UNITED
      STATESSECURITIES
      AND EXCHANGE COMMISSIONWashington,
      D.C.  20549FORM
      10-Q(Mark
      one)[
      X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE
      SECURITIES AND EXCHANGE ACT OF 1934For
      the quarterly period ended July 10, 2009OR[   ]
      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE
      SECURITIES EXCHANGE ACT OF 1934For
      the transition period from __________ to ___________.Commission
      file
      number                                     0-2396
   BRIDGFORD FOODS CORPORATION(Exact
      name of Registrant as specified in its charter)California
                                          95-1778176(State
      or other jurisdiction of
                                          (I.R.S.
      Employerincorporation
      or organization)
                                          identification
      number)1308 N. Patt Street, Anaheim,
      CA  92801(Address
      of principal executive offices-Zip code)714-526-5533(Registrant's
      telephone number, including area code)
  Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been
subject to such filing requirements for the past 90
days.
 Yes   [
X
]                  No
[   ]
  Indicate
by check mark whether the Registrant has submitted electronically and posted on
its corporate
Web site, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such
shorter period that the registrant was required to submit and post such
files). Yes   [   ]                  No
[   ]
  Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a
non-accelerated filer, or a smaller reporting company.  See the
definitions of "large accelerated filer," "accelerated
filer" and "smaller reporting company" in Rule 12b-2 of the Exchange
Act.
 Large
      accelerated filer [   ]
                                                                                    
                                                                                    Accelerated
      filer [   ]Non-accelerated
      filer [   ]   (Do not check if smaller
      reporting company)
                                                                                    
                                                                                    Smaller
      reporting company [ X
]


Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange
Act).
 Yes   [   ]                  No
[ X ]
  As of
August 20, 2009 the registrant had 9,376,194 shares of common stock
outstanding.




1


BRIDGFORD FOODS CORPORATIONFORM 10-Q QUARTERLY REPORTINDEXReferences
      to "Bridgford Foods" or the "Company" contained in this Quarterly Report
      on Form 10-Q refer to Bridgford Foods Corporation.Part
      I.  Financial InformationItem
      1.  Financial Statements
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        Pagea.
      Condensed Consolidated Balance Sheets at July 10, 2009 (unaudited) and
      October 31, 2008
                                        3b.
      Condensed Consolidated Statements of Operations for the twelve and
      thirty-six weeks ended July 10, 2009and
      July 11, 2008 (unaudited)
                                        4c.
      Condensed Consolidated Statement of Shareholders' Equity and Comprehensive
      Loss for the thirty-sixweeks
      ended July 10, 2009 (unaudited)
                                        4d.
      Condensed Consolidated Statements of Cash Flows for the thirty-six weeks
      ended July 10, 2009 andJuly
      11, 2008 (unaudited)
                                        5e.
      Notes to Condensed Consolidated Financial Statements
      (unaudited)
                                        6Item
      2.  Management's Discussion and Analysis of Financial
      Conditionand
      Results of Operations
                                        11Item
      3.  Quantitative and Qualitative Disclosures about Market Risk
                                        20Item
      4T.  Controls and Procedures
                                        20Part
      II.  Other InformationItem
      1A.  Risk Factors
                                        22Item
      2.  Unregistered Sales of Equity Securities and Use of
      Proceeds
                                        22Item
      6.  Exhibits
                                        23Signatures
                                        24Items
      1 and 3-5 of Part II have been omitted because they are not applicable
      with respect to the current reporting period.






2
 
  Part
I.  Financial Information
  Item 1.
a.
 BRIDGFORD FOODS
CORPORATION CONDENSED
CONSOLIDATED BALANCE SHEETS (in
thousands, except per share amounts)


ASSETS
                                                
                                                July
      10, 2009
                                                
                                                
                                                October
      31, 2008(Unaudited)Current
      assets:Cash
      and cash equivalents
                                                
                                                $
                                                12,407
                                                
                                                
                                                $
                                                6,092Accounts
      receivable, less allowance for doubtful accounts of $378and
      $397, respectively, and promotional allowances of $2,108and
      $2,015, respectively
                                                
                                                
                                                7,242
                                                
                                                
                                                
                                                8,867Inventories
      (Note 2)
                                                
                                                
                                                15,047
                                                
                                                
                                                
                                                16,052Prepaid
      expenses and other current assets
                                                
                                                
                                                1,235
                                                
                                                
                                                
                                                906Total
      current assets
                                                
                                                
                                                35,931
                                                
                                                
                                                
                                                31,917Property,
      plant and equipment, lessaccumulated
      depreciation of $55,295and
      $53,740, respectively
                                                
                                                
                                                8,751
                                                
                                                
                                                
                                                9,775Other
      non-current assets
                                                
                                                
                                                10,267
                                                
                                                
                                                
                                                10,263$
                                                54,949
                                                
                                                
                                                $
                                                51,955LIABILITIES AND SHAREHOLDERS'
      EQUITYCurrent
      liabilities:Accounts
      payable
                                                
                                                $
                                                3,604
                                                
                                                
                                                $
                                                3,073Accrued
      payroll, advertising and other expenses
                                                
                                                
                                                7,843
                                                
                                                
                                                
                                                8,405Total
      current liabilities
                                                
                                                
                                                11,447
                                                
                                                
                                                
                                                11,478Non-current
      liabilities
                                                
                                                
                                                13,322
                                                
                                                
                                                
                                                7,942Total
      liabilities
                                                
                                                
                                                24,769
                                                
                                                
                                                
                                                19,420Commitments
      and Contingencies (Note 5)Shareholders'
      equity:Preferred
      stock, without par valueAuthorized
      - 1,000 sharesIssued
      and outstanding - none
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -Common
      stock, $1.00 par valueAuthorized
      - 20,000 sharesIssued
      and outstanding - 9,396 and 9,435 shares
                                                
                                                
                                                9,453
                                                
                                                
                                                
                                                9,492Capital
      in excess of par value
                                                
                                                
                                                10,973
                                                
                                                
                                                
                                                11,204Retained
      earnings
                                                
                                                
                                                17,926
                                                
                                                
                                                
                                                14,298Accumulated
      other comprehensive loss
                                                
                                                
                                                (8,172
                                                )
                                                
                                                
                                                (2,459
                                                )30,180
                                                
                                                
                                                
                                                32,535$
                                                54,949
                                                
                                                
                                                $
                                                51,955See
      accompanying notes to condensed consolidated financial
      statements.




3
 
  Item 1.
b.
  BRIDGFORD FOODS
CORPORATION CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in
thousands, except per share amounts)


12
      weeks ended
                                                  
                                                  
                                                  36
      weeks endedJuly
      10, 2009
                                                  
                                                  
                                                  July
      11, 2008
                                                  
                                                  
                                                  July
      10, 2009
                                                  
                                                  
                                                  July
      11, 2008Net
      sales
                                                  
                                                  $
                                                  26,281
                                                  
                                                  
                                                  $
                                                  26,584
                                                  
                                                  
                                                  $
                                                  83,435
                                                  
                                                  
                                                  $
                                                  82,802Cost
      of products sold, excluding depreciation
                                                  
                                                  
                                                  15,089
                                                  
                                                  
                                                  
                                                  17,546
                                                  
                                                  
                                                  
                                                  49,105
                                                  
                                                  
                                                  
                                                  54,872Selling,
      general and administrative expenses
                                                  
                                                  
                                                  9,393
                                                  
                                                  
                                                  
                                                  10,218
                                                  
                                                  
                                                  
                                                  28,532
                                                  
                                                  
                                                  
                                                  29,311Depreciation
                                                  
                                                  
                                                  531
                                                  
                                                  
                                                  
                                                  753
                                                  
                                                  
                                                  
                                                  1,962
                                                  
                                                  
                                                  
                                                  2,24925,013
                                                  
                                                  
                                                  
                                                  28,517
                                                  
                                                  
                                                  
                                                  79,599
                                                  
                                                  
                                                  
                                                  86,432Income
      (loss) before taxes
                                                  
                                                  
                                                  1,268
                                                  
                                                  
                                                  
                                                  (1,933
                                                  )
                                                  
                                                  
                                                  3,836
                                                  
                                                  
                                                  
                                                  (3,630
                                                  )Income
      tax provision
                                                  
                                                  
                                                  208
                                                  
                                                  
                                                  
                                                  4,339
                                                  
                                                  
                                                  
                                                  208
                                                  
                                                  
                                                  
                                                  3,690Net
      income (loss)
                                                  
                                                  $
                                                  1,060
                                                  
                                                  
                                                  $
                                                  (6,272
                                                  )
                                                  
                                                  $
                                                  3,628
                                                  
                                                  
                                                  $
                                                  (7,320
                                                  )Basic
      income (loss) per share (Note 3)
                                                  
                                                  $
                                                  0.11
                                                  
                                                  
                                                  $
                                                  (0.66
                                                  )
                                                  
                                                  $
                                                  0.38
                                                  
                                                  
                                                  $
                                                  (0.76
                                                  )Diluted
      income (loss) per share (Note 3)
                                                  
                                                  $
                                                  0.11
                                                  
                                                  
                                                  $
                                                  (0.66
                                                  )
                                                  
                                                  $
                                                  0.38
                                                  
                                                  
                                                  $
                                                  (0.76
                                                  )Weighted
      average common shares - Basic shares computed
                                                  
                                                  
                                                  9,419
                                                  
                                                  
                                                  
                                                  9,445
                                                  
                                                  
                                                  
                                                  9,429
                                                  
                                                  
                                                  
                                                  9,669Weighted
      average common shares - Diluted shares computed
                                                  
                                                  
                                                  9,419
                                                  
                                                  
                                                  
                                                  9,445
                                                  
                                                  
                                                  
                                                  9,429
                                                  
                                                  
                                                  
                                                  9,669See
      accompanying notes to condensed consolidated financial
      statements.




