment  sales                            |       | —               |       | 276                 |       | —     |       | 276             |       | —     |       |
| Net sales                                      |       | 11,506               |       | 16,664              |       | —     |       | 276             |       | 27,894     |       |
| Cost of products  sold, excluding depreciation |       | 6,955                |       | 11,265              |       | —     |       | 276             |       | 17,944     |       |
| Selling, general  and administrative expenses  |       | 3,591                |       | 5,933               |       | —     |       | —          |       | 9,524      |       |
| Depreciation                                   |       | 203                  |       | 484                 |       | 95         |       | —          |       | 782        |       |
| ** **                                     |       | 10,749               |       | 17,682              |       | 95         |       | 276             |       | 28,250     |       |
| Income (loss)  before taxes                    |       | 757                  |       | (1,018              | )          | (95        | )          | —          |       | (356       | )          |
| Income tax  provision (benefit)                |       | 292                  |       | (375                | )          | —     |       | —          |       | (83        | )          |
| Net income  (loss)                             |       | $                    | 465        |                | $          | (643       | )          | $               | (95        | )          | $          | — |   | $ | (273 | ) |
| ** **                                     | ** ** | ** **           | ** ** | ** **          | ** ** | ** ** | ** ** | ** **      | ** ** | ** ** | ** ** |
| Total assets                                   |       | $                    | 11,021     |                | $          | 25,998     |       | $               | 32,603     |       | $          | — |   | $ | 69,622 |   |
| Additions to property,  plant and equipment    |       | $                    | 73         |                | $          | 398        |       | $               | 18         |       | $          | — |   | $ | 489 |   |

 
| ** **                                     | ** ** | ** **           | ** ** | **Refrigerated**    | ** ** | ** ** | ** ** | ** **      | ** ** | ** ** | ** ** |
|------------------------------------------------|------------|----------------------|------------|---------------------|------------|------------|------------|-----------------|------------|------------|------------|
| ** **                                     | ** ** | ** **           | ** ** | **and**             | ** ** | ** ** | ** ** | ** **      | ** ** | ** ** | ** ** |
| **Twelve Weeks Ended**               | ** ** | **Frozen Food** | ** ** | **Snack Food** | ** ** | ** ** | ** ** | ** **      | ** ** | ** ** | ** ** |
| **April 14, 2006**                   | ** ** | **Products**         | ** ** | **Products**        | ** ** | **Other**  | ** ** | **Elimination** | ** ** | **Totals** | ** ** |
| Sales from  external customers                 |       | $                    | 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 |   |

 
| ** **                                     | ** ** | ** **           | ** ** | **Refrigerated**    | ** ** | ** ** | ** ** | ** **      | ** ** | ** ** | ** ** |
|------------------------------------------------|------------|----------------------|------------|---------------------|------------|------------|------------|-----------------|------------|------------|------------|
| ** **                                     | ** ** | ** **           | ** ** | **and**             | ** ** | ** ** | ** ** | ** **      | ** ** | ** ** | ** ** |
| **Twenty-Four Weeks Ended**          | ** ** | **Frozen Food** | ** ** | **Snack Food** | ** ** | ** ** | ** ** | ** **      | ** ** | ** ** | ** ** |
| **April 20, 2007**                   | ** ** | **Products**         | ** ** | **Products**        | ** ** | **Other**  | ** ** | **Elimination** | ** ** | **Totals** | ** ** |
| Sales from  external customers                 |       | $                    | 23,424     |                | $          | 36,783     |       | $               | —     |       | $          | — |   | $ | 60,207 |   |
| Intersegment  sales                            |       | —               |       | 575                 |       | —     |       | 575             |       | —     |       |
| Net sales                                      |       | 23,424               |       | 37,358              |       | —     |       | 575             |       | 60,207     |       |
| Cost of products  sold, excluding depreciation |       | 14,417               |       | 25,658              |       | —     |       | 575             |       | 39,500     |       |
| Selling, general  and administrative expenses  |       | 7,029                |       | 12,415              |       | —     |       | —          |       | 19,444     |       |
| Depreciation                                   |       | 406                  |       | 966                 |       | 191        |       | —          |       | 1,563      |       |
| ** **                                     |       | 21,852               |       | 39,039              |       | 191        |       | 575             |       | 60,507     |       |
| Income (loss)  before taxes                    |       | 1,572                |       | (1,681              | )          | (191       | )          | —          |       | (300       | )          |
| Income tax  provision (benefit)                |       | 588                  |       | (656                | )          | —     |       | —          |       | (68        | )          |
| Net income  (loss)                             |       | $                    | 984        |                | $          | (1,025     | )          | $               | (191       | )          | $          | — |   | $ | (232 | ) |
| ** **                                     | ** ** | ** **           | ** ** | ** **          | ** ** | ** ** | ** ** | ** **      | ** ** | ** ** | ** ** |
| Total assets                                   |       | $                    | 11,021     |                | $          | 25,998     |       | $               | 32,603     |       | $          | — |   | $ | 69,622 |   |
| Additions to  property, plant and equipment    |       | $                    | 137        |                | $          | 688        |       | $               | 10         |       | $          | — |   | $ | 835 |   |
| ** **                                     | ** ** | ** **           | ** ** | ** **          | ** ** | ** ** | ** ** | ** **      | ** ** | ** ** | ** ** |

 

8

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Note 7 - SegmentInformation (continued):
| ** **                                     | ** ** | ** **           | ** ** | **Refrigerated**    | ** ** | ** ** | ** ** | ** **      | ** ** | ** ** | ** ** |
|------------------------------------------------|------------|----------------------|------------|---------------------|------------|------------|------------|-----------------|------------|------------|------------|
| ** **                                     | ** ** | ** **           | ** ** | **and**             | ** ** | ** ** | ** ** | ** **      | ** ** | ** ** | ** ** |
| **Twenty-Four Weeks Ended**          | ** ** | **Frozen Food** | ** ** | **Snack Food** | ** ** | ** ** | ** ** | ** **      | ** ** | ** ** | ** ** |
| **April 14, 2006**                   | ** ** | **Products**         | ** ** | **Products**        | ** ** | **Other**  | ** ** | **Elimination** | ** ** | **Totals** | ** ** |
| Sales from  external customers                 |       | $                    | 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 |   |

 

9

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## **Item 2****.   Management’sDiscussion and Analysis of Financial Condition and Results of Operations**

**NOTE REGARDING FORWARD-LOOKINGSTATEMENTS**

Certainstatements in this Form 10-Q under Item 2 “Management’s Discussion and Analysisof Financial Condition and Results of Operations” and elsewhere constitute“forward-looking statements” within the meaning of the Securities Act of 1933and the Securities Exchange Act of 1934. In addition, the Company may from timeto time make oral forward-looking statements. Words such as “may”, “will”,“should”, “could”, “expect”, “plan”, “anticipate”, “believe”, “estimate”,“predict”, “potential” or “contribute” or similar words are intended toidentify forward-looking statements, although not all forward-lookingstatements contain these words. Such forward-looking statements involve knownand unknown risks, uncertainties, and other factors which may cause the actualresults, performance, or achievements of the Company to be materially differentfrom any future results, performance or achievements expressed or implied bysuch forward-looking statements.  Factorsthat might cause or contribute to such differences include, but are not limitedto, those discussed in “Item 3. Quantitative and Qualitative DisclosuresRegarding Market Risk – General Business Risks” of this Quarterly Report onForm 10-Q as well as the risk factors references in the Company’s Form 10-K/Afor the fiscal year ended November 3, 2006.

