0000088948-95-000008.txt : 19950816 0000088948-95-000008.hdr.sgml : 19950816 ACCESSION NUMBER: 0000088948-95-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950701 FILED AS OF DATE: 19950815 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SENECA FOODS CORP /NY/ CENTRAL INDEX KEY: 0000088948 STANDARD INDUSTRIAL CLASSIFICATION: CANNED, FRUITS, VEG & PRESERVES, JAMS & JELLIES [2033] IRS NUMBER: 160733425 STATE OF INCORPORATION: NY FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-01989 FILM NUMBER: 95564243 BUSINESS ADDRESS: STREET 1: 1162 PITTSFORD VICTOR RD CITY: PITTSFORD STATE: NY ZIP: 14534 BUSINESS PHONE: 7163859500 FORMER COMPANY: FORMER CONFORMED NAME: PIERCE S S COMPANY INC DATE OF NAME CHANGE: 19861210 FORMER COMPANY: FORMER CONFORMED NAME: SENECA FOODS CORP DATE OF NAME CHANGE: 19780425 FORMER COMPANY: FORMER CONFORMED NAME: SENECA GRAPE JUICE CORP DATE OF NAME CHANGE: 19710419 10-Q 1 Form 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 QUARTERLY REPORT UNDER SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended July 1, 1995 Commission File Number 0-1989 Seneca Foods Corporation (Exact name of registrant as specified in its charter) New York 16-0733425 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 1162 Pittsford-Victor Road, Pittsford, New York 14534 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 716/385-9500 Not Applicable Former name, former address and former fiscal year, if changed since last report Check mark indicates whether registrant (1) has filed all reports required to be filed by Section 13 of 15(d) of the Securities Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No The number of shares outstanding of each of the issuer's classes of common stock at the latest practical date are: Class Shares Outstanding at July 31, 1995 Common Stock, $.25 Par 2,796,555 PART I FINANCIAL INFORMATION SENECA FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (In Thousands of Dollars)
7/1/95 3/31/95 ______ _______ ASSETS Current Assets: Cash and Short-term Investments $ 2,331 $ 26,538 Accounts Receivable, Net 30,444 32,601 Inventories: Finished Goods 100,066 64,613 Work in Process 17,019 19,531 Raw Materials 47,938 48,260 _______ _______ 165,023 132,404 Off-Season Reserve (Note 3) 17,916 - Deferred Tax (Net) 1,933 1,933 Other Current Assets 591 801 _______ _______ Total Current Assets 218,238 194,277 Property, Plant and Equipment, Net 212,014 179,718 Common Stock of Moog Inc. 9,860 7,494 Other Assets 261 237 _______ _______ $440,373 $381,726 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes Payable $ 48,000 $ - Accounts Payable 40,948 36,089 Accrued Expenses 23,436 19,599 Income Taxes - 125 Current Portion of Long-Term Debt and Capital Lease Obligations 5,571 5,594 _______ _______ Total Current Liabilities 117,955 61,407 Long-Term Debt 220,392 220,677 Capital Lease Obligations 800 803 Deferred Income Taxes 12,343 11,490 10% Preferred Stock, Series A, Voting, Cumulative, Convertible, $.025 Par Value Per Share 10 10 10% Preferred Stock, Series B, Voting, Cumulative, Convertible, $.025 Par Value Per Share 10 10 6% Preferred Stock, Voting, Cumulative, $.25 Par Value Per Share 50 50 Common Stock 1,880 1,880 Net Unrealized Gain on Available-For-Sale Securities 2,383 892 Retained Earnings 84,550 84,507 _______ ________ Stockholders' Equity 88,883 87,349 _______ _______ $440,373 $381,726 ======= ======= The accompanying notes are an integral part of these financial statements.
SENECA FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited) (In Thousands, except Share Data)
Three Months Ended __________________ 7/1/95 6/25/94 ______ _______ Net Sales $ 81,945 $ 70,761 Costs and Expenses: Cost of Product Sold 68,529 59,968 Selling, General, and Administrative 7,783 7,206 Interest Expense 5,545 1,356 _______ _______ Total Costs and Expenses 81,857 68,530 _______ _______ Earnings Before Income Taxes 88 2,231 Income Taxes 33 805 _______ _______ Earnings from Continuing Operations 55 1,426 Earnings from Discontinued Operations - 1 Gain on the Sale of Discontinued Operations Net of Income Taxes - 34 _______ _______ Net Earnings $ 55 $ 1,461 ======= ======= Net Earnings from Continuing Operations Applicable to Common Stock $ 49 $ 1,421 Net Earnings Applicable to Common Stock 49 1,455 Weighted Average Common Shares Outstanding 2,796,555 2,797,305 Primary and Fully Diluted Earnings Per Share of Common Stock (Exhibit II): Earnings from Continuing Operations $ .02 $ .51 Earnings from Discontinued Operations - - Gain on the Sales of Discontinued Operations - .01 _______ _______ Net Earnings $ .02 $ .52 ======= ======= The accompanying notes are an integral part of these condensed financial statements.
