-----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, WflGl+QH9fZBD6V1iNJR5/ZHm81h8nwzzvV6tOCrEaTfjrDlwWkEEjWYzr5Ogf3I 15qtu+K0uDTsylq1V0SEaQ== 0000088948-03-000009.txt : 20030626 0000088948-03-000009.hdr.sgml : 20030626 20030626180914 ACCESSION NUMBER: 0000088948-03-000009 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20030331 FILED AS OF DATE: 20030626 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-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-01989 FILM NUMBER: 03759351 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: 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-K 1 a10k03.txt 2003 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 For the fiscal year-ended March 31, 2003 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.) 3736 South Main Street, Marion, New York 14505 - ---------------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (315) 926-8100 Securities registered pursuant to Section 12(b) of the Act: Name of Each Exchange on Title of Each Class Which Registered None None Securities registered pursuant to Section 12(g) of the Act: Common Stock Class A, $.25 Par Common Stock Class B, $.25 Par (Title of Class) Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained herein, and will not be contained, to best of the Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to the Form 10-K. __X__ Check mark indicates whether Registrant has (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that registrant was required to file such reports), and (2) has been subject to the filing requirements for at least the past 90 days. Yes X No ----- ------ The aggregate market value of the Registrant's voting securities held by non-affiliates based on the closing sales price per market reports by the National Market System on May 30, 2003 was approximately $94,573,000. Common shares outstanding as of May 30, 2003 were Class A: 3,911,480, Class B: 2,764,005. Documents Incorporated by Reference: (1) Proxy Statement to be issued prior to June 30, 2003 in connection with the Registrant's annual meeting of stockholders (the "Proxy Statement") applicable to Part III, Items 10-13 of Form 10-K. (2) Portions of the Annual Report to shareholders for fiscal year ended March 31, 2003 (the "2003 Annual Report") applicable to Part II, Items 5-8 and Part IV, Item 14 of Form 10-K. TABLE OF CONTENTS FORM 10-K ANNUAL REPORT - FISCAL 2003 SENECA FOODS CORPORATION
PART I. Pages ----- Item 1. Business 1-4 Item 2. Properties 4 Item 3. Legal Proceedings 4 Item 4. Submission of Matters to a Vote of Security Holders 4 PART II. Item 5. Market for Registrant's Common Stock and Related Security Holder Matters 5 Item 6. Selected Financial Data 5 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 5 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 5 Item 8. Financial Statements and Supplementary Data 5 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 5 PART III. Item 10. Directors and Executive Officers of the Registrant 6 Item 11. Executive Compensation 6 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Security Holder Matters 6 Item 13. Certain Relationships and Related Transactions 6 Item 14. Controls and Procedures 6 PART IV. Item 16. Exhibits, Financial Statements Schedules and Reports on Form 8-K 8-12 SIGNATURES 13-14 CERTIFICATIONS 15-16
PART I Item 1 Business General Development of Business SENECA FOODS CORPORATION (the "Company") was organized in 1949 and incorporated under the laws of the State of New York. In the spring of 1995, the Company initiated a 20-year Alliance Agreement with the Pillsbury Company, which was acquired by General Mills Operations, Inc. ("GMOI"), that created the Company's most significant business relationship. Under the Alliance Agreement, the Company has packed canned and frozen vegetables carrying GMOI's Green Giant brand name. Since the onset of the Alliance Agreement, vegetable production has been the Company's dominant line of business. In fiscal 1999, the Company sold its fruit juice business and its applesauce and industrial flavors business. As a result of these fiscal 1999 divestitures, the Company's only non-vegetable food products are a line of fruit products. On May 27, 2003, the Company completed the acquisition of the membership interest in Chiquita Processed Foods, L.L.C. from Chiquita Brands International, Inc. The acquisition of this canned vegetable business is expected to increase the Company's annual sales by approximately $250 million. The Company's Internet address is WWW.SENECAFOODS.COM. The Company's annual report on Form 10-K, the Company's quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available on the Company's web site, as soon as reasonably practicable after they are electronically filed with or furnished to the SEC. All such filings on the Company's web site are available free of charge. Financial Information about Industry Segments The Company's business activities are conducted in food and non-food operations. The food operation constitutes 99% of total sales, of which approximately 97% is vegetable processing and 3% is fruit processing. The non-food operation is an air charter service, which represents 1% of the Company's total sales. Narrative Description of Business Principal Products and Markets Food Processing The principal products of this segment include canned vegetable, frozen vegetable and fruit products. The products are sold to retail and institutional markets. The Company has divided the United States into four major marketing sections: Eastern, Southern, Northwestern, and Southwestern. Food processing operations are primarily supported by plant locations in New York, Wisconsin, Washington, Idaho, and Minnesota. The following table summarizes net sales by major product category for the years ended March 31, 2003, 2002, and 2001:
Classes of similar products/services: 2003 2002 2001 - ------------------------------------------------------------------------------------------------------------ (In thousands) Net Sales: Green Giant vegetables $ 252,059 $ 258,412 $ 290,346 Canned vegetables 328,907 333,048 326,224 Frozen vegetables 30,422 25,165 22,052 Fruit and chip products 20,784 19,982 20,092 Flight operations 3,897 5,588 5,905 Other 8,310 8,880 9,681 - ------------------------------------------------------------------------------------------------------------ $ 644,379 $ 651,075 $ 674,300 ============================================================================================================
Other Seneca Flight Operations provides air charter service primarily to industries in upstate New York. Source and Availability of Raw Material Food Processing The Company's food processing plants are located in major vegetable and fruit producing states. Fruits and vegetables are primarily obtained through contracts with growers. The Company's sources of supply are considered equal or superior to its competition for all of its food products. Seasonal Business Food Processing While individual fruits and vegetables have seasonal cycles of peak production and sales, the different cycles are usually offsetting to some extent. The supply of commodities, current pricing, and expected new crop quantity and quality, affect the timing of the Company's sales and earnings. An Off Season Allowance is established during the year to minimize the effect of seasonal production on earnings. The Off Season Allowance is zero at fiscal year-end. Backlog Food Processing In the food processing business, the end of year sales order backlog is not considered meaningful. Traditionally, larger customers provide tentative bookings for their expected purchases for the upcoming season. These bookings are further developed as data on the expected size of the related national harvests becomes available. In general, these bookings serve as a yardstick, rather than as a firm commitment, since actual harvest results can vary notably from early estimates. In actual practice, the Company has substantially all of its expected seasonal production identified to potential sales outlets before the seasonal production is completed. Competition and Customers Food Processing Competition in the food business is substantial with imaginative brand registration, quality, service, and pricing being the major determinants in the Company's relative market position. During the past year approximately 10% of the Company's processed foods were packed for retail customers under the Company's branded labels of Libby's(R), Blue Boy(R), Aunt Nellie's Farm Kitchen(R), and Seneca(R). About 15% of the processed foods were packed for institutional food distributors and 35% of processed foods were retail packed under the private label of customers. The remaining 40% is sold under the Alliance Agreement with GMOI (see note 13 of Item 8, Financial Statements and Supplementary Data). Termination of the Alliance Agreement would substantially reduce the Company's sales and profitability unless the Company were to enter into a new substantial supply relationship with GMOI or another major vegetable marketer. The customers represent a full cross section of the retail, institutional, distributor, and industrial markets and the Company does not consider itself dependent on any single sales source other than sales attributable to the Alliance Agreement. The principal branded products are Libby's canned vegetable products, which rate among the top five national brands. The information under the heading Results of Operations in Management's Discussion and Analysis of Financial Condition and Results of Operations in the 2003 Annual Report is incorporated by reference. Environmental Protection Environmental protection is an area that has been worked on most diligently at each food processing facility. In all locations, the Company has cooperated with federal, state, and local environmental protection authorities in developing and maintaining suitable antipollution facilities. In general, pollution control facilities are equal to or somewhat superior to those of our competitors and are within environmental protection standards. The Company does not expect any material capital expenditures to comply with environmental regulations in the near future. The Company is a potentially responsible party with respect to two waste disposal sites owned and operated by others. The Company believes that any reasonably anticipated liabilities will not exceed $137,000 in the aggregate. Environmental Litigation The Company was a defendant in a suit entitled State of Wisconsin vs. Seneca Foods Corporation, et. al., commenced July 30, 2001, in the Rock County (Wisconsin) Circuit Court. In the suit, the Wisconsin Department of Justice sought civil penalties against the Company. The State alleged that the Company stored and/or disposed of two different types of materials at a Wisconsin facility in violation of applicable laws. The Company cooperated with Wisconsin authorities to remove the materials and complete remediation activities but contested the State's efforts to recover