-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, A90sKMdQZkC7Zme9tONAIU77cMStopvO/IeOVzNPsfizgxuUb/VEE+e/yRXKBGKL UNohFReT3JaE+xPk5edG2w== 0000088948-02-000019.txt : 20020812 0000088948-02-000019.hdr.sgml : 20020812 20020812103058 ACCESSION NUMBER: 0000088948-02-000019 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020629 FILED AS OF DATE: 20020812 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: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-01989 FILM NUMBER: 02725924 BUSINESS ADDRESS: STREET 1: 3736 SOUTH MAIN STREET CITY: MARION STATE: NY ZIP: 14534 BUSINESS PHONE: 315 926 8100 MAIL ADDRESS: STREET 1: 3736 SOUTH MAIN STREET CITY: MARION STATE: NY ZIP: 14505 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 FORMER COMPANY: FORMER CONFORMED NAME: PIERCE S S COMPANY INC DATE OF NAME CHANGE: 19861210 10-Q 1 a10q0602.txt JUNE 29, 2002 10-Q Form 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended June 29, 2002 Commission File Number 0-1989 ------------- ------ Seneca Foods Corporation ------------------------ (Exact name of Company as specified in its charter) New York 16-0733425 -------- ---------- (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 3736 South Main Street, Marion, New York 14505 ---------------------------------------- ----- (Address of principal executive offices) (Zip Code) Company's telephone number, including area code 315/926-8100 ------------ Not Applicable -------------- Former name, former address and former fiscal year, if changed since last report Check mark indicates whether Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the preceding 12 months (or for such shorter period that the Company 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, 2002 ----- ----------------------------------- Common Stock Class A, $.25 Par 3,826,513 Common Stock Class B, $.25 Par 2,764,053 PART I FINANCIAL INFORMATION SENECA FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (In Thousands of Dollars)
6/29/02 3/31/02 ------- ------- ASSETS Current Assets: Cash and Cash Equivalents $ 31,029 $ 24,973 Accounts Receivable, Net 28,885 32,035 Inventories: Finished Goods 109,740 135,727 Work in Process 9,657 8,526 Raw Materials 46,500 37,582 ------- ------- 165,897 181,835 Off-Season Reserve (Note 2) 26,857 - Deferred Income Tax Asset, Net 4,623 4,624 Refundable Income Taxes 723 1,657 Other Current Assets 754 362 -------------- --------------- Total Current Assets 258,768 245,486 Property, Plant and Equipment, Net 150,019 155,189 Other Assets 3,555 2,901 -------------- --------------- $412,342 $403,576 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts Payable $ 40,097 $ 33,979 Accrued Expenses 24,863 25,078 Current Portion of Long-Term Debt and Capital Lease Obligations 22,847 22,823 --------------- --------------- Total Current Liabilities 87,807 81,880 Long-Term Debt 148,989 149,430 Capital Lease Obligations 6,670 6,670 Deferred Income Taxes 8,020 7,308 Other Long-Term Liabilities 7,462 7,165 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 50 50 Convertible, Participating Preferred Stock, $12 Stated Value 42,565 42,605 Common Stock 2,829 2,827 Paid in Capital 13,659 13,619 Accumulated Other Comprehensive Income 1,557 1,208 Retained Earnings 92,714 90,794 --------------- --------------- Stockholders' Equity 153,394 151,123 --------------- --------------- $412,342 $403,576 ======== ======== 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 ------------------ 6/29/02 6/30/01 ------- ------- Net Sales $ 123,255 $ 132,693 Costs and Expenses: Cost of Product Sold 111,489 124,720 Selling, General, and Administrative 4,830 5,067 Interest Expense 3,662 4,915 ------------------ ----------------- Total Costs and Expenses 119,981 134,702 ------------------ ----------------- Earnings (Loss) Before Income Taxes 3,274 (2,009) Income Taxes 1,342 (723) ------------------ ----------------- Net Earnings (Loss) $ 1,932 $ (1,286) ================= ================ Basic: Earnings(Loss) Per Common Share .29 (.20) ================== =============== Diluted: Earnings (Loss) Per Common Share .19 (.20) ================== =============== 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 ------------------- 6/29/02 6/30/01 ------- ------- Cash Flows From Operating Activities: Net Earnings (Loss) $ 1,932 $ (1,286) Adjustments to Reconcile Net Earnings (Loss) to Net Cash Provided by (Used in) Operating Activities: Depreciation and Amortization 5,885 6,108 Deferred Income Taxes 405 (725) Changes in Working Capital: Accounts Receivable 3,150 2,339 Inventories 15,938 18,714 Off-Season Reserve (26,857) (35,865) Other Current Assets (392) (136) Income Taxes 934 (601) Accounts Payable, Accrued Expenses, and Other Liabilities 6,200 (3,355) ------------------ ----------------- Net Cash Provided by (Used in) Operations 7,195 (14,807) ------------------ ----------------- Cash Flows From Investing Activities: Additions to Property, Plant, and Equipment (715) (4,314) Escrow Funds - (1,525) ------------------ ----------------- Net Cash Used in Investing Activities (715) (5,839) ------------------ ----------------- Cash Flows From Financing Activities: Payments and Current Portion of Long-Term Debt and Capital Lease Obligations (417) (170) Other 5 5 Net Borrowings on Notes Payable - 13,545 Proceeds from the Issuance of Long-Term Debt - 3,950 Dividends (12) (12) Net Cash (Used in) Provided by Financing Activities (424) 17,318 ------------------ ----------------- Net Increase (Decrease) in Cash and Short- Term Investments 6,056 (3,328) Cash and Short-Term Investments, Beginning of Period 24,973 5,391 ------------------ ----------------- Cash and Short-Term Investments, End of Period $ 31,029 $ 2,063 ================== ================== The accompanying notes are an integral part of these condensed financial statements.
SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS June 29, 2002 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 Company as of June 29, 2002 and results of its operations and its cash flows for the three month periods ended June 29, 2002 and June 30, 2001. All significant intercompany transactions and accounts have been eliminated in consolidation. The March 31, 2002 balance sheet was derived from audited financial statements. The results of operations for the three month periods ended June 29, 2002 and June 30, 2001 are not necessarily indicative of the results to be expected for the full year. The accounting policies followed by the Company are set forth in Note 1 to the Company's financial statements in the 2002 Seneca Foods Corporation Annual Report and 10-K. Other footnote disclosures normally included in annual 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 Company's 2002 Annual Report and 10-K. 2. Off-Season Reserve is the excess of absorbed expenses over incurred expenses to date. During the first quarter of each year, incurred expenses exceed absorbed expenses due to timing of production. The seasonal nature of the Company'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. 3. Comprehensive income consisted solely of Net Earnings and Net Unrealized Gain Change on Moog, Inc. Stock. The following table provides the results for the periods presented: Three Months Ended ------------------ 6/29/02 6/30/01 ------- ------- Net Earnings (Loss) $1,932 $(1,286) Other Comprehensive Earnings, Net of Tax: Net Unrealized Gain Change on Moog, Inc. Stock 349 30 ------------------- Comprehensive Earnings (Loss) $2,281 $(1,256) =================== MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION RESULTS OF OPERATIONS June 29, 2002 Results of Operations: Sales: Total Sales reflect a decrease of 7.1% for the first three months versus 2001. The Company's Alliance business sales dollars decreased by 19.1%. This decrease was primarily a result of planned reduction in asparagus volume. Non-Alliance sales dollars decreased by 1.3%. Costs and Expenses: The following table shows costs and expenses as a percentage of sales: Three Months Ended ------------------ 6/29/02 6/30/01 ------- ------- Cost of Product Sold 90.4% 94.0% Selling 3.2 3.1 Administrative 0.7 0.7 Interest Expense 3.0 3.7 ---------------------- 97.3% 101.5% ====================== Higher selling prices as compared to the prior year, especially in the Private Label Retail Canned, Frozen and Branded businesses, were a major contributing factor in improved operating results. In addition, interest expense decreased $1,253,000 as a result of lower interest rates and lower average debt balances. Income Taxes: The effective tax rate was 41% in 2002 and 36% in 2001. Financial Condition: The financial condition of the Company is summarized in the following table and explanatory review (In Thousands):
For the Quarter For the Year Ended June Ended March ---------- ----------- 2002 2001 2002 2001 ---- ---- ---- ---- Working Capital Balance $170,961 $164,944 $163,606 $163,367 Quarter Change 7,355 1,577 - - Notes Payable - 38,045 - 24,500 Long-Term Debt 155,659 174,495 156,100 171,346 Current Ratio 2.95:1 2.38:1 3.00:1 2.49:1
The change in the Working Capital for the June 2002 quarter from the June 2001 quarter is largely due to higher earnings in the current year quarter than the prior year quarter ($1,932,000 earnings as compared to $1,286,000 loss last year) and lower capital expenditures, which were $0.7 million in 2002 as compared to $4.3 million in 2001. This was partially offset by new debt issued in 2001 of $4.0 million primarily to fund an expansion in Yakima, Washington. See Consolidated Condensed Statements of Cash Flows for further details. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS June 29, 2002 Quantitative and Qualitative Disclosures about Market Risk: The Company has not experienced any material changes in Market Risk since our March 31, 2002 report. Forward-Looking Statements Except for the historical information contained herein, the matters discussed in this report are forward-looking statements as defined in the Private Securities Litigation Reform Act (PSLRA) of 1995. The Company wishes to take advantage of the "safe harbor" provisions of the PSLRA by cautioning that numerous important factors which involve risks and uncertainties, including but not limited to economic, competitive, governmental and technological factors affecting the Company's operations, markets, products, services