SENECA FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (In Thousands)
Three Months Ended __________________ 7/1/95 6/25/94 ______ _______ Cash Flows From Operating Activities: Net Earnings $ 55 $ 1,461 Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities: Depreciation and Amortization 4,496 2,333 Deferred Income Taxes (22) 1,558 Changes in Working Capital: Accounts Receivable 2,157 6,905 Inventories (32,619) 8,116 Off-Season Reserve (17,916) (6,252) Other Current Assets 238 (3,162) Income Taxes (153) (1,820) Accounts Payable and Accrued Expenses 8,696 472 _______ ______ Net Cash Provided (Used) by Operations (35,068) 9,611 Cash Flows From Investing Activities: Additions to Property, Plant, and Equipment (36,792) (1,638) _______ ______ Net Cash Used in Investing Activities (36,792) (1,638) Cash Flows From Financing Activities: Notes Payable 48,000 - Payments and Current Portion of Long-Term Debt and Capital Lease Obligations (311) (882) Other (24) 3 Dividends (12) (12) Common Stock Retirement - (1,878) ______ ______ Net Cash Provided (Used) in Financing Activities 47,653 (2,769) Net Increase (Decrease) in Cash and Short- Term Investments (24,207) 5,204 Cash and Short-Term Investments, Beginning of Period 26,538 22,198 _______ ______ Cash and Short-Term Investments, End of Period $ 2,331 $ 27,402 ======= ====== The accompanying notes are an integral part of these condensed financial statements.
SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS July 1, 1995 1. Consolidated Condensed Financial Statements In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments, which are normal and recurring in nature, necessary to present fairly the financial position of the Registrant as of July 1, 1995 and March 31, 1995 and results of operations for the three month periods ended July 1, 1995 and June 25, 1994. All significant intercompany transactions and accounts have been eliminated in consolidation. The March 31, 1995 balance sheet was derived from audited financial statements. The results of operations for the three month periods ended July 1, 1995 and June 25, 1994 are not necessarily indicative of the results to be expected for the full year. The accounting policies followed by the Registrant are set forth in Note 1 to the Registrant's financial statements in the 1995 Seneca Foods Corporation Annual Report and 10-K. Other footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these consolidated condensed financial statements be read in conjunction with the financial statements and notes included in the Registrant's March 31, 1995 financial report. 2. Primary earnings per share are based on the weighted average number of common shares outstanding, as the effect of common stock equivalents is immaterial. The difference between primary and fully diluted earnings per share is immaterial. 3. Off-Season Reserve is the excess of absorbed expenses over incurred expenses to date. The seasonal nature of the Registrant's Food Processing business results in a timing difference between expenses (primarily overhead expenses) incurred and absorbed into product cost. All Off-Season Reserve balances are zero at fiscal year end. 4. The Registrant changed its fiscal year end from July 31 to March 31 during Fiscal 1995. These financial statements reflect the prior year as if the fiscal year ended March 31. SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS July 1, 1995 5. A proposed amendment to the Registrant's Certificate of Incorporation which effected a recapitalization of the Registrant by creating a second class of Common Stock (which is being distributed to all common shareholders in the form of a stock dividend) was adopted at the Annual Meeting held on August 5, 1995. This recapitalization amendment (i) reclassifies the existing Common Stock as Class B Common Stock, (ii) authorizes a new class of 10,000,000 shares designated as Class A Common Stock and (iii) establishes the express terms of the Class A Common Stock and the Class B Common Stock. The Class A Common Stock and the Class B Common Stock have substantially identical rights with respect to any dividends or distributions of cash or property declared on shares of common stock and rank equally as to the right to receive proceeds on liquidation or dissolution of the Registrant after payment of the Registrant's indebtedness and liquidation right to the holders of preferred shares. However, holders of Class B Common Stock retain full vote per share whereas the holders of Class A Common Stock have voting rights of 1/20th of one vote per share on all matters as to which shareholders of the Registrant are entitled to vote. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION RESULTS OF OPERATIONS July 1, 1995 Results of Operations: Sales: Sales reflect an increase of 15.8% for the first three months versus 1994. The higher sales, in large part, are due to higher canned vegetables quantities sold than the previous period and acquisitions made within the last year. Costs and Expenses: The following table shows cost and expenses as a percentage of sales:
Three Months Ended __________________ 7/1/95 6/25/94 ______ _______ Cost of Product Sold 83.6% 84.7% Selling 7.1 7.2 Administrative 2.4 3.0 Interest Expense 6.8 1.9 ---- --- 99.9% 96.8% ===== ====