a monetary penalty. The first subject matter of the suit involved events, which occurred approximately 19 years ago, and there was no addition of materials in subsequent years. The second subject matter of the suit involved two events between 1995 and 1999. All material at issue in the action has been removed and properly disposed. During 2003, the Company reached a settlement amount with the State of $242,000 which satisfied both issues. Employment Food processing - Full time 1,854 - Seasonal 364 --------- 2,218 Other 81 --------- 2,299 The Company has four collective bargaining agreements with three union locals covering approximately 503 of its full time employees. The terms of these agreements result in wages and benefits, which are substantially the same for comparable positions for the Company's non-union employees. Three collective bargaining agreements expire in calendar 2005. The remaining agreement expires in calendar 2006. Foreign Operations Export sales for the Company are a relatively small portion (about 3%) of the food processing sales. Item 2 Properties The Company has seven food processing, packaging, and warehousing facilities located in New York State that provide approximately 1,448,000 square feet of food packaging, freezing and freezer storage, and warehouse storage space. These facilities process and package vegetable products. The Company is a lessee under a number of operating and capital leases for equipment and real property used for processing and warehousing. Six facilities in Minnesota, two facilities in Washington, one facility in Idaho, and five facilities in Wisconsin provide approximately 5,682,000 square feet of food packaging, freezing and freezer storage, and warehouse storage space. These facilities process and package various vegetable and fruit products. The facilities are owned by the Company. All of the properties are well maintained and equipped with modern machinery. All locations, although highly utilized, have the ability to expand as sales requirements justify. Because of the seasonal production cycles the exact extent of utilization is difficult to measure. In certain circumstances, the theoretical full efficiency levels are being reached; however, expansion of the number of production days or hours could increase the output by up to 20% for a season. The Company's air charter division has a 42,000 square foot facility, which is owned by the Company. Certain of the Company's facilities are mortgaged to financial institutions to secure long-term debt and capital lease obligations. See Notes 4 and 5 of Item 8, Financial Statements and Supplementary Data, for additional information about the Company's long-term debt and lease commitments. Item 3 Legal Proceedings In the ordinary course of its business, the Company is made a party to certain legal proceedings seeking monetary damages. The Company does not believe that an adverse decision in any of these proceedings would have a material adverse impact on its financial position, results of operations or cash flows. See Environmental Litigation in Item 1 for further legal discussion. Item 4 Submission of Matters to a Vote of Security Holders No matters were submitted to vote of shareholders during the last quarter of the fiscal period covered by this report. PART II Item 5 Market for Registrant's Common Stock and Related Security Holder Matters Each class of preferred stock receives preference as to dividend payment and declaration over any common stock. In addition, refer to the information in the 2003 Annual Report, "Shareholder Information and Quarterly Results", which is incorporated by reference. Item 6 Selected Financial Data Refer to the information in the 2003 Annual Report, "Five Year Selected Financial Data", which is incorporated by reference. Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations Refer to the information in the 2003 Annual Report, "Management's Discussion and Analysis of Financial Condition and Results of Operations", which is incorporated by reference. Item 7A Quantitative and Qualitative Disclosures about Market Risk Refer to the information in the 2003 Annual Report, "Quantitative and Qualitative Disclosures about Market Risk", which is incorporated by reference. Item 8 Financial Statements and Supplementary Data Refer to the information in the 2003 Annual Report, "Consolidated Financial Statements and Notes thereto including Independent Auditors' Report", which is incorporated by reference. Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable. PART III Item 10 Directors and Executive Officers of the Registrant Item 11 Executive Compensation Item 12 Security Ownership of Certain Beneficial Owners and Management Item 13 Certain Relationships and Related Transactions Information required by Items 10 through 13 will be filed separately with the Commission, pursuant to Regulation 14A, in a definitive proxy statement involving the election of directors, which is incorporated herein by reference. Item 14 Controls and Procedures (a) Evaluation of disclosure controls and procedures. The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its periodic filings with the SEC is (a) accumulated and communicated to the Company's management in a timely manner and (b) recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Based on an evaluation within 90 days prior to the filing date of this report of the Company's disclosure controls and procedures, the Company's chief executive officer and chief financial officer concluded that the design and operation of these controls and procedures are effective. (b) Changes in internal controls. The Company also maintains a system of internal accounting controls that are designed to provide reasonable assurance that its books and records accurately reflect its transactions and that its policies and procedures are followed. There have been no significant changes in the Company's internal controls, or in other factors that could significantly affect these controls, subsequent to the date of the most recent evaluation of these controls by these officers. INDEPENDENT AUDITORS' REPORT To the Board of Directors and Stockholders of Seneca Foods Corporation Marion, New York We have audited the consolidated financial statements of Seneca Foods Corporation and subsidiaries as of March 31, 2003 and 2002, and for each of the three years in the period ended March 31, 2003, and have issued our report thereon dated May 21, 2003; such consolidated financial statements and report are included in your 2003 Annual Report to Shareholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedule of Seneca Foods Corporation, listed in Item 16 (A)(2). This consolidated financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein. DELOITTE & TOUCHE LLP /s/DELOITTE & TOUCHE LLP Rochester, New York May 21, 2003 PART IV Item 16 Exhibits, Financial Statement Schedules, and Reports on Form 8-K A. Exhibits, Financial Statements, and Supplemental Schedules 1. Financial Statements - the following consolidated financial statements of the Registrant, included in the Annual Report for the year ended March 31, 2003, are incorporated by reference in Item 8: Consolidated Statements of Net Earnings - Years ended March 31, 2003, 2002 and 2001 Consolidated Balance Sheets - March 31, 2003 and 2002 Consolidated Statements of Cash Flows - Years ended March 31, 2003, 2002 and 2001 Consolidated Statements of Stockholders' Equity - Years ended March 31, 2003, 2002 and 2001 Notes to Consolidated Financial Statements - Years ended March 31, 2003, 2002 and 2001 Independent Auditors' Report Pages 2. Supplemental Schedule: Schedule II -- Valuation and Qualifying Accounts 9 Other schedules have not been filed because the conditions requiring the filing do not exist or the required information is included in the consolidated financial statements, including the notes thereto. 3. Exhibits: No. 3 - Articles of Incorporation and By-Laws - Incorporated by reference to the Company's Form 10-Q/A filed August, 1995; as amended by the amendments filed with the Company's Form 10-K filed June 1996, as amended by the Company's definitive proxy statement filed July, 1998; as amended by the Company's 8-K dated June 10, 2003. No. 4 - Articles defining the rights of security holders - Incorporated by reference to the Company's Form 10-Q/A filed August, 1995 as amended by amendments filed with the Company's Form 10-K filed June 1996. Instrument defining the rights of any holder of Long-Term Debt - Incorporated by reference to Exhibit 99 to the Company's Form 10-Q filed January 1995 as amended by Exhibit No. 4 of the Company's Form 10-K filed June, 1997, amended by Exhibit 4 of the Company's Form 10-Q and Form 10-Q/A filed November, 1997, as amended by amendments filed with the Company's definitive proxy statement filed July, 1998 as amended by the Company's 8-K dated June 10, 2003. The Company will furnish, upon request to the SEC, a copy of any instrument defining the rights of any holder of Long-Term Debt. No. 10 - Material Contracts - Incorporated by reference to the Company's Form 8-K dated February 24, 1995 for the First Amended and Restated Alliance Agreement and the First Amended and Restated Asset Purchase Agreement both with The Pillsbury Company amended by the Company's Form 8-K dated June 11, 2002. Filed herewith is an Indemnification Agreement dated January 31, 2002. Incorporated by reference to the Company's 8-K dated June 10, 2003 for the Purchase Agreement by and among Seneca Foods Corporation, Chiquita Brands International, Inc. and Friday Holdings, L.C.C. dated as of March 6, 2003. No. 13 - The material contained in the 2003 Annual Report to Shareholders under the following headings: "Five Year Selected Financial Data", "Management's Discussion and Analysis of Financial Condition and Results of Operations", "Consolidated Financial Statements and Notes thereto including Independent Auditors' Report", "Quantitative and Qualitative Disclosures about Market Risk", and "Shareholder Information and Quarterly Results". No. 21 - List of Subsidiaries 10 No. 23 - Consents of Experts and Counsel 10 B. Reports on Form 8-K An 8-K filed March 7, 2003 related to the signing of a Definitive Agreement related to the Purchase of Assets. Schedule II VALUATION AND QUALIFYING ACCOUNTS (In thousands)
Balance at Charged/ Charged to Deductions Balance Beginning (Credited) other from at end of period to income accounts reserve of period ------------------------------------------------------------------- Year-ended March 31, 2003: Allowance for doubtful accounts $ 605 $ 390 $ --- $234 $ 761 =================================================================== Year-ended March 31, 2002: Allowance for doubtful accounts $ 632 $ 190 $ -- $217 (a) $ 605 =================================================================== Year-ended March 31, 2001: Allowance for doubtful accounts $ 469 $ 188 $ -- $ 25(a) $ 632 =================================================================== (a) Accounts written off, net of recoveries.
SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) 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 By/s/Jeffrey L. Van Riper May 29, 2003 ----------------------- Jeffrey L. Van Riper Controller and Secretary (Principal Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated: Signature Title Date /s/Arthur S. Wolcott Chairman and Director May 29 , 2003 - -------------------- Arthur S. Wolcott /s/Kraig H. Kayser President, Chief Executive May 29, 2003 - ------------------ Kraig H. Kayser Officer, and Director /s/Philip G. Paras Chief Financial Officer May 29, 2003 - ------------------ Philip G. Paras /s/Jeffrey L. Van Riper Controller and Secretary May 29, 2003 - ----------------------- Jeffrey L. Van Riper (Principal Accounting Officer) /s/Arthur H. Baer Director May 29, 2003 - ----------------- Arthur H. Baer /s/Andrew M. Boas Director May 29, 2003 - ----------------- Andrew M. Boas /s/Robert T. Brady Director May 29, 2003 - ------------------ Robert T. Brady Continued Signature Title Date /s/Douglas F. Brush Director May 29, 2003 - ------------------- Douglas F. Brush /s/Edward O. Gaylord Director May 29, 2003 - -------------------- Edward O. Gaylord /s/G. Brymer Humphreys Director May 29, 2003 - ---------------------- G. Brymer Humphreys /s/Susan W. Stuart Director May 29, 2003 - ------------------ Susan W. Stuart CERTIFICATIONS I, Kraig H. Kayser, certify that: 1. I have reviewed the annual report on Form 10-K of Seneca Foods Corporation; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Dated: May 29, 2003 By: /s/Kraig H. Kayser - ------------------------------------- Kraig H. Kayser President and Chief Executive Officer I, Philip G. Paras, certify that: 1. I have reviewed this annual report on Form 10-K of Seneca Foods Corporation; 2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report; 3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Dated: May 29, 2003 By: /s/Philip G. Paras - ---------------------------------------- Philip G. Paras, Chief Financial Officer EX-13 2 e13-10k03.txt 2003 ANNUAL REPORT Five Year Selected Financial Data Summary of Operations and Financial Condition (In thousands of dollars, except per share data)
Years ended March 31, 2003 2002 2001 2000 1999 ------------------------------------------------------------------------------------------------------------------- Net sales $644,379 $ 651,075 $ 674,300 $ 621,078 $ 588,049 ------------------------------------------------------------------------------------------------------------------- Operating earnings (before Corporate interest and administrative expense) $ 32,283 $ 23,188 $ 23,879 $ 27,335 $ 27,138 Earnings (loss) from continuing operations before extraordinary item and cumulative effect of accounting change 9,050 1,140 813 4,320 1,420 Loss from discontinued operations - - - - (6,791) Gain on sale of discontinued operations - - - - 11,756 Earnings (loss) before extraordinary item and cumulative effect of accounting change 9,050 1,140 813 4,320 6,385 Extraordinary loss - - - - (1,222) Net earnings (loss) 9,050 1,140 813 4,320 5,163 ------------------------------------------------------------------------------------------------------------------- Basic earnings (loss) from continuing operations per common share $ 1.37 $ .17 $ .12 $ .66 $ .23 Basic earnings (loss) per common share before extraordinary item and cumulative effect of accounting change 1.37 $ .17 $ .12 $ .66 $ 1.05 Basic earnings (loss) per common share 1.37 $ .17 $ .12 $ .66 $ .85 ------------------------------------------------------------------------------------------------------------------- Working capital $ 172,382 $ 163,606 $ 163,367 $ 168,972 $ 167,435 Inventories 141,649 181,835 229,170 203,173 152,634 Net property, plant, and equipment 132,969 155,189 167,450 179,146 178,658 Total assets 379,540 403,576 444,233 438,540 404,870 Long-term debt and capital lease obligations 133,337 156,100 171,346 189,968 187,904 Stockholders' equity 159,364 151,123 149,759 148,999 144,588 ------------------------------------------------------------------------------------------------------------------- Additions to property, plant, and equipment $ 6,832 $ 13,423 $ 15,395 $ 19,875 $ 9,494 Interest expense, net 13,757 17,441 18,662 16,147 21,594 ------------------------------------------------------------------------------------------------------------------- Net earnings/average equity 6.0% 0.9% 0.7% 3.6% 4.4% Continuing earnings before taxes/sales 2.3% 0.3% 0.2% 1.1% 0.3% Net earnings/sales 1.4% 0.2% 0.1% 0.7% 0.9% Long-term debt/equity 84% 103% 114% 127% 130% Current ratio 3.4:1 3.0:1 2.5:1 3.1:1 4.0:1 ------------------------------------------------------------------------------------------------------------------- Stockholders' equity per common share $ 17.64 $ 16.46 $ 16.26 $ 16.16 $ 15.65 Class A National Market System closing price range 18 3/4-10 3/4 4 3/4 -11 1/2 15 1/4 -11 15 1/2 -10 1/4 17 1/8 -10 Class B National Market System closing price range 18 3/8-12 3/4 14 7/9 -12 14 7/8 -10 3/4 14 3/4 -10 16 3/4-10 3/8 Common cash dividends declared per share - - - - - Price earnings ratio 13.6 84.3 110.2 17.1 13.1 -------------------------------------------------------------------------------------------------------------------
Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources Because the Company is primarily engaged in vegetable processing, the Company's yearly business cycle shows large inventory growth during the summer and fall harvest period. The inventory peaks in the early fall and drops to its minimum level immediately prior to the next pack season (pack refers to canning and freezing of vegetables and certain fruits with each commodity at a certain time during the year which can vary based on weather conditions among other factors). These peaks are financed through seasonal borrowings whose high and low points essentially correspond with the changes in inventory, or by a reduction in short-term investments. Accordingly, inventory management is key to liquidity. As of March 31, 2003, the Company maintained a committed revolving line of credit of $20 million and uncommitted lines of credit totaling $76 million. The Company had no short-term bank borrowings throughout fiscal 2003 and no short-term bank borrowings as of the end of 2002. As a result of a subsequent event (see Subsequent Event, note 10) where the Company acquired Chiquita Processed Foods, LLC, the Company entered into a $200 million revolving credit facility which, the Company believes will be sufficient, with its other resources, for its anticipated working capital requirements in 2004. The Company has three major long-term debt instruments: 1) a $24.0 million note payable to The Prudential Insurance Company of America, with an interest rate of 10.78%, which is due through 2005; 2) a $53.8 million secured nonrecourse note payable to General Mills Operations, Inc., with an interest rate of 8%, which is due through 2009; and 3) a $32.5 million note payable to John Hancock Life Insurance Company, with an interest rate of 10.81%, which is due through 2009. The Company did not issue any significant new long-term debt in 2003. The Company issued long-term debt totaling $8.1 million during 2002. The largest instrument was a $3.2 million Industrial Development Bond issued to finance the expansion of the Yakima, Washington plant. Also, a $1.5 million mortgage was issued to finance the purchase of a warehouse in Mayville, Wisconsin. The increase in cash and short-term investments of $53.6 million over the three year period ended in 2003 was primarily due to the reduction in inventory of $61.5 million; the proceeds of new long-term debt totaling $8.3 million; proceeds of the sale of assets totaling $3.4 million; and net earnings (before depreciation effect, which is non-cash). This was partially offset by: long-term debt repayments totaling $50.2 million; and capital additions of $6.8 million, $13.4 million, and $15.4 million, in 2003, 2002, and 2001, respectively. In 2003, accounts receivable decreased by $200 thousand. In 2002, accounts receivable increased by $500 thousand to $32.0 million. In 2001, accounts receivable decreased by $200 thousand to $31.5 million. In 2003, inventories decreased by $40.2 million, primarily reflecting the Company's continued emphasis on inventory management and a reduced pack. In 2002, inventories decreased by $47.3 million, primarily reflecting a strategic decision by the Company to reduce its canned vegetable production during the 2001 harvest season following the inventory buildup in the prior year. In 2001, inventories increased by $26.0 million mainly due to a temporary disruption in retail canned vegetable sales patterns resulting from the Year 2000 stock-up phenomenon in the prior year. In 2003, capital expenditures were $6.8 million versus $13.4 million in 2002 and $15.4 million in 2001. The 2003 capital expenditures were devoted to a wide range of projects with no single project exceeding $1 million. The largest project in 2002 was the expansion of production capacity in the Snack Chip plant in Yakima, Washington of $4.2 million (of which $300 thousand was spent in 2001), while the largest project in 2001 was an automatic corn cutter project in Minnesota, which totaled $3.3 million and was financed with the Industrial Revenue Development Bond discussed above. 2004 capital expenditures are expected to be $10 million, excluding the effect of the acquisition. 