###### **CriticalAccounting Policies and Management Estimates**

Thepreparation of financial statements in conformity with generally acceptedaccounting principles requires management to make certain estimates andassumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the financialstatements and the reported revenues and expenses during the respectivereporting periods. Actual results could differ from those estimates. Amountsestimated related to liabilities for pension costs, self-insured workers’compensation and employee healthcare are especially subject to inherentuncertainties and these estimated liabilities may ultimately settle at amountsnot originally estimated. An actuary updates the pension and post-retirementhealthcare data on a quarterly basis. Management believes its current estimatesare reasonable and based on the best information available at the time.

Theprovision for doubtful accounts receivable is based on historical trends andcurrent collectibility risk.  The Companyhas significant amounts receivable with a few large, well-known customerswhich, although historically secure, could be subject to material risk shouldthese customers’ operations suddenly deteriorate. The Company monitors thesecustomers closely to minimize the risk of loss.  Wal-Mart® comprised 14.9% of revenues for thefirst twenty-four weeks of fiscal year 2007 and 15.5% of accounts receivable atthe end of the second quarter of fiscal year 2007.  Wal-Mart® comprised 12.3% of revenues for thefirst twenty-four weeks of fiscal year 2006 and 16.3% of accounts receivable atthe end of the second quarter of fiscal year 2006.

Revenuesare recognized upon passage of title to the customer upon product pick-up,shipment or delivery to customers as determined by applicable contracts.Products are delivered to customers through the Company’s own fleet or througha Company-owned direct store delivery system.

Inventoriesare valued at the lower of cost (at standard cost, which approximates actualcost on a first-in, first-out basis) or market. Costs related to warehousing, transportation and distribution tocustomers are considered when computing market value.  Inventories include the cost of rawmaterials, labor and manufacturing overhead. The Company regularly reviews inventory quantities on hand and writesdown any excess or obsolete inventories to net realizable value.  An inventory reserve is created whenpotentially slow-moving or obsolete inventories are identified in order toreflect the appropriate inventory value. Changes in economic conditions, production requirements, and lower thanexpected customer demand could result in additional obsolete or slow-movinginventory that cannot be sold or can be sold at reduced prices and could resultin additional reserve provisions.

TheCompany records the cash surrender or contract value for life insurancepolicies as an adjustment of premiums paid in determining the expense or incometo be recognized under the contract for the period.

Theabove listing is not intended to be a comprehensive list of all the Company’saccounting policies. In many cases, the accounting treatment of a particulartransaction is specifically dictated by accounting principles generallyaccepted in the United States, with no need for management’s judgment in their application.There are also areas in which management’s judgment in selecting any availablealternative would not produce a materially different result.

10

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**ExecutiveLevel Overview of Business Segments**

The Company operates in twobusiness segments – the processing and distribution of frozen products and theprocessing and distribution of refrigerated and snack food products.  For information regarding the separatefinancial performance of the business segments refer to Note 7 of the Notes tothe Consolidated Financial Statements included in this Quarterly Report on Form10-Q.  Although the Company has recentlyintroduced several new products, most of these products have not contributedsignificantly to the Company’s revenue growth for the fiscal year with the exceptionof  Bridgford Monkey Bread, included inthe Frozen Food Products segment, originally introduced in 2005.

**Frozen FoodProducts Segment**

The products manufacturedand distributed by the Company in the Frozen Food Products Segment consist ofan extensive line of food products, including biscuits, bread dough items, rolldough items and sandwiches.  All itemswithin this segment are considered similar products and have been aggregated atthis level.  The Company’s frozen fooddivision serves both food service and retail customers. The Company sellsapproximately 200 unique frozen food products through wholesalers, cooperativesand distributors to approximately 21,000 retail outlets and 22,000 restaurantsand institutions.

**Frozen FoodProducts–Food Service Customers**

The food service industry iscomposed of establishments that serve food outside the home and includesrestaurants, the food operations of health care providers, schools, hotels,resorts, corporations, and other traditional and non-traditional food serviceoutlets. Growth in this industry has been driven by the increase inaway-from-home meal preparation, which has accompanied the expanding number ofboth dual income and single-parent households. Another trend within the foodservice industry is the growth in the number of non-traditional food serviceoutlets such as convenience stores, retail stores and supermarkets. Thesenon-traditional locations often lack extensive cooking, storage or preparationfacilities, resulting in a need for pre-cooked and prepared foods similar tothose provided by the Company. The expansion in the food service industry hasalso been accompanied by the continued consolidation and growth of broad lineand specialty food service distributors, many of which are long-standingcustomers of the Company.

The Company supplies itsfood service customers generally through distributors that take title to theproduct and resell it. Among the Company’s customers are many of the country’slargest broad line and specialty food service distributors. For these and otherlarge end purchasers, the Company’s products occasionally go through extensivequalification procedures and its manufacturing capabilities are subjected tothorough review by the end purchasers prior to the Company’s approval as avendor. Large end purchasers typically select suppliers that can consistentlymeet increased volume requirements on a national basis during peak promotionalperiods. The Company believes that its manufacturing flexibility, nationalpresence and long-standing customer relationships should pose barriers to entryfor other manufacturers seeking to provide similar products to the Company’scurrent large food service end purchasers, although no assurances can be given.

**Frozen FoodProducts–Retail Customers**

The majority of theCompany’s existing and targeted retail customers are involved in the resale ofbranded and private label packaged foods. The same trends which havecontributed to the increase in away-from-home meal preparation have also fueledthe growth in easy to prepare, microwaveable frozen and refrigeratedconvenience foods. Among the fastest growing segments is the frozen andrefrigerated hand-held foods market. This growth has been driven by improvedproduct quality and variety and the increasing need for inexpensive and healthyfood items that require minimal preparation. Despite rapid growth, manycategories of frozen and refrigerated hand-held foods have achieved minimalhousehold penetration. The Company believes it has been successful inestablishing and maintaining supply relationships with certain selected leadingretailers in this market.

