##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q(Mark one)

|      |  |                                                                                            
|----- |  | -------------------------------------------------------------------------------------------
|[X]   |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
|     
|      |  | For the quarterly period ended May 3, 2002                                                 
|     
|      |  | OR                                                                                         
|     
|[   ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934   

For the transition period from

Commission file number 0-2396

BRIDGFORD FOODS CORPORATION

---

(Exact name of Registrant as specified in its charter)


|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|California                                                     |  | 95-1778176                             
|                                                               |  |                                        
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
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 [   ]

As of June 1, 2002 the registrant had 10,448,000 shares of common stock
outstanding.

Number of pages in this Form 10-Q      8

|                    |  |                  
|------------------- |  | -----------------
|(end of cover page) |  | Page 1 of 8 pages





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TABLE OF CONTENTS



| |                                                                                               |                                                           |  |  |  |  |  | 
| | --------------------------------------------------------------------------------------------- | --------------------------------------------------------- |  |  |  |  |  | 
| |                                                                                               | CONSOLIDATED CONDENSED BALANCE SHEETS                    
| |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF INCOME              
| |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS EQUITY
| |                                                                                               | CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS          
| |                                                                                               | NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS     
| | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
| | Item 3. Quantitative and Qualitative Disclosures about Market Risk                           



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##### Table of Contents



BRIDGFORD FOODS CORPORATION
FORM 10-Q QUARTERLY REPORT
INDEX

|                                                                                              |    |   |                                                                                                              |  |   |     
|--------------------------------------------------------------------------------------------- | -- | - | ------------------------------------------------------------------------------------------------------------ |  | - | ----
|                                                                                              |    |   |                                                                                                              |  |   | Page
|                                                                                              |    |   |                                                                                                              |  |   |     
|Part I. Financial Information                                                                 |    |  
|                                                                                             
|Item 1. Financial Statements                                                                  |    |  
|                                                                                             
|                                                                                              | a. |   | Consolidated Condensed Balance Sheets at May 3, 2002 and November 2, 2001                                    |  | 3
|                                                                                             
|                                                                                              | b. |   | Consolidated Condensed Statements of Income for the 13 and 26 weeks ended May 3, 2002
and May 4, 2001        |  | 4
|                                                                                             
|                                                                                              | b. |   | Consolidated Condensed Statements of Shareholders Equity for the 26 weeks ended
May 3, 2002 and May 4, 2001 |  | 4
|                                                                                             
|                                                                                              | c. |   | Consolidated Condensed Statements of Cash Flows for the 26 weeks ended May 3, 2002
and May 4, 2001           |  | 5
|                                                                                             
|                                                                                              | d. |   | Notes to Consolidated Condensed Financial Statements                                                         |  | 6
|                                                                                             
|Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations |    | 7
|                                                                                             
|Item 3. Quantitative and Qualitative Disclosures about Market Risk                            |    | 8

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)             
|                   
|Date: June 17, 2002 | By:                                                   | /s/ Robert E. Schulze
|                    |                                                      
|                    | R. E. Schulze, President,
Principal Financial Officer

Page 2 of 8 pages





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##### Table of Contents



Item 1. a.