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. - - Results of Operations The Company has an Alliance Agreement with GMOI, whereby the Company processes canned and frozen vegetables for GMOI under the Green Giant brand name. GMOI continues to be responsible for all of the sales, marketing and customer service functions for the Green Giant products. The Alliance Agreement has a remaining term of twelve years. Net sales for 2003 were $644.4 million, which includes $252.1 million sold under the Alliance with GMOI. Net sales for 2002 were $651.1 million, which includes $258.4 million sold under the Alliance with GMOI. Net sales for 2001 were $674.3 million, which includes $290.3 million sold under the Alliance with GMOI. In 2003, Non-Alliance sales decreased slightly from $392.7 million to $392.3 million. In 2002, Non-Alliance sales increased from $384.0 million to $392.7 million primarily reflecting growth in private label and international canned retail vegetable volume together with an improved retail canned vegetable selling price environment. These increases were partially offset by lower volume in food service canned vegetables. In 2001, Non-Alliance sales increased from $357.8 million to $384.0 million reflecting a full year of sales from the Agrilink acquisition partly offset by lower selling prices. In 2003, earnings increased primarily due to the following reasons: 1) higher selling prices on vegetables, especially on branded and private label canned retail and frozen vegetables, than the previous year and; 2) a $3.7 million decrease in interest expense as a result of lower interest rates and lower average debt balances. These gains were partially offset by a $4.7 million non-cash impairment charge attributable to idle fixed assets. In 2002, earnings increased primarily due to the following reasons: 1) a $1.2 million decrease in interest expense as a result of lower interest rates and lower average debt balances; and 2) higher selling prices on vegetables, especially on branded and private label canned retail vegetables, than the previous year. In 2001, earnings decreased primarily due to the following reasons: 1) a $2.5 million increase in interest expense as a result of the higher short-term borrowings in support of an increase in average inventories; 2) lower selling prices on vegetables, especially on private label canned retail vegetables than the previous year; and 3) an increase in natural gas and fuel costs of $6.0 million (approximately $3.0 million effect on 2001 results). A deferred tax valuation allowance as of March 31, 2003, was not deemed necessary due to the fact that there was positive evidence that outweighed the negative evidence that it was more likely than not that these tax assets will be realized. In general, inflation played a relatively small role in the operating results and cash flows of 2003, 2002, and 2001. Critical Accounting Policy During the year ended 2003, the Company sold for cash, on a bill and hold basis, $214.2 million of Green Giant finished goods inventory to GMOI. At the time of the sale of the Green Giant vegetables to GMOI, title of the specified inventory transferred to GMOI. In addition, 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. Trade promotions are an important component of the sales and marketing of the Company's branded products, and are critical to the support of the business. Trade promotion costs include amounts paid to encourage retailers to offer temporary price reductions for the sale of our products to consumers, amounts paid to obtain favorable display positions in retailers' stores, and amounts paid to retailers for shelf space in retail stores. Accruals for trade promotions are recorded primarily at the time of the sale of the product to the retailer based on expected levels of performance. Settlement of these liabilities typically occurs in subsequent periods primarily through an authorized process for deductions taken by a retailer from amounts otherwise due to us. As a result, the ultimate cost of a trade promotion program is dependent on the relative success of the events and the actions and level of deductions taken by retailers for amounts they consider due to them. Final determination of the permissible deductions may take extended periods of time. Future Commitments As of March 31, 2003, the Company is obligated to make cash payments in connection with our capital leases, debt, and operating leases. The effect of these obligations and commitments on our liquidity and cash flows in future periods are listed below. All of these arrangements require cash payments over varying periods of time. Certain of these arrangements are cancelable on short notice and others require termination or severance payments as part of any early termination.
Contractual Obligations March 31, 2003 2007 2004 2005 2006 and beyond ---- ---- ---- ---------- Capital lease obligations $ 718 $ 720 $ 715 $ 6,482 Long-term debt 22,547 22,666 10,667 93,774 Operating lease obligations 9,112 7,587 6,697 15,869 Total $32,377 $30,973 $18,079 $116,125
We have no material off-balance sheet debt or other unrecorded obligations other than the items noted in the above table. Recently Issued Accounting Standards In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit and Disposal Activities. This statement supercedes the accounting for exit and disposal activities under EITF Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits and other Costs to Exit an Activity. Commitment to a plan to exit an activity or dispose of long-lived assets will no longer be sufficient to record a one-time charge for most anticipated costs. Instead, companies will record exit or disposal costs when they are "incurred" and can be measured at fair value, and they will subsequently adjust the recorded liability for changes in estimated cash flows. The provisions of SFAS No. 146 are effective prospectively for exit or disposal activities initiated after December 31, 2002. Companies may not restate previously issued financial statements for the effect of the provisions of SFAS No. 146 and liabilities that a company previously recorded under EITF Issue 94-3 are grandfathered. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk As a result of its regular borrowing activities, the Company's operating results are exposed to fluctuations in interest rates, which it manages primarily through its regular financing activities. The Company uses bank lines of credit with variable interest rates to finance seasonal working capital requirements. The Company maintains investments in cash equivalents ($60.9 million as of March 31, 2003) and does have investments in a modest amount of marketable securities. Long-term debt represents secured and unsecured notes and debentures, certain notes payable to insurance companies used to finance long-term investments such as business acquisitions, and capital lease obligations. Long-term debt bears interest at fixed and variable rates. The following table provides information about the Company's financial instruments that are sensitive to changes in interest rates. The table presents principal cash flows and sinking fund requirements and related weighted-average interest rates by expected maturity date. Weighted-average interest rates on variable-rate debt are based on current rates as of March 31, 2003. Interest Rate Sensitivity of Long-Term Debt, Short-Term Debt and Short-Term Investments March 31, 2003 (In Thousands)
EXPECTED MATURITY DATE Total / Estimated Weighted Fair 2004 2005 2006 2007 2008 Thereafter Average Value - -------------------------- ------------- ------------- ------------ ------------ ------------ ------------ -------------- ---------- - -------------------------- ------------- ------------- ------------ ------------ ------------ ------------ -------------- ---------- Fixed-rate L/T debt: Principal cash flows $22,987 $23,126 $11,142 $10,558 $10,114 $55,768 $133,694 $126,043 Average interest rate 8.69% 8.45% 8.27% 8.22% 8.12% 7.48% 8.25% -- Variable-rate L/T debt: Principal cash flows $ -- $ -- $ -- $ -- $ -- $22,630 $ 22,630 $ 22,630 Average interest rate 3.59% 3.59% 3.59% 3.59% 3.59% 3.59% 3.59% -- Short-Term investments: Average Balance $ 51,029 $ 51,029 Average interest rate 1.56% -- - -------------------------- ------------- ------------- ------------ ------------ ------------ ------------ -------------- ----------
Consolidated Statements of Net Earnings Seneca Foods Corporation and Subsidiaries (In thousands of dollars, except share amounts)
Years ended March 31, 2003 2002 2001 - -------------------------------------------------------------------------------------------------------------------------- Net sales $644,379 $651,075 $ 674,300 - ------------------------------------------------------------------------------------------------------------------------- Costs and expenses: Cost of product sold 590,079 609,574 630,138 Selling, general, and administrative expense 21,265 21,095 23,367 Other expense, net 4,719 1,011 971 Interest expense, net of interest income of $834, $301 and $629, respectively 13,757 17,441 18,662 ------------------------------------------------- 629,820 649,121 673,138 - ------------------------------------------------------------------------------------------------------------------------- Earnings before income taxes 14,559 1,954 1,162 Income taxes 5,509 814 349 ------------------------------------------------- Net earnings $ 9,050 $ 1,140 $ 813 ========================================================================================================================== Basic earnings per common share $ 1.37 $ .17 $ .12 ========================================================================================================================== Diluted earnings per common share $ .88 $ .11 $ .08 ========================================================================================================================== See notes to consolidated financial statements.
