Seneca Foods Corporation (Nasdaq:SENEA) (Nasdaq:SENEB) reported for
the third quarter of 2015, net earnings of $7.8 million, or $0.71
per diluted share, compared to net earnings of $6.8 million, or
$0.61 per diluted share, in the fiscal third quarter of 2014. Net
sales for the third quarter ended December 27, 2014 decreased from
the third quarter ended December 28, 2013 by 4.5%, or $21.5 million
to $456.2 million. The decrease is attributable to a sales volume
decrease of $32.3 million partially offset by favorable sales mix
and higher selling prices of $10.8 million. A major portion of the
lower sales was due to a $12.4 million reduction in Canned Fruit
sales as a result of the second short pack in a row. During the
quarter ended December 27, 2014, the Company recorded a gain of
$5.0 million related to a contractual payment received in
connection with the closing of a Midwest plant which is included in
other operating income in the Unaudited Condensed Consolidated
Statements of Net Earnings.
The Company reported net earnings for the fiscal nine months
ended December 27, 2014 of $7.1 million, or $0.65 per diluted
share, compared to net earnings of $14.8 million, or $1.32 per
diluted share for the same period in the prior year. In the nine
months ended December 27, 2014, net sales decreased $38.0 million,
or 3.6% to $1,008.4 million. The decrease is attributable to a
sales volume decrease of $70.5 million partially offset by
favorable sales mix and higher selling prices of $32.5 million.
Excluding a non-cash after-tax LIFO charge of $3.5 million, net
earnings per diluted share were $1.03 during the quarter ended
December 27, 2014 versus $1.06 during the quarter ended December
28, 2013, which included a non-cash LIFO charge of $5.0 million.
Excluding a non-cash after-tax LIFO charge of $7.1 million, net
earnings per diluted share were $1.29 during the nine months ended
December 27, 2014, compared to $2.61 during the nine months ended
December 28, 2013 which included a non-cash LIFO charge of $14.4
million.
About Seneca Foods
Corporation
Seneca Foods is North America's leading provider of packaged
fruits and vegetables, with facilities located throughout the
United States. Its high quality products are primarily sourced from
over 2,000 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®,
READ®, Seneca Farms® and Seneca labels, including Seneca snack
chips. In addition, Seneca provides vegetable products under an
alliance with General Mills Operations, LLC, a subsidiary of
General Mills, Inc., under the Green Giant label. Seneca's common
stock is traded on the Nasdaq Global Stock Market under the symbols
"SENEA" and "SENEB". SENEA is included the S&P SmallCap 600,
Russell 2000 and Russell 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 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 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 |
|
December 27, 2014 |
December 28, 2013 |
|
Income |
Diluted |
Income |
Diluted |
|
(in millions) |
EPS |
(in millions) |
EPS |
|
|
|
|
|
Net earnings, as reported: |
$ 7.8 |
$ 0.71 |
$ 6.8 |
$ 0.61 |
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|
|
|
|
LIFO charge, after tax at statutory federal
rate |
$ 3.5 |
$ 0.32 |
$ 5.0 |
$ 0.45 |
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|
|
|
Net earnings, excluding LIFO impact |
$ 11.3 |
$ 1.03 |
$ 11.8 |
$ 1.06 |
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Diluted weighted average common
shares outstanding (in thousands) |
|
10,804 |
|
10,815 |
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|
|
|
|
Nine Months Ended |
|
December 27, 2014 |
December 28, 2013 |
|
Income |
Diluted |
Income |
Diluted |
|
(in millions) |
EPS |
(in millions) |
EPS |
|
|
|
|
|
Net earnings, as reported: |
$ 7.1 |
$ 0.65 |
$ 14.8 |
$ 1.32 |
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|
LIFO charge, after tax at statutory federal
rate |
$ 7.1 |
$ 0.64 |
$ 14.4 |
$ 1.29 |
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|
Net earnings, excluding LIFO impact |
$ 14.2 |
$ 1.29 |
$ 29.2 |
$ 2.61 |
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|
|
|
|
Diluted weighted average common
shares outstanding (in thousands) |
|
10,840 |
|
10,820 |