11

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**Frozen FoodProducts–Sales and Marketing**

The Company’s frozen foodbusiness covers the United States and Canada. In addition to regional salesmanagers, the Company maintains a network of independent food service andretail brokers covering most of the states as well as Canada. Brokers arecompensated on a commission basis. The Company believes that its brokerrelationships, in close cooperation with the regional sales managers, are avaluable asset providing significant new product and customer opportunities.The regional sales managers perform several significant functions for theCompany, including identifying and developing new business opportunities andproviding customer service and support to the Company’s distributors and endpurchasers through the effective use of the Company’s broker network.

The Company’s annualadvertising expenditures are directed towards retail and institutionalcustomers. These customers participate in various special promotional andmarketing programs and direct advertising allowances sponsored by the Company.The Company also invests in general consumer advertising in various newspapersand periodicals. The Company directs advertising at food service customers withcampaigns in major industry publications and through Company participation intrade shows throughout the United States.

**Refrigeratedand Snack Food Segment**

The products distributed bythe Company in the Refrigerated and Snack Food Products segment consist of bothproducts manufactured by the Company and product manufactured or processed bythird parties.   Approximately 46% ofthis segment’s products were manufactured by third parties.  All items within this segment are consideredsimilar products and have been aggregated at this level.  The dry sausage division includes productssuch as jerky, meat snacks, sausage, summer sausage and pepperoni products.  The deli division includes products such asham, sandwiches, cheese, Mexican food, pastries and other delicatessen typefood products.

**Refrigeratedand Snack Food Segment–Customers**

The Company’s refrigeratedand snack food products division sells approximately 270 different itemsthrough a direct store delivery network serving approximately 36,000supermarkets, mass merchandise and convenience retail stores located in 49states and Canada.

These customers arecomprised of large retail chains and smaller “independent” operators. This partof the Company’s business is highly competitive. Proper placement of theCompany’s product lines is critical to selling success since most items couldbe considered “impulse” items which are often consumed shortly after purchase.The Company’s ability to sell successfully to this distribution channel dependson aggressive marketing and maintaining relationships with key buyers.

**Refrigeratedand Snack Food Segment–Sales and Marketing**

The Company’s direct storedelivery network consists of two separate divisions, refrigerated and non-refrigeratedsnack food products. Refrigerated snack food products are distributed throughfive different regions located in the southwest, primarily operating inCalifornia, Arizona and Nevada. Non-refrigerated snack food products aredistributed in seventeen geographic regions across the United States andCanada, each managed by regional sales managers. The regional sales managersperform several significant functions for the Company including identifying anddeveloping new business opportunities and providing customer service andsupport to the Company’s customers. The Company also utilizes the services ofbrokers where appropriate to support efficient product distribution andcustomer satisfaction.

12

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**Results of Operations for the Twelve Weeks ended April 20,2007 and Twelve Weeks ended April 14, 2006.**

**Net Sales-Consolidated**

Netsales decreased by $411,000 (1.5%) to $27,894,000 in the second twelve weeks ofthe 2007 fiscal year compared to the same twelve-week period last year. Theprimary reason for the decline was an increase in promotional allowances, as apercent of sales, of approximately 1.0% as compared to the same twelve-weekperiod last year. Unit prices decreased slightly (1.3%) offset by a unit volumeincrease of approximately 1.3%. Product return levels also decreased slightlyagainst the comparative prior period.

Comparedto the prior twelve-week period ended January 26, 2007 (not shown), averageweekly sales decreased $368,000 (13.7%).  The decrease primarily relates to 10.1% lower unit sales volume duringthe second twelve weeks of the 2007 fiscal year compared to the previoustwelve-week period. Unit selling prices were also lower than in the priortwelve-week period contributing to the sales decrease.

**Net Sales-Frozen Food Products Segment**

Netsales in the Frozen Food Products segment decreased by $488,000 (4.1%) to$11,506,000 in the second twelve weeks of the 2007 fiscal year compared to thesame twelve-week period last year. The primary reason for the decline was anincrease in promotional allowances compared to the same twelve-week period lastyear. Unit volume decreases of 6.4% were not fully offset by unit priceincreases (before promotional allowances) of 5.5%, which also contributed tothe decline in sales.

**Net Sales-Refrigerated and Snack Food Segment**

Netsales in the Refrigerated and Snack Food Products segment increased by $75,000(0.5%) to $16,388,000 in the second twelve weeks of the 2007 fiscal yearcompared to the same twelve-week period last year. The primary reason for thesales increase was an 11.6% increase in dry sausage unit volume offset by adecrease in deli unit volume. A decrease in unit selling prices also offsetoverall unit volume increases.

**Cost of Products Sold-Consolidated**

Costof products sold increased by $434,000 (2.5%) to $17,944,000 in the secondtwelve weeks of the 2007 fiscal year compared to the same twelve-week period infiscal 2006.  The increase in cost ofproducts sold on a comparative basis was due primarily to slightly higher unitsales volume.  The gross margin decreasedslightly due to higher flour commodity costs when compared to the sametwelve-week period in fiscal 2006.

Compared to the priortwelve-week period ended January 26, 2007 (not shown), the average weekly costof products sold decreased $301,000 (16.8%) for the second twelve weeks offiscal year 2007.  This decrease isconsistent with normal seasonal trends.

**Cost of Products Sold–Frozen Food Products Segment**

Costof products sold in the Frozen Food Products segment increased by $385,000 (5.9%)to $6,955,000 in the second twelve weeks of the 2007 fiscal year compared tothe same twelve-week period in fiscal 2006. An increase in flour commodity costs was the primary contributing factorin this increase. Unit production volumes were also lower than the comparativetwelve-week period.

**Cost of Products Sold–Refrigerated and Snack Food Segment**

Costof products sold in the Refrigerated and Snack Food Products segment decreasedby $159,000 (1.4%) to $11,265,000 in the second twelve weeks of the 2007 fiscalyear compared to the same twelve-week period in fiscal 2006.  Favorable trends in meat commodity costs andhigher production volumes contributed to the decrease in costs of products soldin this segment.