BRIDGFORD FOODS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS

|                                                                                    |                                                                              |                                        |                           |        |                |        |                |        |        |        | 
|----------------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | -------------------------------------- | ------------------------- | ------ | -------------- | ------ | -------------- | ------ | ------ | ------ | 
|                                                                                    |                                                                              |                                        |                           |        | May 3          |        | November 2    
|                                                                                    |                                                                              |                                        |                           |        | 2002           |        | 2001          
|                                                                                    |                                                                              |                                        |                           |        |                |        |               
|                                                                                    |                                                                              |                                        |                           |        | (unaudited)    |        |                |        |       
|                                                                                    |                                                                              |                                        |                           |        | (in thousands) |        | (in thousands)
|                                                                                   
|ASSETS                                                                             
|                                                                                   
|Current assets:                                                                     |                                                                              |                                        |                           |        |                |        |                |       
|                                                                                    | Cash and cash equivalents                                                    |                                        | $                         | 11,569 |                |        | $              | 12,974 |       
|                                                                                    | Accounts receivable, less allowance
for doubtful accounts of $1,679 and $779 |                                        |                           | 16,933 |                |        |                | 14,282 |       
|                                                                                    | Inventories (Note 2)                                                         |                                        |                           | 17,340 |                |        |                | 19,165 |       
|                                                                                    | Prepaid expenses and other current assets                                    |                                        |                           | 3,813  |                |        |                | 5,356  |       
|                                                                                    |                                                                              |                                        |                           |        |                |        |                |       
|                                                                                    |                                                                              |                                        | Total current assets      |        |                | 49,655 |                |        |        | 51,777 | 
|Property, plant and equipment, less
accumulated depreciation of $37,577
and $35,378 |                                                                              |                                        | 18,970                    |        |                |        | 19,471         |       
|Other non-current assets                                                            |                                                                              |                                        | 11,423                    |        |                |        | 11,090         |       
|                                                                                    |                                                                              |                                        |                           |        |                |        |                |       
|                                                                                    |                                                                              | $                                      | 80,048                    |        |                | $      | 82,338         |       
|                                                                                    |                                                                              |                                        |                           |        |                |        |                |       
|                                                                                   
|LIABILITIES AND SHAREHOLDERS EQUITY                                               
|                                                                                   
|Current liabilities:                                                                |                                                                              |                                        |                           |        |                |        |                |       
|                                                                                    | Accounts payable                                                             |                                        | $                         | 3,949  |                |        | $              | 6,958  |       
|                                                                                    | Accrued payroll and other expenses                                           |                                        |                           | 7,278  |                |        |                | 6,464  |       
|                                                                                    | Income taxes payable                                                         |                                        |                           | 330    |                |        |                | 330    |       
|                                                                                    |                                                                              |                                        |                           |        |                |        |                |       
|                                                                                    |                                                                              |                                        | Total current liabilities |        |                | 11,557 |                |        |        | 13,752 | 
|                                                                                    |                                                                              |                                        |                           |        |                |        |                |       
|Non-current liabilities                                                             |                                                                              |                                        | 9,569                     |        |                |        | 11,251         |       
|                                                                                    |                                                                              |                                        |                           |        |                |        |                |       
|Shareholders equity:                                                               |                                                                              |                                        |                           |        |                |        |                |       
|                                                                                    | Preferred stock, without par value                                           |                                        |                           |        |                |        |                |        |       
|                                                                                    |                                                                              | Authorized - 1,000 shares              |                           |        |                |        |                |        |        |       
|                                                                                    |                                                                              | Issued and outstanding - none          |                           |        |                |        |                |        |        |       
|                                                                                    | Common stock, $1.00 par value                                                |                                        |                           |        |                |        |                |        |       
|                                                                                    |                                                                              | Authorized
- 20,000 shares             |                           |        |                |        |                |        |        |       
|                                                                                    |                                                                              | Issued and outstanding - 10,448 shares |                           |        | 10,505         |        |                |        | 10,505 |       
|                                                                                    | Capital in excess of par value                                               |                                        |                           | 17,475 |                |        |                | 17,475 |       
|                                                                                    | Retained earnings                                                            |                                        |                           | 30,942 |                |        |                | 29,355 |       
|                                                                                    |                                                                              |                                        |                           |        |                |        |                |       
|                                                                                    |                                                                              |                                        | 58,922                    |        |                |        | 57,335         |       
|                                                                                    |                                                                              |                                        |                           |        |                |        |                |       
|                                                                                    |                                                                              | $                                      | 80,048                    |        |                | $      | 82,338         |       
|                                                                                    |                                                                              |                                        |                           |        |                |        |                |       

See accompanying notes to consolidated condensed financial statements.

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Item 1. b.




BRIDGFORD FOODS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)