Consolidated Balance Sheets Seneca Foods Corporation and Subsidiaries (In thousands)
March 31, 2003 2002 - ------------------------------------------------------------------------------------------------------------------------------------ Assets Current Assets: Cash and short-term investments $ 64,984 $ 24,973 Accounts receivable, less allowance for doubtful accounts of $761 and $605, respectively 31,799 32,035 Inventories: Finished products 88,769 135,727 In process 13,911 8,526 Raw materials and supplies 38,969 37,582 Deferred income tax asset 3,300 4,624 Refundable income taxes 715 1,657 Prepaid expenses 1,254 362 ------------------------------------- Total Current Assets 243,701 245,486 - ------------------------------------------------------------------------------------------------------------------------------------ Other Assets 2,870 2,901 - ------------------------------------------------------------------------------------------------------------------------------------ Property, Plant, and Equipment: Land 7,850 7,855 Building 96,730 98,850 Equipment 254,536 263,587 ------------------------------------- 359,116 370,292 Less accumulated depreciation and amortization 226,147 215,103 ------------------------------------- Net Property, Plant, and Equipment 132,969 155,189 - ------------------------------------------------------------------------------------------------------------------------------------ Total Assets $379,540 $403,576 ==================================================================================================================================== Liabilities and Stockholders' Equity Current Liabilities: Accounts payable $22,730 $33,979 Accrued expenses 25,602 25,078 Current portion of long-term debt and capital lease obligations 22,987 22,823 - ------------------------------------------------------------------------------------------------------------------------------------ Total Current Liabilities 71,319 81,880 Long-Term Debt 127,107 149,430 Capital Lease Obligations 6,230 6,670 Deferred Gain and Other Liabilities 6,497 7,165 Deferred Income Taxes 9,023 7,308 ------------------------------------- Total Liabilities 220,176 252,453 - ------------------------------------------------------------------------------------------------------------------------------------ Commitments (Note 5) - - Stockholders' Equity: Preferred stock 41,656 42,675 Common stock 2,849 2,827 ------------------------------------- Total Capital Stock 44,505 45,502 Additional paid-in capital 14,616 13,619 Accumulated other comprehensive income 422 1,208 Retained earnings 99,821 90,794 ------------------------------------- Total Stockholders' Equity 159,364 151,123 - ------------------------------------------------------------------------------------------------------------------------------------ Total Liabilities and Stockholders' Equity $379,540 $403,576 ==================================================================================================================================== See notes to consolidated financial statements.
Consolidated Statements of Cash Flows Seneca Foods Corporation and Subsidiaries (In thousands)
Years ended March 31, 2003 2002 2001 - ------------------------------------------------------------------------------------------------------------------------------- Cash flows from operating activities: Net earnings $ 9,050 $ 1,140 $ 813 Adjustments to reconcile net earnings to net cash provided by (used in) operations: Depreciation and amortization 22,597 24,546 23,733 Deferred income taxes 3,520 969 (2,071) Gain on the sale of assets - - (1,370) Impairment provision and other expenses 4,719 1,011 2,341 Changes in operating assets and liabilities: Accounts receivable 236 (525) 192 Inventories 40,186 47,335 (25,997) Prepaid expenses (892) 946 (780) Accounts payable, accrued expenses, and other liabilities (11,588) (6,630) (11,243) Income taxes 942 (2,000) (302) ------------------------------------------------- Net cash provided by (used in) operations 68,770 66,792 (14,684) - -------------------------------------------------------------------------------------------------------------------------------- Cash flows from investing activities: Additions to property, plant, and equipment (6,832) (13,423) (15,395) Proceeds from the sale of assets 677 - 2,683 Escrow fund - 1,316 4,011 Disposals of property, plant, and equipment - 448 1,147 ------------------------------------------------- Net cash used in investing activities (6,155) (11,659) (7,554) - -------------------------------------------------------------------------------------------------------------------------------- Cash flows from financing activities: Payments of long-term debt and capital lease obligations (22,834) (19,124) (8,214) Proceeds from issuance of long-term debt 235 8,079 - Dividends paid (23) (23) (23) Other assets 18 17 18 Net (payments) borrowings on notes payable - (24,500) 24,500 ------------------------------------------------- Net cash (used in) provided by financing activities (22,604) (35,551) 16,281 - -------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in cash and short-term investments 40,011 19,582 (5,957) Cash and short-term investments, beginning of year 24,973 5,391 11,348 ------------------------------------------------- Cash and short-term investments, end of year $64,984 $ 24,973 $5,391 ================================================================================================================================ Supplemental disclosures of cash flow information: Cash paid during the year for: Interest $15,122 $ 17,973 $ 17,235 Income taxes 2,025 1,844 1,994 Supplemental information of noncash investing and financing activities: None =============================================================================================================================== See notes to consolidated financial statements.
Consolidated Statements of Stockholders' Equity Seneca Foods Corporation and Subsidiaries (In thousands, except share amounts)
Preferred Stock ------------------------------------------------- 6% 10% Cumulative Par Cumulative Par Participating Value $.25 Value $.025 Convertible Par Class A Class B Callable at Par Convertible Value Common Stock Common Stock Voting Voting $.025 Par Value $.25 Par Value $.25 - --------------------------------------------------------------------------------------------------------- Shares authorized 200,000 1,400,000 4,166,667 20,000,000 10,000,000 - --------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------- Shares issued and outstanding: ========================================================================================================= March 31, 2001 200,000 807,240 3,576,433 3,814,095 2,767,357 ========================================================================================================= March 31, 2002 200,000 807,240 3,570,861 3,823,115 2,764,005 ========================================================================================================= March 31, 2003 200,000 807,240 3,485,506 3,908,470 2,764,005 - ---------------------------------------------------------------------------------------------------------- Balance March 31, 2000 $50 $20 $42,870 $950 $1,872 Net earnings -- -- -- -- -- Cash dividends paid on preferred stock -- -- -- -- -- Preferred Stock Conversion -- -- (199) 3 -- Net unrealized gain on investments -- -- -- -- -- - --------------------------------------------------------------------------------------------------------- Balance March 31, 2001 50 20 42,671 953 1,872 Net earnings Cash dividends paid on preferred stock -- -- -- -- -- Preferred stock conversion -- -- (66) 2 -- Common stock conversion -- -- -- 1 (1) Net unrealized loss on investments -- -- -- -- -- - --------------------------------------------------------------------------------------------------------- Balance March 31, 2002 50 20 42,605 956 1,871 Net earnings -- -- -- -- -- Cash dividends paid on preferred stock -- -- -- -- -- Preferred Stock Conversion -- -- (1,019) 22 -- Minimum Pension Liability -- -- -- -- -- Net unrealized gain on investments -- -- -- -- -- - -------------------------------------------------------------------------------------------------------- Balance March 31, 2003 $50 $20 $41,586 $978 $1,871 ========================================================================================================= Accumulated Additional Other Paid-In Comprehensive Retained Comprehensive Capital Income Earnings Income - ------------------------------------------------------------------------------------- Balance March 31, 2000 $13,359 $991 $ 88,887 Net earnings -- -- 813 $ 813 Cash dividends paid on preferred stock -- -- (23) -- Preferred Stock Conversion 196 -- -- -- Net unrealized gain on investments -- (30) -- (30) - -------------------------------------------------------------------------------------- Balance March 31, 2001 13,555 961 89,677 $ 783 ======== Net earnings 1,140 1,140 Cash dividends paid on preferred stock -- -- (23) -- Preferred stock conversion 64 -- -- -- Common stock conversion -- -- -- -- Net unrealized loss on investments -- 247 -- 247 - -------------------------------------------------------------------------------------- Balance March 31, 2002 13,619 1,208 90,794 $ 1,387 ======== Net earnings -- -- 9,050 9,050 Cash dividends paid on preferred stock -- -- (23) -- Preferred Stock Conversion 997 -- -- -- Minimum Pension Liability -- (778) -- (778) Net unrealized gain on investments -- (8) -- (8) - -------------------------------------------------------------------------------------- Balance March 31, 2003 $14,616 $422 $99,821 $8,264 ====================================================================================== See notes to consolidated financial statements.