13

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###### **Selling,General and Administrative Expenses-Consolidated**

Selling, general andadministrative expenses decreased by $317,000 (3.2%) to $9,524,000 in thesecond twelve weeks of fiscal year 2007 compared to the same twelve-week periodin the prior fiscal year.  The change in thiscategory for the twelve-week period ended April 20, 2007 did not directlycorrespond to the sales decrease. Favorable trends in employee pension and healthcare expenses, interestincome and bad debt recoveries reduced this category.  As a result of significant bad debt write-offin past years, the Company has received shares of stock from customers in lieuof cash payment on accounts receivable. Material recoveries associated with the unplanned receipt of shares ofstock were recognized by the Company when shares were received.  The timing of these receipts areunpredictable and there is no guarantee that this trend will continue.  Offsetting the favorable trends notedpreviously, the Company incurred higher advertising and outside storage coststhan in the comparative twelve week period.

Compared to the priortwelve-week period ended January 26, 2007 (not shown), average weekly selling,general and administrative expenses decreased by $33,000 (4.0%). The decreasewas primarily caused by a decrease in average weekly sales which lowered theseexpenses.

###### **Selling,General and Administrative Expenses-Frozen Food Products Segment**

Selling, general andadministrative expenses in the Frozen Food Products segment increased by$242,000 (7.2%) to $3,591,000 in the second twelve weeks of fiscal year 2007compared to the same twelve-week period in the prior fiscal year.  Higher advertising costs were the primarycontributor to the increase in selling, general and administrative expenseswhen compared to the same twelve-week period in fiscal 2006.

###### **Selling,General and Administrative Expenses-Refrigerated and Snack Food Segment**

Selling, general andadministrative expenses in the Refrigerated and Snack Food Products segmentdecreased by $559,000 (8.6%) to $5,933,000 in the second twelve weeks of fiscalyear 2007 compared to the same twelve-week period in the prior fiscalyear.  Lower healthcare and pensionexpenses and a significant bad debt recovery were the most significantcontributors to the decrease in selling, general and administrative expenseswhen compared to the same twelve-week period in fiscal 2006.

**Depreciation Expense-Consolidated**

Depreciationexpense decreased by $110,000 (12.3%) to $782,000 in the second twelve weeks ofthe 2007 fiscal year compared to the same twelve-week period in fiscal year2006.  The decrease in depreciationexpense reflects lower capital expenditure levels in recent years and certainsignificant assets becoming fully depreciated in the 2007 fiscal year.  Compared to the prior twelve-week periodended January 26, 2007 (not shown), average weekly depreciation remainedconstant at $65,000.

**Depreciation Expense-Frozen Food Products and Refrigeratedand Snack Food Segments**

Depreciationexpense in the Frozen Food Products segment decreased by $88,000 (30.2%) to$203,000 in the second twelve weeks of the 2007 fiscal year compared to thesame twelve-week period in fiscal year 2006.

Depreciationexpense in the Refrigerated and Snack Food Products segment decreased by$18,000 (3.6%) to $484,000 in the second twelve weeks of the 2007 fiscal yearcompared to the same twelve-week period in fiscal year 2006.   The decrease in depreciation expense in bothsegments was due to lower capital expenditures in recent years and certainsignificant assets becoming fully depreciated in the 2007 fiscal year.

**Income Taxes-Consolidated**

TheCompany recorded an income tax provision based on an estimated annual effectivetax rate of 23.3% in the second twelve weeks of fiscal 2007 as compared to57.1% in the prior fiscal year and 27.3% for the prior twelve-week period.  The change in the effective income tax raterelates to significant non-taxable gains on life insurance policies andrevisions to the Company’s projected tax rates related to updated income estimates.

14

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**Net Income (Loss)-Consolidated**

Netloss in the twelve weeks ended April 20, 2007 was affected by non-taxable gainson life insurance policies in the amount of $175,000. Gains and losses on lifeinsurance policies are dependent upon the performance of the underlyingequities and future results may produce losses of equal magnitude. Taxableinvestment income also increased on a comparative basis during the secondtwelve weeks of fiscal 2007 in the amount of $70,000 due to higher cashbalances and an increase in short-term interest rates.  After considering the effect of thesetransactions, the Company’s results were as follows:
| ** **                                                        | ** ** | **12 Weeks Ended** | ** ** | **12 Weeks Ended** | ** ** |
|-------------------------------------------------------------------|------------|------------------------------|------------|------------------------------|------------|
| ** **                                                        | ** ** | **April 20, 2007** | ** ** | **April 14, 2006** | ** ** |
|                                                              |       |                         |       |                         |       |
| Net loss before  taxes, life insurance gain and investment income |       | $                            | (720,000   | )                            | $          | (203,000 | ) |
| Gain on sale of  equity securities                                |       | —                       |       | 106,000                      |       |
| Life insurance  gain and investment income                        |       | 364,000                      |       | 265,000                      |       |
| Income (loss)  before taxes                                       |       | (356,000                     | )          | 168,000                      |       |
| Income tax  provision (benefit)                                   |       | (83,000                      | )          | 96,000                       |       |
| Net income (loss)                                                 |       | $                            | (273,000   | )                            | $          | 72,000 |   |

 

TheCompany presents net income or loss before taxes, life insurance gain or lossand investment income because the Company believes it is an important measurefor investors to use in understanding the Company’s underlying operations.

**Results of Operations for the Twenty-four Weeks ended April20, 2007 and Twenty-four Weeks ended April 14, 2006.**

**Net Sales-Consolidated**

Netsales decreased by $2,673,000 (4.3%) to $60,207,000 in the first twenty-fourweeks of the 2007 fiscal year compared to the same twenty-four week period lastyear. The primary reason for the sales decline was a 2.3% decrease in unitvolume. Promotional allowances, as a percent of sales, increased 2.8% comparedto the same 24 week period last year. Unit selling prices decreased approximately0.5% contributing to the sales decline. Product return levels also decreasedslightly against the comparative prior period.

**Net Sales-Frozen Food Products Segment**

Netsales in the Frozen Food Products segment decreased by $674,000 (2.8%) to $23,424,000in the first twenty-four weeks of the 2007 fiscal year compared to the sametwenty-four week period last year. The primary reason for the decline was anincrease in promotional allowances compared to the same twenty-four week periodlast year. Unit prices, before promotions and allowances, increased (4.5%)offset by unit volume decrease of approximately 3.3%.

**Net Sales-Refrigerated and Snack Food Segment**

Netsales in the Refrigerated and Snack Food Products segment decreased by$1,999,000 (5.2%) to $36,783,000 in the first twenty-four weeks of the 2007fiscal year compared to the same twenty-four week period last year. Unitvolumes were slightly lower than the comparative twenty-four week period.Average unit selling prices were also lower than the prior twenty-four weekperiod.

