8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________

FORM 8-K/A

(Amendment No. 1)

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): August 18, 2006

SENECA FOODS CORPORATION

(Exact Name of Registrant as Specified in its Charter)

New York (State or Other Jurisdiction of Incorporation) 0-01989 (Commission File Number) 16-0733425 (IRS Employer Identification No.)

3736 South Main Street, Marion, New York 14505-9751

(Address of Principal Executive Offices, including zip code)

(315) 926-8100

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

ྑ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

ྑ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

ྑ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

ྑ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Explanatory Note

The Current Report on Form 8-K/A is being filed to amend Item 9.01 of the Current Report on Form 8-K filed by Seneca Foods Corporation on August 23, 2006. This amendment provides audited and unaudited historical financial statements of the business acquired and certain Pro Forma financial information as required under Item 9.01 (as described thereunder), which financial statements and information were not included in the Current Report on Form 8-K filed August 23, 2006.

Item 1.01Entry into a Material Definitive Agreement

On August 18, 2006, Seneca Foods Corporation (the “Company”) entered into a Purchase Agreement to acquire the outstanding membership interests in Signature Fruit Company, LLC (“Signature”) from John Hancock Life Insurance Company and John Hancock Variable Life Insurance Company (the “Sellers”). The information set forth below in Item 2.01 relating to the acquisition of Signature is incorporated by reference into this Item 1.01. A copy of the Purchase Agreement was attached to the Current Report on Form 8-K as Exhibit 2 filed on August 23, 2006 and is incorporated herein by reference.

Also on August 18, 2006, the Company, Seneca Snack Company and Signature, entered into an Amended and Restated Revolving Credit Agreement with a consortium of five banks with Bank of America, N.A. as Administrative Agent, Collateral Agent and Issuing Bank. The Amended and Restated Revolving Credit Agreement provides for a $250 million revolving credit facility (which upon the satisfaction of certain conditions may be increased to up to $400 million) maturing in August 2011. The $250 million facility replaced a $100 million revolving credit facility, which was to mature in July 2011. The interest rate on the $250 million facility is based on LIBOR or the Bank of America’s prime rate plus an applicable margin determined based on overall Company leverage as set forth in the Amended and Restated Credit Agreement. Additionally, the Company pays fees on the unused portion of the revolver also based upon overall Company leverage as set forth in the Amended and Restated Credit Agreement, a copy of which was attached to the Current Report on Form 8-K as Exhibit 2 filed on August 23, 2006 and is incorporated herein by reference.

.

Item 2.01Completion of Acquisition or Disposition of Assets

On August 18, 2006, the Company acquired the outstanding membership interests in Signature from the Sellers pursuant to a Purchase Agreement dated August 18, 2006 (the “Acquisition”). Signature, located in Modesto, California, is engaged in the shelf stable fruit processing business. The purchase price totaled $45 million plus the assumption of certain liabilities. The Acquisition was financed with $20 million in cash and $25 million of the Company’s Convertible Participating Preferred Stock, Series 2006. In connection with the Acquisition, the Company executed a guaranty with respect to Signature’s $45.5 million Senior Secured Notes payable to the Sellers.

Item 2.03Creation of a Direct Financial Obligation

The information set forth above in Items 1.01 and 2.01 relating to the Amended and Restated Revolving Credit Agreement and the guaranty of the Signature Senior Secured Notes is incorporated by reference into this Item 2.03.

Item 3.02Unregistered Sales of Equity Securities

In connection with the Acquisition, the Company issued 1,025,220 shares of its newly designated Convertible Participating Preferred Stock, Series 2006 (the “Preferred Shares”). The Preferred Shares were issued to the Sellers and were valued at $25 million under the Purchase Agreement.

The Preferred Shares are convertible into shares of the Company’s Class A Common Stock at any time at the option of the holder thereof. The Preferred Shares are currently convertible on a one-for-one basis, subject to adjustment upon the occurrence of certain dilutive events as set forth in the Company’s Certificate of Incorporation, as amended.

The issuance of the Preferred Shares was exempt from registration with the U.S. Securities and Exchange Commission pursuant to the exemption from such registration under Section 4(2) of the Securities Act of 1933, as amended, for a sale not involving a public offering. The Company and the Sellers entered into a Registration Rights Agreement with respect to the registration of the Preferred Shares, as well as the shares of Class A Common Stock issuable upon conversion of the Preferred Shares, for resale under the Securities Act. A copy of the Registration Rights Agreement was attached to the Current Report on Form 8-K as Exhibit 10.2 filed on August 23, 2006 and is incorporated herein by reference.

.

Item 5.03Amendments to Articles of Incorporation

On August 18, 2006, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the New York Secretary of State authorizing a fifth series of Class A Preferred Stock designated Convertible Participating Preferred Stock, Series 2006. The Company also filed a Certificate of Correction to the Certificate of Amendment with the New York Secretary of State on August 21, 2006. A copy of the Certificate of Amendment, as corrected, was attached to the Current Report on Form 8-K as Exhibit 3 filed on August 23, 2006 and is incorporated herein by reference.