Item 1.
c.
  CONDENSED
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY AND COMPREHENSIVE
LOSS (Unaudited) (in
thousands)


AccumulatedCapital
                                
                                
                                
                                
                                
                                otherCommon
      Stock
                                
                                
                                in
      excess
                                
                                
                                Retained
                                
                                
                                comprehensiveShares
                                
                                
                                Amount
                                
                                
                                of
      par
                                
                                
                                earnings
                                
                                
                                loss
                                
                                
                                TotalOctober
      31, 2008
                                
                                
                                9,435
                                
                                
                                $
                                9,492
                                
                                
                                $
                                11,204
                                
                                
                                $
                                14,298
                                
                                
                                $
                                (2,459
                                )
                                
                                $
                                32,535Shares
      repurchased
                                
                                
                                (39
                                )
                                
                                
                                (39
                                )
                                
                                
                                (231
                                )
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                (270
                                )Net
      income
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                3,628
                                
                                
                                
                                
                                
                                
                                
                                3,628Other
      comprehensiveloss:Unrealized
      loss oninvestments
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                (8
                                )
                                
                                
                                (8
                                )Change
      in pensionliability
      (Note 4)
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                (5,705
                                )
                                
                                
                                (5,705
                                )Comprehensive
      loss
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                (2,085
                                )July
      10, 2009
                                
                                
                                9,396
                                
                                
                                $
                                9,453
                                
                                
                                $
                                10,973
                                
                                
                                $
                                17,926
                                
                                
                                $
                                (8,172
                                )
                                
                                $
                                30,180See
      accompanying notes to condensed consolidated financial
      statements.




4
 
  Item 1.
d. BRIDGFORD FOODS
CORPORATION CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in
thousands)


36
      weeks endedJuly
      10, 2009
                                            
                                            
                                            July
      11, 2008Cash
      flows from operating activities:Net
      income (loss)
                                            
                                            $
                                            3,628
                                            
                                            
                                            $
                                            (7,320
                                            )Income
      or charges not affecting cash and cash equivalents:Depreciation
                                            
                                            
                                            1,962
                                            
                                            
                                            
                                            2,249Provision
      for losses on accounts receivable
                                            
                                            
                                            6
                                            
                                            
                                            
                                            26Gain
      on sale of property, plant and equipment
                                            
                                            
                                            (10
                                            )
                                            
                                            
                                            (35
                                            )Tax
      valuation allowance on deferrred tax assets
                                            
                                            
                                            -
                                            
                                            
                                            
                                            4,940Effect
      on cash and cash equivalents of changes in operating assets and
      liabilities:Accounts
      receivable, net
                                            
                                            
                                            1,619
                                            
                                            
                                            
                                            740Inventories
                                            
                                            
                                            1,005
                                            
                                            
                                            
                                            (91
                                            )Prepaid
      expenses and other current assets
                                            
                                            
                                            (337
                                            )
                                            
                                            
                                            (839
                                            )Other
      non-current assets
                                            
                                            
                                            (4
                                            )
                                            
                                            
                                            376Accounts
      payable
                                            
                                            
                                            531
                                            
                                            
                                            
                                            838Accrued
      payroll, advertising and other expenses
                                            
                                            
                                            (562
                                            )
                                            
                                            
                                            (1,062
                                            )Non-current
      liabilities
                                            
                                            
                                            (325
                                            )
                                            
                                            
                                            (360
                                            )Net
      cash provided by (used in) operating activities
                                            
                                            
                                            7,513
                                            
                                            
                                            
                                            (538
                                            )Cash
      used in investing activities:Proceeds
      from sale of property, plant and equipment
                                            
                                            
                                            56
                                            
                                            
                                            
                                            40Additions
      to property, plant and equipment
                                            
                                            
                                            (984
                                            )
                                            
                                            
                                            (1,586
                                            )Net
      cash used in investing activities
                                            
                                            
                                            (928
                                            )
                                            
                                            
                                            (1,546
                                            )Cash
      used in financing activities:Shares
      repurchased
                                            
                                            
                                            (270
                                            )
                                            
                                            
                                            (3,018
                                            )Net
      cash used in financing activities
                                            
                                            
                                            (270
                                            )
                                            
                                            
                                            (3,018
                                            )Net
      increase (decrease) in cash and cash equivalents
                                            
                                            
                                            6,315
                                            
                                            
                                            
                                            (5,102
                                            )Cash
      and cash equivalents at beginning of period
                                            
                                            
                                            6,092
                                            
                                            
                                            
                                            11,336Cash
      and cash equivalents at end of period
                                            
                                            $
                                            12,407
                                            
                                            
                                            $
                                            6,234Cash
      paid for income taxes
                                            
                                            $
                                            0
                                            
                                            
                                            $
                                            0See
      accompanying notes to condensed consolidated financial
      statements.








5
 
 Item 1.
e.
  BRIDGFORD
FOODS CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 (in
thousands, except percentages, share and per share amounts)
  Note 1 - Summary of Significant Accounting
Policies:
  The
unaudited consolidated condensed financial statements of Bridgford Foods
Corporation (the "Company", "we", "our", "us") for the twelve and
thirty-six weeks ended July 10, 2009 and July 11, 2008 have been prepared in
conformity with the accounting principles described in the Company's
Annual Report on Form 10-K for the fiscal year ended October 31, 2008 (the
"Annual Report") and include all adjustments
considered
 necessary by
management for a fair presentation of the interim periods.  Such
adjustments consist only of normal recurring items.  This reportshould be
read in conjunction with the Annual Report.  Due to seasonality and
other factors, interim results are not necessarily indicative ofthe results
for the full year.  New accounting pronouncements and their effect on
the Company are discussed in Management'sDiscussion
and Analysis of Financial Condition and Results of Operations in this Form
10-Q. The October
31, 2008 balance sheet within these interim condensed consolidated financial
statements were derived from the audited fiscal 2008financial
statements.
  The
preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure ofcontingent
assets and liabilities as of the date of the financial statements and the
reported revenues and expenses during the reporting periods. Actual
results may vary from these estimates.  Some of the estimates needed
to be made by management include the allowance for doubtful accounts,
inventory reserves and the estimated useful lives of property and equipment, and
the valuation allowance for the Company’s deferred tax
asset. Actual results could materially differ from these estimates. Amounts
estimated related to liabilities for self-insured workers’ compensation,
employee healthcare and pension benefits are especially subject to inherent
uncertainties and these estimated liabilities may ultimately
settle at amounts which vary from our current
estimates. Financial
instruments that subject the Company to credit risk consist primarily of cash
and cash equivalents, accounts and other receivables, accounts
payable and accrued liabilities.  The carrying amount of these
instruments approximate fair market value due to the short maturity of these
instruments.  At July 10, 2009, the Company had accounts in excess of
the Federal Deposit Insurance Corporation insurance coverage limit. The
Company has not experienced any losses in these accounts and believes it is not
exposed to any significant credit risk on cash and cash equivalents.  The
Company issues credit to a significant number of customers that are diversified
over a wide geographic area.  The Company monitors
the payment histories of its customers and maintains an allowance for doubtful
accounts which is reviewed for adequacy on a quarterly basis.  The
Company does not require collateral from its
customers. For the
thirty-six weeks ended July 10, 2009 and July 11, 2008, Wal-Mart® accounted for
11.7% and 13.1%, respectively of consolidated revenues
or 15.2% and 16.4% of consolidated accounts receivable.  For the
twelve weeks ended July 10, 2009 and July 11, 2008, Wal-Mart® accounted
for  17.3% and 13.6%, respectively of consolidated revenues or 15.2%
and 16.4% of consolidated accounts receivable. Note 2 - Inventories:
 Inventories
are comprised of the following at the respective
periods:


July
      10, 2009
                                                                  
                                                                  
                                                                  October
      31, 2008Meat,
      ingredientsand supplies
                                                                  
                                                                  $
                                                                  4,599
                                                                  
                                                                  
                                                                  $
                                                                  4,086Work
      in progress
                                                                  
                                                                  
                                                                  1,988
                                                                  
                                                                  
                                                                  
                                                                  2,322Finished
      goods
                                                                  
                                                                  
                                                                  8,460
                                                                  
                                                                  
                                                                  
                                                                  9,644$
                                                                  15,047
                                                                  
                                                                  
                                                                  $
                                                                  16,052




Inventories
are valued at the lower of 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 computing
market value.  Inventories include the cost of raw
materials, labor and manufacturing overhead.  We regularly review
inventory quantities on hand and write down any excess or obsolete
inventories to estimated net realizable value.  An inventory reserve
is created when potentially slow-moving or obsolete inventories are
identified in order to reflect the appropriate inventory
value.  Changes in economic conditions, production requirements, and
lower than expected
customer demand could result in additional obsolete or slow-moving inventory
that cannot be sold or may need to be sold at reduced
prices and could result in additional reserve
provisions.


Note 3 - Basic and Diluted Earnings Per
Share:
  The employee
stock option plan expired by its terms on April 29, 2009 and no further stock
options are available for grant under the plan.The Company
had 250,000 employee stock options outstanding through April 29, 2009 and the
thirty-six week periods ended July 11, 2008.The effect
of the employee stock options outstanding for the thirty-six weeks ended July
10, 2009 and July 11, 2008 was not included inthe
calculation of diluted shares and diluted earnings per share as to do so would
be anti-dilutive.  No stock options were granted during thefirst
thirty-six weeks ended July 10, 2009 and July 11,
2008.


6




Note 4 - Retirement and Other Benefit
Plans:




The
Company has noncontributory-trusteed defined benefit retirement plans for sales,
administrative, supervisory and certain other employees.
The benefits under these plans are primarily based on years of service and
compensation levels.  Our general funding policy is to
make contributions which are at least equal to the minimum required
contributions needed to avoid a funding deficiency for our funding
plans in accordance with the Employee Retirement Income Security Act. The
measurement date for the plans is the Company's fiscal
year end.