and prices, and other factors discussed in the Company's filings with the Securities and Exchange Commission, in the future, could affect the Company's actual results and could cause its actual consolidated results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, the Company. Critical Accounting Policies In the first quarter ended June 29, 2002, the Company sold for cash, on a bill and hold basis, $23,377,000 of Green Giant finished goods inventory to General Mills Operations, Inc. ("GMOI"). At the time of the sale of the Green Giant vegetables to the GMOI, the aforementioned finished goods inventory was complete, ready for shipment and segregated from the Company's other finished goods inventory. Further, the Company had performed all of its obligations with respect to the sale of the specified Green Giant finished goods inventory. Off-Season Reserve is the excess of absorbed expenses over incurred expenses to date. During the first quarter of each year, incurred expenses exceed absorbed expenses due to timing of production. The seasonal nature of the Company'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. Alliance Agreement Amendment On May 23, 2002, the Company, The Pillsbury Company, General Mills Operations, Inc. and General Mills, Inc. entered into an amendment to the Alliance Agreement pursuant to which certain provisions were modified to (i) assign Pillsbury's rights and obligations under the Alliance Agreement to General Mills Operations, Inc. ("GMOI"), which is an indirect, wholly-owned subsidiary of General Mills, Inc.; (ii) accelerate the timing of the obligation of GMOI to purchase Green Giant inventory from the Company by requiring that such inventory be purchased at the end of each commodity production cycle (e.g. corn, peas, green beans, and asparagus); and (iii) substitute General Mills, Inc. for Diageo PLC as the guarantor of GMOI's obligations under the Alliance Agreement. Recently Issued Accounting Standard In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections." SFAS No. 145 rescinds several statements, including SFAS No. 4, "Reporting Gains and Losses from Extinguishment of Debt." The statement also makes several technical corrections to other existing authoritative pronouncements. SFAS No. 145 is effective in May 2002, except for the rescission of SFAS No. 4, which is effective in April 2003. The Company does not expect the adoption of SFAS No. 145 to have a significant impact on its consolidated financial statements. 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 None. Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K A. Exhibits 11 (11) Computation of earnings per share (filed herewith) Reports on Form 8-K - a report was filed in June 2002 related to an Amended Alliance Agreement. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Seneca Foods Corporation ------------------------ (Company) /s/Kraig H. Kayser ------------------------ August 12, 2002 Kraig H. Kayser President and Chief Executive Officer /s/Jeffrey L. Van Riper ------------------------ August 12, 2002 Jeffrey L. Van Riper Controller and Chief Accounting Officer EX-11 4 ex11602.txt EXHIBIT 11 SENECA FOODS CORPORATION AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (In thousands except share data)
Three Months Ended ------------------ 6/29/02 6/30/01 ------- ------- Basic Net Earnings (Loss) Applicable to Common Stock: Net Earnings (Loss) $ 1,932 $ (1,286) Deduct Preferred Cash Dividends 6 6 ---------------------------------- Net Earnings (Loss) Applicable to Common Stock $ 1,926 $ (1,292) ================================== Weighted Average Common Shares Outstanding for Primary Earnings per Share 6,588,637 6,582,359 ================================== Basic Earnings (Loss) Per Share $ .29 $ (.20) ================================== Diluted Net Earnings (Loss) Applicable to Common Stock: Net Earnings (Loss) Applicable to Common Stock $ 1,926 $ (1,292) Add Back Preferred Cash Dividends 5 - ---------------------------------- Net Earnings (Loss) Applicable to Common Stock $ 1,931 $ (1,292) ================================== Weighted Average Common Shares Outstanding 6,588,637 6,582,359 Effect of Convertible Preferred Stock 3,636,734 - ---------------------------------- Weighted Average Common Shares Outstanding for Diluted Earnings per Share 10,225,371 6,582,359 ================================== Diluted Earnings (Loss) Per Share $ .19 $ (.20) ==================================
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