.

Item 9.01Financial Statements and Exhibits.

(a)Financial Statements of Business Acquired.

Audited consolidated financial statements of Signature Fruit Company, LLC for the years ended December 31, 2005, December 25, 2004, and December 27, 2003 and related Reports of Independent Auditors thereon are included as Exhibit 99.1 and Exhibit 99.2 to this Current Report on Form 8-K/A and are incorporated herein by reference.

(b)Financial Statements of Business Acquired.

Unaudited consolidated financial statements of Signature Fruit Company, LLC for the six-month periods ended July 1, 2006 and June 25, 2005 are included as Exhibit 99.3 to this Current Report on Form 8-K/A and are incorporated herein by reference.

(c)Pro Forma Financial Information.

The required pro forma financial information of Seneca Foods Corporation as of and for the fiscal year ended March 31, 2006 and three months ended July 1, 2006 (Acquirer) and three months ended April 1, 2006 (Acquiree) is attached hereto as Exhibit 99.4 and is incorporated herein by reference.

(d)Exhibits

2 Purchase Agreement by and among Seneca Foods Corporation, John Hancock Life Insurance Company and John Hancock Variable Life Insurance Company dated as of August 18, 2006 (incorporated by reference to Exhibit 2 to the Current Report on Form 8-K filed August 23, 2006).

3 Certificate of Amendment of the Certificate of Incorporation of Seneca Foods Corporation filed August 18, 2006 as corrected by a Certificate of Correction filed August 21, 2006 (incorporated by reference to Exhibit 3 to the Current Report on Form 8-K filed August 23, 2006).

10.1 Amended and Restated Revolving Credit Agreement dated as of August 18, 2006 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed August 23, 2006).

10.2 Registration Rights Agreement between Seneca Foods Corporation, John Hancock Life Insurance Company and John Hancock Variable Life Insurance Company dated as of August 18, 2006 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed August 23, 2006).

23.1 Consent of Independent Auditors - Ernst & Young LLP

99.1 Audited consolidated financial statements of Signature Fruit Company, LLC for the years ended December 31, 2005 and December 25, 2004 and related Report of Independent Auditors thereon.

99.2 Audited consolidated financial statements of Signature Fruit Company, LLC for the years ended December 25, 2004 and December 27, 2003 and related Report of Independent Auditors thereon.

99.3 Unaudited consolidated financial statements of Signature Fruit Company, LLC for the six month periods ended July 1, 2006 and June 25, 2005.

99.4 Unaudited Pro Forma Condensed Consolidated financial statements of Seneca Foods Corporation as of and for the fiscal year ended March 31, 2006 and three months ended July 1, 2006 (Acquirer) and three months ended April 1, 2006 (Acquiree).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amended report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:November 2, 2006

SENECA FOODS CORPORATION

By: /s/Jeffrey L. Van Riper

Jeffrey L. Van Riper

Controller

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the following Registration Statements:

(1)Registration Statement (Form S-3/A No. 333-120982) of Seneca Foods Corporation;

(2)Post-Effective Amendment No. 1 of Registration Statement (Form S-8 No. 333-12365) pertaining to the Seneca Foods Corporation Employees’ Savings Plan; and

(3)Registration Statement (Form S-8 No. 333-114097) pertaining to the Seneca Foods, L.L.C. 401(k) Retirement Savings Plan

of our report dated February 1, 2006 (except for Note 14, as to which the date is June 15, 2006) with respect to the consolidated financial statements of Signature Fruit Company, LLC as of December 31, 2005 and December 25, 2004 and for each of the two years in the period ended December 31, 2005, and of our report dated January 26, 2005 with respect to the consolidated financial statements of Signature Fruit Company, LLC as of December 25, 2004 and December 27, 2003 and for each of the two years in the period ended December 25, 2004, included in the Form 8-K/A filed with the Securities and Exchange Commission on November 2, 2006.

/s/Ernst & Young LLP

San Jose, California

October 31, 2006

EX-99.1

Exhibit 99.1

Consolidated Financial Statements

Signature Fruit Company, LLC

Years ended December 31, 2005 and December 25, 2004

With Report of Independent Auditors

Signature Fruit Company, LLC

Consolidated Financial Statements

Years ended December 31, 2005 and December 25, 2004

Contents

Report of Independent Auditors    1

Audited Consolidated Financial Statements

Consolidated Balance Sheets    2

Consolidated Statements of Operations   3

Consolidated Statements of Members’ Equity  4

Consolidated Statements of Cash Flows  5

Notes to Consolidated Financial Statements  6

Report of Independent Auditors

The Management and Board of Directors

Signature Fruit Company, LLC

We have audited the accompanying consolidated balance sheets of Signature Fruit Company, LLC and subsidiary (the “Company”) as of December 31, 2005 and December 25, 2004, and the related consolidated statements of operations, members’ equity and cash flows for the years then ended. 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Signature Fruit Company, LLC and subsidiary at December 31, 2005 and December 25, 2004, and the consolidated results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