Net
pension cost consisted of the following:


36
      weeks endedJuly
      10, 2009
                          
                          
                          July
      11, 2008Service
      cost
                          
                          $
                          71
                          
                          
                          $
                          103Interest
      cost
                          
                          
                          1,396
                          
                          
                          
                          1,356Expected
      return on plan assets
                          
                          
                          (1,175
                          )
                          
                          
                          (1,601
                          )Amortization
      of unrecognized prior service cost
                          
                          
                          1
                          
                          
                          
                          1Amortization
      of net (gain) loss from earlier periods
                          
                          
                          61
                          
                          
                          
                          —Net
      pension cost
                          
                          $
                          354
                          
                          
                          $
                          (141
                          )
   The
expected Company contribution to the plans within the next twelve months is
$1,260. We have funded the plans in the amount of
$361 through the third quarter of fiscal 2009.  The
pension liability increased significantly during the first thirty-six weeks of
fiscal 2009 primarily due to a decrease in the discount rate to
6.27% as of July 10, 2009 from 8.00% as of October 31,
2008.  Statement of Financial Accounting Standards ("SFAS") No. 158
"Employers
Accounting for Defined Benefit Pension and Other Postretirement Plans" amended
paragraph 44 of SFAS No. 87 "Employers'
Accounting for Pensions" to require that an internal rate of return analysis be
included in the discount rate selection process.  The
discount rate was based on the Citigroup Pension Liability Index as of the end
of the reporting period.
 Note 5 - Commitments and
Contingencies:
  The Company
leases certain transportation equipment under operating leases.  The
terms of the transportation leases providefor annual
renewal options and contingent rental payments based upon mileage and
adjustments of rental payments based on the ConsumerPrice
Index.   No material changes have been made to these contracts
during the first thirty-six weeks of fiscal
2009.
  The Company
is involved in various other claims and legal actions arising in the ordinary
course of business.  In the opinion of management,the ultimate
disposition of these matters is not expected to have a material adverse effect
on the Company’s consolidated financial positionor
results of operations. The Company
purchases bulk flour under short-term fixed price contracts during the normal
course of business. Under these arrangements,the Company
is obligated to purchase specific quantities at fixed prices, within the
specified contract period.  These contracts provide forautomatic
price increases if agreed quantities are not purchased within the specified
contract period. No significant contracts remainedunfulfilled
at July 10, 2009.
  Note
6 - Segment Information:
  The Company
has two reportable operating segments, Frozen Food Products (the processing and
distribution of frozen products) andRefrigerated
and Snack Food Products (the processing and distribution of refrigerated meat
and other convenience foods). We evaluate
each segment's performance based on revenues and operating income. Selling,
general and administrative expensesinclude
corporate accounting, information systems, human resource management and
marketing, which are managed at the corporate level.These
activities are allocated to each operating segment based on revenues and/or
actual
usage.






7


The
following segment information is presented for the twelve and thirty-six weeks
ended July 10, 2009 and July 11, 2008.




RefrigeratedandTwelve
      Weeks Ended
                                                      
                                                      Frozen
      Food
                                                      
                                                      
                                                      Snack
      FoodJuly
      10, 2009
                                                      
                                                      Products
                                                      
                                                      
                                                      Products
                                                      
                                                      
                                                      Other
                                                      
                                                      
                                                      Elimination
                                                      
                                                      
                                                      TotalsSales
      from external customers
                                                      
                                                      $
                                                      11,186
                                                      
                                                      
                                                      $
                                                      15,095
                                                      
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      26,281Intersegment
      sales
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      123
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      123
                                                      
                                                      
                                                      
                                                      -Net
      sales
                                                      
                                                      
                                                      11,186
                                                      
                                                      
                                                      
                                                      15,218
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      123
                                                      
                                                      
                                                      
                                                      26,281Cost
      of products sold, excludingdepreciation
                                                      
                                                      
                                                      6,419
                                                      
                                                      
                                                      
                                                      8,793
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      123
                                                      
                                                      
                                                      
                                                      15,089Selling,
      general and administrativeexpenses
                                                      
                                                      
                                                      3,676
                                                      
                                                      
                                                      
                                                      5,717
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      9,393Depreciation
                                                      
                                                      
                                                      148
                                                      
                                                      
                                                      
                                                      351
                                                      
                                                      
                                                      
                                                      32
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      53110,243
                                                      
                                                      
                                                      
                                                      14,861
                                                      
                                                      
                                                      
                                                      32
                                                      
                                                      
                                                      
                                                      123
                                                      
                                                      
                                                      
                                                      25,013Income
      (loss) before taxes
                                                      
                                                      
                                                      943
                                                      
                                                      
                                                      
                                                      357
                                                      
                                                      
                                                      
                                                      (32
                                                      )
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      1,268Income
      tax provision
                                                      
                                                      
                                                      68
                                                      
                                                      
                                                      
                                                      140
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      208Net
      income (loss)
                                                      
                                                      $
                                                      875
                                                      
                                                      
                                                      $
                                                      217
                                                      
                                                      
                                                      $
                                                      (32
                                                      )
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      1,060Total
      assets
                                                      
                                                      $
                                                      10,100
                                                      
                                                      
                                                      $
                                                      21,374
                                                      
                                                      
                                                      $
                                                      23,475
                                                      
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      54,949Additions
      to property, plantand
      equipment
                                                      
                                                      $
                                                      143
                                                      
                                                      
                                                      $
                                                      37
                                                      
                                                      
                                                      $
                                                      30
                                                      
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      210RefrigeratedandTwelve
      Weeks Ended
                                                      
                                                      Frozen
      Food
                                                      
                                                      
                                                      Snack
      FoodJuly
      11, 2008
                                                      
                                                      Products
                                                      
                                                      
                                                      Products
                                                      
                                                      
                                                      Other
                                                      
                                                      
                                                      Elimination
                                                      
                                                      
                                                      TotalsSales
      from external customers
                                                      
                                                      $
                                                      11,469
                                                      
                                                      
                                                      $
                                                      15,115
                                                      
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      26,584Intersegment
      sales
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      317
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      317
                                                      
                                                      
                                                      
                                                      -Net
      sales
                                                      
                                                      
                                                      11,469
                                                      
                                                      
                                                      
                                                      15,432
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      317
                                                      
                                                      
                                                      
                                                      26,584Cost
      of products sold, excludingdepreciation
                                                      
                                                      
                                                      8,477
                                                      
                                                      
                                                      
                                                      9,386
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      317
                                                      
                                                      
                                                      
                                                      17,546Selling,
      general and administrativeexpenses
                                                      
                                                      
                                                      3,599
                                                      
                                                      
                                                      
                                                      6,619
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      10,218Depreciation
                                                      
                                                      
                                                      181
                                                      
                                                      
                                                      
                                                      498
                                                      
                                                      
                                                      
                                                      74
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      75312,257
                                                      
                                                      
                                                      
                                                      16,503
                                                      
                                                      
                                                      
                                                      74
                                                      
                                                      
                                                      
                                                      317
                                                      
                                                      
                                                      
                                                      28,517Loss
      before taxes
                                                      
                                                      
                                                      (788
                                                      )
                                                      
                                                      
                                                      (1,071
                                                      )
                                                      
                                                      
                                                      (74
                                                      )
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      (1,933
                                                      )Income
      tax benefit
                                                      
                                                      
                                                      (265
                                                      )
                                                      
                                                      
                                                      (337
                                                      )
                                                      
                                                      
                                                      4,940
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      4,339Net
      loss
                                                      
                                                      $
                                                      (523
                                                      )
                                                      
                                                      $
                                                      (734
                                                      )
                                                      
                                                      $
                                                      (5,014
                                                      )
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      (6,272
                                                      )Total
      assets
                                                      
                                                      $
                                                      10,934
                                                      
                                                      
                                                      $
                                                      26,113
                                                      
                                                      
                                                      $
                                                      21,395
                                                      
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      58,442Additions
      to property, plantand
      equipment
                                                      
                                                      $
                                                      82
                                                      
                                                      
                                                      $
                                                      588
                                                      
                                                      
                                                      $
                                                      36
                                                      
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      706RefrigeratedandThirty-six
      Weeks Ended
                                                      
                                                      Frozen
      Food
                                                      
                                                      
                                                      Snack
      FoodJuly
      10, 2009
                                                      
                                                      Products
                                                      
                                                      
                                                      Products
                                                      
                                                      
                                                      Other
                                                      
                                                      
                                                      Elimination
                                                      
                                                      
                                                      TotalsSales
      from external customers
                                                      
                                                      $
                                                      36,899
                                                      
                                                      
                                                      $
                                                      46,536
                                                      
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      83,435Intersegment
      sales
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      481
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      481
                                                      
                                                      
                                                      
                                                      -Net
      sales
                                                      
                                                      
                                                      36,899
                                                      
                                                      
                                                      
                                                      47,017
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      481
                                                      
                                                      
                                                      
                                                      83,435Cost
      of products sold, excludingdepreciation
                                                      
                                                      
                                                      21,370
                                                      
                                                      
                                                      
                                                      28,216
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      481
                                                      
                                                      
                                                      
                                                      49,105Selling,
      general and administrative expenses
                                                      
                                                      
                                                      11,444
                                                      
                                                      
                                                      
                                                      17,088
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      28,532Depreciation
                                                      
                                                      
                                                      481
                                                      
                                                      
                                                      
                                                      1,368
                                                      
                                                      
                                                      
                                                      113
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      1,96233,295
                                                      
                                                      
                                                      
                                                      46,672
                                                      
                                                      
                                                      
                                                      113
                                                      
                                                      
                                                      
                                                      481
                                                      
                                                      
                                                      
                                                      79,599Income
      (loss) before taxes
                                                      
                                                      
                                                      3,604
                                                      
                                                      
                                                      
                                                      345
                                                      
                                                      
                                                      
                                                      (113
                                                      )
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      3,836Income
      tax provision
                                                      
                                                      
                                                      68
                                                      
                                                      
                                                      
                                                      140
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      -
                                                      
                                                      
                                                      
                                                      208Net
      income (loss)
                                                      
                                                      $
                                                      3,536
                                                      
                                                      
                                                      $
                                                      205
                                                      
                                                      
                                                      $
                                                      (113
                                                      )
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      3,628Total
      assets
                                                      
                                                      $
                                                      10,100
                                                      
                                                      
                                                      $
                                                      21,374
                                                      
                                                      
                                                      $
                                                      23,475
                                                      
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      54,949Additions
      to property, plantand
      equipment
                                                      
                                                      $
                                                      677
                                                      
                                                      
                                                      $
                                                      185
                                                      
                                                      
                                                      $
                                                      122
                                                      
                                                      
                                                      $
                                                      -
                                                      
                                                      
                                                      $
                                                      984




8
 
  RefrigeratedandThirty-six
      Weeks Ended
                        
                        Frozen
      Food
                        
                        
                        Snack
      FoodJuly
      11, 2008
                        
                        Products
                        
                        
                        Products
                        
                        
                        Other
                        
                        
                        Elimination
                        
                        
                        TotalsSales
      from external customers
                        
                        $
                        36,028
                        
                        
                        $
                        46,774
                        
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        82,802Intersegment
      sales
                        
