Bridgford Foods Corp. :BRID-US: Earnings Analysis: 2016 By the Numbers : January 17, 2017

Bridgford Foods Corp. reports financial results for the year ended October 31, 2016.

We analyze the earnings along side the following peers of Bridgford Foods Corp. – Campbell Soup Company (CPB-US) that have also reported for this period.


  • Gross margins widened from 35.93% to 39.42% compared to the same period last year, operating (EBITDA) margins now 9.91% from 8.56%.
  • Year-on-year change in operating cash flow of -39.32% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Earnings decline largely a result of non-operational activity, pretax margins improved from 6.22% to 7.74%.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2016 2015 2014 2013 2012
Relevant Numbers (Annual)
Revenues 140.06 130.45 133.4 129 127.36
Revenue Growth (YOY) N/A N/A N/A N/A N/A
Earnings 7.77 15.44 -4.34 2.92 3.65
Earnings Growth (YOY) -49.68 455.48 -248.97 -20.13 924.15
Net Margin 5.55 11.84 -3.26 2.26 2.87
EPS 0.86 1.7 -0.48 0.32 0.4
Return on Equity 20.84 50.72 -14.8 10.88 16.23
Return on Assets 9.56 23.14 -7.07 4.62 6.16

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Earnings Growth Analysis

The company’s year-on-year earnings decline did not come as a result of a contraction in gross margins or because of any cost control issues. Both gross margins and operating margins (EBITDA) margins actually improved over this time frame. Gross margins went from 35.93% to 39.42%, while operating margins improved from 8.56% to 9.91% over this period. For comparison, gross margins were 35.93% and EBITDA margins 8.56% in the immediate last period.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Gross Margin Trend

Companies sometimes sacrifice improvements in revenues and margins in order to extend friendlier terms to customers and vendors. Capital Cube probes for such activity by comparing the changes in gross margins with any changes in working capital. If the gross margins improved without a worsening of working capital, it is possible that the company’s performance is a result of truly delivering in the marketplace and not simply an accounting prop-up using the balance sheet.

Gross Margin History
Working Capital Days History

BRID-US‘s gross margin improvement has not produced any big difference in its working capital. Working capital days are currently 81.97, compared to last year’s level of 62.13 days. This leads Capital Cube to conclude that the improvements in gross margins are likely from operating decisions and not trade-offs with the balance sheet.

Gross Margin Versus Working Capital Days

Quadrant label definitions. Hover to know more

Customer Financed, Cash Starved, Supplier Financed, Cash Rich

Cash Versus Earnings – Sustainable Performance?

BRID-US‘s change in operating cash flow of -39.32% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Cash Flow based Earnings, Likely Non-cash Earnings, Low Cash Flow Base, Likely Undeclared Earnings


The company’s earnings decline is largely a result of non-operational activity. As a matter of fact, the company showed increases in operating (EBIT) and pretax margins. EBIT margins improved from 6.22% to 7.74% and pretax margins widened from 6.22% to 7.74%.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

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Company Profile

Bridgford Foods Corp. engages in the manufacturing, marketing and distribution of frozen and snack food products throughout the United States. It operates through two business segments: Frozen Food Products and Snack Food Products. The Frozen Food Products segment manufactures and distributes food products, including biscuits, bread dough items, roll dough items and sandwiches. The Snack Food Products segment distribute both products manufactured by the company and products manufactured or processed by third parties. Bridgford Foods was founded by Hugh H. Bridgford in February 1932 and is headquartered in Anaheim, CA.

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