senea20230930

senea20230930_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark one)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number 0-01989

Seneca Foods Corporation

(Exact name of Registrant as specified in its charter)

New York	16-0733425
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

350 WillowBrook Office Park, Fairport, New York	14450
(Address of principal executive offices)	(Zip code)

(585) 495-4100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol

Name of Exchange on

Which Registered

Common Stock Class A, $.25 Par

SENEA

NASDAQ Global Select Market

Common Stock Class B, $.25 Par

SENEB

NASDAQ Global Select Market

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 ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by checkmark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of each of the Registrant’s classes of common stock as of October 26, 2023, are as follows:

Class	Shares Outstanding
Common Stock Class A, $0.25 Par	5,471,117
Common Stock Class B, $0.25 Par	1,676,953

Table of Contents

Seneca Foods Corporation

Quarterly Report on Form 10-Q

Table of Contents

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets (Unaudited)	1
Condensed Consolidated Statements of Net Earnings (Unaudited)	2
Condensed Consolidated Statements of Comprehensive Income (Unaudited)	2
Condensed Consolidated Statements of Cash Flows (Unaudited)	3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited)	4
Notes to Condensed Consolidated Financial Statements	5
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3. Quantitative and Qualitative Disclosures about Market Risk	23
Item 4. Controls and Procedures	23
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	24
Item 1A. Risk Factors	24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3. Defaults Upon Senior Securities	24
Item 4. Mine Safety Disclosures	24
Item 5. Other Information	25
Item 6. Exhibits	25
SIGNATURES	26

Table of Contents

SENECA FOODS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

	Unaudited			Unaudited
	September 30, 2023			October 1, 2022			March 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	12,081		$	12,887		$	12,256
Accounts receivable, net of allowance for credit losses of $61, $66 and $34, respectively		128,380			162,517			97,101
Assets held for sale		200			4,604			4,358
Inventories		1,013,447			814,966			670,898
Refundable income taxes		960			1,367			6,976
Other current assets		2,443			3,542			2,450
Total current assets		1,157,511			999,883			794,039
Property, plant and equipment, net		305,856			283,729			301,212
Right-of-use assets operating, net		22,154			26,481			23,235
Right-of-use assets financing, net		26,578			34,838			33,571
Pension assets		58,506			51,048			59,304
Other assets		1,115			1,993			1,360
Total assets	$	1,571,720		$	1,397,972		$	1,212,721


Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	321,579		$	345,151		$	69,232
Deferred revenue		14,637			13,009			9,956
Accrued vacation		11,295			11,887			11,143
Accrued payroll		22,446			22,054			16,772
Other accrued expenses		31,277			31,051			23,293
Current portion of long-term debt and lease obligations		31,583			22,063			25,792
Total current liabilities		432,817			445,215			156,188
Long-term debt, less current portion		492,685			316,345			432,695
Operating lease obligations, less current portion		13,995			16,508			16,675
Financing lease obligations, less current portion		14,202			18,499			17,293
Deferred income tax liability, net		31,440			33,959			31,481
Other liabilities		3,356			4,039			3,639
Total liabilities		988,495			834,565			657,971
Commitments and contingencies
Stockholders' equity:
Preferred stock		351			612			351
Common stock, $0.25 par value per share		3,050			3,043			3,049
Additional paid-in capital		99,392			98,818			99,152
Treasury stock, at cost		(188,217	)		(165,871	)		(168,573	)
Accumulated other comprehensive loss		(20,488	)		(26,468	)		(20,488	)
Retained earnings		689,137			653,273			641,259
Total stockholders' equity		583,225			563,407			554,750
Total liabilities and stockholders’ equity	$	1,571,720		$	1,397,972		$	1,212,721

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

SENECA FOODS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF NET EARNINGS

(In thousands, except per share data)

(Unaudited)

	Three Months Ended						Six Months Ended
	September 30, 2023			October 1, 2022			September 30, 2023			October 1, 2022
Net sales	$	407,475		$	439,842		$	706,139		$	705,035

Costs and expenses:
Cost of product sold		349,357			398,063			592,732			640,413
Selling, general and administrative		21,031			20,480			40,880			38,722
Plant restructuring		9			52			149			108
Other operating income, net		(1,346	)		(589	)		(1,543	)		(2,640	)
Total costs and expenses		369,051			418,006			632,218			676,603
Operating income		38,424			21,836			73,921			28,432
Other income and expenses:
Other non-operating income		(1,338	)		(1,527	)		(2,675	)		(3,053	)
Interest expense, net		7,185			2,370			13,758			3,760
Earnings before income taxes		32,577			20,993			62,838			27,725
Income taxes		7,798			4,862			14,948			6,491
Net earnings	$	24,779		$	16,131		$	47,890		$	21,234

Earnings per share:
Basic	$	3.32		$	2.05		$	6.36		$	2.64
Diluted	$	3.29		$	2.03		$	6.30		$	2.62

Weighted average common shares outstanding:
Basic		7,445			7,836			7,521			7,995
Diluted		7,515			7,906			7,591			8,065

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

SENECA FOODS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	Three Months Ended				Six Months Ended
	September 30, 2023		October 1, 2022		September 30, 2023		October 1, 2022

Comprehensive income:
Net earnings	$	24,779	$	16,131	$	47,890	$	21,234
Total	$	24,779	$	16,131	$	47,890	$	21,234

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

SENECA FOODS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended
	September 30, 2023			October 1, 2022
Cash flows from operating activities:
Net earnings	$	47,890		$	21,234
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation and amortization		21,769			19,844
Gain on the sale of assets		(1,785	)		(2,167	)
Deferred income taxes		(41	)		943
Changes in operating assets and liabilities:
Accounts receivable		(31,279	)		(42,848	)
Inventories		(342,549	)		(410,971	)
Other current assets		7			1,651
Income taxes		6,016			4,079
Accounts payable		252,347			257,549
Accrued expenses and other		21,346			17,065
Net cash used in operating activities		(26,279	)		(133,621	)
Cash flows from investing activities:
Additions to property, plant and equipment		(26,452	)		(33,871	)
Proceeds from the sale of assets		7,566			4,045
Net cash used in investing activities		(18,886	)		(29,826	)
Cash flows from financing activities:
Long-term borrowing		551,313			499,956
Payments on long-term debt		(482,107	)		(293,235	)
Payments on financing leases		(4,560	)		(4,287	)
Purchase of treasury stock		(19,644	)		(36,992	)
Dividends		(12	)		(12	)
Net cash provided by financing activities		44,990			165,430

Net (decrease) increase in cash and cash equivalents		(175	)		1,983
Cash and cash equivalents, beginning of the period		12,256			10,904
Cash and cash equivalents, end of the period	$	12,081		$	12,887

Supplemental disclosures of cash flow information:
Noncash transactions:
Right-of-use assets obtained in exchange for lease obligations	$	4,136		$	5,166
Right-of-use assets derecognized upon early lease termination

SEC Form 10-Q filed by Seneca Foods Corp.