|                                              |  |                |        |                                          |  |       |        |       |  |   |        |  |  |   |        | 
|--------------------------------------------- |  | -------------- | ------ | ---------------------------------------- |  | ----- | ------ | ----- |  | - | ------ |  |  | - | ------ | 
|                                              |  | 13 weeks ended |        | 26 weeks ended                          
|                                              |  |                |        |                                         
|                                              |  | May 3          |        | May 4                                    |  | May 3 |        | May 4
|                                              |  | 2002           |        | 2001                                     |  | 2002  |        | 2001 
|                                              |  |                |        |                                          |  |       |        |      
|                                              |  | (in thousands) |        | (in thousands, except per share amounts)
|                                             
|Net sales                                     |  | $              | 35,904 |                                          |  | $     | 38,497 |       |  | $ | 75,135 |  |  | $ | 80,777 | 
|                                              |  |                |        |                                          |  |       |        |       |  |   |        |  |  |   |        | 
|Cost of products sold,
excluding depreciation |  |                | 21,986 |                                          |  |       | 23,411 |       |  |   | 45,119 |  |  |   | 48,284 | 
|Selling, general and
administrative expenses  |  |                | 10,413 |                                          |  |       | 11,142 |       |  |   | 22,900 |  |  |   | 23,486 | 
|Depreciation                                  |  |                | 1,092  |                                          |  |       | 1,063  |       |  |   | 2,198  |  |  |   | 2,126  | 
|                                              |  |                |        |                                          |  |       |        |       |  |   |        |  |  |   |        | 
|                                              |  |                | 33,491 |                                          |  |       | 35,616 |       |  |   | 70,217 |  |  |   | 73,896 | 
|                                              |  |                |        |                                          |  |       |        |       |  |   |        |  |  |   |        | 
|Income before taxes                           |  |                | 2,413  |                                          |  |       | 2,881  |       |  |   | 4,918  |  |  |   | 6,881  | 
|Income tax provision                          |  |                | 917    |                                          |  |       | 1,095  |       |  |   | 1,869  |  |  |   | 2,615  | 
|                                              |  |                |        |                                          |  |       |        |       |  |   |        |  |  |   |        | 
|Net income                                    |  | $              | 1,496  |                                          |  | $     | 1,786  |       |  | $ | 3,049  |  |  | $ | 4,266  | 
|                                              |  |                |        |                                          |  |       |        |       |  |   |        |  |  |   |        | 
|Basic earnings per share                      |  | $              | .14    |                                          |  | $     | .17    |       |  | $ | .29    |  |  | $ | .40    | 
|                                              |  |                |        |                                          |  |       |        |       |  |   |        |  |  |   |        | 
|Basic shares computed                         |  |                | 10,448 |                                          |  |       | 10,551 |       |  |   | 10,448 |  |  |   | 10,576 | 
|                                              |  |                |        |                                          |  |       |        |       |  |   |        |  |  |   |        | 
|Diluted earnings per share                    |  | $              | .14    |                                          |  | $     | .17    |       |  | $ | .29    |  |  | $ | .40    | 
|                                              |  |                |        |                                          |  |       |        |       |  |   |        |  |  |   |        | 
|Diluted shares computed                       |  |                | 10,474 |                                          |  |       | 10,606 |       |  |   | 10,486 |  |  |   | 10,629 | 
|                                              |  |                |        |                                          |  |       |        |       |  |   |        |  |  |   |        | 
|Cash dividends paid per share                 |  | $              | .07    |                                          |  | $     | .07    |       |  | $ | .14    |  |  | $ | .14    | 
|                                              |  |                |        |                                          |  |       |        |       |  |   |        |  |  |   |        | 




CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)

(in thousands, except per share amounts)

|                 |                                 |  |              |     |           |   |          |     |          |   |        |        |   |   |        |        |  
|---------------- | ------------------------------- |  | ------------ | --- | --------- | - | -------- | --- | -------- | - | ------ | ------ | - | - | ------ | ------ | -
|                 |                                 |  | Common Stock |     | Capital   |   |          |     |         
|                 |                                 |  |              |     | in excess |   | Retained
|                 |                                 |  | Shares       |     | Amount    |   | of par   |     | earnings
|                 |                                 |  |              |     |           |   |          |     |         
|November 3, 2000 |                                 |  | 10,615       |     |           | $ | 10,672   |     |          | $ | 19,459 |        |   | $ | 26,065 |       
|                 | Net income                      |  |              |     |           |   |          |     |          |   |        |        |   |   |        | 4,266  |  
|                 | Shares repurchased              |  |              | (86 | )         |   |          | (86 | )        |   |        | (1,019 | ) |   |        |        |  
|                 | Cash dividends
($.07 per share) |  |              |     |           |   |          |     |          |   |        |        |   |   |        | (1,482 | )
|                 |                                 |  |              |     |           |   |          |     |          |   |        |        |   |   |        |       
|May 4, 2001      |                                 |  | 10,529       |     |           | $ | 10,586   |     |          | $ | 18,440 |        |   | $ | 28,849 |       
|                 |                                 |  |              |     |           |   |          |     |          |   |        |        |   |   |        |       
|November 2, 2001 |                                 |  | 10,448       |     |           | $ | 10,505   |     |          | $ | 17,475 |        |   | $ | 29,355 |       
|                 | Net income                      |  |              |     |           |   |          |     |          |   |        |        |   |   |        | 3,049  |  
|                 | Cash dividends
($.07 per share) |  |              |     |           |   |          |     |          |   |        |        |   |   |        | (1,462 | )
|                 |                                 |  |              |     |           |   |          |     |          |   |        |        |   |   |        |       
|May 3, 2002      |                                 |  | 10,448       |     |           | $ | 10,505   |     |          | $ | 17,475 |        |   | $ | 30,942 |       
|                 |                                 |  |              |     |           |   |          |     |          |   |        |        |   |   |        |       