**Cost of Products Sold-Consolidated**

Costof products sold decreased by $1,563,000 (3.8%) to $39,500,000 in the firsttwenty-four weeks of the 2007 fiscal year compared to the same twenty-four weekperiod in fiscal 2006.  The decrease incost of products sold on a comparative basis was due primarily to lower unitsales volume.  The slight decrease ingross margin was partially due to higher flour commodity costs partially offsetby lower meat commodities when compared to the same twenty-four-week period infiscal year 2006.

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**Cost of Products Sold–Frozen Food Products Segment**

Costof products sold in the Frozen Food Products segment increased by $217,000(1.5%) to $14,417,000 in the first twenty-four weeks of the 2007 fiscal yearcompared to the same twenty-four week period in fiscal 2006.  Higher flour commodity costs contributed tothe increase in costs of products sold.

**Cost of Products Sold–Refrigerated and Snack Food Segment**

Costof products sold in the Refrigerated and Snack Food Products segment decreasedby $2,406,000 (8.6%) to $25,658,000 in the first twenty-four weeks of the 2007fiscal year compared to the same twenty-four-week period in fiscal 2006.  Lower unit volumes, favorable meat commoditycosts and lower repairs and maintenance costs contributed to the decrease incosts of products sold.

###### **Selling,General and Administrative Expenses-Consolidated**

Selling, general andadministrative expenses decreased by $767,000 (3.8%) to $19,444,000 in thefirst twenty-four weeks of fiscal year 2007 compared to the same twenty-fourweek period in the prior fiscal year. The change in this category for the twenty-four week period ended April20, 2007 did not directly correspond to the sales decrease. Costs foradvertising and display racks increased while reductions in employee healthcareand pension expenses, and higher interest income helped offset these increases. As a result of significant bad debtwrite-off in past years, the Company has received shares of stock fromcustomers in lieu of cash payment on accounts receivable.  Material recoveries associated with theunplanned receipt of shares of stock were recognized by the Company when shareswere received.  The timing of thesereceipts are unpredictable and there is no guarantee that this trend willcontinue.

###### **Selling,General and Administrative Expenses-Frozen Food Products Segment**

Selling, general andadministrative expenses in the Frozen Food Products segment increased by$159,000 (2.3%) to $7,029,000 in the first twenty-four weeks of fiscal year2007 compared to the same twenty-four week period in the prior fiscalyear.  Higher promotional spendingcontributed to the increase in selling, general and administrative expenseswhen compared to the same twenty-four-week period in fiscal 2006.

###### **Selling,General and Administrative Expenses-Refrigerated and Snack Food Segment**

Selling, general andadministrative expenses in the Refrigerated and Snack Food Products segmentdecreased by $926,000 (6.9%) to $12,415,000 in the first twenty-four weeks offiscal year 2007 compared to the same twenty-four week period in the priorfiscal year.  Lower labor, healthcare andpension expenses contributed to the decrease in selling, general andadministrative expenses when compared to the same twenty-four week period infiscal 2006.

**Depreciation Expense-Consolidated**

Depreciationexpense decreased by $221,000 (12.4%) to $1,563,000 in the first twenty-fourweeks of the 2007 fiscal year compared to the same twenty-four week period infiscal year 2006.  The decrease indepreciation expense was due to lower capital expenditures in recent years andcertain significant assets becoming fully depreciated in the 2007 fiscal year.

**Depreciation Expense-Frozen Food Products and Refrigeratedand Snack Food Segments**

Depreciationexpense in the Frozen Food Products segment decreased by $175,000 (30.1%) to$406,000 in the second twelve weeks of the 2007 fiscal year compared to thesame twelve-week period in fiscal year 2006. Depreciation expense in theRefrigerated and Snack Food Products segment decreased by $39,000 (3.9%) to$966,000 in the second twelve weeks of the 2007 fiscal year compared to thesame twelve-week period in fiscal year 2006.  The decrease in depreciation expense in both segments was due to lowercapital expenditures in recent years and certain significant assets becomingfully depreciated in the 2007 fiscal year.

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**Income Taxes-Consolidated**

TheCompany recorded an income tax provision based on an estimated annual effectivetax rate of 22.7% in the first twenty-four weeks of fiscal 2007 as compared to9.7% in the prior fiscal year.  Thechange in the effective income tax rate relates to significant non-taxablegains on life insurance policies and revisions to the Company’s projected taxrates related to updated estimates and the recognition of research anddevelopment tax credits.

**Net Income (Loss)-Consolidated**

Netloss in the twenty-four weeks ended April 20, 2007 was affected by non-taxablegains on life insurance policies in the amount of $360,000. Gains and losses onlife insurance policies are dependent upon the performance of the underlyingequities and future results may produce losses of equal magnitude. Taxableinvestment income also increased on a comparative basis during the firsttwenty-four weeks of fiscal 2007 in the amount of $161,000 due to higher cashbalances and an increase in short-term interest rates.  After considering the effect of thesetransactions, the Company’s results were as follows:
| ** **                                                        | ** ** | **24 Weeks Ended** | ** ** | **24 Weeks Ended** | ** ** |
|-------------------------------------------------------------------|------------|------------------------------|------------|------------------------------|------------|
| ** **                                                        | ** ** | **April 20, 2007** | ** ** | **April 14, 2006** | ** ** |
|                                                              |       |                         |       |                         |       |
| Net loss before  taxes, life insurance gain and investment income |       | $                            | (1,012,000 | )                            | $          | (725,000 | ) |
| Gain on sale of  equity securities                                |       | —                       |       | 106,000                      |       |
| Life insurance  gain and investment income                        |       | 712,000                      |       | 547,000                      |       |
| Loss before taxes                                                 |       | (300,000                     | )          | (72,000                      | )          |
| Income tax  provision (benefit)                                   |       | (68,000                      | )          | (7,000                       | )          |
| Net loss                                                          |       | $                            | (232,000   | )                            | $          | (65,000 | ) |

 

TheCompany presents net income or loss before taxes, life insurance gain or lossand investment income because the Company believes it is an important measurefor investors to use in understanding the Company’s underlying operations.