                        
                        -
                        
                        
                        
                        1,065
                        
                        
                        
                        -
                        
                        
                        
                        1,065
                        
                        
                        
                        -Net
      sales
                        
                        
                        36,028
                        
                        
                        
                        47,839
                        
                        
                        
                        -
                        
                        
                        
                        1,065
                        
                        
                        
                        82,802Cost
      of products sold, excludingdepreciation
                        
                        
                        24,738
                        
                        
                        
                        31,199
                        
                        
                        
                        -
                        
                        
                        
                        1,065
                        
                        
                        
                        54,872Selling,
      general and administrativeexpenses
                        
                        
                        10,641
                        
                        
                        
                        18,670
                        
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        29,311Depreciation
                        
                        
                        538
                        
                        
                        
                        1,489
                        
                        
                        
                        222
                        
                        
                        
                        -
                        
                        
                        
                        2,24935,917
                        
                        
                        
                        51,358
                        
                        
                        
                        222
                        
                        
                        
                        1,065
                        
                        
                        
                        86,432Income
      (loss) before taxes
                        
                        
                        111
                        
                        
                        
                        (3,519
                        )
                        
                        
                        (222
                        )
                        
                        
                        -
                        
                        
                        
                        (3,630
                        )Income
      tax provision (benefit)
                        
                        
                        58
                        
                        
                        
                        (1,308
                        )
                        
                        
                        4,940
                        
                        
                        
                        -
                        
                        
                        
                        3,690Net
      income (loss)
                        
                        $
                        53
                        
                        
                        $
                        (2,211
                        )
                        
                        $
                        (5,162
                        )
                        
                        $
                        -
                        
                        
                        $
                        (7,320
                        )Total
      assets
                        
                        $
                        10,934
                        
                        
                        $
                        26,113
                        
                        
                        $
                        21,395
                        
                        
                        $
                        -
                        
                        
                        $
                        58,442Additions
      to property, plantand
      equipment
                        
                        $
                        139
                        
                        
                        $
                        1,300
                        
                        
                        $
                        147
                        
                        
                        $
                        -
                        
                        
                        $
                        1,586
  Note 7 - Income Taxes:
  The
Company expects its effective tax rate for the fiscal year to be minimal (giving
consideration to net operating loss carryforwards and other
available tax deductions). We recorded a provision for income taxes in the
amount of $208 for the twelve and thirty-six week
periods ended July 10, 2009 related to alternative minimum tax and state
taxes.
  In
accordance with the provisions of SFAS No. 109, "Accounting for Income Taxes",
the Company assesses, on a quarterly basisthe
realizability of its deferred tax assets.  A valuation allowance must
be established when, based upon the evaluation of all available
evidence, it is more likely than not that all or a portion of the deferred tax
assets will not be realized.  Realization of deferred
tax assets is dependent upon taxable income in prior carryback years, estimates
of future taxable income, tax planning strategies
and reversals of existing taxable temporary differences.  SFAS No. 109
provides that forming a conclusion that a valuation allowance
is not needed is difficult when there is negative evidence such as cumulative
losses in recent years or losses expected in early
future years.
  Due to
three years of cumulative losses, management has recorded a full valuation
allowance on all deferred tax assets through the third
quarter of fiscal 2009.  The Company's future realization of its
deferred tax assets ultimately depends on the existence of sufficient
taxable income in the carryforward periods (both federal and state). Changes in
existing laws could affect the valuation of deferred
tax assets for future periods.
  In July
2006, the Financial Accounting Standards Board ("FASB") issued FASB
Interpretation No. 48, "Accounting for Uncertainty in Income
Taxes," ("FIN 48"), an interpretation of SFAS No. 109, "Accounting for Income
Taxes".  FIN 48 clarifies the accounting for uncertainty
in income taxes recognized in an enterprise's financial statements in accordance
with SFAS No. 109.  This Interpretation prescribes
a recognition threshold and measurement attribute for the financial statement
recognition and measurement of a tax position taken or
expected to be taken in a tax return.  FIN 48 also provides guidance
on derecognition, classification, interest and penalties, accounting
in interim periods, disclosure, and transition.  FIN 48 is effective
for fiscal years beginning after December 15,
2006.
  We have
provided a liability of $97 for unrecognized tax benefits related to various
federal and state income tax matters. As of
November 1, 2008, the cumulative effect of adopting this interpretation was
recorded as a decrease of $92 to opening retained earnings
with an offsetting increase in the accrued FIN 48 liability.  This
entire amount would reduce the Company's effective income tax rate
if an asset is recognized in future reporting periods.  As of July 10,
2009, the Company has not identified any new unrecognized
tax benefits or losses.
 9
 
  We will
recognize any future accrued interest and penalties related to unrecognized tax
benefits in income tax expense.  As of July 10,
2009, we had approximately $7 in accrued interest and penalties which is
included as a component of the $97 unrecognized
tax benefit noted above.
  We are
subject to U.S. federal income tax, and are currently under audit by the
Internal Revenue Service for the years ended November
1, 2002 through October 28, 2005. Our federal income tax returns are open to
audit under the statute of limitations for the
years ended October 29, 2004 through November 2, 2007.  The Company's
statute of limitations for its years ended November 1, 2002 and
October 31,2003 have been extended to September 30, 2009.  We believe
the appropriate provisions for all outstanding
issues have been made for all years under
audit. We are
subject to income tax in California and various other state taxing
jurisdictions. Our state income tax returns are open
to audit under the statute of limitations for the years ended October 29, 2004
through October 31,
2008.
 We do not
anticipate a significant change to the total amount of unrecognized tax benefits
within the next twelve months.
 Note 8 - Fair Value
Measurements:
  Effective
November 1, 2008, we adopted SFAS No. 157, Fair Value Measurements (“SFAS No.
157”). The purpose of SFAS No. 157
is to define fair value, establish a framework for measuring fair value and
enhance disclosures about fair value measurements. The
standard describes three levels of inputs that may be used to measure fair
value:
 •
      Level 1 inputs: Level 1 inputs are quoted market prices in active markets
      for identical assets or liabilities that are accessible at the measurement
      date.•
      Level 2 inputs: Level 2 inputs are from other than quoted market prices
      included in Level 1 that are observable for the asset or liability,
      either directly or indirectly.•
      Level 3 inputs: Level 3 inputs are unobservable and should be used to
      measure fair value to the extent that observable inputs are not
      available.The
      hierarchy noted above requires us to minimize the use of unobservable
      inputs and to use observable market data, if available, when
      determining fair value.Financial
      assets carried at fair value as of July 10, 2009 are classified
      below:
  Level
      1
                                        
                                        
                                        Level
      2
                                        
                                        
                                        Level
      3
                                        
                                        
                                        TotalMoney
      market funds
                                        
                                        $
                                        6,036
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        6,036Equity
      securities available for sale
                                        
                                        
                                        241
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        241Total
                                        
                                        $
                                        6,277
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        6,277




10




Item
2.   Management's Discussion and Analysis of Financial Condition
and Results of Operations
 (dollars
in thousands)
 
 NOTE
REGARDING FORWARD-LOOKING STATEMENTS
 
 Certain
statements under “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and elsewhere in this report constitute
“forward-looking statements” within the meaning of the Securities Act of 1933
and the Securities Exchange Act of 1934 (the “Exchange Act”).  Such
forward-looking statements involve known and unknown risks, uncertainties, and
other factors which may cause the actual results, performance or achievements of
Bridgford Foods Corporation to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements.  Such factors include, among others, the following:
general economic and business conditions; the impact of competitive products and
pricing; success of operating initiatives; development and operating costs;
advertising and promotional efforts; adverse publicity; acceptance of new
product offerings; consumer trial and frequency; changes in business strategy or
development plans; availability, terms and deployment of capital; availability
of qualified personnel; commodity, labor, and employee benefit costs; changes
in, or failure to comply with, government regulations; weather conditions;
construction schedules; and other factors referenced in this Quarterly Report on
Form 10-Q.  Assumptions relating to budgeting, marketing, and other
management decisions are subjective in many respects and thus susceptible to
interpretations and periodic revisions based on actual experience and business
developments, the impact of which may cause us to alter our marketing, capital
expenditure or other budgets, which may in turn affect our business, financial
position, results of operations and cash flows.  The reader is
therefore cautioned not to place undue reliance on forward-looking statements
contained herein and to consider other risks detailed more fully in our Annual
Report on Form 10-K for the fiscal year ended October 31, 2008.  We
undertake no obligation to publicly release the result of any revisions to these
forward-looking statements which may be made to reflect events or circumstances
after the date hereof, or to reflect the occurrence of unanticipated
events.
 
 Critical Accounting Policies
and Management Estimates
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles in the United States requires management to make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported revenues and expenses during the
respective reporting periods.  Actual results could differ from those
estimates.  Amounts estimated related to liabilities for self-insured
workers’ compensation, employee healthcare and pension benefits are especially
subject to inherent uncertainties and these estimated liabilities may ultimately
settle at amounts which vary from our current estimates. We record promotional
and returns allowances based on recent and historical
trends.  Management believes its current estimates are reasonable and
based on the best information available at the time.
 
 Our
credit risk is diversified across a broad range of customers and geographic
regions. Losses due to credit risk have recently been immaterial.  The
provision for doubtful accounts receivable is based on historical trends and
current collection risk.  We have significant amounts receivable with
a few large, well known customers which, although historically secure, could be
subject to material risk should these customers’ operations suddenly
deteriorate. We monitor these customers closely to minimize the risk of
loss.  Sales to Wal-Mart® comprised 11.7% of revenues in the first
thirty-six weeks of fiscal year 2009 and 15.2% of accounts receivable was due
from Wal-Mart® at July 10, 2009. In comparison, Wal-Mart® comprised 13.1% of
revenues for the first thirty-six weeks of fiscal year 2008 and 16.4% of
accounts receivable at the end of the third quarter of fiscal year
2008.  A portion of deliveries to Wal-Mart and other major customers
are now handled by independent third-party food distributors who pay us with the
sales invoices of Bridgford products sold to these customers.
 