/s/ Ernst & Young LLP

San Jose, California

February 1, 2006

except for Note 14, as to which the date is

June 15, 2006

Signature Fruit Company, LLC
Consolidated Balance Sheets
(In Thousands)
		December 31,			December 25,
		2005			2004
Assets
Current assets:
Cash and cash equivalents	$	1,175		$	630
Trade accounts receivable, net of allowances of $2,571 in 2005 and $2,626 in 2004		20,576			19,187
Inventories		153,040			173,342
Intercompany receivable in lieu of tax benefit		1,900			717
Prepaid expenses and other current assets		693			744
Total current assets		177,384			194,620
Property, plant and equipment, net		74,283			79,955
Assets held for sale		–			7,084
Investments		–			428
Other assets		299			1,307
Total assets	$	251,966		$	283,394
Liabilities and members’ equity
Current liabilities:
Bank overdraft	$	1,096		$	1,842
Accounts payable		2,071			1,443
Accrued liabilities		15,840			17,149
Accrued interest		2,301			1,973
Revolving line of credit		77,873			96,228
Current portion of long-term debt		21,067			11,428
Total current liabilities		120,248			130,063
Payable to vendor		7,360			7,360
Long-term debt, less current portion		88,783			99,474
Members’ equity:
Class A membership interest		53,000			53,000
Accumulated deficit		(17,425	)		(6,503	)
Total members’ equity		35,575			46,497
Total liabilities and members’ equity	$	251,966		$	283,394
See accompanying notes.

Signature Fruit Company, LLC
Consolidated Statements of Operations
(In Thousands)
		Year ended December 31, 2005			Year ended December 25, 2004
Net sales	$	241,189		$	242,577
Cost of goods sold		223,573			210,314
Gross profit		17,616			32,263
Selling, general and administrative expenses		21,926			22,026
Income (loss) from operations		(4,310	)		10,237
Other income (expense):
Interest expense, net		(15,394	)		(14,098	)
Other income		944			885
		(18,760	)		(2,976	)
Intercompany allocation in lieu of income tax benefit		7,838			4,797
Net income (loss)	$	(10,922	)	$	1,821
See accompanying notes.

Signature Fruit Company, LLC
Consolidated Statements of Members’ Equity
Years ended December 31, 2005 and December 25, 2004
(In Thousands)
		Class A Membership Interest		Accumulated Deficit			Total Members’ Equity
Balance at December 27, 2003	$	53,000	$	(8,324	)	$	44,676
Net income and comprehensive income		–		1,821			1,821
Balance at December 25, 2004		53,000		(6,503	)		46,497
Net loss and comprehensive loss		–		(10,922	)		(10,922	)
Balance at December 31, 2005	$	53,000	$	(17,425	)	$	35,575
See accompanying notes.

Signature Fruit Company, LLC
Consolidated Statements of Cash Flows
(In Thousands)
		Year ended December 31, 2005			Year ended December 25, 2004
Operating activities
Net income (loss)	$	(10,922	)	$	1,821
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		8,445			8,598
Amortization of debt issuance costs		678			678
Accretion of interest expense on notes payable		741			969
Impairment charge on Fruit asset held for sale		–			3,119
(Gain) loss on disposal of property, plant and equipment		1,783			(719	)
Changes in operating assets and liabilities:
Trade accounts receivable		(1,389	)		3,662
Inventories		20,302			(13,513	)
Prepaid expenses, current assets and other assets		381			192
Intercompany receivable in lieu of tax benefit		(1,183	)		258
Bank overdraft		(746	)		(426	)
Accounts payable and accrued liabilities		(681	)		1,269
Accrued interest and other liabilities		328			(2,413	)
Net cash provided by operating activities		17,737			3,495
Investing activities
Payments for purchases of property, plant and equipment		(5,018	)		(6,221	)
Proceeds from sales of property, plant and equipment		7,546			8,158
Net cash provided by investing activities		2,528			1,937
Financing activities
Borrowings on revolving line of credit		262,915			286,259
Repayments on revolving line of credit		(281,270	)		(276,876	)
Borrowings on long-term debt		23,367			–
Repayments on long-term debt		(24,732	)		(14,448	)
Net cash used in financing activities		(19,720	)		(5,065	)
Increase in cash and cash equivalents		545			367
Cash and cash equivalents at beginning of year		630			263
Cash and cash equivalents at end of year	$	1,175		$	630
Supplemental disclosure of cash flow information
Cash paid during the year for interest	$	14,326		$	14,448
Supplemental disclosure of noncash financing activities
Redemption of securities to bank to reduce outstanding
borrowings in lieu of cash payments	$	428		$	2,421
See accompanying notes.