**Liquidity and Capital Resources-Consolidated**

Netcash from operating activities was $15,446,000 for the first twenty-four weeksof the 2007 fiscal year. Operating cash was generated principally by reductionsin trading securities, accounts receivable and inventories. The substantialreduction in inventory in the first twenty-four weeks of fiscal 2007 isconsistent with normal seasonal trends and a planned seasonal reduction infield inventories.  The Company sold$12,200,000 in auction rate securities in the first twenty-four weeks of the2007 fiscal year and currently has no investments in these instruments. TheCompany utilized cash flow for additions to property, plant and equipment andshare repurchases.  The net effect ofthese transactions resulted in a cash and cash equivalents increase during thefirst twenty-four weeks of fiscal 2007 of $14,438,000 (1224.6%) to $15,618,000.  The additions to property, plant andequipment reflect the Company’s continued investment in processing,transportation and information technology equipment.

TheCompany’s refrigerated and snack food products segment has continueddevelopment of a new major production line that was originally scheduled forcompletion in the fourth quarter of fiscal year 2005.  The line has been producing product foranalysis purposes for approximately six months. The oven and processing parameters are being fine-tuned.  A total capital expenditure of $1,883,000 hasbeen invested in this new production line through April 20, 2007.  No significant additional investments areanticipated at this time. The Company expects regular production to begin nolater than the last quarter of fiscal year 2007.

Nocash dividends were paid during the first twenty-four weeks of the 2007 fiscalyear, as was the case during the first twenty-four weeks of the 2006 fiscalyear, as the Board of Directors suspended the quarterly cash dividend at itsMay 2004 meeting in recognition of lower profitability levels in recentquarters.

The Company remained freeof interest bearing debt during the first twenty-four weeks of fiscal year2007.  The Company’s revolving line ofcredit with Bank of America expires April 30, 2008 and provides for borrowingsup to $2,000,000.  The Company has notborrowed under this line for more than twenty consecutive years.

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Theimpact of inflation on the Company’s financial position and results ofoperations has not been significant. Management is of the opinion that the Company’s financial position andits capital resources are sufficient to provide for its near term operatingneeds and capital expenditures.

**Recently Issued Accounting Pronouncements and Interpretations**

InJune 2006, the Financial Accounting Standards Board (“FASB”) issuedInterpretation No. 48, “Accounting for Uncertainty in Income Taxes, aninterpretation of FASB Statement No. 109” (“ FIN 48 “).  This Statement addresses uncertainty in taxpositions recognized in a company’s financial statements and stipulates arecognition threshold and measurement of a tax position taken or expected to betaken in a tax return.  FIN 48 will applyto the Company’s fiscal year beginning November 3, 2007, with earlier adoptionpermitted.   The Company does not expectthis interpretation will have a material impact on the Company’s results ofoperations or financial position.

InSeptember 2006, the FASB issued Statement of Accounting Standards No. 157,“Fair Value Measurements” (SFAS No. 157). This Statement defines fair value,provides a framework for measuring fair value, and expands the disclosuresrequired for fair value measurements. SFAS No. 157 applies to other accountingpronouncements that require fair value measurements; it does not require anynew fair value measurements. SFAS No. 157 is effective for financial statementsfor fiscal years beginning after November 15, 2007, the Company’s first quarterof the 2009 fiscal year, and interim periods within those years.   The Company does not expect this statementwill have a material impact on the Company’s results of operations or financialposition.

InSeptember 2006, the Financial Accounting Standards Board issued FAS 158,“Employers’ Accounting for Defined Benefit Pension and Other PostretirementPlans—an amendment of FASB Statements No. 87, 88, 106, and 132(R)”. FAS 158requires employers to recognize the over- or under-funded status of definedbenefit plans and other postretirement plans in the statement of financialposition and to recognize changes in the funded status in the year in which thechanges occur through comprehensive income. In addition, FAS 158 requiresemployers to measure the funded status of plans as of the date of the year-endstatement of financial position. The recognition and disclosure provisions ofFAS 158 are effective as of the end of for fiscal years ending after December15, 2006 (effective for the Company’s fiscal year ending November 2, 2007),while the requirement to measure plan assets and benefit obligations as of acompany’s year-end date is effective for fiscal years ending after December 15,2008 (effective for the Company’s fiscal year ending October 30, 2009).  Based on recent preliminary analysis, theCompany does not expect that the adoption of this statement will materiallyaffect other comprehensive income, long-term liabilities and shareholdersequity.

InFebruary 2007, the FASB issued Statement of Financial Accounting Standards No.159, “The Fair Value Option for Financial Assets and Financial Liabilities”(FAS 159).  FAS 159 expands opportunitiesto use fair value measurement in financial reporting and permits entities tochoose to measure many financial instruments and certain other items at fairvalue.  This Statement is effective forfiscal years beginning after November 15, 2007, or our fiscal year endingOctober 30, 2009.  The Company does notexpect this statement will have a material impact on the Company’s results ofoperations or financial position.

**Off-Balance Sheet Arrangements**

TheCompany is not engaged in any “off-balance sheet arrangements” within themeaning of Item 303(a)(4)(ii) of Regulation S-K.

# **Item 3.  Quantitative and Qualitative Disclosures about Market Risk**

**General Business Risks**

Generalrisk factors include, among others, the following: general economic andbusiness conditions; the impact of competitive products and pricing; success ofoperating initiatives; development and operating costs; advertising andpromotional efforts; adverse publicity; acceptance of new product offerings; consumertrial 

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andfrequency; 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 complywith, government regulations; weather conditions; construction schedules; andother factors referenced in this Form 10-Q and in Bridgford Foods’ AnnualReport on Form 10-K/A for the fiscal year ended November 3, 2006. Because ofthese and other factors that may affect the Company’s operating results, pastfinancial performance should not be considered an indicator of futureperformance, and investors should not use historical trends to anticipateresults or trends in future periods. The Company expressly disclaims any intentor obligation to publicly release the results of any revisions to theseforward-looking statements that may be made to reflect events or circumstancesafter the date hereof, or to reflect the occurrence of unanticipated events.

Therecan be no assurances that the Company’s growth objectives will be met or thatproduct lines will be profitable. Anticipated and unanticipated declines in customer demand or taste,sales softness or aggressive competition may have a material adverse effect onthe Company’s results of operations. The business is also exposed to the riskof negative publicity, whether or not based in fact, which affects consumerperceptions about the health, safety or quality of food and inputs of foodproducts.

TheCompany’s operating results are heavily dependent upon the prices paid for rawmaterials.  Other significant factorsthat influence operating results include transportation and energy costs.  The marketing of the Company’s value-addedproducts does not lend itself to instantaneous changes in selling prices.  Changes in selling prices are relativelyinfrequent and do not compare with the volatility of commodity markets,transportation costs and energy prices.

**Financial Instrument Risk**

TheCompany’s financial instruments generally consist of cash and cash equivalents,auction rate securities and life insurance policies.  At April 20, 2007, the carrying value of theCompany’s financial instruments approximated their fair market values based on currentmarket prices and rates.  It is not theCompany’s policy to enter into derivative financial instruments.