See accompanying notes to consolidated condensed financial statements.

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Item 1.c.




BRIDGFORD FOODS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

|                                                 |                                                      |                                             |        |                                           |        |                |        |                |        |   |        |  
|------------------------------------------------ | ---------------------------------------------------- | ------------------------------------------- | ------ | ----------------------------------------- | ------ | -------------- | ------ | -------------- | ------ | - | ------ | -
|                                                 |                                                      |                                             |        |                                           |        | 26 weeks ended
|                                                 |                                                      |                                             |        |                                           |        |               
|                                                 |                                                      |                                             |        |                                           |        | May 3          |        | May 4         
|                                                 |                                                      |                                             |        |                                           |        | 2002           |        | 2001          
|                                                 |                                                      |                                             |        |                                           |        |                |        |               
|                                                 |                                                      |                                             |        |                                           |        | (in thousands) |        | (in thousands)
|Cash flows from operating activities:            |                                                      |                                             |        |                                           |        |                |        |               
|                                                 | Net income                                           |                                             | $      | 3,049                                     |        |                | $      | 4,266          |       
|                                                 | Income charges not affecting cash:                   |                                             |        |                                           |        |                |        |                |       
|                                                 |                                                      | Depreciation                                |        |                                           | 2,198  |                |        |                | 2,126  |  
|                                                 |                                                      | Provision for losses on accounts receivable |        |                                           | 968    |                |        |                | 86     |  
|                                                 | Effect on cash of changes in assets and liabilities: |                                             |        |                                           |        |                |        |                |       
|                                                 |                                                      | Accounts receivable                         |        |                                           | (3,619 | )              |        |                | 486    |  
|                                                 |                                                      | Inventories                                 |        |                                           | 1,825  |                |        |                | 2,506  |  
|                                                 |                                                      | Prepaid expenses and other                  |        |                                           | 1,543  |                |        |                | (485   | )
|                                                 |                                                      | Other non-current assets                    |        |                                           | (333   | )              |        |                | (516   | )
|                                                 |                                                      | Accounts payable and accrued expenses       |        |                                           | (2,195 | )              |        |                | (4,810 | )
|                                                 |                                                      | Income taxes payable                        |        |                                           | 0      |                |        |                | (76    | )
|                                                 |                                                      | Non-current liabilities                     |        |                                           | (1,682 | )              |        |                | 127    |  
|                                                 |                                                      |                                             |        |                                           |        |                |        |               
|                                                 |                                                      |                                             |        | Net cash provided by operating activities |        |                | 1,754  |                |        |   | 3,710  |  
|                                                 |                                                      |                                             |        |                                           |        |                |        |               
|Cash used in investing activities:               |                                                      |                                             |        |                                           |        |                |        |               
|                                                 |                                                      | Additions to property, plant and equipment  |        |                                           | (1,697 | )              |        |                | (2,040 | )
|                                                 |                                                      |                                             |        |                                           |        |                |        |               
|Cash used for financing activities:              |                                                      |                                             |        |                                           |        |                |        |               
|                                                 |                                                      | Shares repurchased                          |        |                                           |        |                |        |                | (1,105 | )
|                                                 |                                                      | Cash dividends paid                         |        |                                           | (1,462 | )              |        |                | (1,482 | )
|                                                 |                                                      |                                             |        |                                           |        |                |        |               
|                                                 |                                                      |                                             |        | Net cash used in financing activities     |        |                | (1,462 | )              |        |   | (2,587 | )
|                                                 |                                                      |                                             |        |                                           |        |                |        |               
|Net decrease in cash and cash equivalents        |                                                      |                                             | (1,405 | )                                         |        |                | (917   | )             
|Cash and cash equivalents at beginning of period |                                                      |                                             | 12,974 |                                           |        |                | 18,301 |               
|                                                 |                                                      |                                             |        |                                           |        |                |        |               
|Cash and cash equivalents at end of period       |                                                      | $                                           | 11,569 |                                           |        | $              | 17,384 |               
|                                                 |                                                      |                                             |        |                                           |        |                |        |               
|Cash paid for income taxes                       |                                                      | $                                           | 762    |                                           |        | $              | 3,696  |               
|                                                 |                                                      |                                             |        |                                           |        |                |        |               