Signature Fruit Company, LLC

Notes to Consolidated Financial Statements

December 31, 2005

1. Organization

Signature Fruit Company, LLC (“Signature Fruit”) and its wholly owned subsidiary, Signature Tomato, Inc. (“Tomato”) (collectively, the “Company”), are in the business of manufacturing and marketing processed foods, primarily processed fruit products. Signature Fruit sells its products under an assortment of labels to a variety of food retailers and food service companies. Signature Fruit is a wholly owned subsidiary of John Hancock Life Insurance Company (the “Parent”). As of December 31, 2005, Tomato had no significant remaining assets or liabilities, and for the years ended December 31, 2005 and December 25, 2004, Tomato had no manufacturing operations.

2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of Signature Fruit and its wholly owned subsidiary Tomato. All significant intercompany transactions and balances are eliminated upon consolidation.

Fiscal Year

The Company maintains a 52/53-week fiscal year cycle. Fiscal years ended December 31, 2005 and December 25, 2004 consisted of 53 weeks and 52 weeks, respectively.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Areas affected by estimates include accounts receivable reserves and allowances, inventory reserves, impairment of long-lived assets, and certain accrued liabilities including workers’ compensation reserves. Actual results could differ from those estimates.

2. Summary of Significant Accounting Policies (continued)

Cash and Cash Equivalents

Cash and cash equivalents are carried at cost, which approximates market value, and consist of deposit amounts and highly liquid investments with original maturities of three months or less. The Company places its cash in depository accounts of highly rated financial institutions in order to minimize concentrations of credit risk.

Accounts Receivable

The Company’s products are primarily sold to commercial customers throughout the United States, various foreign countries and to the United States government. Substantially all foreign sales are denominated in U.S. dollars. Accounts receivable are stated net of promotional and other allowances. The Company performs ongoing credit evaluations of its commercial customers and generally does not require collateral. The Company establishes allowances for potential credit losses. Historically, such losses have been within the expectations of management. Accounts receivable are charged against the allowance when the Company determines that payments will not be received. Any subsequent receipts are credited to the allowance.

Inventories

Inventory is stated at the lower of cost (on the first-in, first-out basis) or market. The Company provides for excess and obsolete inventories in the period when excess and obsolescence are determined to have occurred.

Property, Plant and Equipment

Property, plant and equipment are stated at cost and are depreciated over their estimated useful lives on a straight-line basis. The ranges of estimated useful lives used for depreciable assets are as follows:

Buildings and leasehold improvements	10 to 30 years
Machinery and equipment	3 to 15 years

2. Summary of Significant Accounting Policies (continued)

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets held for sale are reported at the lower of their carrying amount or fair value less costs to sell.

Revenue Recognition

The Company recognizes revenue from sales of product when title of product passes to the buyer, which usually occurs upon shipment of the product. Sales revenues are reported net of promotional and cash discounts. Customers generally do not have the right to return a product unless it is damaged or defective. Shipping and handling revenues are included in sales revenues.

Shipping and Handling Costs

Costs incurred related to the fulfillment of customer orders and shipment of merchandise from the Company’s distribution facilities to customers are recorded in cost of goods sold.

Income Taxes

Signature Fruit is a single-member limited liability company treated as a division of the Parent for income tax purposes. Accordingly, the Company is generally not responsible for the payment of income taxes in the United States. For financial reporting purposes, the Company has entered into a tax allocation agreement with the Parent whereby the Company is allocated taxes (benefits) based on the Parent’s determination of the impact of the inclusion of the Company’s income (loss) in the Parent’s consolidated income tax returns. Amounts determined under this intercompany tax allocation methodology are included as an “intercompany receivable in lieu of income tax benefit” in the accompanying financial statements. The Parent generally remits the intercompany receivable quarterly in connection with its utilization of the Company’s losses in the Parent’s consolidated federal income tax return.

2. Summary of Significant Accounting Policies (continued)

Income Taxes (continued)

Tomato is a C corporation. As such, Tomato uses the liability method to account for income taxes, wherein deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

Fair Value of Financial Instruments

The carrying amount of certain of the Company’s financial instruments, including accounts receivable, bank overdraft, accounts payable, and accrued liabilities, approximates fair value due to the relatively short maturity of such instruments. The majority of long-term debt and other financial instruments have variable interest rates that reset frequently; therefore, their carrying value does not differ materially from their calculated fair value.

Concentrations of Credit Risk and Labor Supply

For each of the years ended December 31, 2005 and December 25, 2004, one customer accounted for 17% of net sales; no other individual customers accounted for more than 10% of net sales in 2005 or 2004. Additionally, the same customer accounted for 29% and 16% of gross trade accounts receivable at December 31, 2005 and December 25, 2004, respectively; no other customer accounted for more than 10% of trade accounts receivable.

