senea20210703

senea20210703_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

Form 10-Q

(Mark one)

☑	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended July 3, 2021

☐	TRANSITION REPORT UNDER 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	(I. R. S. Employer
incorporation or organization)	Identification No.)

3736 South Main Street, Marion, New York	14505
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (315) 926-8100

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 Company (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 Company 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 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 Company 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 Company 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 Company 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 at the latest practical date are:

Class	Shares Outstanding at July 30, 2021
Common Stock Class A, $.25 Par	7,185,269
Common Stock Class B, $.25 Par	1,705,938





		Page

PART 1	FINANCIAL INFORMATION

Item 1	Financial Statements:

	Condensed Consolidated Balance Sheets-As of July 3, 2021, June 27, 2020 and March 31, 2021	1

	Condensed Consolidated Statements of Net Earnings-Three Months Ended July 3, 2021 and June 27, 2020	2

	Condensed Consolidated Statements of Comprehensive Income-Three Months Ended July 3, 2021 and June 27, 2020	2

	Condensed Consolidated Statements of Cash Flows-Three Months Ended July 3, 2021 and June 27, 2020	3

	Condensed Consolidated Statements of Stockholders' Equity-Three Months Ended July 3, 2021 and June 27, 2020	4

	Notes to Condensed Consolidated Financial Statements	5

Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	12

Item 3	Quantitative and Qualitative Disclosures about Market Risk	17

Item 4	Controls and Procedures	18

PART II	OTHER INFORMATION

Item 1	Legal Proceedings	19

Item 1A	Risk Factors	19

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	19

Item 3	Defaults Upon Senior Securities	19

Item 4	Mine Safety Disclosures	19

Item 5	Other Information	19

Item 6	Exhibits	19

SIGNATURES		20

	Unaudited			Unaudited
	July 3, 2021			June 27, 2020			March 31, 2021
Assets

Current assets:
Cash and cash equivalents	$	59,834		$	11,607		$	59,837
Accounts receivable, net		66,743			62,860			92,221
Contracts receivable		742			6,059			911
Current assets held for sale		8,535			11,989			8,656
Inventories		414,690			423,844			343,144
Refundable income taxes		4,621			-			8,385
Other current assets		4,745			7,545			3,145
Total current assets		559,910			523,904			516,299
Property, plant and equipment, net		254,012			239,524			248,583
Right-of-use assets operating, net		45,935			57,349			42,193
Right-of-use assets financing, net		35,814			32,222			30,611
Pension assets		62,667			-			62,851
Deferred income tax asset, net		-			9,185			-
Other assets		9,938			20,777			8,811
Total assets	$	968,276		$	882,961		$	909,348

Liabilities and Stockholders' Equity

Current liabilities:
Accounts payable	$	125,571		$	99,615		$	74,089
Deferred revenue		3,079			3,594			4,287
Accrued vacation		11,879			12,147			11,660
Accrued payroll		8,346			8,796			15,366
Other accrued expenses		24,224			17,182			24,403
Income taxes payable		-			8,463			-
Current portion of operating lease obligations		16,842			21,311			17,047
Current portion of financing lease obligations		7,716			6,232			6,778
Current portion of long-term debt		4,000			500			4,500
Total current liabilities		201,657			177,840			158,130
Long-term debt, less current portion		93,092			144,467			94,085
Operating lease obligations, less current portion		30,035			38,634			27,769
Financing lease obligations, less current portion		23,046			22,613			19,232
Deferred income tax liability, net		28,803			-			28,306
Pension liabilities		-			79,321			-
Other long-term liabilities		4,231			5,000			4,011
Total liabilities		380,864			467,875			331,533
Commitments and contingencies
Stockholders' equity:
Preferred stock		663			681			663
Common stock, $.25 par value per share		3,041			3,041			3,041
Additional paid-in capital		98,527			98,412			98,502
Treasury stock, at cost		(95,750	)		(88,319	)		(91,198	)
Accumulated other comprehensive loss		(19,067	)		(79,220	)		(19,067	)
Retained earnings		599,998			480,491			585,874
Total stockholders' equity		587,412			415,086			577,815
Total liabilities and stockholders’ equity	$	968,276		$	882,961		$	909,348

	Three Months Ended
	July 3,			June 27,
	2021			2020

Net sales	$	235,042		$	288,165

Costs and expenses:
Cost of product sold		201,419			239,603
Selling, general and administrative		17,274			18,145
Plant restructuring charge		66			263
Other operating income		(1,444	)		(145	)
Total costs and expenses		217,315			257,866
Operating income		17,727			30,299
Loss from equity investment		156			676
Other (income) loss		(2,376	)		931
Interest expense, net		1,342			1,651
Earnings before income taxes		18,605			27,041
Income taxes		4,469			6,335
Net earnings	$	14,136		$	20,706


