Seneca Foods Reports Sales and Earnings for the Three Months Ended July 3, 2021
11 Août 2021 - 10:15PM
Seneca Foods Corporation (NASDAQ: SENEA, SENEB) today announced
financial results for the three months ended July 3, 2021.
Highlights (vs. year-ago, year-to-date
results):
-
Net sales for the first quarter of fiscal 2022 totaled
$235.0 million compared to $288.2 million for the prior
quarter. The year-over-year decrease in sales resulted from a $24.2
million decrease due to the divesture of our prepared foods
business, a $28.5 million decrease from a volume variance and a
$0.5 million decrease from a pricing/mix variance.
-
Gross margin as a percentage of net sales is 14.3% in 2022 as
compared to 16.9% in 2021.
“Overall, the first quarter of 2022 was as we
expected. A comparison to prior year is difficult as COVID-driven
panic buying commenced last year. However, for the first quarter of
2022 we achieved very respectable earnings per common share of
$1.56. With the exception of last year, this is our highest first
quarter earnings per common share in many years,” said Paul Palmby,
Chief Executive Officer of Seneca Foods.
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
Select 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.
|
|
|
|
|
|
|
Three Months Ended |
|
|
July 3, 2021 |
|
June 27, 2020 |
|
|
(In thousands) |
|
|
|
|
|
Operating income, as reported: |
$ |
17,727 |
$ |
30,299 |
|
|
|
|
|
|
LIFO charge (credit) |
|
2,837 |
|
(2,141 |
) |
|
|
|
|
|
Plant restructuring
charge |
|
66 |
|
263 |
|
|
|
|
|
|
Operating income, excluding
LIFO and plant restructuring impact |
$ |
20,630 |
$ |
28,421 |
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
Three Months Ended |
EBITDA and FIFO EBITDA: |
|
July 3, 2021 |
|
June 27, 2020 |
|
|
(In thousands) |
|
|
|
|
|
Net earnings |
$ |
14,136 |
|
$ |
20,706 |
|
Income tax expense |
|
4,469 |
|
|
6,335 |
|
Interest expense, net of
interest income |
|
1,342 |
|
|
1,651 |
|
Depreciation and
amortization |
|
8,581 |
|
|
7,881 |
|
Interest amortization |
|
(60 |
) |
|
(69 |
) |
EBITDA |
|
28,468 |
|
|
36,504 |
|
LIFO charge (credit) |
|
2,837 |
|
|
(2,141 |
) |
FIFO EBITDA |
$ |
31,305 |
|
$ |
34,363 |
|
|
|
|
|
|
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
|
Seneca Foods Corporation |
Unaudited Selected Financial Data |
|
|
|
|
For the Periods Ended July 3, 2021 and June 27, 2020 |
(In thousands of dollars, except share data) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
July 3, 2021 |
|
June 27, 2020 |
|
|
|
|
Net sales |
$ |
235,042 |
|
|
$ |
288,165 |
|
|
|
|
Plant restructuring expense
(note 2) |
$ |
66 |
|
|
$ |
263 |
|
|
|
|
Other operating income, net
(note 3) |
$ |
1,444 |
|
|
$ |
145 |
|
|
|
|
Operating income (note 1) |
$ |
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 tax expense |
|
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 |
Note
1: |
The effect of the LIFO inventory valuation method on first quarter
pre-tax results decreased operating earnings by $2,837,000 for
the three month period ended July 3, 2021 and increased operating
earnings by $2,141,000 for the three month period ended June
27, 2020. |
Note 2: |
The three month period ended July 3, 2021 included a restructuring
charge of $66,000 mostly related to health cost from a closed
plant. The three month period ended June 27, 2020 included a
restructuring charge of $263,000 related to closing plants in the
Northwest of which $219,000 was related to severance and $44,000
was for lease impairments. |
Note 3: |
During the three months ended July 3, 2021, the Company recorded a
gain from the sale of an aircraft of $1,194,000, a gain from debt
forgiveness of $500,000 on an economic development loan and a
charge of $276,000 for a supplemental early retirement plan. During
the three months ended June 27, 2020 the Company recorded a gain on
the sale of unused fixed assets of $534,000. The Company also
recorded a loss of $389,000 on the disposal of equipment from a
sold Northwest plant. |
Note 4: |
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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