Approximately 96% of the Company’s hourly and seasonal work force is employed under a union collective bargaining agreement, which expires in July 2006.

Comprehensive Income (Loss)

The Company has no significant items of other comprehensive income in the periods presented. Therefore, net income (loss) as presented in the accompanying consolidated statements of operations equals comprehensive income (loss).

2. Summary of Significant Accounting Policies (continued)

Recent Accounting Pronouncements

In November 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 151, Inventory Costs - an Amendment of ARB No. 43, Chapter 4 (“FAS 151”). FAS 151 clarifies the accounting that requires abnormal amounts of idle facility expenses, freight, handling costs, and spoilage costs to be recognized as current-period charges. It also requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. FAS 151 will be effective for inventory costs incurred in fiscal years beginning after July 1, 2005, or fiscal year 2006 for the Company. The Company is currently evaluating the impact of this standard on its consolidated financial statements and believes the impact to be immaterial.

3. Inventories

Inventories consist of the following:

		December 31, 2005		December 25, 2004
Finished product	$	144,494,000	$	162,087,000
Raw materials and supplies		6,454,000		9,246,000
Other, principally packaging materials		2,092,000		2,009,000
	$	153,040,000	$	173,342,000

4. Property, Plant and Equipment

Property, plant and equipment consist of the following:

		December 31, 2005			December 25, 2004
Land	$	12,234,000		$	12,234,000
Buildings and improvements		27,934,000			27,135,000
Machinery and equipment		62,984,000			63,550,000
Capital projects in progress		868,000			1,486,000
		104,020,000			104,405,000
Accumulated depreciation		(29,737,000	)		(24,450,000	)
Total	$	74,283,000		$	79,955,000

5. Impairment of Long-Lived Assets

In fiscal 2004, the Company recorded an impairment charge of $3,119,000 to reduce the carrying value of an idle facility to its estimated fair value less costs to sell of $7,084,000 (Note 6), which was charged to selling, general and administrative expenses in the accompanying consolidated statement of operations in accordance with FAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets.

6. Assets Held for Sale

Assets held for sale of $7,084,000 (Note 5) at December 25, 2004, consisted of land, buildings, and equipment held by Signature Fruit that would not be used in the ongoing operations of the Company. These assets were sold in fiscal 2005 and proceeds from the sale were used to pay down the Note Payable to TVG (Note 9). The $84,000 gain on the sale of the assets is included in selling, general and administrative expenses in the accompanying consolidated statement of operations for the year ended December 31, 2005.

There were no assets classified as held for sale at December 31, 2005.

7. Revolving Line of Credit

The Company has an asset-based revolving line of credit facility with a bank that provides for borrowings of up to $150,000,000. The revolving line of credit is collateralized primarily by a security interest in the Company’s accounts receivable and inventories. Interest on this revolving line of credit is based on, at the option of the Company, either the bank’s prime commercial rate plus 0.50% or the LIBOR rate plus 2.50% (7.75% or 6.89%, respectively, at December 31, 2005). Interest is payable monthly. The revolving line of credit agreement contains certain restrictive covenants that, among other things, require the Company to meet specific fixed charge coverage ratios and tangible net worth levels. The Company is required to pay commitment fees equal to 0.50% per annum on any unused portion of the revolving line of credit.

Under the agreement with the bank, cash receipts of the Company are received by the bank and applied against the outstanding balance. The Company periodically draws on the available line to fund operations. At December 31, 2005 and December 25, 2004, outstanding borrowings on the revolving line of credit were $77,873,000 and $96,228,000, respectively. All outstanding borrowings are due and payable on March 13, 2006, the date of expiration of the revolving line of credit agreement. Availability under the revolving line of credit was approximately $16,200,000 at December 31, 2005.

Subsequent to year-end, the Company amended its revolving line of credit agreement (Note 14).

8. Payable to Vendor

Payable to vendor represents a noninterest-bearing agreement with a supplier whereby the Company is permitted to defer up to $8,000,000 of payments until March 31, 2006. Under the terms of the agreement with the vendor, the purchase price paid by the Company for materials from the vendor must not be greater than the average price charged by the vendor for similar products. Accordingly, the Company believes the materials are acquired at fair value, and the carrying value of the payable has not been discounted to provide for the periodic interest expense. The payable balance of $7,360,000 at each of December 31, 2005 and December 25, 2004, is secured by a letter of credit with a bank, which is guaranteed by the Parent and expires July 26, 2006.

The agreement includes a provision that in the event the Company defaults on other debt agreements, this amount also becomes immediately due and payable.

