senea20220101

senea20220101_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 January 1, 2022

	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 February 1, 2022
Common Stock Class A, $.25 Par	6,736,047
Common Stock Class B, $.25 Par	1,705,938

Table of Contents

	Seneca Foods Corporation
	Quarterly Report on Form 10-Q
	Table of Contents

		Page

PART 1	FINANCIAL INFORMATION

Item 1	Financial Statements:

	Condensed Consolidated Balance Sheets as of January 1, 2022, December 26, 2020 and March 31, 2021	1

	Condensed Consolidated Statements of Net Earnings for the Three and Nine Months Ended January 1, 2022 and December 26, 2020	2

	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended January 1, 2022 and December 26, 2020	2

	Condensed Consolidated Statements of Cash Flows for the Three and Nine Months Ended January 1, 2022 and December 26, 2020	3

	Condensed Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended January 1, 2022 and December 26, 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	19

Item 4	Controls and Procedures	20

PART II	OTHER INFORMATION

Item 1	Legal Proceedings	21

Item 1A	Risk Factors	21

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	21

Item 3	Defaults Upon Senior Securities	21

Item 4	Mine Safety Disclosures	21

Item 5	Other Information	21

Item 6	Exhibits	22

SIGNATURES

SENECA FOODS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Per Share Data)

	Unaudited			Unaudited
	January 1, 2022			December 26, 2020			March 31, 2021
Assets

Current assets:
Cash and cash equivalents	$	11,011		$	14,149		$	59,837
Accounts receivable, net		80,361			95,439			92,221
Contracts receivable		878			1,207			911
Current assets held for sale		8,930			11,375			8,656
Inventories		481,978			410,927			343,144
Refundable income taxes		14,088			-			8,385
Other current assets		7,931			2,681			3,145
Total current assets		605,177			535,778			516,299
Property, plant and equipment, net		258,204			225,500			248,583
Right-of-use assets operating, net		38,442			47,183			42,193
Right-of-use assets financing, net		35,968			31,331			30,611
Pension assets		62,690			-			62,851
Other assets		1,878			18,749			8,811
Total assets	$	1,002,359		$	858,541		$	909,348

Liabilities and Stockholders' Equity

Current liabilities:
Accounts payable	$	111,323		$	98,840		$	74,089
Deferred revenue		12,199			7,548			4,287
Accrued vacation		11,951			11,023			11,660
Accrued payroll		9,885			9,992			15,366
Other accrued expenses		27,472			26,957			24,403
Income taxes payable		-			4,274			-
Current portion of operating lease obligations		14,736			18,327			17,047
Current portion of financing lease obligations		8,375			6,608			6,778
Current portion of long-term debt		4,000			4,500			4,500
Total current liabilities		199,941			188,069			158,130
Long-term debt, less current portion		123,808			94,077			94,085
Operating lease obligations, less current portion		24,533			30,436			27,769
Financing lease obligations, less current portion		21,587			20,546			19,232
Pension liabilities		-			12,641			-
Deferred income tax liability, net		32,361			4,999			28,306
Other long-term liabilities		5,575			4,240			4,011
Total liabilities		407,805			355,008			331,533
Commitments and contingencies
Stockholders' equity:
Preferred stock		644			678			663
Common stock, $.25 par value per share		3,041			3,041			3,041
Additional paid-in capital		98,608			98,462			98,502
Treasury stock, at cost		(118,977	)		(90,473	)		(91,198	)
Accumulated other comprehensive loss		(19,067	)		(79,220	)		(19,067	)
Retained earnings		630,305			571,045			585,874
Total stockholders' equity		594,554			503,533			577,815
Total liabilities and stockholders’ equity	$	1,002,359		$	858,541		$	909,348

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

Table of Contents

SENECA FOODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF NET EARNINGS
(Unaudited)
(In Thousands, Except Per Share Data)

	Three Months Ended						Nine Months Ended
	January 1, 2022			December 26, 2020			January 1, 2022			December 26, 2020