Notes to Consolidated Financial Statements Seneca Foods Corporation and Subsidiaries 1. Summary of Significant Accounting Policies Nature of Operations -The Company conducts its business almost entirely in food processing, operating 20 plants and warehouses in five states. The Company markets branded and private label processed foods to retailers and institutional food distributors. Principles of Consolidation - The consolidated financial statements include the accounts for the parent Company and all of its wholly-owned subsidiaries after elimination of intercompany transactions, profits, and balances. Revenue Recognition - Sales and related cost of product sold are recognized primarily upon shipment of products. When customers, under the terms of specific orders, request that the Company invoice goods and hold the goods for future shipment, the Company recognizes revenue when legal title to the finished goods inventory passes to the purchaser. Generally, the Company receives cash from the purchaser when legal title passes. Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist of trade receivables and interest-bearing investments. Wholesale and retail food distributors comprise a significant portion of the trade receivables; collateral is generally not required. The risk associated with the concentration is limited due to the large number of wholesalers and retailers and their geographic dispersion. The Company places substantially all its interest-bearing investments with financial institutions and monitors credit exposure. Cash and short-term investments in certain accounts exceed the federal insured limit, however, the Company has not experienced any losses in such accounts. Cash and Short-Term Investments - The Company considers all highly liquid instruments purchased with a maturity of three months or less as short-term investments. Inventories - Inventories are stated at lower of cost; first-in, first-out (FIFO) method; or market. Income Taxes - The provision for income taxes includes federal, foreign, and state income taxes currently payable and those deferred because of temporary differences between the financial statement and tax bases of assets and liabilities. Notes to Consolidated Financial Statements (continued) Earnings per Common Share A reconciliation of basic earnings per share with diluted earnings per share as follows:
Years ended March 31, 2003 2002 2001 - --------------------------------------------------------------------------------------------- (In thousands, except share amounts) Basic Net earnings $ 9,050 $ 1,140 $ 813 Deduct preferred stock dividends paid 23 23 23 --------------------------------------- Basic earnings $ 9,027 $ 1,117 $ 790 ============================================================================================= Weighted average common shares outstanding 6,597 6,585 6,577 ============================================================================================= Basic earnings per share $ 1.37 $ .17 $ .12 ============================================================================================= Diluted Basic earnings $ 9,027 $ 1,117 $ 790 Add dividends on convertible preferred stock 20 20 20 --------------------------------------- Earnings applicable to common stock on a diluted basis $ 9,047 $ 1,137 $ 810 ============================================================================================= Shares used in calculating basic earnings per share above 6,597 6,585 6,577 Additional shares to be issued under full conversion of preferred stock 3,628 3,640 3,648 --------------------------------------- Total shares for diluted 10,225 10,225 10,225 ============================================================================================= Diluted earnings per share $ .88 $ .11 $ .08 =============================================================================================
Depreciation Property, plant, and equipment are stated at cost or, in the case of capital leases, the present value of future lease payments. For financial reporting, the Company provides for depreciation and capital lease amortization on the straight-line method at rates based upon the estimated useful lives of the various assets. The estimated useful lives are as follows: buildings - 30 years; machinery and equipment - 10-15 years; vehicles - 3-7 years; and land improvements - 10-20 years. Impairment losses are recognized when the carrying value of an asset exceeds its fair value. The Company regularly assesses all of its long-lived assets for impairment. Impairment losses of $4,719,000, $690,000, and $898,000 were recognized in 2003, 2002, and 2001, respectively, and were included in Other Expense, net (see Other Income and Expense, note 11). Use of Estimates in the Preparation of Financial Statements - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the related revenues and expenses during the reporting period. Actual amounts could differ from those estimated. Recently Issued Accounting Standards - In July 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated with Exit and Disposal Activities. This statement supercedes the accounting for exit and disposal activities under EITF Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits and other Costs to Exit an Activity. Commitment to a plan to exit an activity or dispose of long-lived assets will no longer be sufficient to record a one-time charge for most anticipated costs. Instead, companies will record exit or disposal costs when they are "incurred" and can be measured at fair value, and they will subsequently adjust the recorded liability for changes in estimated cash flows. The provisions of SFAS No. 146 are effective prospectively for exit or disposal activities initiated after December 31, 2002. Companies may not restate previously issued financial statements for the effect of the provisions of SFAS No. 146 and liabilities that a company previously recorded under EITF Issue 94-3 are grandfathered. Notes to Consolidated Financial Statements (continued) 2. Common Stock of Moog Inc. Other assets include the Company's investment in the Class B Common Stock of Moog Inc. totaling $2,683,000, and $2,696,000 as of March 31, 2003 and 2002, respectively, which is classified as an available-for-sale security and is carried at fair value. There were no realized gains or losses in 2003, 2002, and 2001, and gross unrealized holding gains were $1,967,000, $1,980,000, and $1,548,000. Notes to Consolidated Financial Statements (continued) 3. Lines of Credit The Company obtains required short-term funds through bank borrowings. As of March 31, 2003, the Company had $7,808,000 outstanding for letters of credit, a committed revolving line of credit totaling $20,000,000, and uncommitted lines of credit totaling $76,000,000. The lines are renewable annually at various dates and provide for loans of varying maturities. There are no formal compensating balance arrangements with any of the banks. As of March 31, 2003 and 2002, there were no amounts borrowed under the line of credit. Notes to Consolidated Financial Statements (continued) 4. Long-Term Debt
2003 2002 - ---------------------------------------------------------------------------------------------------------------------------------- (In thousands) Secured nonrecourse subordinated promissory note, 8.00%, due through 2009 $ 53,833 $ 57,458 Unsecured note payable to insurance company, 10.81%, due through 2009 32,500 37,500 Unsecured note payable to insurance company, 10.78%, due through 2005 24,000 36,000 Secured Industrial Revenue Development Bonds, 3.59% and 4.57%, due through 2028 22,630 22,630 Unsecured subordinated promissory note, 8.00%, due through 2009 4,978 4,978 Secured Industrial Revenue Development Bond, 5.69%, due through 2009 4,319 4,845 Secured notes payable to utility company, 3.00%, due through 2007 2,546 2,971 Secured Industrial Revenue Development Bond, 5.61%, due through 2008 2,318 2,837 Other 2,530 2,609 -------------- ------------ 149,654 171,828 Less current portion 22,547 22,398 -------------- ------------ $ 127,107 $ 149,430 ============ ============
Long-term debt agreements contain various restrictive financial covenants, the most restrictive of which requires the Company to maintain specific quarterly levels of interest coverage. In addition, these agreements include a provision that the Company may pay dividends on any class of stock only from consolidated net earnings available for distribution. There were no earnings available for distribution as of March 31, 2003. The Company has four Industrial Revenue Bonds ("IRB's") totaling $22,630,000, which are secured by direct pay letters of credit. The interest rates in the table above reflect the direct pay letters of credit costs and amortization of other related costs for those IRB's. Other than the four IRB's above, the carrying value of assets pledged for secured debt is $40,524,000. Debt repayment requirements for the next five fiscal years are: (In thousands) 2004 22,547 2005 22,666 2006 10,667 2007 10,063 2008 9,594 Notes to Consolidated Financial Statements (continued) 5. Leases The Company leases a portion of its equipment and buildings. Capitalized leases consist primarily of limited obligation special revenue bonds, which bear interest rates from 3.55% to 4.75%. Other leases include non-cancelable operating leases expiring at various dates through 2024. Leased assets under capital leases consist of the following:
2003 2002 -------------------------------------------------------------------------------- (In thousands) Land $ 67 $ 67 Buildings 1,033 1,033 Equipment 9,711 9,711 --------------------------------- 10,811 10,811 Less accumulated amortization 8,215 7,270 --------------------------------- $ 2,596 $ 3,541 ================================================================================
The following is a schedule by year of minimum payments due under leases as of March 31, 2002:
Operating Capital ---------------------------------------------------------------------------- (In thousands) Years ending March 31: 2004 $ 9,112 $ 718 2005 7,587 720 2006 6,697 715 2007 5,314 716 2008 4,181 741 2009-2024 6,374 5,025 ----------------------------- Total minimum payment required $39,265 $ 8,635 ============================================================= Less interest 1,965 -------------- Present value of minimum lease payments 6,670 Amount due within one year 440 -------------- Long-term capital lease obligations $ 6,230 ============================================================================