9. Long-Term Debt

The Company has several long-term debt instruments, all of which are collateralized by a security interest in substantially all of the Company’s property, plant and equipment. The working capital loan and notes payable contain certain restrictive covenants that, among other things, require the Company to meet specific interest coverage ratios and tangible net worth levels.

Long-term debt consists of the following:

		December 31, 2005		December 25, 2004
Working capital loan from Parent	$	49,367,000	$	36,000,000
Signature Fruit senior secured notes		55,666,000		55,995,000
Signature Fruit note payable to bank		4,817,000		10,294,000
Note payable to TVG		-		8,613,000
Total debt		109,850,000		110,902,000
Less current portion		21,067,000		11,428,000
Long-term debt	$	88,783,000	$	99,474,000

Working Capital Loan from Parent

The Company has a working capital loan agreement with the Parent, consisting of two components. Interest on the borrowings under the agreement is based on, at the option of the Company, either the prime rate plus 0.25% or the LIBOR rate plus 3.50% (7.50% or 7.89%, respectively, at December 31, 2005). Interest is payable monthly.

In 2004, borrowings of $30,000,000 were converted to a term loan with a maturity date of April 13, 2006. In 2005, an additional balance of $3,117,000 was converted to the term loan. At December 31, 2005 and December 25, 2004, outstanding borrowings under the term loan component of the working capital loan of $33,117,000 and $30,000,000, respectively, were classified as long-term debt in the accompanying consolidated balance sheets.

9. Long-Term Debt (continued)

Working Capital Loan from Parent (continued)

The second component is an excess liquidity loan that provides for borrowings of up to $26,883,000, through April 13, 2006, the proceeds of which shall be used for working capital purposes. At December 31, 2005 and December 25, 2004, outstanding borrowings under this component of the working capital loan of $16,250,000 and $6,000,000, respectively, were classified as short-term debt in the accompanying consolidated balance sheets.

Subsequent to year-end, the Company amended its working capital loan agreement with the Parent (Note 14).

Senior Secured Notes

The Signature Fruit senior secured notes bear interest at 10%, with the principal due in one lump-sum payment on April 1, 2007. Interest is payable quarterly. At December 31, 2005 and December 25, 2004, the Company’s Parent, its affiliates and other related parties held $49,172,000 and $49,463,000, respectively, of the principal amount of these notes.

Subsequent to year-end, the Company amended its senior secured notes (Note 14).

Note Payable to Bank

The Signature Fruit note payable to bank of $4,817,000 bears interest at 10%, payable monthly, with principal payments of $1,250,000, payable quarterly, and any unpaid principal balance due April 1, 2006. As part of this arrangement, the bank issued nonvoting, noninterest-bearing securities to the Company that had a balance of $428,000 at December 25, 2004. These securities, recorded on the cost basis, were classified as investments in the accompanying consolidated balance sheets. Quarterly through March 26, 2005, the bank redeemed a portion of the Company’s investment in the bank with an offsetting reduction to this note. The amounts redeemed were subject to an annual vote of the bank’s board of directors. As of December 31, 2005, the securities have been fully redeemed.

Subsequent to year-end, the Company repaid in full the Signature Fruit note payable to bank (Note 14).

9. Long-Term Debt (continued)

Note Payable to TVG

In conjunction with the Company’s formation in 2001, the Company issued a $10,000,000 noninterest-bearing note payable to the former Tri Valley Growers entity (“TVG”). This note requires a lump-sum payment on March 31, 2006. This note was discounted by the Company at the time of issuance using an interest rate of 12%, and the resulting discount of $4,496,000 on the note was amortized as interest expense using the effective-interest method over the term of the debt. For the years ended December 31, 2005 and December 25, 2004, the Company recognized interest expense of $741,000 and $969,000, respectively. In April 2005, proceeds from the sale of assets (Note 6), along with cash generated from operations, were used to repay the outstanding balance on the note payable to TVG of $9,354,000.

Debt Issuance Costs

During the year ended December 27, 2003, the Company incurred debt issuance costs of $2,034,000, related to the Company’s revolving line of credit (Note 7), which are being amortized to interest expense using the effective-interest method through March 13, 2006. For each of the years ended December 31, 2005 and December 25, 2004, the Company recognized amortization of $678,000 to interest expense in the accompanying statements of operations. As of December 31, 2005, remaining prepaid loan costs of $104,000 are included in other assets in the accompanying consolidated balance sheet.

Scheduled Maturities of Long-Term Debt

At December 31, 2005, future scheduled maturities of long-term debt, excluding the payable to vendor disclosed in Note 8, were as follows:

2006	$	21,067,000
2007		33,117,000
2008		55,666,000
	$	109,850,000

10. Members’ Equity

At December 31, 2005 and December 25, 2004, the Class A Members are entitled to 100% of the Company’s earnings and distributions, subject to certain limitations.