 Revenues
are recognized upon passage of title to the customer, typically upon product
pick-up, shipment or delivery to customers. Products are delivered to customers
primarily through our own long-haul fleet or through our own direct store
delivery system.  The Company also uses independent distributors to
deliver products in remote geographic areas of the country.
 
 We record
the cash surrender or contract value for life insurance policies as an
adjustment of premiums paid in determining the expense or income to be
recognized under the contract for the period.
 
 Deferred
taxes are provided for items whose financial and tax bases differ.  A
valuation allowance is provided against deferred tax assets when it is expected
that it is more likely than not that the related asset will not be fully
realized.
 
 11
 We
provide tax reserves for federal, state, local and international exposures
relating to audit results, tax planning initiatives and compliance
responsibilities.  The development of these reserves requires
judgments about tax issues, potential outcomes and timing, and is a subjective
estimate.  Although the outcome of these tax audits is uncertain, in
management’s opinion adequate provisions for income taxes have been made for
potential liabilities emanating from these reviews.  Actual outcomes
may differ materially from these estimates.
 
 We assess
the recoverability of our long-lived assets on an annual basis or whenever
adverse events or changes in circumstances or business climate indicate that
expected undiscounted future cash flows related to such long-lived assets may
not be sufficient to support the net book value of such assets.  If
undiscounted cash flows are not sufficient to support the recorded assets, we
recognize an impairment to reduce the carrying value of the applicable
long-lived assets to their estimated fair value.
 
 Overview of Reporting
Segments
  We
operate in two business segments -- the processing and distribution of frozen
products (the Frozen Food Products Segment), and the processing and distribution
of refrigerated and snack food products, (the Refrigerated and Snack Food
Products Segment).  For information regarding the separate financial
performance of the business segments refer to Note 6 of the Notes to the
Consolidated Condensed Financial Statements included in this Quarterly Report on
Form 10-Q.  We manufacture and distribute products consisting of an
extensive line of food products, including biscuits, bread dough items, roll
dough items, dry sausage products, beef jerky and a variety of sandwiches and
sliced luncheon meats.  We purchase products for resale including a
variety of jerky, cheeses, salads, party dips, Mexican foods, nuts and other
delicatessen type food products.
  Frozen
Food Products Segment
  In our
Frozen Food Products Segment, we manufacture and distribute an extensive line of
food products, including biscuits, bread dough items, roll dough items and
sandwiches.  All items within this Segment are considered similar
products and have been aggregated at this level.  Our frozen food
division serves both food service and retail customers. We sell approximately
190 unique frozen food products through wholesalers, cooperatives and
distributors to approximately 21,000 retail outlets and 22,000 restaurants and
institutions.
  Refrigerated
and Snack Food Products Segment
  In our
Refrigerated and Snack Food Products Segment, we distribute both products
manufactured by us and products manufactured or processed by third
parties.   All items within this Segment are considered similar
products and have been aggregated at this level.  The dry sausage
division includes products such as jerky, meat snacks, sausage and pepperoni
products.  The deli division includes products such as ham,
sandwiches, cheese, Mexican food, pastries and other delicatessen type food
products.  Our Refrigerated and Snack Food Products Segment sells
approximately 270 different items through a direct store delivery network
serving approximately 36,000 supermarkets, mass merchandise and convenience
retail stores located in 49 states and Canada.  These customers are
comprised of large retail chains and smaller “independent”
operators.  Independent distributors serve approximately 1,000 stores
of all types in areas impractical to serve by our Company-owned vehicles and
personnel.
  Results
of Operations for the Twelve Weeks ended July 10, 2009 and Twelve Weeks ended
July 11, 2008
 (in
thousands, except percentages)
  Net
Sales-Consolidated
 
 Net sales
decreased by $303 (1.1%) to $26,281 in the third twelve weeks of the 2009 fiscal
year compared to the same twelve-week period last year.  Average
selling prices per pound decreased 1.0%.  The selling price decreases
were partially offset by increased unit sales volume in the amount of
0.7%.  Promotional allowances increased 0.7%, as a percent of sales,
compared to the same twelve-week period last year.  Product return
levels decreased 0.6% as a percent of sales compared to the same twelve-week
period last year.
 
 12
 Compared
to the prior twelve-week period ended April 17, 2009 (not shown), average weekly
net sales increased $54 (2.5%).  The average selling price per pound
decreased 0.5% during the third twelve weeks of the 2009 fiscal year compared to
the previous twelve-week period while unit sales volume increased
2.6%.
  Net Sales-Frozen Food
Products Segment
 
 Net sales
in the Frozen Food Products Segment, excluding inter-segment sales, decreased by
$283 (2.5%) to $11,186 in the third twelve weeks of the 2009 fiscal year
compared to the same twelve-week period last year.  Unit sales volume
decreased 3.8% offset by selling price per pound increase of 1.9% when compared
to the comparative twelve-week period last year.  Promotional
allowances increased by approximately 0.9%, as a percent of sales, compared to
the same twelve-week period last year.
 
 Net Sales-Refrigerated and
Snack Food Segment
 
 Net sales
in the Refrigerated and Snack Food Products Segment, excluding inter-segment
sales, decreased by $20 (0.1%) to $15,095 in the third twelve weeks of the 2009
fiscal year compared to the same twelve-week period last year. Unit sales volume
increased by 4.3% and was partially offset by a selling price per pound decrease
of 3.3% compared to the same twelve-week period in the prior year.
 
 Cost of Products Sold and
Gross Margin-Consolidated
 
 Cost of
products sold decreased by $2,457 (14.0%) to $15,089 in the third twelve weeks
of the 2009 fiscal year compared to the same twelve-week period in fiscal
2008.  The gross margin before depreciation increased from 32.8% to
42.1% in the third twelve weeks of the 2009 fiscal year due to higher selling
prices, lower commodity costs and slight increases in the proportion of goods
processed in Company facilities when compared to the same twelve-week period in
fiscal year 2008.
 
 Compared
to the prior twelve-week period ended April 17, 2009 (not shown), the average
weekly cost of products sold during the third twelve weeks of fiscal year 2009
increased $35 (2.9%).  This increase is consistent with the overall
sales volume increase compared to the prior twelve-week period.
 
 Cost of Products Sold-Frozen
Food Products Segment
 
 Cost of
products sold in the Frozen Food Products Segment decreased by $2,058 (24.3%) to
$6,419 in the third twelve weeks of the 2009 fiscal year compared to the same
twelve-week period in fiscal year 2008.  Lower flour costs contributed
significantly to this decrease in the current year period.
 
 Cost of Products
Sold-Refrigerated and Snack Food Segment
 
 Cost of
products sold in the Refrigerated and Snack Food Products Segment decreased by
$593 (6.3%) to $8,793 in the third twelve weeks of the 2009 fiscal year compared
to the same twelve-week period in fiscal year 2008.  This decrease
corresponds to lower sales levels and a reduction in meat commodity costs and
increased in-sourcing of products previously purchased from outside
suppliers.
 
 Selling, General and
Administrative Expenses-Consolidated
 
 Selling,
general and administrative (“SG&A”) expenses decreased by $825 (8.1%) to
$9,393 in the third twelve weeks of fiscal year 2009 compared to the same
twelve-week period in the prior fiscal year.  The decrease in this
category for the twelve-week period ended July 10, 2009 did not directly
correspond to the sales decrease.  The table below summarizes the
primary expense increases and decreases included in this category:
 
 13
 12
      Weeks Ended
                
                
                Expense/LossJuly
      10, 2009
                
                
                July
      11, 2008
                
                
                Increase
      (Decrease)Fuel
                
                $
                580
                
                
                $
                1,001
                
                
                $
                (421
                )Benefits-Health/Life
                
                
                484
                
                
                
                677
                
                
                
                (193
                )Benefits-Workers
      Compensation
                
                
                35
                
                
                
                401
                
                
                
                (366
                )Bad
      Debt Expense / Provision
                
                
                33
                
                
                
                1
                
                
                
                32Cash
      Surrender Value (Gain)/Loss
                
                
                (76
                )
                
                
                186
                
                
                
                (262
                )Interest
      Income
                
                
                (4
                )
                
                
                (37
                )
                
                
                33Other
      SG&A
                
                
                8,341
                
                
                
                7,989
                
                
                
                352Total
                
                $
                9,393
                
                
                $
                10,218
                
                
                $
                (825
                )
 
 When
comparing the third twelve weeks of fiscal year 2009 to the prior twelve-week
period ended April 17, 2009 (not shown), average weekly SG&A increased by
$20 (2.6%).
 
 Selling, General and
Administrative Expenses-Frozen Food Products Segment
 
 SG&A
expenses in the Frozen Food Products Segment increased by $77 (2.1%) to $3,676
in the third twelve weeks of fiscal year 2009 compared to the same twelve week
period in the prior fiscal year. Increased advertising expenses were the primary
contributor to this variance.
 
 Selling, General and
Administrative Expenses-Refrigerated and Snack Food Segment
 
 SG&A
in the Refrigerated and Snack Food Products Segment decreased by $902 (13.6%) to
$5,717 in the third twelve weeks of fiscal year 2009 compared to the same
twelve-week period in the prior fiscal year.   Significant
decreases in fuel cost, healthcare and workers’ compensation contributed to the
decrease in SG&A expenses when compared to the same twelve-week period in
the prior fiscal year.  This decline was partially offset by higher
pension costs in fiscal year 2009.
 
 Depreciation
Expense-Consolidated
 
 Depreciation
expense decreased by $222 (29.5%) to $531 in the third twelve weeks of the 2009
fiscal year compared to the same twelve-week period in fiscal year
2008.  The decrease in depreciation expense reflects a decline in
current capital expenditure projects and routine asset disposals during the
third twelve weeks of fiscal year 2009.  Compared to the prior
twelve-week period ended April 17, 2009 (not shown), average weekly depreciation
decreased $16 (26.0%).
 
 Depreciation Expense-Frozen
Food Products Segment
 
 Depreciation
expense in the Frozen Food Products Segment decreased by $33 (18.2%) to $148 in
the third
twelve weeks of the 2009 fiscal year compared to the same twelve-week period in
fiscal year 2008.  This decrease reflects lower capital spending
activity in the current year period.
 