Rental expense in 2003, 2002, and 2001 was $13,077,000, $12,545,000, and $11,762,000 respectively. Notes to Consolidated Financial Statements (continued) 6. Income Taxes The Company files a consolidated income tax return. The provision for income taxes is as follows:
2003 2002 2001 ---------------------------------------- (In thousands) Current: Federal $ 1,529 $ 50 $ 1,286 State 460 93 151 ---------------------------------------- 1,989 143 1,437 ---------------------------------------- Deferred: Federal 3,150 600 (973) State 370 71 (115) ---------------------------------------- 3,520 671 (1,088) ---------------------------------------- Total income taxes $ 5,509 $ 814 $ 349 ========================================
As of March 31, 2003, the Company has Alternative Minimum Tax Credits in the amount of $3,403,000 to offset future years' regular tax expense. State net operating loss carry forwards of approximately $5,106,000, expiring March 31, 2004 through March 31, 2018, are available to offset future state tax expense. During fiscal year 2001, the Internal Revenue Service completed an audit of fiscal years 1997, 1998 and 1999. Audit adjustments related primarily to changes in the timing of deductions for income tax purposes. There was no negative effect on the Company's income statement for the year. A reconciliation of the expected U.S. statutory rate to the effective rate follows:
2002 2002 2001 ------------------------------------------------------------------------------- Computed (expected tax rate) 34.0% 34.0% 34.0% Tax-exempt income (1.5) (5.9) (8.8) Other permanent differences not deductible 0.4 2.1 (6.6) State income taxes (net of federal tax benefit) 3.8 6.4 6.4 Other 1.1 5.0 5.0 -------------------------------------------- Effective tax rate 37.8% 41.6% 30.0% =============================================================================
6. Income Taxes (continued) The following is a summary of the significant components of the Company's deferred tax assets and liabilities as of March 31, 2003 and 2002:
2003 2002 --------------------------------------------------------------------------------- (In thousands) Deferred tax liabilities: Basis and depreciation difference $ 15,872 $ 15,705 Other comprehensive income 290 772 ----------------------------------- 16,162 16,477 ----------------------------------- Deferred tax assets: Inventory valuation 58 625 Future tax credits 3,403 5,089 Net operating loss carryforwards 404 1,208 Employee benefits 1,845 1,772 Pension 1,857 1,629 Insurance 1,108 1,996 Deferred gain on sale/leaseback 569 1,054 Contributions 808 - Other 387 420 ----------------------------------- 10,439 13,793 ----------------------------------- Net deferred tax liability $ 5,723 $ 2,684 =================================================================================
Net current deferred tax assets of $3,300,000 and $4,624,000 as of March 31, 2003 and 2002, respectively, are recognized in the Consolidated Balance Sheets. Also recognized are net non-current deferred tax liabilities of $9,023,000 and $7,308,000 as of March 31, 2003 and 2002, respectively. Notes to Consolidated Financial Statements (continued) 7. Stockholders' Equity Preferred Stock - The Company has issued a class of preferred stock ("Participating Preferred Stock") which is convertible, and participating. These shares are convertible immediately on a share-for-share basis into shares of Class A Common Stock. There were no dividends on this class of stock. These shares have a liquidation value of $12 per share. The outstanding 10% cumulative, convertible, voting preferred stock consists of 407,240 Series A shares, convertible at the rate of one common share of Class A and Class B for every twenty preferred shares, and 400,000 Series B shares, which carry a one common share of Class A and Class B for thirty conversion rate. The Series A and B shares have a $.025 stated value and a $.025 par value. There are 2,633,333 shares authorized of Class A $.025 par value stock, which are unissued and undesignated. In addition, there are 30,000 shares of no par stock, which are also unissued and undesignated. 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 Company after payment of the Company's indebtedness and liquidation right to the holders of preferred shares. However, holders of Class B Common Stock retain a 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 Company are entitled to vote. Unissued shares of common stock reserved for conversion privileges were 33,695 of Class A and Class B as of March 31, 2003 and 2002. Additionally, there were 3,485,506 and 3,570,861 shares of Class A reserved for conversion of the Participating Preferred Stock as of March 31, 2003 and 2002, respectively. Notes to Consolidated Financial Statements (continued) 8. Retirement Plans The Company has a noncontributory defined benefit pension plan covering all employees who meet certain age entry requirements and work a stated minimum number of hours per year. Annual contributions are made to the Plan sufficient to satisfy legal funding requirements. The following tables provide a reconciliation of the changes in the plan's benefit obligation and fair value of plan assets over the two-year period ended March 31, 2003 and a statement of the funded status as of March 31 of both years: 2003 2002 ------------------------------ Change in Benefit Obligation (In thousands) Benefit obligation at beginning of year $ 34,368 $ 31,150 Service cost 2,571 2,150 Interest cost 2,334 2,232 Actuarial gain 3,570 669 Benefit payments and expenses (1,474) (1,833) - ------------------------------------------------------------------------------- Benefit obligation at end of year $ 41,369 $ 34,368 =============================================================================== Change in Plan Assets Fair value of plan assets at beginning of year $ 33,350 $ 29,153 Actual (loss) return on plan assets (4,992) 4,483 Employer contributions 1,897 1,547 Benefit payments and expenses (1,474) (1,833) - ------------------------------------------------------------------------------- Fair value of plan assets at end of year $ 28,781 $ 33,350 =============================================================================== Funded Status Funded status at end of year $(12,588) $ (1,018) Unrecognized transition asset (2,437) (2,714) Unrecognized prior service cost - 31 Unrecognized loss (gain) 10,137 (1,430) - ------------------------------------------------------------------------------- Accrued benefit cost $ (4,888) $ (5,131) =============================================================================== Accrued benefit liability (6,144) (5,131) Accumulated other comprehensive income 1,256 - - ------------------------------------------------------------------------------- Net amount recognized $ (4,888) $ (5,131) =============================================================================== The Plan holds the Company's common stock with a fair market value of $3,812,000. Notes to Consolidated Financial Statements (continued) 8. Retirement Plan (continued) The following table provides the components of net periodic benefit cost for the plan for fiscal years 2003, 2002, and 2001: 2003 2002 2001 - ------------------------------------------------------------------------------------------------------- (In thousands) Service cost $ 2,571 $ 2,150 $ 2,017 Interest cost 2,334 2,232 2,080 Expected return on plan assets (3,005) (2,639) (2,288) Amortization of transition assets (276) (276) (276) Amortization of prior service cost 31 94 94 - ------------------------------------------------------------------------------------------------------- Net periodic benefit cost $ 1,655 $ 1,561 $ 1,627 =======================================================================================================
The plan's accumulated benefit obligation was $34,925,000 at March 31, 2003, and $29,067,000 at March 31, 2002. The amount included within accumulated other comprehensive income arising from a change in the additional minimum pension liability was $1,255,401 at March 31, 2003 and none at March 31, 2002. The prior service costs are amortized on a straight-line basis over the average remaining service period of active participants. Gains and losses in excess of 10% of the greater of the benefit obligation and the market-related value of assets are amortized over the average remaining service period of active participants. The assumptions used to measure the Company's benefit obligation are shown in the following table: 2003 2002 - ----------------------------------------------------------------------------- Discount rate 6.25% 7.25% Expected return on plan assets 9.00% 9.00% Rate of compensation increase 4.00% 4.00% The Company has an Employees' Savings Plan (401(k)) covering all employees who meet certain age entry requirements and work a stated minimum number of hours per year. Participants may make contributions up to the legal limit. The Company's matching contributions are discretionary. Costs charged to operations for the Company's matching contributions amounted to $605,000, $846,000, and $875,000, in 2003, 2002, and 2001, respectively. 9. Fair Value of Financial Instruments The carrying amounts and the estimated fair values of the Company's financial instruments are summarized as follows:
2003 2002 ----------------------------------------------- Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value - ----------------------------------------------------------------------------------------------------------------------------------- (In thousands) Long-term debt, including current portion $149,654 $143,639 $171,828 $163,885 Notes payable - - Class B Common Stock of Moog Inc. 2,683 2,683 2,696 2,696 The estimated fair values were determined as follows: Long-term debt - The quoted market prices for similar debt or current rates offered to the Company for debt with the same maturities. Notes payable - The carrying amount approximates fair value due to the short-term maturity of the notes. Class B Common Stock of Moog Inc. - Based on quoted market prices.
