MARION, N.Y., Oct. 28 /PRNewswire-FirstCall/ -- Seneca Foods
Corporation (Nasdaq: SENEA, SENEB) reported that net sales for the
six months ended October 2, 2010
decreased from last year by $58.3
million, or 10.5%, to $495.4
million. The decrease is attributable to decreased
selling prices and a less favorable sales mix of $30.2 million and decreased sales volume of
$28.1 million attributable to lower
alliance and co-pack sales. Net earnings decreased to
$8.1 million, or $0.66 per diluted share, compared to $23.5 million, or $1.92 per diluted share, in the prior year.
For the second quarter ended October 2,
2010, sales decreased $47.8
million, or 14.8%, to $275.4
million compared to the second quarter of last year.
The decrease in sales is attributable to decreased selling
prices and a less favorable sales mix of $19.1 million and a sales volume reduction of
$28.7 million due to decreased
alliance and co-pack sales. Net earnings were $2.8 million, or $0.23 per diluted share, versus $12.4 million or $1.02 per diluted share, in the quarter ended
September 26, 2009.
During the second quarter of fiscal 2011, the Company
implemented workforce reductions, at its plants in Buhl, Idaho and Mayville, Wisconsin and certain other
locations that resulted in a restructuring charge of
$1.2 million for severance costs.
Pre-tax results for six months ended October 2, 2010 included a $0.1 million gain on the sale of unused
equipment.
"The first half results reflect the continuing inventory
overhang in the market from last year's bumper crops which has
required us to continue aggressive promotional activity," said
Kraig H. Kayser, President and
CEO.
On August 6, 2010, the Company
completed its acquisition of 100% of the partnership interest of
Lebanon Valley Cold Storage, LP and the assets of Unilink, LLC
(collectively "Lebanon") from
Pennsylvania Food Group, LLC and related entities.
Earnings Conference Call and Webcast
The Company will host a conference call to discuss second
quarter fiscal year 2011 financial results tomorrow at 8:00 AM EDT. The conference call can be
accessed live over the phone by dialing (866) 244-4635 (conference
ID 1490652). If you are unable to listen to the live conference
call, a replay will be available on Monday,
November 1, 2010, please visit www.senecafoods.com and click
on "Company Profile" and then "Investor Information". This replay
will be available for two weeks.
About Seneca Foods Corporation
Seneca Foods is one of the country's largest processors of
canned fruits and vegetables with manufacturing facilities located
throughout the United States. Its
products are sold under the Libby's, Aunt Nellie's Farm Kitchen,
Stokely's, READ, and Seneca labels
as well as through the private label and industrial markets. In
addition, under an alliance with General Mills Operations, LLC, a
successor to the Pillsbury Company and a subsidiary of General
Mills, Inc., Seneca produces
canned and frozen vegetables, which are sold by General Mills
Operations, LLC under the Green Giant label. Seneca's common stock is traded on the Nasdaq
Global Stock Market under the symbols "SENEA" and "SENEB".
SENEA was added to the S&P SmallCap 600 index on
October 22, 2010 and is also included
in the Russell 2000 and 3000 indices.
Non-GAAP Financial Measures -- Net Earnings
Excluding LIFO Impact, EBITDA and FIFO EBITDA
Net Earnings excluding LIFO, EBITDA and FIFO EBITDA are non-GAAP
financial measures. The Company believes these non-GAAP financial
measures provide a basis for comparison to companies that do not
use LIFO and to periods prior to 2008 when the company did not use
LIFO and enhance the understanding of the company's operating
performance. The Company does not intend for this information
to be considered in isolation or as a substitute for other measures
prepared in accordance with GAAP.
Set forth below is a reconciliation of reported net earnings and
reported diluted earnings per share to net earnings excluding LIFO
and diluted earnings per share excluding LIFO.
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Quarter
Ended
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October 2,
2010
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September
26, 2009
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Income
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Diluted
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Income
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Diluted
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(in
millions)
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EPS
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(in
millions)
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EPS
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Net
earnings, as reported:
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$
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2.8
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$
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0.23
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$
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12.4
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$
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1.02
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LIFO
(credit) charge, after tax at statutory federal rate
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$
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(0.4)
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$
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(0.03)
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$
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3.1
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$
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0.25
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Net
earnings, excluding LIFO impact
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$
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2.4
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$
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0.20
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$
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15.5
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$
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1.27
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Diluted weighted average
common shares outstanding (in thousands)
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11,807
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10,708
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Six Months
Ended
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October 2,
2010
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September
26, 2009
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Income
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Diluted
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Income
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Diluted
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(in
millions)
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EPS
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(in
millions)
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EPS
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Net
earnings, as reported:
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$
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8.1
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$
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0.66
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$
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23.5
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$
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1.92
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LIFO
(credit) charge, after tax at statutory federal rate
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$
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(3.1)
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$
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(0.25)
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$
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6.1
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$
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0.50
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Net
earnings, excluding LIFO impact
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$
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5.0
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$
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0.41
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$
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29.6
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$
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2.42
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Diluted weighted average
common shares outstanding (in thousands)
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11,463
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9,180
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Set forth below is a reconciliation of reported net earnings to
EBITDA and FIFO EBITDA (earnings before interest, income taxes,
depreciation, amortization, non-cash charges and credits related to
the LIFO inventory valuation method). The Company does not intend
for this information to be considered in isolation or as a
substitute for other measures prepared in accordance with GAAP.