See accompanying notes to consolidated condensed financial statements.

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Item 1.d.

BRIDGFORD FOODS CORPORATION




Note 1  General Comments

The unaudited consolidated condensed financial statements of the Company
for the thirteen and twenty-six weeks ended May 3, 2002 and May 4, 2001 have
been prepared in conformity with the accounting principles described in the 2001
Annual Report to Shareholders and include all adjustments considered necessary
by management for a fair statement of the interim periods. Such adjustments
consist only of normal recurring items. This report should be read in
conjunction with the Companys 2001 Annual Report to Shareholders.

The provision for losses on accounts receivable is based on historical
trends and current collectibility risk. Losses due to credit risk have been
immaterial prior to the Fiscal 2002 Year.

Revenues are recognized upon passage of title to the customer typically
upon product shipment or delivery to customers.

Note 2  Inventories

Inventories are comprised as follows at the respective periods:

|                               |  |                |        |                |  |   |        | 
|------------------------------ |  | -------------- | ------ | -------------- |  | - | ------ | 
|                               |  | May 3          |        | November 2    
|                               |  | 2002           |        | 2001          
|                               |  |                |        |               
|                               |  | (in thousands) |        | (in thousands)
|Meat, ingredients
and supplies |  | $              | 4,586  |                |  | $ | 3,757  | 
|Work in progress               |  |                | 2,370  |                |  |   | 1,324  | 
|Finished goods                 |  |                | 10,384 |                |  |   | 14,084 | 
|                               |  |                |        |                |  |   |        | 
|                               |  | $              | 17,340 |                |  | $ | 19,165 | 
|                               |  |                |        |                |  |   |        | 

Note 3  Basic and diluted earnings per share

The difference between basic and diluted earnings per share for the thirteen
week and twenty-six week periods ended May 3, 2002 was as a result of the
dilutive effect of employee stock options totaling 250,000 shares.

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Item 2.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Form 10-Q under Item 2., Managements Discussion
and Analysis of Financial Condition and Results of Operations and elsewhere in
this Form 10-Q constitute forward-looking statements within the meaning of
the Securities Act of 1933 and the Securities Exchange Act of 1934. In
addition, the Company may from time to time make oral forward-looking
statements. 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 Form 10-Q and in Bridgford Foods Corporations Annual Report on Form 10-K
for the fiscal year ended November 2, 2001. Because of these and other factors
that may affect the Companys operating results, past financial performance
should not be considered an indicator of future performance, and investors
should not use historical trends to anticipate results or trends in future
periods.

Managements Discussion and Analysis of Financial
Condition and Results of Operations

The Companys operating results are heavily dependent upon the prices paid for
raw materials. The marketing of the Companys value-added products does not
lend itself to instantaneous changes in selling prices. Changes in selling
prices are relatively infrequent and do not compare with the volatility of
commodity markets.

Sales decreased by $2,593,000 (6.7%) to $35,904,000 in the second thirteen
weeks of the 2002 fiscal year compared to the same period last year. Compared
to the prior thirteen-week period, sales decreased $3,327,000 (8.5%). The sales
decrease compared to the second thirteen weeks of 2001 relates to lower unit
sales volume as a result of a general downturn in the economy and the
bankruptcy of a significant customer . Sales compared to the prior
thirteen-week period ended February 1, 2002 (not shown) decreased due to normal
seasonal trends and the continued sluggish economy.