# **Foreign Currency Risk**

TheCompany did not have significant foreign currency exposure at April 20, 2007.

# **Concentration of Credit Risk**

TheCompany’s credit risk is diversified across a broad range of customers andgeographic regions.  Losses due to creditrisk have recently been immaterial although losses in fiscal year 2002 weresignificant.  The provision for doubtfulaccounts receivable is based on historical trends and current collectibilityrisk.  The Company has significantamounts receivable with a few large, well known customers which, althoughhistorically secure, could be subject to material risk should these customers’operations suddenly deteriorate. The Company monitors these customers closelyto minimize the risk of loss.

# **Fixed – Price Contracts Risk:**

TheCompany purchases bulk flour under short-term fixed price contracts during thenormal course of business. Under these arrangements, the Company is obligatedto purchase specific quantities at fixed prices, within the specified contractperiod.  These contracts provide forautomatic price increases if agreed quantities are not purchased within thespecified contract period. No significant contracts remained unfulfilled atApril 20, 2007.

# **Item 4. Controls and Procedures**

Managementof the Company, with the participation and under the supervision of theCompany’s Chairman and Chief Financial Officer, has evaluated the effectivenessof the Company’s disclosure controls and procedures (as defined in Exchange ActRules 13a-15(e) and 15d-15(e)) as of the end of the period covered by thisquarterly report. Based on this evaluation, the Chairman and Chief FinancialOfficer have concluded that the Company’s disclosure controls and proceduresare effective as of the end of the period covered by 

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thisreport to provide reasonable assurance that material information required to bedisclosed by the Company in the reports that it files or submits under theExchange Act is recorded, processed, summarized and reported within the timeperiods specified by the Securities and Exchange Commission’s rules andforms.  There has been no change in theCompany’s internal control over financial reporting (as defined in Exchange ActRules 13a-15(f) and 15d-15(f)) during the period covered by this report thathas materially affected, or is reasonably likely to materially affect, theCompany’s internal control over financial reporting.

TheCompany’s management, including its Chairman and Chief Financial Officer, doesnot expect that the Company’s disclosure controls and internal controls willprevent all error and all fraud.  Acontrol system, no matter how well conceived and operated, can provide onlyreasonable, not absolute, assurance that the objectives of the control systemare met.  Further, the design of acontrol system must reflect the fact that there are resource constraints, andthe benefits of controls must be considered relative to their costs.  Because of inherent limitations in allcontrol systems, no evaluation of controls can provide absolute assurance thatall control issues and instances of fraud, if any, within the Company have beendetected.  These inherent limitationsinclude the realities that judgments in decision-making can be faulty, and thatbreakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented bythe individual acts of some persons, by collusion of two or more people, or bymanagement override of the control.

Thedesign of any system of controls is also based in part upon certain assumptionsabout the likelihood of future events, and there can be no assurance that anydesign will succeed in achieving its stated goals under all potential futureconditions; over time, a control may become inadequate because of changes inconditions, or the degree of compliance with the policies or procedures maydeteriorate.  Because of inherentlimitations in a cost-effective control system, misstatements due to error orfraud may occur and not be detected.

**Section 404 Sarbanes-Oxley Act of 2002**

TheSecurities and Exchange Commission, on December 15, 2006, adopted new measuresto grant relief to smaller public companies by extending the date of compliancewith Section 404 of the Sarbanes-Oxley Act of 2002 (the “Act”). Under these newmeasures, the Company will be required to comply with the Act in twophases.  The first phase will beeffective for the Company’s fiscal year ending October 31, 2008 and willrequire the Company to furnish a management report on internal control overfinancial reporting. The second phase will require the Company to provide anauditor’s attestation report on internal control over financial reportingbeginning with the Company’s fiscal year ending October 30, 2009.

Inorder to comply with the Act, the Company is in the process of centralizingmost accounting and many administrative functions at its corporate headquartersin an effort to control the cost of maintaining its control systems. On July11, 2006, The Committee of Sponsoring Organizations (“COSO”) issued guidance onhow small companies should implement an effective internal control frameworkover financial reporting and other risks. This guidance is considered a keytool to help smaller public companies to confront the challenges of theAct.  As a result, the Company may incursubstantial additional expenses and diversion of management’s time. During thecourse of these activities, the Company may identify certain internal controlissues which management believes should be improved. These improvements, ifnecessary, will likely include further formalization of policies andprocedures, improved segregation of duties, additional information technologysystem controls and additional monitoring controls. Although management does notbelieve that any of these matters will result in material weaknesses beingidentified in the Company’s internal controls as defined by the Public CompanyAccounting Oversight Board Auditing Standard No. 2, no assurances can be givenregarding the outcome of these efforts. Additionally, control weaknesses maynot be identified in a timely enough manner to allow remediation prior to theissuance of the auditor’s report on internal controls over financial reporting.Any failure to adequately comply could result in sanctions or investigations byregulatory authorities, which could harm the Company’s business or investors’confidence in the Company.

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OnMay 23, 2007 the Securities and Exchange Commission unanimously approvedinterpretive guidance to assist public companies to reinforce their internalcontrol over financial reporting with a focus on smaller companies.  The Securities and Exchange Commissionapproved rules that allow a company to satisfy the annual evaluationrequirement by Exchange Act Rules 13a-15 and 15d-15 through the evaluation ofinternal control in accordance with interpretive guidance.  The term “material weakness” was modified bythe Securities and Exchange Commission as “a deficiency, or combination ofdeficiencies, in internal control over financial reporting, such that there isa reasonable possibility that a material misstatement of the company’s annualor interim financial statements will not be prevented or detected on a timelybasis.”  Another revision includedchanges to the required auditor’s attestation report on the effectiveness ofinternal controls over financial reporting which now excludes the auditor’sevaluation of management’s evaluation process. The auditor’s attestation report will now opine directly on the internalcontrols over financial reporting.  Theeffective date for these changes will be 30 days from their publication in theFederal Register.

ThePublic Company Accounting Oversight Board voted on May 24, 2007 to adoptAuditing Standard No. 5, An Audit of Internal Control over Financial Reportingthat is Integrated with an Audit of Financial Statements, to replace itsprevious internal control auditing standard, Auditing Standard No. 2.  The new standard removes unnecessary auditrequirements while maintaining adequate internal control, provides direction onhow to scale the audit for smaller and less complex companies, and reduces andsimplifies the text of the standard.

**PartII.  Other Information**

**Item 1.Legal Proceedings**

None.