 Depreciation
Expense-Refrigerated and Snack Food Segment
 
 Depreciation
expense in the Refrigerated and Snack Food Products Segment decreased by $147
(29.5%) to $351 in the third twelve weeks of the 2009 fiscal year compared to
the same twelve-week period in fiscal year 2008.  This decrease
reflects lower capital spending in the third twelve weeks of fiscal year
2009.
 
 Income
Taxes-Consolidated
 
 Our
income tax benefits for the third
twelve weeks ended July 10, 2009 and July 11, 2008 are as follows:
 
 July 10, 2009
                                      
                                      
                                      July 11, 2008Tax
      provision (benefit) at regular annual effective tax rate
                                      
                                      $
                                      208
                                      
                                      
                                      $
                                      (601
                                      )Tax
      valuation allowance
                                      
                                      
                                      ---
                                      
                                      
                                      
                                      4,940Total
      income tax provision
                                      
                                      $
                                      208
                                      
                                      
                                      $
                                      4,339Regular
      effective tax rate
                                      
                                      
                                      16.4
                                      %
                                      
                                      
                                      31.1
                                      %
 
 14
 We
previously recorded a full income tax valuation allowance as of October 31,
2008.  As a result, the estimated annual effective tax rate is 16.4%
in the third twelve weeks of fiscal year 2009 as compared to 31.1% in the prior
fiscal year and 0% for the prior twelve-week period.
 
 Net Income
(Loss)-Consolidated
 
 The net
income of $1,060 in the twelve weeks ended July 10, 2009 includes a non-taxable
gain on life insurance policies in the amount of $76. Gains and losses on life
insurance policies are dependent upon the performance of the underlying equities
and future results may vary considerably.  Taxable investment income
decreased on a comparative basis due to lower short-term interest
rates.
 
 After
considering the effect of these transactions, our results for the twelve week
periods ended July 10, 2009 and July 11, 2008 are as follows:
  12
      Weeks EndedJuly 10, 2009
                                          
                                          
                                          July 11, 2008Income
      (loss) before taxes, life insurance gains (losses)and
      investment income
                                          
                                          $
                                          1,188
                                          
                                          
                                          $
                                          (1,784
                                          )Life
      insurance gains (losses) and investment income
                                          
                                          
                                          80
                                          
                                          
                                          
                                          (149
                                          )Income
      (loss) before taxes
                                          
                                          
                                          1,268
                                          
                                          
                                          
                                          (1,933
                                          )Income
      taxes
                                          
                                          
                                          208
                                          
                                          
                                          
                                          4,339Net
      income (loss)
                                          
                                          $
                                          1,060
                                          
                                          
                                          $
                                          (6,272
                                          )
 
 We
present net income or loss before taxes, life insurance gains (losses) and
investment income because we believe it is an important measure for investors to
use in understanding our underlying operations.
 
 Results
of Operations for the Thirty-six weeks ended July 10, 2009 and July 11, 2008 (in
thousands, except percentages)
  Net
Sales-Consolidated
 
 Net sales
increased by $633 (0.8%) to $83,435 in the first thirty-six weeks of the 2009
fiscal year compared to the same period last year.  Average selling
prices per pound increased 3.3%.  The selling price increases were
partially offset by decreased unit sales volume in the amount of
1.2%.  Promotional allowances increased 0.3%, as a percent of sales,
compared to the same thirty-six week period last year.  Product return
levels decreased 0.2% as a percent of sales compared to the same thirty-six week
period last year.
 
 Net Sales-Frozen Food
Products Segment
 
 Net sales
in the Frozen Food Products Segment, excluding inter-segment sales, increased by
$871 (2.4%) to $36,899 in the first thirty-six weeks of the 2009 fiscal year
compared to the same thirty-six week period last year.  Unit sales
volume decreased 6.8% offset by selling price per pound increase of 9.8% when
compared to the comparative thirty-six week period last
year.  Promotional allowances remained flat, as a percent of sales,
compared to the same thirty-six week period last year.
 
 Net Sales-Refrigerated and
Snack Food Segment
 
 Net sales
in the Refrigerated and Snack Food Products Segment, excluding inter-segment
sales, decreased by $238 (0.5%) to $46,536 in the first thirty-six weeks of the
2009 fiscal year compared to the same thirty-six week period last year. Unit
sales volume increased by 0.3% compared to the same thirty-six week period last
year.  The selling price per pound increased 1.0% compared to the same
thirty-six week period in the prior year.
 
 15
 Cost of Products Sold and
Gross Margin-Consolidated
 
 Cost of
products sold decreased by $5,767 (10.5%) to $49,105 in the first thirty-six
weeks of the 2009 fiscal year compared to the same thirty-six week period in
fiscal 2008.  The gross margin before depreciation increased from
32.4% to 40.6% in the first thirty-six weeks of the 2009 year fiscal year
primarily due to lower commodity costs when compared to the same thirty-six week
period in fiscal year 2008.
 
 Cost of Products Sold-Frozen
Food Products Segment
 
 Cost of
products sold in the Frozen Food Products Segment decreased by $3,368 (13.6%) to
$21,370 in the first thirty-six weeks of the 2009 fiscal year compared to the
same thirty-six week period in fiscal year 2008.  Lower flour costs
contributed significantly to this decrease.
 
 Cost of Products
Sold-Refrigerated and Snack Food Segment
 
 Cost of
products sold in the Refrigerated and Snack Food Products Segment decreased by
$2,983 (9.6%) to $28,216 in the first thirty-six weeks of the 2009 fiscal year
compared to the same thirty-six week period in fiscal year 2008.  This
decrease corresponds to the reduction in sales and increased in-sourcing of
products previously purchased from outside suppliers.
  Selling, General and
Administrative Expenses-Consolidated
 
 SG&A
expenses decreased by $779 (2.7%) to $28,532 in the first thirty-six weeks of
fiscal year 2009 compared to the same thirty-six week period in the prior fiscal
year.  The table below summarizes the primary expenses included in
this category:
 
 36
      Weeks Ended
                
                
                Expense/LossJuly
      10, 2009
                
                
                July
      11, 2008
                
                
                Increase
      (Decrease)Fuel
                
                $
                1,537
                
                
                $
                2,713
                
                
                $
                (1,176
                )Benefits-Health/Life
                
                
                1,651
                
                
                
                1,916
                
                
                
                (265
                )Benefits-Workers
      Compensation
                
                
                341
                
                
                
                690
                
                
                
                (349
                )Bad
      Debt Expense / Provision
                
                
                (27
                )
                
                
                (95
                )
                
                
                68Cash
      Surrender Value Loss(Gain)
                
                
                (3
                )
                
                
                376
                
                
                
                (379
                )Interest
      Income
                
                
                (29
                )
                
                
                (231
                )
                
                
                202Other
      SG&A
                
                
                25,064
                
                
                
                23,942
                
                
                
                1,122Total
                
                $
                28,532
                
                
                $
                29,311
                
                
                $
                (777
                )
 
 Selling, General and
Administrative Expenses-Frozen Food Products Segment
 
 SG&A
expenses in the Frozen Food Products Segment increased by $803 (7.5%) to $11,444
in the first thirty-six weeks of fiscal year 2009 compared to the same
thirty-six week period in the prior fiscal year.  Increases in
pension, wages and advertising expense were the primary contributors to this
variance.
 
 Selling, General and
Administrative Expenses-Refrigerated and Snack Food Segment
 
 SG&A
expenses in the Refrigerated and Snack Food Products Segment decreased by $1,582
(8.5%) to $17,088 in the first thirty-six weeks of fiscal year 2009 compared to
the same thirty-six week period in the prior fiscal
year.   Significant decreases in fuel cost and workers’
compensation expenses contributed to the decrease in SG&A expenses when
compared to the same thirty-six week period in the prior fiscal
year.  This decline was partially offset by higher advertising
expense.
 
 Depreciation
Expense-Consolidated
 
 Depreciation
expense decreased by $287 (12.8%) to $1,962 in the first thirty-six weeks of the
2009 fiscal year compared to the same thirty-six week period in fiscal year
2008.  The decrease in depreciation expense reflects a decline in
current capital expenditure projects and routine asset disposals during the
first thirty-six weeks of fiscal year 2009.
 
 16
 Depreciation Expense-Frozen
Food Products Segment
 
 Depreciation
expense in the Frozen Food Products Segment decreased by $57 (10.6%) to $481 in
the first thirty-six weeks of the 2009 fiscal year compared to the same
thirty-six week period in fiscal year 2008.  This decrease reflects
lower capital spending activity during the first thirty-six weeks of fiscal year
2009.
 
 Depreciation
Expense-Refrigerated and Snack Food Segment
 
 Depreciation
expense in the Refrigerated and Snack Food Products Segment decreased by $121
(8.1%) to $1,368 in the first thirty-six weeks of the 2009 fiscal year compared
to the same thirty-six week period in fiscal year 2008.  This decrease
reflects lower capital spending activity during the first thirty-six weeks of
fiscal year 2009.
 
 Income
Taxes-Consolidated
 
 Our
income tax provision for the first thirty-six weeks ended July 10, 2009 and July
11, 2008 is as follows:
 
 July 10, 2009
                                
                                
                                July 11, 2008Tax
      provision (benefit) at regular annual effective tax rate
                                
                                $
                                208
                                
                                
                                $
                                (1,250
                                )Tax
      valuation allowance
                                
                                
                                -
                                
                                
                                
                                4,940Total
      income tax provision
                                
                                $
                                208
                                
                                
                                $
                                3,690Effective
      tax rate before valuation allowance
                                
                                
                                5.4
                                %
                                
                                
                                34.4
                                %
 
 We
previously recorded a full income tax valuation allowance as of October 31,
2008.  As a result, the estimated annual effective tax rate is 5.4% in
the first thirty-six weeks of fiscal 2009 as compared to 34.4% in the prior
fiscal year.
 
 Net Income
(Loss)-Consolidated
 
 The net
income of $3,628 in the thirty-six weeks ended July 10, 2009 includes a
non-taxable gain on life insurance policies in the amount of $3. Gains and
losses on life insurance policies are dependent upon the performance of the
underlying equities and future results may vary considerably.  Taxable
investment income also decreased on a comparative basis due to lower short-term
interest rates.
 