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Six Months
Ended
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EBITDA and FIFO
EBITDA:
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October 2,
2010
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September
26, 2009
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(In
thousands)
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Net earnings
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$ 8,086
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$ 23,511
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Income taxes
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1,929
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12,921
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Interest expense, net of
interest income
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4,176
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5,183
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Depreciation and
amortization
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11,050
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10,883
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Interest amortization
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(243)
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(300)
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EBITDA
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24,998
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52,198
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LIFO (credit) charge
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(4,777)
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9,429
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FIFO EBITDA
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$20,221
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$61,627
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Forward-Looking Information
The information contained in this release contains, or may
contain, forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These
statements appear in a number of places in this release and include
statements regarding the intent, belief or current expectations of
the Company or its officers (including statements preceded by,
followed by or that include the words "believes," "expects,"
"anticipates" or similar expressions) with respect to various
matters.
Because such statements are subject to risks and uncertainties,
actual results may differ materially from those expressed or
implied by such forward-looking statements. Investors are
cautioned not to place undue reliance on such statements, which
speak only as of the date the statements were made. Among the
factors that could cause actual results to differ materially
are:
- general economic and business conditions;
- cost and availability of commodities and other raw materials
such as vegetables, steel and packaging materials;
- transportation costs;
- climate and weather affecting growing conditions and crop
yields;
- leverage and the Company's ability to service and reduce its
debt;
- foreign currency exchange and interest rate fluctuations;
- effectiveness of the Company's marketing and trade promotion
programs;
- changing consumer preferences;
- competition;
- product liability claims;
- the loss of significant customers or a substantial reduction in
orders from these customers;
- changes in, or the failure or inability to comply with,
United States, foreign and local
governmental regulations, including environmental and health and
safety regulations; and
- other risks detailed from time to time in the reports filed by
the Company with the SEC.
Except for ongoing obligations to disclose material information
as required by the federal securities laws, the Company does not
undertake any obligation to release publicly any revisions to any
forward-looking statements to reflect events or circumstances after
the date of the filing of this report or to reflect the occurrence
of unanticipated events.
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Seneca Foods
Corporation
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Unaudited
Condensed Consolidated Statements of Net Earnings
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For the
Periods Ended October 2, 2010 and September 26, 2009
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(In
thousands of dollars, except share data)
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Quarter
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Year-to-Date
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2010
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2009
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2010
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2009
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Net sales
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$
275,448
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$
323,205
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$
495,390
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$
553,733
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Plant restructuring expense
(note 3)
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$
1,211
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$
-
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$
1,211
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$
-
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Other operating income, net
(note 4)
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$
(8)
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$
(31)
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$
(84)
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$
(31)
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Operating income (notes 1 and
2)
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$
4,070
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$
22,458
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$
14,191
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$
41,615
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Interest expense, net
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2,240
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2,546
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4,176
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5,183
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Earnings before income
taxes
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$
1,830
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$
19,912
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$
10,015
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$
36,432
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Income taxes (benefit) expense
(note 5)
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(981)
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7,487
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1,929
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12,921
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Net earnings
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$
2,811
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$
12,425
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$
8,086
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$
23,511
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Earnings attributable to common
stock (note 6)
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$
2,709
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$
10,879
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$
7,571
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$
17,631
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Basic earnings per
share
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$
0.23
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$
1.02
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$
0.66
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$
1.94
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Diluted earnings per
share
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$
0.23
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$
1.02
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$
0.66
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$
1.92
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Weighted average shares
outstanding basic
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11,735,631
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10,639,848
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11,392,281
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9,111,845
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Weighted average shares
outstanding diluted
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11,806,707
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10,707,639
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11,463,357
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9,179,636
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Note 1: The effect of the
LIFO inventory valuation method on second quarter pre-tax results
was to increase operating earnings by $645,000
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for the three month period ended
October 2, 2010 and reduce operating earnings by $4,728,000, for
the three month period ended September 26, 2009.
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Note 2: The effect of the
LIFO inventory valuation method on year-to-date pre-tax results was
to increase operating earnings by $4,777,000
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for the six month period ended
October 2, 2010 and reduce operating earnings by $9,429,000, for
the six month period ended September 26, 2009.
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Note 3: The three and six month
periods ended October 2, 2010 include a restructuring charge for
severance costs of $1,211,000.
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Note 4: Other income for the
current year period of $84,000 principally represents a net gain on
the sale of unused fixed assets.
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Other income for the prior year
periods of $31,000 principally represents a net gain on the sale of
unused fixed assets.
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Note 5: The three and six month
periods ended October 2, 2010 include a tax benefit of $1,519,000
mostly related to the settlement of an
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audit of fiscal years 2006,
2007, and 2008 with the Internal Revenue Service.
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Note 6: The Company uses the
"two-class" method for basic earnings per share by dividing the
earnings allocated to common shareholders
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by the weighted average of
common shares outstanding during the period. The diluted
earnings per share includes the effect
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of convertible shares for the
each period presented. Average common and participating
shares totaled 12,149,372 as of October 2, 2010.
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SOURCE Seneca Foods Corporation
Copyright . 28 PR Newswire