Net sales	$	445,593		$	484,392		$	1,052,891		$	1,162,851

Costs and expenses:
Cost of product sold		400,608			406,688			931,555			987,642
Selling, general and administrative		21,032			22,613			57,442			60,211
Plant restructuring (credit)/charge		(110	)		(118	)		3			169
Other operating loss/(income)		399			(35,351	)		681			(33,716	)
Total costs and expenses		421,929			393,832			989,681			1,014,306
Operating income		23,664			90,560			63,210			148,545
(Income)/loss from equity investment		-			(728	)		7,775			752
Other (income)/loss		(2,218	)		(234	)		(6,969	)		2,457
Interest expense, net		1,505			1,531			4,183			4,586
Earnings before income taxes		24,377			89,991			58,221			140,750
Income taxes		5,713			17,531			13,767			29,479
Net earnings	$	18,664		$	72,460		$	44,454		$	111,271


Basic earnings per common share	$	2.16		$	7.96		$	5.02		$	12.18
Diluted earnings per common share:	$	2.14		$	7.90		$	4.98		$	12.09

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

SENECA FOODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(In Thousands)

	Three Months Ended				Nine Months Ended
	January 1, 2022		December 26, 2020		January 1, 2022		December 26, 2020

Comprehensive income:
Net earnings	$	18,664	$	72,460	$	44,454	$	111,271
Total	$	18,664	$	72,460	$	44,454	$	111,271

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

Table of Contents

SENECA FOODS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)

	Nine Months Ended
	January 1, 2022			December 26, 2020
Cash flows from operating activities:
Net earnings	$	44,454		$	111,271
Adjustments to reconcile net earnings to net cash from operating activities:
Depreciation & amortization		27,048			24,302
Gain on the sale of assets		(1,635	)		(35,976	)
Provision for restructuring		3			169
Loss from equity investment		7,775			752
Deferred income taxes		4,055			12,871
Changes in operating assets and liabilities:
Accounts receivable		11,893			20,766
Inventories		(138,834	)		704
Other current assets		(4,786	)		4,658
Income taxes		(5,703	)		8,624
Accounts payable, accrued expenses and other		44,645			(45,051	)
Net cash (used in)/provided by operating activities		(11,085	)		103,090
Cash flows from investing activities:
Additions to property, plant and equipment		(36,437	)		(40,167	)
Proceeds from the sale of assets		4,773			72,782
Net cash (used in)/provided by investing activities		(31,664	)		32,615
Cash flows from financing activities:
Long-term borrowing		278,106			468,181
Payments on long-term debt		(248,383	)		(587,185	)
Other assets		(2,206	)		(6,407	)
Payments on financing leases		(5,803	)		(4,681	)
Purchase of treasury stock		(27,779	)		(2,154	)
Dividends		(12	)		(12	)
Net cash used in financing activities		(6,077	)		(132,258	)

Net (decrease)/increase in cash and cash equivalents		(48,826	)		3,447
Cash and cash equivalents, beginning of the period		59,837			10,702
Cash and cash equivalents, end of the period	$	11,011		$	14,149

Supplemental disclosures of cash flow information:
Noncash transactions:
Property, plant and equipment purchased under lease obligations	$	18,713		$	5,214
Property, plant and equipment purchased on account	$	2,229		$	975

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

Table of Contents

SENECA FOODS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

(Unaudited)

(In Thousands)

											Accumulated
						Additional					Other
	Preferred			Common		Paid-In		Treasury			Comprehensive			Retained
	Stock			Stock		Capital		Stock			Loss			Earnings
First Quarter FY 2022:
Balances, 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	)		-			-
Balances, July 3, 2021	$	663		$	3,041	$	98,527	$	(95,750	)	$	(19,067	)	$	599,998
Second Quarter FY 2022:
Net earnings		-			-		-		-			-			11,654
Equity incentive program		-			-		30		-			-			-
Preferred stock conversion		(1	)		-		1		-			-			-
Purchase treasury stock		-			-		-		(12,757	)		-			-
Balances, October 2, 2021	$	662		$	3,041	$	98,558	$	(108,507	)	$	(19,067	)	$	611,652
Third Quarter FY 2022:
Net earnings		-			-		-		-			-			18,664
Cash dividends declared on preferred stock		-			-		-		-			-			(11	)
Equity incentive program		-			-		32		-			-			-
Preferred stock conversion		(18	)		-		18		-			-			-
Purchase treasury stock		-			-		-		(10,470	)		-			-
Balances, January 1, 2022	$	644		$	3,041	$	98,608	$	(118,977	)	$	(19,067	)	$	630,305

First Quarter FY 2021:
Balances, March 31, 2020	$	681		$	3,041	$	98,384	$	(88,319	)	$	(79,220	)	$	459,797
Net earnings		-			-

SEC Form 10-Q filed by Seneca Foods Corp.