Basic earnings per common share	$	1.56		$	2.26
Diluted earnings per common share	$	1.55		$	2.24

										Accumulated
					Additional					Other
	Preferred		Common		Paid-In		Treasury			Comprehensive			Retained
	Stock		Stock		Capital		Stock			Loss			Earnings
First Quarter FY 2022:
Balance March 31, 2021	$	663	$	3,041	$	98,502	$	(91,198	)	$	(19,067	)	$	585,874
Net earnings		-		-		-		-			-			14,136
Cash dividends declared on preferred stock		-		-		-		-			-			(12	)
Equity incentive program		-		-		25		-			-			-
Purchase treasury stock		-		-		-		(4,552	)		-			-
Balance July 3, 2021	$	663	$	3,041	$	98,527	$	(95,750	)	$	(19,067	)	$	599,998

First Quarter FY 2021:
Balance March 31, 2020	$	681	$	3,041	$	98,384	$	(88,319	)	$	(79,220	)	$	459,797
Net earnings		-		-		-		-			-			20,706
Cash dividends declared on preferred stock		-		-		-		-			-			(12	)
Equity incentive program		-		-		28		-			-			-
Purchase treasury stock		-		-		-		-			-			-


Balance June 27, 2020	$	681	$	3,041	$	98,412	$	(88,319	)	$	(79,220	)	$	480,491

	July 3,		June 27,		March 31,
	2021		2020		2021

Property, Plant and Equipment (net)	$	8,535	$	11,989	$	8,656
Current Assets Held For Sale	$	8,535	$	11,989	$	8,656

Years ending March 31:	Operating		Financing
Balance of 2022	$	12,891	$	6,499
2023		15,315		8,665
2024		8,396		7,096
2025		4,636		3,713
2026		2,618		2,625
2027-2033		7,436		4,941
Total minimum payment required	$	51,292	$	33,539
Less interest		4,415		2,777
Present value of minimum lease payments		46,877		30,762
Amount due within one year		16,842		7,716
Long-term lease obligations	$	30,035	$	23,046

	As of:
	July 3,			June 27,
	2021			2020
Reported end of period:
Outstanding borrowings	$	1,000		$	34,406
Weighted average interest rate		1.35	%		1.75	%

	Three Months Ended:
	July 3,			June 27,
	2021			2020
Reported during the period:
Maximum amount of borrowings	$	1,071		$	107,967
Average outstanding borrowings	$	938		$	57,281
Weighted average interest rate		1.35	%		2.03	%

	Restructuring Payable
	Severance		Other Costs			Total

Balance March 31, 2021	$	-	$	-		$	-
First quarter charge		-		66			66
Cash payments/write offs		-		(66	)		(66	)
Balance July 03, 2021	$	-	$	-		$	-

	Three Months Ended
	July 3,		June 27,
	2021		2020
Canned Vegetables	$	187,944	$	221,018
Frozen Vegetables		22,584		17,833
Fruit Products		15,873		18,861
Snack Products		3,412		2,364
Prepared Foods		-		24,224
Other		5,229		3,865
	$	235,042	$	288,165

	July 3,		June 27,		March 31,
	2021		2020		2021
Finished products	$	340,468	$	330,071		317,654
In process		17,070		29,875		25,175
Raw materials and supplies		188,661		206,024		128,987
FIFO inventories		546,199		565,970		471,816
Less excess of FIFO cost over LIFO cost		131,509		142,126		128,672
Total LIFO inventories	$	414,690	$	423,844	$	343,144

	Three Months Ended
	July 3,		June 27,
	2021		2020
Lease cost:

Amortization of right of use asset	$	1,295	$	1,186
Interest on lease liabilities		257		294
Finance lease cost		1,552		1,480
Operating lease cost		5,000		6,407
Total lease cost	$	6,552	$	7,887

Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	$	257	$	294
Operating cash flows from operating leases		6,498		7,278
Financing cash flows from finance leases		1,745		1,536
	$	8,500	$	9,108

Right-of-use assets obtained in exchange for new finance lease liabilities	$	6,498	$	35
Right-of-use assets obtained in exchange for new operating lease liabilities	$	8,052	$	2,340
Weighted-average lease term (years):
Financing leases		4.9		5.1
Operating leases		4.4		3.7
Weighted-average discount rate (percentage):
Financing leases		3.5		4.1
Operating leases		4.3		4.4

	Three Months Ended
	July 3,			June 27,
	2021			2020
Service Cost Including Administration	$	2,560		$	2,574
Interest Cost		1,878			2,251
Expected Return on Plan Assets		(4,276	)		(3,567	)
Amortization of Prior Service Cost		23			23
Amortization of Net Loss		0			2,224
Net Periodic Benefit Cost	$	185		$	3,505

SEC Form 10-Q filed by Seneca Foods Corp.