**Item 1A.Risk Factors**

Therisk factors listed in Part I “Item 1A. Risk Factors” in the Annual Report onForm 10-K/A for the fiscal year ended November 3, 2006, should be consideredwith the information provided elsewhere in this Form 10-Q, which couldmaterially adversely affect the business, financial condition or results ofoperations.  There have been no materialchanges to the risk factors as previously disclosed in such Annual Report onForm 10-K/A.

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

Thefollowing table provides information regarding repurchases by the Company ofits common stock, for each of the three four-week periods included in theinterim twelve-week period ended April 20, 2007.

**ISSUERPURCHASES OF EQUITY SECURITIES**
| **Period (1)**                        | ** ** | **Total Number  of Shares  Purchased** | ** ** | **Average Price  Paid Per Share** | ** ** | **Total Number  of Shares  Purchased as  Part of Publicly  Announced  Plans or  Programs (2)** | ** ** | **Maximum  Number of  Shares that May  Yet Be  Purchased  Under the Plans  or Programs** (2) | ** ** |
|--------------------------------------------|------------|--------------------------------------------------|------------|--------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------|------------|
|                                       |       |                                             |       |                                             |       |                                                                                                                              |       |                                                                                                                                 |       |
| January 27, 2007  – February 23, 2007 |       | 11,425                                           |       | $                                                | 7.65       |                                                                                                                              | 11,425     |                                                                                                                                 | 570,830    |   |
|                                       |       |                                             |       |                                             |       |                                                                                                                              |       |                                                                                                                                 |       |
| February 24,  2007 – March 23, 2007   |       | 2,198                                            |       | $                                                | 7.79       |                                                                                                                              | 2,198      |                                                                                                                                 | 568,632    |   |
|                                       |       |                                             |       |                                             |       |                                                                                                                              |       |                                                                                                                                 |       |
| March 24, 2007 –  April 20, 2007      |       | 4,281                                            |       | $                                                | 7.63       |                                                                                                                              | 4,281      |                                                                                                                                 | 564,351    |   |
|                                       |       |                                             |       |                                             |       |                                                                                                                              |       |                                                                                                                                 |       |
| Total                                      |       | 17,904                                           |       | $                                                | 7.66       |                                                                                                                              | 17,904     |                                                                                                                                 |       |   |

 

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(1)                                  Periodinformation is presented by reference to the Company’s fiscal period endsduring the twelve-week period ended April 20, 2007.

(2)                                  Allrepurchases reflected in the foregoing table were made on the open market.  The Company’s stock repurchase program wasapproved by the Board of Directors in November 1999 and was expanded in June2005.  Under the stock repurchaseprogram, the Company is authorized, at the 

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discretion of managementand the Board of Directors, to purchase up to an aggregate of 2,000,000 sharesof the Company’s common stock on the open market**.**OnSeptember 15, 2006, the Company entered into a Rule 10b5-1 Stock Purchase Planwith Citigroup Global Markets Inc. for the purchase of shares of common stockpreviously issued by the Company that complies with the requirements of Rule10b5-1  under the Securities Exchange Actof 1934 (“Exchange Act”).  The purchaseperiod covers each trading day commencing October 2, 2006 through and includingSeptember 15, 2007.The daily purchase quantity is defined as a number of sharesup to, but not to exceed, each day’s applicable SEC Rule 10b-18 maximum volumelimit (i.e. 25% of the prior four calendar weeks’ average daily tradingvolume); however, once per week a block of stock may be purchased that exceedsthe SEC Rule 10b-18 25% average daily trading volume condition, provided thatno other Plan purchases are made on any day on which such a block ispurchased.  The total maximum number ofshares that may be purchased under the plan is 594,000 at a total maximumdollar amount (exclusive of commission) of $5,940,000.

# **Item 4. Submission of Matters to a Vote of Security Holders**

The Company held its annual meeting of shareholders onWednesday, March 14, 2007 at the Four Points Sheraton, 1500 South Raymond Avenue,Fullerton, California at 10:00 am. Shareholders representing 9,563,701 or 96.2% of the 9,946,353 sharesentitled to vote were present in person or by proxy.  Proxies for the meeting were solicitedpursuant to Regulation 14A of the Securities Exchange Act of 1934.  The following persons were nominated andelected directors:
| Allan L. Bridgford |   | Hugh W. Bridgford |   | William L. Bridgford |
|--------------------|--------|-------------------|--------|----------------------|
| Todd C. Andrews    |   | Richard A. Foster |   | Robert E. Schulze    |
| D. Gregory Scott   |   | Paul R. Zippwald  |   |                 |

 

Votes cast for directorswere 9,548,110 FOR, 15,591 AGAINST and none ABSTAINED or WITHHELD.  Votes cast for appointment of Haskell &White LLP, as the independent registered public accounting firm for the Companyfor the fiscal year commencing November 4, 2006 were 9,560,334 FOR, noneAGAINST and 3,367 ABSTAIN or WITHHELD.

**Item 6.**

##### **Exhibits**

| Exhibit No. | ** ** | **Description**                                                                                                                         |
|-------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------|
|        |       |                                                                                                                                    |
| 31.1        |       | Certification of Chairman (Principal Executive  Officer), as required by Section 302 of the Sarbanes-Oxley Act of 2002.                 |
|        |       |                                                                                                                                    |
| 31.2        |       | Certification of Chief Financial Officer (Principal  Financial Officer), as required by Section 302 of the Sarbanes-Oxley Act of  2002. |
|        |       |                                                                                                                                    |
| 32.1        |       | Certification of Chairman (Principal Executive  Officer), as required by Section 906 of the Sarbanes-Oxley Act of 2002.                 |
|        |       |                                                                                                                                    |
| 32.2        |       | Certification of Chief Financial Officer (Principal  Financial Officer), as required by Section 906 of the Sarbanes-Oxley Act of  2002. |

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**SIGNATURES**

Pursuantto the requirements of the Securities Exchange Act of 1934, the registrant hasduly caused this report to be signed on its behalf by the undersigned thereuntoduly authorized.
|         |   | BRIDGFORD FOODS CORPORATION                                |   |
|--------------|--------|------------------------------------------------------------|--------|
|         |   | (Registrant)                                               |   |   |
|         |   |                                                       |
|         |   | By:                                                        |   | /s/ |   | Raymond F. Lancy |
| June 4, 2007 |   | Raymond F. Lancy                                           |
| Date         |   | Chief Financial  Officer                                   |
|         |   | (Duly Authorized  Officer and Principal Financial Officer) |
|              |        |                                                            |        |  |  |  |  |  |  |

 

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