I just returned from Bridgford Foods' (NASDAQ:BRID) annual shareholders meeting and I thought I might record a few observations. After the company read through its standard boiler plate parliamentary procedures, it was time to move on to the nitty gritty: questions and comments, lunch and small talk.
It was an intimate affair, as the meeting was situated in the CEO’s office. Fortunately, it was spacious enough to accommodate the crowd (about fifty of us) because the top three at Bridgford all share it. With three generations of the family represented, the company is no slouch, with plenty of rich history behind it. Management is extremely capable, as they have massive experience under their belt coupled with prestigious Stanford degrees (both Allan and Bill graduated from Stanford). They literally have built the business with their bare hands. The founder opened up a single butcher shop in 1932 that evolved into a slaughterhouse (now the current home offices) in the 1940’s, and ultimately a diverse food processing empire across the USA.
They are not going anywhere soon. When I asked one of the founder’s sons (Allan) what was the highlight of his career, without pause, he responded “the opportunity to work alongside my father”. Now fittingly, Bill’s son has taken over the reins. Sure the family has its fair share of disagreements. Allan indicated that since they all share the same office, they needed to enlarge it. In case fists started flying, they’d have ample room to dodge the punches.
About suitors: Apparently the company has been courted by its fair share of interested parties such as large food companies and private equity firms over the years, but don’t hold your breath. I suppose if somebody made it an offer it couldn’t refuse, it might take the money and run. But I still have my doubts, as the fourth generation of Bridgfords are now taking prominent roles within the company. As the company fast approaches its 100th anniversary, there seems to be no trace of entitlement within this up and coming group (Bill Junior’s son works his summers as a route salesmen). I suppose 80 years from now, somebody else will be writing about eighth generation Bridgfords running the company. I guess the old adage, “The more things change, the more they stay the same” can’t be emphasized enough when it comes to describing this American success story.
Going private talk: The management seems to have no intention of taking the company private any time soon. Their rationale: they think the shares are so undervalued at this juncture, it would be unethical to purchase the shares back from the remaining shareholder base at prices so low.
Sales and marketing update: Good news on the orders front. It was announced that BRID was awarded another 1 million unit “first strike” rations (shelf stable sandwiches with three year expiration dates) order from the US military as well as a go ahead to start offering its dry meat products within 350 CVS Drug Store locations. BRID is also getting additional shelf space in the 8400 unit Dollar General (NYSE:DG) store chain, and will be doubling its SKUs from 5 to 10. These new sales orders could bode well for the second quarter, as the company could show sales growth as high as 20%, translating into an earnings scenario of almost 20 cents, when they report the first week of June.
The retirees know the game: It is typical that annual meeting attendance is dominated by retirees. It’s their chance to get their fill of good old days talk, a nice lunch and all the sample products they can possibly carry out. It was comical watching a retiree walk by our table, loaded down with two bags chock full of salami, pepperoni, beef jerky and shelf stable sandwiches. It prompted a smile from a Bridgford executive and the following insight “some people own this stock for different reasons”. This was no “Teldar Paper” moment, when Gordon Gecko steps up with his infamous, “Greed is good” speech. This was a harmonious event where family, friends and retirees rejoiced in the moment. It would be nice if more companies were like this!
Disclosure: Long BRID.