 After
considering the effect of these transactions, our results for the thirty-six
week periods ended July 10, 2009 and July 11, 2008 are as follows:
  36
      Weeks EndedJuly 10, 2009
                                            
                                            
                                            July 11, 2008Income
      (loss) before taxes, life insurance gains (losses)and
      investment income
                                            
                                            $
                                            3,804
                                            
                                            
                                            $
                                            (3,485
                                            )Life
      insurance gains (losses) and investment income
                                            
                                            
                                            32
                                            
                                            
                                            
                                            (145
                                            )Income
      (loss) before taxes
                                            
                                            
                                            3,836
                                            
                                            
                                            
                                            (3,630
                                            )Income
      taxes
                                            
                                            
                                            208
                                            
                                            
                                            
                                            3,690Net
      income (loss)
                                            
                                            $
                                            3,628
                                            
                                            
                                            $
                                            (7,320
                                            )
 
 We
present net income or loss before taxes, life insurance gains (losses) and
investment income because we believe it is an important measure for investors to
use in understanding our underlying operations.
  Liquidity
and Capital Resources (in thousands)
  Our need
for operations’ growth, capital expenses and share repurchases are expected to
be met with cash flows provided by future operating activities.
  17
 Cash
flows from operating activities for the thirty-six weeks ended:
  July 10, 2009
                                        
                                        
                                        July 11, 2008Net
      income (loss)
                                        
                                        $
                                        3,628
                                        
                                        
                                        $
                                        (7,320
                                        )Adjustments
      to reconcile net income (loss) to net cash provided by (used in) operating
      activities:Depreciation
                                        
                                        
                                        1,962
                                        
                                        
                                        
                                        2,249Provision
      on losses on accounts receivable
                                        
                                        
                                        6
                                        
                                        
                                        
                                        26Gain
      on sale of property, plant and equipment
                                        
                                        
                                        (10
                                        )
                                        
                                        
                                        (35
                                        )Tax
      valuation allowance
                                        
                                        
                                        -
                                        
                                        
                                        
                                        4,940Changes
      in operating working capital
                                        
                                        
                                        1,927
                                        
                                        
                                        
                                        (398
                                        )Net
      cash provided (used in) by operating activities
                                        
                                        $
                                        7,513
                                        
                                        
                                        $
                                        (538
                                        )
 
 
 Significant
changes in working capital for the thirty-six weeks ended:
 
 July 10, 2009 – Sources of
cash included reductions in accounts receivable of $1,619 and inventory of
$1,005. The increase in operating cash flows for the period ended July 10, 2009
included an increase in accounts payable of $531 and a decrease in accrued
payroll, advertising and other expenses of $562.   During the
period we funded $361 towards our defined benefit pension plan.
 
 July 11, 2008- Reductions in
operating cash flows for the period ended July 11, 2008 included an increase in
prepaid expenses and other current assets in the amount of $839 as well as a
reduction in accrued payroll, advertising and other expenses in the amount of
$1,062. These uses of cash were offset by reductions in accounts receivable of
$740 and increases in accounts payable and accrued expenses of
$838.
 
 Cash
used in investing activities for the thirty-six weeks ended:
 
 July
      10, 2009
                  
                  
                  July
      11, 2008Proceeds
      from sale of property, plant and equipment
                  
                  $
                  56
                  
                  
                  $
                  40Additions
      to property, plant and equipment
                  
                  
                  (984
                  )
                  
                  
                  (1,586
                  )Net
      cash used in investing activities
                  
                  $
                  (928
                  )
                  
                  $
                  (1,546
                  )
 
 Expenditures
for property, plant and equipment include the acquisition of new equipment,
upgrading of facilities to maintain operating efficiency and investments in cost
effective technologies to lower costs. Overall capital spending has declined in
recent years as we carefully scrutinize capital investments for short term
pay-back of investment.
  Cash
used in financing activities for the thirty-six weeks ended:
  July
      10, 2009
                      
                      
                      July
      11, 2008Shares
      repurchased
                      
                      $
                      (270
                      )
                      
                      $
                      (3,018
                      )Net
      cash used in financing activities
                      
                      $
                      (270
                      )
                      
                      $
                      (3,018
                      )
  Our stock
repurchase program was approved by the Board of Directors in November 1999 and
was expanded in June 2005.  Under the stock repurchase program, we are
authorized, at the discretion of management and the Board of Directors, to
purchase up to an aggregate of 2,000 shares of our common stock on the open
market.  As of July 10, 2009, up to approximately 439 shares were
still authorized for repurchase under the program.  No cash dividends
were paid during the first thirty-six weeks of the 2009 fiscal
year.  The Board of Directors suspended the quarterly cash dividend at
its May 2004 meeting in recognition of lower profitability levels in recent
periods
 
 Fluctuations
in the discount rate used to value our pension liability resulted in significant
changes in net worth between comparative quarters and year end.
 
 18
 We
remained free of interest bearing debt during the first thirty-six weeks of
fiscal year 2009.  We have remained free of interest-bearing debt for
twenty-two consecutive years. We maintain a line of credit with Bank of America
that expires April 30, 2010. Under the terms of this line of credit, we may
borrow up to $2,000 at an interest rate equal to the bank’s reference rate,
unless we elect an optional interest rate. The borrowing agreement contains
various covenants, the more significant of which require us to maintain certain
levels of shareholders’ equity and working capital. We were in compliance with
all loan covenants as of July 10, 2009.  There were no borrowings
under this line of credit during the year.  Management believes that
our strong financial position and our capital resources are sufficient to
provide for our operating needs and capital expenditures for fiscal
2009.
 
 Recent
Accounting Pronouncements
 
 During
the last three years, various accounting standard-setting bodies have been
active in soliciting comments and issuing statements, interpretations and
exposure drafts. For information on new accounting pronouncements and the
impact, if any, on our financial position or results of operations, see Note 1
of the Notes to the Consolidated Financial Statements on Form 10-K for fiscal
year ended October 31, 2008.
 
 In April
2009, the Financial Accounting Standards Board (“FASB”) issued FASB Staff
Position (“FSP”) FAS 107-1/APB 28-1 (“FSP 107-1”), which is entitled “Interim
Disclosures about Fair Value of Financial Instruments.”  This
pronouncement amended SFAS No 107, Disclosures about Fair Value of Financial
Instruments, to require disclosure of the carrying amount and the fair value of
all financial instruments for interim reporting periods and annual financial
statements of publicly traded companies (even if the financial instrument is not
recognized in the balance sheet), including the methods and significant
assumptions used to estimate the fair values and any changes in such methods and
assumptions.  FSP 107-1 also amended APB Opinion No. 28, Interim
Financial Reporting, to require disclosures in summarized financial information
at interim reporting periods.  FSP 107-1 is effective for interim
reporting periods ending after June 15, 2009, with early adoption permitted for
periods ended after March 15, 2009 if a company also elects to early adopt FSP
FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the
Asset or Liability Have Significantly Decreased and Identifying Transactions
That Are Not Orderly, and FSP FAS 115-2/FAS 124-2, Recognition and Presentation
of Other-Than-Temporary Impairments.  The adoption of this standard
did not have a significant impact on our consolidated financial
statements.
 
 In April
2009, the FASB also issued FSP FAS 157-4, which generally applies to all assets
and liabilities within the scope of any accounting pronouncements that require
or permit fair value measurements.  This pronouncement, which does not
change SFAS No. 157’s guidance regarding Level 1 inputs, requires the entity to
(i) evaluate certain factors to determine whether there has been a significant
decrease in the volume and level of activity for the asset or liability when
compared with normal market activity, (ii) consider whether the preceding
indicates that transactions or quoted prices are not determinative of fair value
and, if so, whether a significant adjustment thereof is necessary to estimate
fair value in accordance with SFAS No. 157, and (iii) ignore the intent to hold
the asset or liability when estimating fair value.  FSP FAS 157-4 also
provides guidance to consider in determining whether a transaction is orderly
(or not orderly) when there has been a significant decrease in the volume and
level of activity for the asset or liability, based on the weight of available
evidence.  This pronouncement is effective for interim and annual
reporting periods ending after June 15, 2009, and shall be applied
prospectively.  Early adoption of FSP FAS 157-4 also requires early
adoption of the pronouncement described in the following
paragraph.  However, early adoption for periods ended before March 15,
2009 is not permitted.   The adoption of this standard did not
have a significant impact on our consolidated financial statements.
 
 In April
2009, the FASB issued FSP FAS 115-2 and 124-2 (hereinafter referred to as “FAS
115-2/124-2”), which amends the other-than-temporary impairment (“OTTI”)
recognition guidance in certain existing U.S. GAAP (including SFAS No. 115 and
130, FSP FAS 115-1/FAS 124-1, and EITF Issue 99-20) for debt securities
classified as available-for-sale and held-to-maturity.  FAS
115-2/124-2 requires the entity to consider (i) whether the entire amortized
cost basis of the security will be recovered (based on the present value of
expected cash flows), and (ii) its intent to sell the security.  Based
on the factors described in the preceding sentence, this pronouncement also
explains the process for determining the OTTI to be recognized in “other
comprehensive income” (generally, the impairment charge for other than a credit
loss) and in earnings.  FAS 115-2/124-2 does not change existing
recognition or measurement guidance related to OTTI of equity
securities.  This pronouncement is effective as described in the
preceding paragraph.  Certain transition rules apply to debt
securities held at the beginning of the interim period of adoption when an OTTI
was previously recognized.  If an entity early adopts either FSP 107-1
or FSP FAS 157-4, the entity is also required to early adopt this
pronouncement.  In addition, if an entity early adopts FAS
115-2/124-2, it is also required to early adopt FSP FAS 157-4.  The
adoption of this standard did not have a significant impact on our consolidated
financial statements.
 
 19
 The
pronouncements described in the immediately preceding three paragraphs do not
require any of the new disclosures for earlier periods (ended before initial
adoption) that are presented for comparative purposes.
 