Lower Cost of Product Sold percentages (i.e. higher Gross Margins) reflect, in part, lower selling prices for vegetable products than in the prior year due to the relatively high packs of vegetables throughout the U. S. after the previous year which saw unprecedented floods in the Midwest. The Interest Expense is higher largely due to the debt issued to finance the acquisitions made over the last year. Income Taxes: The effective tax rate used in fiscal 1996 is 38% and in fiscal 1995 it is 36%. Financial Condition: The financial condition of the Registrant is summarized in the following table and explanatory review (In Thousands):
For the Quarter For the Year Ended June Ended March ---------- ----------- 1995 1994 1995 1994 ---- ---- ---- ---- Working Capital Balance $100,283 $79,591 $132,870 $78,180 Quarter Change (32,587) 1,411 - - Notes Payable 48,000 - - - Long-Term Debt 221,192 68,130 221,480 68,546 Current Ratio 1.85:1 2.77:1 3.16:1 2.67:1 Inventory (Average) Turnover 1.8 3.1 1.9 1.8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION RESULTS OF OPERATIONS July 1, 1995 The change in the Working Capital for the quarter from the prior year is largely due to acquisition of Green Giant assets in the prior year and the capital expenditure program needed for the Registrant's plants to take on some of the canned vegetable volume added by the acquisition. When the Registrant acquired the Green Giant assets, it did not acquire the Finished Goods. Therefore, as the Registrant produces finished goods for Pillsbury, working capital needs increase accordingly. As part of the Alliance with Pillsbury (see 1995 Annual Report for details), Pillsbury takes Green Giant inventory as it needs it or at least by the take-or-pay date (varies by commodity). Due to the industrywide high carry-in inventory, it is expected that Pillsbury will begin taking the Green Giant inventory in significant quantities during the third quarter. This has and will reduce the Registrant's sales and increase its inventories and associated borrowing needs for the second quarter of 1996 versus it's original plan. The Registrant was not in compliance with certain debt covenants related to Short-Term and Long-Term Debt. However, all provisions have been met or waived. See Consolidated Statements of Cash Flows for further details. PART II - OTHER INFORMATION Item 1. Legal Proceedings None. Item 2. Changes in Securities None. Item 3. Defaults on Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders The annual meeting of shareholders of the Registrant was held on August 5, 1995 and the following were the voting results: (1) Management's nominees for Director positions were elected, (2) three management proposals related to the Registrant's recapitalization plan and year-end change were adopted, (3) a management proposal to ratify the appointment of Deloitte & Touche L.L.P. as independent auditors was adopted. A summary of the voting results follows (In thousands):
Proposal For Withheld Against Abstain Broker Non-Votes -------- --- -------- ------- ------- ---------------- Directors: D. L. Call 3,409 29 S. W. Stuart 3,408 30 M. A. Schaeffer 3,408 30 Approve amendments to Certificate of Incorporation: 3,100 183 1 154 Approve amendment to Company By-Laws per above 3,121 162 1 154 Approve amendment to Company By-Laws-meeting date 3,292 18 129 Appointment of Auditors 3,435 1 3 Such other business 3,438
Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K (a) Exhibit 3 - (3) Articles of Incorporation and By-Laws will be filed under Form 10-Q/A when available. (b) Exhibit 4 - (4) Instruments defining rights of security holders including indentures will be filed under Form 10-Q/A when available. (c) Exhibit 11 - (11) Computation of earnings per share (d) Exhibit 27 - (27) Financial Data Schedules (e) Reports on Form 8-K - None during the quarter. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Seneca Foods Corporation (Registrant) /s/Kraig H. Kayser __________________ August 11, 1995 Kraig H. Kayser President and Chief Executive Officer /s/Jeffrey L. Van Riper _______________________ August 11, 1995 Jeffrey L. Van Riper Controller and Chief Accounting Officer EX-11 2 EXHIBIT 11 SENECA FOODS CORPORATION AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (In thousands except share data)
Three Months Ended ------------------ 7/1/95 6/25/94 ______ _______ Net Earnings Applicable to Common Stock: Net Earnings $ 55 $ 1,461 Deduct Preferred Cash Dividends 6 6 ------- ----- Net Earnings Applicable to Common Stock $ 49 $ 1,455 = == = ===== Weighted Average Common Shares Outstanding 2,796,555 2,797,305 Effect of Common Stock Equivalent - - _________ _________ Weighted Average Common Shares Outstanding for Primary Earnings per Share 2,796,555 2,797,305 ========= ========= Primary and Fully Diluted Earnings Per Share $ .02 $ .52 = === = ===
EX-27 3
5 Commercial and Industrial Companies Article 5 of Regulation S-X 1000 3-MOS MAR-31-1995 JUL-01-1995 2331 0 30684 240 165023 218238 323420 111406 440373 117955 221192 1880 0 70 86933 440373 81945 81945 68529 68529 7783 0 5545 88 33 55 0 0 0 55 0.02 0.02 Other-Expenses is Selling, General and Administrative Expenses.