On April 2, 2001, Class C Member interests were issued to TVG for no monetary consideration. Class C Members are entitled to 2% of future distributions after the Company achieves certain performance thresholds. These thresholds include the generation of sufficient net cash flow to allow for the repayment in full of the Company’s outstanding debt and the achievement of a 15% annual return on capital by the Class A Members.

11. Related-Party Transactions

The Company has entered into various debt agreements with the Parent, or in which the Parent participates (Note 9).

During 2005, the Company received $1,006,000 in cash from the Parent for the purchase of certain products to be shipped to various agencies on behalf of Hurricane Katrina victims. During the year, the Company recognized $882,000 of the proceeds as revenue. The remaining balance of $124,000 is recorded as an unearned revenue liability to the Parent at December 31, 2005.

12. Employee Benefit Plans

The Company participates in several multiemployer pension plans, which provide defined benefits to certain union employees. Company contributions to multiemployer plans charged to expense for the years ended December 31, 2005 and December 25, 2004, were $2,196,000 and $2,327,000, respectively.

The Company also sponsors a 401(k) pension plan covering substantially all salaried employees. Company contributions to the plan are based on employee contributions or compensation. Company contributions to this plan charged to expense for the years ended December 31, 2005 and December 25, 2004, were $460,000 and $719,000, respectively.

13. Commitments and Contingencies

Lease Commitments

Future minimum rental payments under noncancelable operating leases having an initial term of one year or more are primarily related to manufacturing equipment and are summarized as follows:

2006	$	5,029,000
2007		4,346,000
2008		1,314,000
2009		1,328,000
2010		482,000
Thereafter		49,000
	$	12,548,000

Rental expense for all operating leases totaled $6,831,000 and $6,759,000 for the years ended December 31, 2005 and December 25, 2004, respectively.

Grower Commitments

The Company has entered into noncancelable agreements with fruit growers and other vendors, with terms ranging from one to five years, to purchase certain fixed quantities or acreage of raw products. The purchase price of fruit acquired under these agreements is based upon a market price established from negotiations between the Company, other companies in the industry, and a bargaining association for the growers each year before the harvest. Total purchases under these agreements were $49.2 million and $60.3 million during the years ended December 31, 2005 and December 25, 2004, respectively.

At December 31, 2005, estimated aggregate future payments under such purchase commitments (priced at the December 31, 2005 estimated cost) are as follows:

2006	$	39,956,000
2007		35,403,000
2008		21,766,000
2009		22,769,000
2010		9,077,000
Thereafter		43,525,000
	$	172,496,000

13. Commitments and Contingencies (continued)

Workers’ Compensation

The Company is self-insured for a substantial portion of the cost of workers’ compensation benefits for claims from its employees. The Company purchases insurance from a third party, which provides individual and aggregate stop-loss protection for these costs. The Company utilizes a third-party administrator to monitor the number and the severity of such claims to develop appropriate estimates for expected costs to provide both medical care and disability benefits. The Company’s workers’ compensation reserve is developed using actuarial estimates of the expected cost and length of time an employee will be unable to work based on industry statistics for the cost of similar disabilities. This statistical information is trended to provide estimates of future expected costs based on factors developed from the Company’s experience of actual claims cost compared to original estimates. The Company had accrued workers’ compensation reserves classified within accrued liabilities of $7,824,000 and $7,742,000 in the accompanying consolidated balance sheets at December 31, 2005 and December 25, 2004, respectively.

Legal Proceedings

From time to time, the Company may be involved in claims, assessments, litigation or other legal actions that arise in the normal course of business. At December 31, 2005, in the opinion of management, none of these claims and actions, individually or in the aggregate, will have a material effect on the financial position of the Company.

14. Subsequent Events

Payable to Vendor

Effective January 1, 2006, the Company terminated the noninterest-bearing agreement with a supplier and signed a new five-year agreement which permits the Company to defer up to $8,000,000 of payments until December 31, 2010. Under the terms of the agreement with the vendor, the purchase price paid by the Company for materials from the vendor must not be greater than the average price charged by the vendor for similar products. The payable balance is secured by a letter of credit with a bank which is guaranteed by the Parent.

14. Subsequent Events (continued)

Notes Payable to Bank

As described in Note 9 to the financial statements, at December 31, 2005 the Company had a note payable to a bank with a due date of April 1, 2006. In accordance with the terms of the agreement, in April 2006, the Company fully repaid the remaining principal balance outstanding on the note with proceeds from operations.

Revolving Line of Credit

As described in Note 7 to the financial statements, the Company has an asset-based revolving line of credit with a bank with a due date of March 13, 2006. Subsequent to year-end, the term of this revolving line of credit agreement was extended for a period of four months. Effective June 15, 2006, the Company extended the term of this revolving line of credit agreement through May 31, 2007, on the same borrowing terms as described in Note 7.