 In May
2009, the FASB issued SFAS No. 165, “Subsequent Events” (“SFAS
165”).  SFAS 165 establishes general standards of accounting for and
disclosure of events that occur after the balance sheet date but before the date
the financial statements are issued or available to be issued.  SFAS
165 requires companies to disclose in their financial statements the effects of
subsequent events that would cause the financial statements to be misleading by
providing additional evidence about conditions at the balance-sheet date
including evidence about conditions that arose after the balance-sheet
date.  Disclosures should include the nature of the event and either
an estimate of its financial effect or a statement that an estimate cannot be
made. SFAS 165 is effective for interim and annual financial periods ending
after June 15, 2009, and should be applied prospectively.  As the
requirements under SFAS 165 are consistent with our current practice, the
adoption of this standard did not have a significant impact on our consolidated
financial statements.   We have evaluated subsequent events
through August 24, 2009 for purposes of this Quarterly Report.
 
 In June
2009, the FASB issued SFAS No. 166, “Accounting for Transfers of Financial
Assets” (“SFAS 166”).  SFAS 166 removes the concept of a qualifying
special-purpose entity (“QSPE”) from SFAS No. 140,   “ Accounting
for Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities”  (“SFAS 140”) and removes the exception from applying
FASB Interpretation No. 46 (revised December 2003), “Consolidation of Variable
Interest Entities” (“FIN 46R”).  This statement also clarifies the
requirements for isolation and limitations on portions of financial assets that
are eligible for sale accounting.  This statement is effective for
fiscal years beginning after November 15, 2009.  Accordingly, we will
adopt SFAS 166 in fiscal 2011.  The adoption of this standard is not
expected to have a significant impact on our consolidated financial
statements.
 
 In June
2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46R”
(“SFAS 167”).  SFAS 167 amends FIN 46R to require an analysis to
determine whether a variable interest gives a company a controlling financial
interest in a variable interest entity.  This statement requires an
ongoing reassessment of and eliminates the quantitative approach previously
required for determining whether a company is the primary
beneficiary.  This statement is effective for fiscal years beginning
after November 15, 2009.  Accordingly, we will adopt SFAS 167 in
fiscal 2011.  The adoption of this standard is not expected to have a
significant impact on our consolidated financial statements.
 
 In June
2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification
and the Hierarchy of Generally Accepted Accounting Principles; SFAS No. 168
designates the FASB Accounting Standards Codification,officially launched July
1, 2009,  as the authoritative source of generally accepted accounting
principles in the United States. Rules and interpretive releases of the
Securities and Exchange Commission (SEC) under federal securities laws are also
sources of authoritative GAAP for SEC registrants. SFAS No. 168 is effective for
financial statements issued for interim and annual periods ending after
September 15, 2009. We do not expect adoption to have a material impact on our
consolidated financial position, results of operations or cash
flows.
  In August
2009, the SEC issued Interpretive Release No. 33-9062, “Commission Guidance
Regarding the Financial Accounting Standards Board’s Accounting Standards
Codification” regarding the impact of the FASB Codification on certain SEC
rules, regulations, interpretive releases and staff accounting
bulletins.  The SEC advised that references to FASB standards in
current SEC text should correspond to the rules in the
Codification.  The Codification does not supersede any SEC rules or
regulations.  The Codification should not be considered the
authoritative source for SEC guidance.
  Off-Balance
Sheet Arrangements
 
 We are
not engaged in any “off-balance sheet arrangements” within the meaning of Item
303(a)(4)(ii) of Regulation S-K.
 
 Item
3.   Quantitative and Qualitative Disclosures about Market
Risk
 
 Not
applicable to smaller reporting company.
  20
 Item
4T.  Controls and Procedures
 
 Our
management, with the participation and under the supervision of our Chairman and
Chief Financial Officer, has evaluated the effectiveness of our disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) as of the end of the period covered by this Quarterly Report on Form
10-Q. Based on this evaluation, the Chairman and Chief Financial Officer have
concluded that our disclosure controls and procedures are effective as of the
end of the period covered by this report to provide reasonable assurance that
material information required to be disclosed by us in the reports that we file
or submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified by the Securities and Exchange Commission’s
rules and forms.  There has been no change in our internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and
15d-15(f)) during the period covered by this report that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.
 
 Our
management, including our Chairman and Chief Financial Officer, does not expect
that our disclosure controls and internal controls will prevent all error and
all fraud.  A control system, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met.  Further, the design of a
control system must reflect the fact that there are resource constraints, and
the benefits of controls must be considered relative to their
costs.  Because of inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, have been detected.  These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or
mistake.  Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people, or by management
override of the control.
 
 The
design of any system of controls is also based in part upon certain assumptions
about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future
conditions; over time, a control may become inadequate because of changes in
conditions, or the degree of compliance with the policies or procedures may
deteriorate.  Because of inherent limitations in a cost-effective
control system, misstatements due to error or fraud may occur and not be
detected.
 
 Section 404 of the
Sarbanes-Oxley Act of 2002:
 
 In order
to comply with the Sarbanes-Oxley Act of 2002 (the “Act”), we have undertaken
and continue a comprehensive effort, which includes the documentation and review
of our internal controls. In order to comply with the Act, we have centralized
most accounting and many administrative functions at our corporate headquarters
in an effort to control the cost of maintaining our control
systems.  On July 11, 2006, The Committee of Sponsoring Organizations
(“COSO”) issued guidance on how small companies should implement an effective
internal control framework over financial reporting and other risks. This
guidance is considered a key tool to help smaller public companies to confront
the challenges of the Act.  As a result, we may incur substantial
additional expenses and diversion of management’s time. During the course of
these activities, we may identify certain internal control issues which
management believes should be improved. These improvements, if necessary, will
likely include further formalization of policies and procedures, improved
segregation of duties, additional information technology system controls and
additional monitoring controls. Although management does not believe that any of
these matters will result in material weaknesses being identified in our
internal controls as defined by the Public Company Accounting Oversight Board
Auditing Standard No. 5, no assurances can be given regarding the outcome of
these efforts. Additionally, control weaknesses may not be identified in a
timely enough manner to allow remediation prior to the issuance of the auditor’s
report on internal controls over financial reporting. Any failure to adequately
comply could result in sanctions or investigations by regulatory authorities,
which could harm our business or investors’ confidence in us.
 
 The
Securities and Exchange Commission, on December 15, 2006, as amended on June 26,
2008, adopted new measures to grant relief to smaller public companies by
extending the date of compliance with Section 404 of the Act.  Under
these new measures, we will be required to comply with the Act in two
phases.  The first phase was completed by us for the fiscal year ended
October 31, 2008 and required us to issue a management report on internal
control over financial reporting. The second phase will require us to obtain an
auditor’s attestation report on internal control over financial reporting
beginning with the fiscal year ending October 30, 2010.  There have
been no changes in our internal controls over financial reporting that occurred
during our third quarter ended July 10, 2009 that have materially affected, or
are reasonably likely to materially affect, our internal controls over financial
reporting.
  21
 Part
II.  Other Information
 
 Item
1A. Risk Factors
 
 The risk
factors listed in Part I “Item 1A. Risk Factors” in the Annual Report on Form
10-K for the fiscal year ended October 31, 2008, should be considered with the
information provided elsewhere in this Quarterly Report on Form 10-Q, which
could materially adversely affect our business, financial condition or results
of operations.  There have been no material changes to the risk
factors as previously disclosed in such Annual Report on Form 10-K.
 
 Item
2.  Unregistered Sales of Equity Securities and Use of
Proceeds
 
 We have
not sold any equity securities during the period covered by this
report.
 
 The
following table provides information regarding repurchases by us of our common
stock, for each of the three four-week periods included in the interim
twelve-week period ended July 10, 2009.
  ISSUER
PURCHASES 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)April
      18, 2009 – May 15, 2009
                                  
                                  
                                  4,842
                                  
                                  
                                  $
                                  4.83
                                  
                                  
                                  
                                  4,842
                                  
                                  
                                  
                                  470,234May
      16, 2009 – June 12, 2009
                                  
                                  
                                  11,410
                                  
                                  
                                  $
                                  6.40
                                  
                                  
                                  
                                  11,410
                                  
                                  
                                  
                                  458,824June
      13, 2009 – July 10, 2009
                                  
                                  
                                  19,906
                                  
                                  
                                  $
                                  8.14
                                  
                                  
                                  
                                  19,906
                                  
                                  
                                  
                                  438,918Total
                                  
                                  
                                  36,158
                                  
                                  
                                  $
                                  7.15
                                  
                                  
                                  
                                  36,158
 
 (1)
              The
      periods shown are the fiscal periods during the twelve-week quarter ended
      July 10, 2009.
 
 (2)
              Repurchases
      reflected in the foregoing table were made on the open
      market.  Our stock repurchase program was approved by the Board
      of Directors in November 1999 (1,500,000 shares authorized, disclosed
      in a Form 10-K filed on January 26, 2000) and was expanded in
      June 2005 (500,000 additional shares authorized, disclosed in a press
      release and Form 8-K filed on June 17, 2005).  Under
      the stock repurchase program, we are authorized, at the discretion of our
      management and the Board of Directors, to purchase up to an aggregate of
      2,000,000 shares of our common stock on the open market.  Our
      Stock Purchase Plan (“Purchase Plan”) is administered by Citigroup Global
      Markets Inc. (“CGM”) for purchase of shares of our common stock in
      compliance with the requirements of Rule 10b5-1 under the Exchange
      Act.  Commencing on October 14, 2008 and continuing through
      and including October 13, 2009, CGM shall act as our exclusive agent
      to purchase shares of our common stock under the Purchase
      Plan.  This Purchase Plan supplements any purchases of stock by
      us “outside” of the Purchase Plan, which may occur from time to time, in
      open market transactions pursuant to Rule 10b-18 of the Exchange Act
      or in privately-negotiated transactions.  As of July 10, 2009,
      the total maximum number of shares that may be purchased under the
      Purchase Plan is 438,918 at a total maximum aggregate price (exclusive of
      commission) of $4,389,180.
 
 22
 
 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.
 
 23
 SIGNATURES
  Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
  BRIDGFORD
      FOODS CORPORATION
                  (Registrant)Dated:
      August 24, 2009
                By:
                /s/ Raymond
      F. LancyRaymond
      F. LancyChief
      Financial Officer(Duly
      Authorized Officer and Principal Financial Officer)
 
   24