Seneca Foods Reports Sales and Earnings for the Quarter and Twelve Months Ended March 31, 2021
11 Juin 2021 - 10:15PM
Seneca Foods Corporation (NASDAQ: SENEA, SENEB) today announced
financial results for the fourth quarter and twelve months ended
March 31, 2021.
Highlights (vs. year-ago, year-to-date
results):
- Net sales for 2021 totaled
$1,467.6 million compared to $1,335.8 million for the
prior year, an increase of $131.8 million. The overall
increase in sales was attributable to increased sales volume of
$74.2 million and higher selling prices/ favorable sales mix
of $57.6 million, both predominantly due to canned
vegetables.
- Gross margin as a percentage of net
sales increased from 10.6% in 2020 to 15.8% in 2021 due to the
favorable impact of higher selling prices and an improved selling
mix outweighing the negative impact of a smaller than planned pack
and incremental expenditures incurred for precautionary and safety
measures taken for COVID-19.
“Fiscal 2021 was a year of contrasts. While increased pandemic
demand for our products led to record financial performance it was
overshadowed by the suffering and loss from the virus by many of
our employees, their families and our communities.” said Paul
Palmby, Chief Executive Officer of Seneca Foods.
Mr. Palmby continued to state that “our results speak for
themselves but it was the dedication and hard work of our plant
employees who truly made the difference through these difficult
times”.
Highlights (vs. year-ago, fourth quarter
results):
- Net sales for the quarter were
$304.8 million and $307.9 million for the prior year quarter. The
overall decrease in sales of $3.1 million was attributable to
decreased sales volume of $15.9 million offset by higher selling
prices/favorable sales mix of $12.8 million.
- Gross margin percentage increased
from 15.1% for the quarter in 2020 to 18.7% for the quarter in
2021.
About Seneca Foods Corporation
Seneca Foods is one of North America’s leading
providers of packaged fruits and vegetables, with facilities
located throughout the United States. Its high quality products are
primarily sourced from over 1,600 American farms. Seneca holds the
largest share of the retail private label, food service, and export
canned vegetable markets, distributing to over 90
countries. Products are also sold under the highly
regarded brands of Libby’s®, Aunt Nellie’s®, Green Valley®,
CherryMan®, READ®, and Seneca labels, including Seneca snack
chips. Seneca’s common stock is traded on the Nasdaq Global
Stock Market under the symbols “SENEA” and “SENEB”. SENEA is
included in the S&P SmallCap 600, Russell 2000 and Russell 3000
indices.
Non-GAAP Financial Measures—Operating
Income Excluding LIFO and Plant Restructuring Impact, EBITDA and
FIFO EBITDA
Operating income excluding LIFO and plant
restructuring, 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 or
have plant restructuring to enhance the understanding of the
Company’s historical 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 Operating Income
excluding LIFO and plant restructuring.
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Quarter Ended |
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Twelve Months Ended |
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In millions |
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In millions |
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3/31/2021 |
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3/31/2020 |
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3/31/2021 |
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3/31/2020 |
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FY 2021 |
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FY 2020 |
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FY 2021 |
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FY 2020 |
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Operating income, as reported: |
$ |
32.5 |
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$ |
27.1 |
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$ |
181.1 |
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$ |
70.5 |
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LIFO
credit |
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(11.3 |
) |
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(9.6 |
) |
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(15.6 |
) |
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(17.1 |
) |
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Plant
restructuring charge |
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- |
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0.3 |
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0.2 |
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7.0 |
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Operating
income, excluding LIFO and plant restructuring impact |
$ |
21.2 |
|
$ |
17.8 |
|
$ |
165.7 |
|
$ |
60.4 |
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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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Twelve Months Ended |
EBITDA and
FIFO EBITDA: |
|
March 31, 2021 |
|
March 31, 2020 |
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(In thousands) |
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|
|
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Earnings from continuing operations |
$ |
126,100 |
|
$ |
51,188 |
|
Income tax
expense |
|
33,916 |
|
|
14,427 |
|
Interest
expense, net of interest income |
|
6,125 |
|
|
11,834 |
|
Depreciation
and amortization |
|
32,375 |
|
|
30,933 |
|
Interest
amortization |
|
(330 |
) |
|
(279 |
) |
LIFO
EBITDA |
|
198,186 |
|
|
108,103 |
|
LIFO
credit |
|
(15,595 |
) |
|
(17,075 |
) |
FIFO
EBITDA |
$ |
182,591 |
|
$ |
91,028 |
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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;
- availability of financing;
- leverage and the Company’s ability
to service and reduce its debt;
- potential impact of COVID-19
related issues at our facilities;
- 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.
