Author Topic: BRID - Bridgford Foods  (Read 5346 times)

rist.tom

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Re: BRID - Bridgford Foods
« Reply #10 on: January 28, 2019, 02:37:14 PM »
This is now trading around $30/share ($265 million market cap), which is over a 100% increase from Jan 2018.  I'm completely out of this position now, since it is well above my fair value estimate.  The Chicago real estate is probably worth between $50-100 million and a lot of that cash flow is going towards transitioning to the new facility.  The business is profitable, but struggled this year and only produced $6.5 million in pre-tax operating income in 2018. Not exactly cheap at this price.

Annual 10-K was just released (https://www.sec.gov/Archives/edgar/data/14177/000149315219000765/form10-k.htm). Revenue up 4% YoY, but operating income and net income (excluding one-time events) were down over 40%. The large drop in operating income was consistent across both divisions: frozen and snacking. This past year really highlighted the fragility of the business. They're essentially a commodity business because they don't have much pricing power (highly competitive) and have lots of exposure to commodity input costs, which took a toll on their gross margins. I've also anecdotally noticed increased competition in the cured meats snacking business, especially jerky.

One potential positive is that they're spending quite a bit on the new Chicago facility ($18 million in capex last year), which could lead to lower operational costs in the future if they're investing in new equipment (higher capacity?) and a more efficient layout. The current Chicago West Loop facility is over 50 years old and has multiple floors...it probably wasn't optimally designed for their current needs.


Faustus

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Re: BRID - Bridgford Foods
« Reply #11 on: February 13, 2020, 02:16:32 PM »
"The stars move still, time runs, the clock will strike"