Notes to Consolidated Financial Statements (continued) 10. Subsequent Event On May 27, 2003, the Company completed the acquisition of the membership interest in Chiquita Processed Foods, L.L.C. from Chiquita Brands International, Inc. The acquisition of this canned vegetable business is expected to increase the Company's annual sales by approximately $250 million. The purchase price totaled $126.1 million plus the assumption of liabilities. This acquisition was financed with cash, proceeds from a new $200 million revolving credit facility, and the issuance of $16.1 million of Participating Convertible Preferred Stock. In June 2003, the Company expects to refinance up to $42.5 million of outstanding debt under the revolving credit facility with new term debt from an insurance company. Notes to Consolidated Financial Statements (continued) 11. Other Income and Expense Other expense in 2003 consisted of an impairment loss of $4,719,000. Other expense in 2002 consisted of the following: 1) an impairment loss of $690,000; and 2) severance expense of $321,000. Other expense in 2001 consisted of the following: 1) a gain on the sale of the Othello, Washington facility of $1,151,000; 2) a loss of $1,443,000 which is related primarily to exiting a line of business; 3) an impairment loss of $898,000; and 4) a gain on the sale of the Buckley, Michigan facility of $219,000. 12. Sales Information The Company sold $252,059,000, $228,556,000 and $241,492,000 representing 39%, 35% and 36% of net sales, to one customer in 2003, 2002, and 2001 respectively. 13. Segment Information The Company manages its business on the basis of one reportable segment - the processing and sale of vegetables. The Company markets its product almost entirely in the United States. The Company has an Alliance Agreement with General Mills Operations, Inc. (GMOI) whereby the Company processes canned and frozen vegetables for GMOI under the Green Giant brand name. GMOI continues to be responsible for all of the sales, marketing, and customer service functions for the Green Giant products. In 2003, 2002, and 2001, the sale of Green Giant vegetables account for 39%, 40%, and 43% of net sales. The following information is presented in accordance with SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information":
Classes of similar products/services: 2003 2002 2001 - ------------------------------------------------------------------------------------------------------- (In thousands) Net Sales: Green Giant vegetables $ 252,059 $258,412 $ 290,346 Canned vegetables 328,907 333,048 326,224 Frozen vegetables 30,422 25,165 22,052 Fruit and chip products 20,784 19,982 20,092 Flight operations 3,897 5,588 5,905 Other 8,310 8,880 9,681 - ------------------------------------------------------------------------------------------------------- $ 644,379 $651,075 $ 674,300 =======================================================================================================
Independent Auditors' Report To the Board of Directors and Stockholders of Seneca Foods Corporation Marion, New York We have audited the accompanying consolidated balance sheets of Seneca Foods Corporation and subsidiaries as of March 31, 2003 and 2002, and the related consolidated statements of net earnings, stockholders' equity, and cash flows for each of the three years in the period ended March 31, 2003. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Seneca Foods Corporation and subsidiaries as of March 31, 2003 and 2002, and the results of their operations and their cash flows for each of the three years in the period ended March 31, 2003 in conformity with accounting principles generally accepted in the United States of America. /s/DELOITTE & TOUCHE LLP DELOITTE & TOUCHE LLP Rochester, New York May 21, 2003 Additional Information A copy of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2003, as filed with the Securities and Exchange Commission, will be provided by the Company to any shareholder who so requests in writing. Requests should be sent to Philip G. Paras, Seneca Foods Corporation, 3736 South Main Street, Marion, New York 14505, or contact us via our web site at http://www.senecafoods.com, or e-mail us at senecafoods@senecafoods.com. Forward-Looking Statements Except for the historical information contained herein, the matters discussed in this annual 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. Shareholder Information and Quarterly Results The Company's common stock is traded on The NASDAQ National Stock Market. The 3.9 million of Class A outstanding shares and 2.8 million Class B outstanding shares are owned by 315 and 310 shareholders of record, respectively. The high and low prices of the Company's common stock during each quarter of the past two years are shown below:
Class A: 2003 2002 ------------------------------------------------ Quarter High Low High Low --------------------------------------------------------------- First $15.39 $12.96 $13.90 $12.62 Second 13.99 12.02 13.75 11.50 Third 15.00 10.75 14.39 12.10 Fourth 18.75 13.94 14.75 13.45 Class B: 2003 2002 ------------------------------------------------ Quarter High Low High Low --------------------------------------------------------------- First $16.00 $14.05 $13.70 $12.63 Second 14.80 13.80 13.75 12.00 Third 16.42 12.75 14.00 12.11 Fourth 18.38 15.13 14.77 13.20
The Company may pay dividends on common stock only from consolidated net earnings available for distribution, which were none as of March 31, 2003. Payment of dividends to common stockholders is made at the discretion of the Company's Board of Directors and depends, among other factors, on earnings, capital requirements, operating and financial condition of the Company. The Company has not declared or paid a common dividend in many years. The following is a summary of the unaudited interim results of operations by quarter:
First Second Third Fourth - ------------------------------------------------------------------------------------------------------------------------------- (In thousands, except per share data) Year ended March 31, 2003: Net sales $123,255 $183,806 $235,430 $101,888 Gross margin 11,766 12,174 13,871 16,489 Net earnings 1,932 2,090 3,147 1,881 Basic earnings per common share .29 .32 .48 .28 Diluted earnings per common share .19 .20 .31 .18 Year ended March 31, 2002: Net sales $132,693 $176,800 $236,932 $104,650 Gross margin 7,973 9,372 12,968 11,188 Net earnings (loss) (1,286) (416) 2,290 552 Basic earnings per common share (loss) (.20) (.06) .35 .08 Diluted earnings per common share (loss) (.20) (.06) .22 .05
Earnings for the fourth quarter have historically reflected adjustments of previously estimated raw material costs and production levels. Due to the dependence on fruit and vegetable yields of the Company's food processing segment, interim costing must be estimated. EX-23 3 e23-10k03.txt AUDITOR CONSENT Exhibit 23 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Post-Effective Amendment No. 1 of Registration Statement No. 333-12365 of Seneca Foods Corporation on Form S-8 of our reports dated May 21, 2003, appearing in and incorporated by reference in this Annual Report on Form 10-K of Seneca Foods Corporation for the year ended March 31, 2003. DELOITTE & TOUCHE LLP /s/DELOITTE & TOUCHE LLP Rochester, New York June 24, 2003 EX-21 4 ex21-10k03.txt SUBSIDIARIES Exhibit 21 LIST OF SUBSIDIARIES The following is a listing of subsidiaries 100% owned by Seneca Foods Corporation, directly or indirectly: Name State Seneca Foods, L.L.C. Delaware Marion Foods, Inc. New York Seneca Foods International, Ltd. New York Seneca Snack Company Washington -----END PRIVACY-ENHANCED MESSAGE-----