Cost of products sold decreased by $1,425,000 (6.1%) in the second thirteen
weeks of the 2002 fiscal year to $21,986,000 compared to the same period in
2001. The decrease in cost of sales relates to lower sales volume. Compared to
the prior thirteen-week period (not shown), the cost of products sold decreased
$1,147,000 (5.0%) due primarily to lower unit sales volume and changes in
product mix.

Selling, general and administrative expenses decreased by $730,000 (6.6%) to
$10,413,000 in the second thirteen weeks of 2002 compared to the same period
last year. This decrease corresponds to the sales decrease for the same
period. Compared to the prior thirteen-week period (not shown), selling,
general and administrative expenses decreased by $2,075,000 (16.6%) as a result
of seasonally lower sales and a significant loss provision recorded in the
first quarter related to the bankruptcy of a major customer. In addition,
expenses related to the integration of the Companys new information systems
declined in the second quarter also contributed to this decrease.

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Managements Discussion and Analysis of Financial
Condition and Results of Operations(continued)

Depreciation expense increased by $29,000 (2.7%) in the second thirteen weeks
of the 2002 fiscal year compared to the same period in 2001. Depreciation
expense decreased $15,000 (1.3%) in the second thirteen weeks of fiscal 2002
compared to the prior fiscal thirteen week period. Depreciation remained flat
due to a slight decrease in capital expenditures.

The effective income tax rate was 38.0% in the second thirteen weeks of fiscal
2002, consistent with the prior fiscal year and the prior thirteen-week period.

Cash and cash equivalents decreased $1,405,000 (10.8%) to $11,569,000 during
the first twenty-six weeks of the 2002 fiscal year. The principal items
favorably affecting the $1,754,000 net cash provided by operating activities
were net income of $3,049,000, depreciation of $2,198,000 and inventory
reductions of $1,825,000 offset by an increase in accounts receivable of
$3,619,000, reductions in accounts payable and accrued expenses of $2,195,000
and a reduction in long-term liabilities of $1,682,000.

Cash used in investing activities for the second thirteen weeks of fiscal 2002
consisted of $1,697,000 in additions to property, plant and equipment. This
amount reflects the Companys continued investment in processing,
transportation and information technology equipment.

Cash used for financing activities consisted of cash dividends in the amount of
$1,462,000 and $1,482,000, respectively, in the first twenty-six weeks of
fiscal years 2002 and 2001. The slight decline in cash dividends reflects
additional purchases of common shares under the Companys stock repurchase
program implemented November 1999.

The Company remained free of interest bearing debt during the first twenty-six
weeks of 2002. The Companys revolving line of credit with Bank of America
expires April 30, 2004 and provides for borrowings up to $2,000,000. The
Company has not borrowed under this line for more than fifteen consecutive
years.

The impact of inflation on the Companys financial position and results of
operations has not been significant. Management is of the opinion that the
Companys strong financial position and its capital resources are sufficient to
provide for its operating needs and capital expenditures.




Item 3.

Quantitative and Qualitative Disclosures about Market Risk

The Company does not have significant domestic or foreign currency exposure at
May 3, 2002 and May 4, 2001. The Companys financial instruments consist of
cash and cash equivalents and life insurance policies at May 3, 2002 and May 4,
2001. The carrying value of the Companys financial instruments approximated
their fair market values based on current market prices and rates. It is not
the Companys policy to enter into derivative financial instruments.

A significant customer of the Company filed a voluntary petition for
reorganization under Chapter 11 of the U.S. Bankruptcy Code on January 22,
2002. This customer comprised approximately 6% of revenue during fiscal year
2001 and 7% of revenues in fiscal years 2000 and 1999. This event did not
materially impact the Companys financial position or results of operations for
the fiscal year ended November 2, 2001. As of May 3, 2002, the Company has
approximately $2,600,000 in pre-petition accounts receivable from this
customer, substantially all of which relates to first quarter sales.
Management has allocated bad debt reserves of approximately $1.1 million
related to this customer. Management believes that total company reserves of
$1,679,000 will be adequate to cover anticipated losses related to all
customers at May 3, 2002. It is possible that the Company may need to further
increase its reserve for bad debts as a result of the outcome of these
bankruptcy proceedings.

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