Contact: Timothy J. Benjamin, Chief Financial
Officer315-926-8100
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Seneca Foods
Corporation |
Unaudited Selected
Financial Data |
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For the Periods
Ended March 31, 2021 and March 31, 2020 |
(In thousands of
dollars, except share data) |
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Fourth Quarter |
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Year-to-Date |
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Fiscal 2021 |
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Fiscal 2020 |
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Fiscal 2021 |
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Fiscal 2020 |
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Net sales |
$ |
304,793 |
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|
$ |
307,871 |
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$ |
1,467,644 |
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$ |
1,335,769 |
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Plant restructuring expense (note 2) |
$ |
13 |
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$ |
301 |
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$ |
182 |
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$ |
7,046 |
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Other operating (loss) income, net (note 3) |
$ |
(4,702 |
) |
|
$ |
4,035 |
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|
$ |
29,014 |
|
|
$ |
12,653 |
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Operating income (note 1) |
$ |
32,522 |
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|
$ |
27,081 |
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$ |
181,067 |
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$ |
70,524 |
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Loss from equity investment (note 4) |
|
10,701 |
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|
93 |
|
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|
11,453 |
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|
93 |
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Other loss (income) |
|
1,016 |
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(1,755 |
) |
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|
3,473 |
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(7,018 |
) |
Interest expense, net |
|
1,539 |
|
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|
2,651 |
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|
6,125 |
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|
11,834 |
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Earnings from continuing operations before income taxes |
$ |
19,266 |
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$ |
26,092 |
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$ |
160,016 |
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|
$ |
65,615 |
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Income tax expense from continuing operations |
|
4,437 |
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|
5,070 |
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33,916 |
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|
14,427 |
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Earnings from continuing operations |
|
14,829 |
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|
21,022 |
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|
126,100 |
|
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|
51,188 |
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Earnings from discontinued operations (net of tax) |
|
- |
|
|
|
192 |
|
|
|
- |
|
|
|
1,147 |
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Net earnings |
$ |
14,829 |
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$ |
21,214 |
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$ |
126,100 |
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|
$ |
52,335 |
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Basic earnings per share: |
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Continuing operations |
$ |
1.63 |
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$ |
2.29 |
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$ |
13.82 |
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$ |
5.50 |
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Discontinued operations |
$ |
- |
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$ |
0.02 |
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$ |
- |
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$ |
0.12 |
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Net basic earnings per common share |
$ |
1.63 |
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$ |
2.31 |
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$ |
13.82 |
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$ |
5.62 |
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Diluted earnings per share: |
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Continuing operations |
$ |
1.62 |
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$ |
2.27 |
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$ |
13.72 |
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$ |
5.46 |
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Discontinued operations |
$ |
- |
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$ |
0.02 |
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$ |
- |
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$ |
0.12 |
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Net diluted earnings per common share |
$ |
1.62 |
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$ |
2.29 |
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$ |
13.72 |
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$ |
5.58 |
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Note 1: |
The effect of the LIFO inventory valuation method on fourth quarter
pre-tax results increased operating earnings by $11,327,000
for the three month period ended March 31, 2021 and increased
operating earnings by $9,618,000 for the three month period
ended March 31, 2020. |
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The effect of the LIFO inventory valuation method on fourth quarter
pre-tax results increased operating earnings by $15,595,000
for the twelve month period ended March 31, 2021 and increased
operating earnings by $17,075,000 for the twelve month period
ended March 31, 2020. |
Note 2: |
The twelve month period ended March 31, 2021 included a
restructuring charge of $182,000 primarily related to
closed plants in the Northwest, of which $227,000 was related
to severance and $44,000 was related to lease impairments partially
offset by a $89,000 credit of a former grower payment. The
twelve month period ended March 31, 2020 included a restructuring
charge of $7,046,000 primarily for lease impairments including
accelerated amortization of $5,267,000 and equipment moves for
plants in the Midwest and Northwest. |
Note 3: |
During the twelve months ended March 31, 2021, the Company recorded
a gain of $34,793,000 from the sale of it's prepared
food business, a loss of $800,000 on the disposal of equipment
from a sold Northwest plant, a loss of $390,000 from the sale of
unused fixed assets, a loss of $3,211,000 on the disposition
of equipment that was previously held for sale, and a charge of
$175,000 for severance. |
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The Company also recorded a charge of $1,174,000 for a supplemental
early retirement plan. Other operating income for the twelve
months ended March 31, 2020 includes a gain on the partial sale of
a plant in the Midwest and Northwest of $11,409,000 and a gain
on the sale of unused fixed assets of $1,244,000. |
Note 4: |
During the fourth quarter of 2021 the Company recorded an
other-than-temporary impairment charge of $9,666,000 to its equity
method investment. |
Note 5: |
The Company uses the "two-class" method for basic earnings per
share by dividing the earnings attributable to common
shareholders by the weighted average of common shares outstanding
during the period. |
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