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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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Nine Months Ended |
EBITDA and FIFO EBITDA: |
December 27, 2014 |
December 28, 2013 |
|
(In thousands) |
|
|
|
Net earnings |
$ 7,134 |
$ 14,796 |
Income tax expense |
2,333 |
1,518 |
Interest expense, net of interest income |
3,917 |
4,799 |
Depreciation and amortization |
16,495 |
17,543 |
Interest amortization |
(224) |
(226) |
EBITDA |
29,655 |
38,430 |
LIFO charge |
10,885 |
22,111 |
FIFO EBITDA |
$ 40,540 |
$ 60,541 |
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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;
- 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 |
Unaudited Condensed
Consolidated Statements of Net Earnings |
For the Periods Ended December
27, 2014 and December 28, 2013 |
(In thousands of dollars,
except share data) |
|
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|
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|
|
Quarter |
Year-to-Date |
|
Fiscal 2015 |
Fiscal 2014 |
Fiscal 2015 |
Fiscal 2014 |
|
|
|
|
|
Net sales |
$ 456,207 |
$ 477,694 |
$ 1,008,411 |
$ 1,046,449 |
|
|
|
|
|
Plant restructuring expense (note 2) |
$ 889 |
$ -- |
$ 889 |
$ 501 |
|
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Other operating income (loss) net (note
3) |
$ 5,033 |
$ (365) |
$ 4,839 |
$ 423 |
|
|
|
|
|
Operating income (note 1) |
$ 11,469 |
$ 10,542 |
$ 13,153 |
$ 21,113 |
Loss (earnings) from equity investment |
55 |
-- |
(231) |
-- |
Interest expense, net |
1,431 |
1,424 |
3,917 |
4,799 |
Earnings before income taxes |
$ 9,983 |
$ 9,118 |
$ 9,467 |
$ 16,314 |
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|
|
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|
Income taxes (benefit) expense |
2,164 |
2,272 |
2,333 |
1,518 |
|
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|
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Net earnings |
$ 7,819 |
$ 6,846 |
$ 7,134 |
$ 14,796 |
|
|
|
|
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Earnings attributable to common stock (note
4) |
$ 7,711 |
$ 6,622 |
$ 6,995 |
$ 14,307 |
|
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|
|
Basic earnings per share |
$ 0.72 |
$ 0.62 |
$ 0.65 |
$ 1.33 |
|
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|
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Diluted earnings per share |
$ 0.71 |
$ 0.61 |
$ 0.65 |
$ 1.32 |
|
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Weighted average shares outstanding
basic |
10,733,113 |
10,742,912 |
10,769,124 |
10,747,715 |
|
|
|
|
|
Weighted average shares outstanding
diluted |
10,804,615 |
10,814,832 |
10,840,626 |
10,819,635 |
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Note 1: The effect of the LIFO inventory valuation method on
third quarter pre-tax results was to decrease operating earnings by
$3,455,000 for the three month period ended December 27, 2014 and
decrease operating earnings by $4,989,000 for the three month
period ended December 28, 2013. The effect of the LIFO inventory
valuation method on year-to-date pre-tax results was to decrease
operating earnings by $7,075,000 for the nine month period ended
December 27, 2014 and decrease operating earnings by $14,372,000
for the nine month period ended December 28, 2013.
Note 2: The nine month period ended December 27, 2014 included a
restructuring charge for plant closure costs of $889,000. The nine
month period ended December 28, 2013 included a restructuring
charge for product rationalization costs of $501,000.
Note 3: Other income for the current year of $4,839,000
represents a $5,000,000 gain related to a third party payment for
the closing of a Midwest plant, $250,000 charge related to
environmental accrual and net gain on the sale of unused fixed
assets of $89,000. Other income for the prior year of $423,000
represents a net gain on the sale of unused fixed assets of
$348,000 and a gain of $75,000 to adjust the bargain purchase gain
on the Sunnyside acquisition.
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. The diluted earnings per share includes the
effect of convertible shares for each period presented.
CONTACT: Timothy J. Benjamin, Chief Financial Officer
315-926-8100
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