Seneca Foods Reports Sales and Earnings for the Six Months Ended October 2, 2021
12 Novembre 2021 - 10:10PM
Seneca Foods Corporation (NASDAQ: SENEA, SENEB) today announced
financial results for the second quarter and six months ended
October 2, 2021.
Executive Summary (vs. year-ago, second quarter
results):
- Net sales for the second quarter of fiscal 2022 totaled $372.3
million compared to $390.3 million in the second quarter of fiscal
2021.
- Gross margin as a percentage of net sales for the second
quarter is 11.5% in 2022 as compared to 12.5% in 2021.
Commenting on the results, Paul Palmby,
President and Chief Executive Officer of Seneca Foods, stated, “We
are pleased with the Company’s performance in the second
quarter. A comparative perspective to the prior year remains
a challenge given the 2020 COVID-19 pantry loading and the Truitt
divestiture that happened in fiscal year 2021. However, as
expected, our net sales performance has remained on level to
pre-pandemic levels. Quarterly and year-to-date reported
earnings were strong even considering a large LIFO charge that is
being driven by higher input costs.”
Executive Summary (vs. year-ago, year-to-date
results):
- Net sales for the six months ended October 2, 2021 totaled
$607.3 million compared to $678.5 million for the six months ended
September 26, 2020.
- Gross margin as a percentage of net sales for the six months
ended October 2, 2021 is 12.6% as compared to 14.4% for the six
months ended September 26, 2020.
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 |
|
Six Months Ended |
|
|
October 2, |
|
September 26, |
|
October 2, |
|
September 26, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
|
(In thousands) |
|
|
|
|
|
|
|
|
|
Operating income, as reported: |
|
$ |
21,819 |
|
$ |
27,686 |
|
$ |
39,546 |
|
$ |
57,985 |
LIFO charge |
|
|
8,802 |
|
|
2,528 |
|
|
11,639 |
|
|
388 |
Plant restructuring
charge |
|
|
47 |
|
|
24 |
|
|
113 |
|
|
287 |
Operating income, excluding
LIFO and plant restructuring impact |
|
$ |
30,668 |
|
$ |
30,238 |
|
$ |
51,298 |
|
$ |
58,660 |
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
Six Months Ended |
|
|
October 2, |
|
September 26, |
EBITDA and FIFO EBITDA: |
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
(In thousands) |
|
|
|
|
|
Net earnings |
|
$ |
25,790 |
|
|
$ |
38,811 |
|
Income tax expense |
|
|
8,054 |
|
|
|
11,948 |
|
Interest expense, net of
interest income |
|
|
2,678 |
|
|
|
3,055 |
|
Depreciation and
amortization |
|
|
17,691 |
|
|
|
16,050 |
|
Interest amortization |
|
|
(121 |
) |
|
|
(137 |
) |
EBITDA |
|
|
54,092 |
|
|
|
69,727 |
|
LIFO charge |
|
|
11,639 |
|
|
|
388 |
|
FIFO EBITDA |
|
$ |
65,731 |
|
|
$ |
70,115 |
|
|
|
|
|
|
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 October 2, 2021 and September 26, 2020 |
(In thousands of dollars, except share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
October 2, |
|
September 26, |
|
October 2, |
|
September 26, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
372,256 |
|
|
$ |
390,294 |
|
|
$ |
607,298 |
|
|
$ |
678,459 |
|
|
|
|
|
|
|
|
|
|
Plant restructuring expense
(note 2) |
|
$ |
47 |
|
|
$ |
24 |
|
|
$ |
113 |
|
|
$ |
287 |
|
|
|
|
|
|
|
|
|
|
Other operating loss, net
(note 3) |
|
$ |
(1,726 |
) |
|
$ |
(1,780 |
) |
|
$ |
(282 |
) |
|
$ |
(1,635 |
) |
|
|
|
|
|
|
|
|
|
Operating income (note 1) |
|
$ |
21,819 |
|
|
$ |
27,686 |
|
|
$ |
39,546 |
|
|
$ |
57,985 |
|
Loss from equity
investment |
|
|
7,619 |
|
|
|
804 |
|
|
|
7,775 |
|
|
|
1,480 |
|
Other (income) loss |
|
|
(2,375 |
) |
|
|
1,760 |
|
|
|
(4,751 |
) |
|
|
2,691 |
|
Interest expense, net |
|
|
1,336 |
|
|
|
1,404 |
|
|
|
2,678 |
|
|
|
3,055 |
|
Earnings before income
taxes |
|
$ |
15,239 |
|
|
$ |
23,718 |
|
|
$ |
33,844 |
|
|
$ |
50,759 |
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
3,585 |
|
|
|
5,613 |
|
|
|
8,054 |
|
|
|
11,948 |
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
11,654 |
|
|
$ |
18,105 |
|
|
$ |
25,790 |
|
|
$ |
38,811 |
|
|
|
|
|
|
|
|
|
|
Basic earnings per common
share |
|
$ |
1.32 |
|
|
$ |
1.98 |
|
|
$ |
2.88 |
|
|
$ |
4.24 |
|
Diluted earnings per common
share |
|
$ |
1.31 |
|
|
$ |
1.97 |
|
|
$ |
2.86 |
|
|
$ |
4.21 |
|
Note
1: |
The effect of
the LIFO inventory valuation method on second quarter pre-tax
results decreased operating earnings by $8.8 million and $2.5
million for the three month periods ended October 2, 2021 and
September 26, 2020, respectively. The effect of the LIFO inventory
valuation method on YTD six month pre-tax results decreased
operating earnings by $11.6 million and $0.4 million for the six
month periods ended October 2, 2021 and September 26, 2020,
respectively |
|
|
Note 2: |
The six month period ended October 2, 2021 included a
restructuring charge of $0.1 million mostly related to closed plant
cost. The six month period ended September 26, 2020 included a
restructuring charge of $0.3 million primarily related to closed
plants in the Northwest, of which $0.2 million was related to
severance and $0.1million was related to lease impairments |
|
|
Note 3: |
During the six months period ended October 2, 2021, the Company
recorded a charge of $2.4 million for supplemental early retirement
plans, which was offset by a gain from the sale of an aircraft of
$1.1 million, a gain of $0.8 million from the sale of a plant in
the Midwest and a gain from debt forgiveness of $0.5 million. The
Company also recorded miscellaneous expense of $1.0 million,
partially offset by miscellaneous income of $0.7 million. During
the six month period ended September 26, 2020, the Company recorded
a loss of $0.5 million on the disposal of equipment from a sold
Northwest plant and a gain on the sale of unused fixed assets of
$0.1 million. The Company also recorded a charge of $1.2 million
for a supplemental early retirement plan. |
|
|
Note 4: |
The Company used the “two-class” method for basic earnings per
share by dividing the earning attributable to common shareholders
by the weighted average of common shares outstanding during the
period. |
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