Working Capital Loan from Parent

Effective June 15, 2006, the term of the working capital loan from Parent as described in Note 9 to the financial statements has been extended through June 30, 2007, on the same borrowing terms as described in Note 9.

Senior Secured Notes

Effective June 15, 2006, the term of the Signature Fruit senior secured note payable as described in Note 9 to the financial statements has been extended through April 1, 2008, on the same borrowing terms as described in Note 9.

EX-99.2

Exhibit 99.2

Consolidated Financial Statements

Signature Fruit Company, LLC

For the years ended December 25, 2004 and December 27, 2003

with Report of Independent Auditors

Signature Fruit Company, LLC

Consolidated Financial Statements

For the years ended December 25, 2004 and December 27, 2003

Contents

Report of Independent Auditors        1

Audited Consolidated Financial Statements

Consolidated Balance Sheets        2

Consolidated Statements of Operations       3

Consolidated Statements of Members’ Equity      4

Consolidated Statements of Cash Flows  5

Notes to Consolidated Financial Statements  6

Report of Independent Auditors

To the Management and Board of Directors

Signature Fruit Company, LLC

We have audited the accompanying consolidated balance sheets of Signature Fruit Company, LLC and subsidiary (the “Company”) as of December 25, 2004 and December 27, 2003, and the related consolidated statements of operations, members’ equity and cash flows for the years then ended. 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. 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 consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Signature Fruit Company, LLC and subsidiary at December 25, 2004 and December 27, 2003, and the consolidated results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

/s/Ernst & Young LLP

San Jose, California

January 26, 2005

A Member Practice of Ernst & Young Global

Signature Fruit Company, LLC

Consolidated Balance Sheets

(in thousands)

		December 25,			December 27,
		2004			2003
Assets
Current assets:
Cash and cash equivalents	$	630		$	263
Trade accounts receivable, net of allowances of $2,626 in 2004 and $4,526 in 2003		19,187			22,849
Inventories		173,342			159,828
Intercompany receivable in lieu of tax benefit		717			976
Prepaid expenses and other current assets		744			810
Total current assets		194,620			184,726
Property, plant and equipment, net		79,955			97,994
Assets held for sale		7,084			1,980
Investments		428			2,849
Other assets		1,307			2,111
Total assets	$	283,394		$	289,660
Liabilities and members’ equity
Current liabilities:
Bank overdraft	$	1,842		$	2,268
Accounts payable		1,443			1,353
Accrued liabilities		17,149			15,969
Accrued interest		1,973			2,233
Payable to Class B members		-			2,033
Revolving line of credit		96,228			86,845
Current portion of long-term debt		11,428			14,701
Total current liabilities		130,063			125,402
Payable to vendor		7,360			7,480
Long-term debt, less current portion		99,474			112,102
Members’ equity:
Class A membership interest		53,000			53,000
Accumulated deficit		(6,503	)		(8,324	)
Total members’ equity		46,497			44,676
Total liabilities and members’ equity	$	283,394		$	289,660

See accompanying notes.

Signature Fruit Company, LLC

Consolidated Statements of Operations

(in thousands)

		Year ended December 25, 2004			Year ended December 27, 2003
Net sales	$	242,577		$	254,436
Cost of goods sold		210,314			218,243
Gross profit		32,263			36,193
Selling, general and administrative expenses		22,026			24,082
Income from operations		10,237			12,111
Other income (expense):
Interest expense, net		(14,098	)		(15,529	)
Other income		885			618
		(2,976	)		(2,800	)
Intercompany allocation in lieu of income tax benefit		4,797			1,848
Net income (loss)	$	1,821		$	(952	)

See accompanying notes.

Signature Fruit Company, LLC

Consolidated Statements of Members’ Equity

For the years ended December 25, 2004 and December 27, 2003

(in thousands)

	Class A Membership Interest		Class B Membership Interest			Accumulated Deficit			Total Members’ Equity
Balance at December 28, 2002	$	53,000	$	309		$	(7,372	)	$	45,937
Liquidation of Class B membership interest		-		(309	)		-			(309	)
Net loss and comprehensive loss		-		-			(952	)		(952	)
Balance at December 27, 2003		53,000		-			(8,324	)		44,676
Net income and comprehensive income		-		-			1,821			1,821
Balance at December 25, 2004	$	53,000	$	-		$	(6,503	)	$	46,497

See accompanying notes.

Signature Fruit Company, LLC

Consolidated Statements of Cash Flows

(in thousands)

	Year ended December 25, 2004			Year ended December 27, 2003
Operating activities
Net income (loss)	$	1,821		$	(952	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		8,598			7,855
Amortization of debt issuance costs		678			668
Accretion of interest expense on notes payable		969			860
Accretion of dividend on redeemable preferred stock to interest expense		-			19
Impairment charge on Fruit asset held for use		-			1,818
Impairment charge on Fruit asset held for sale		3,119			-
Impairment charge on Tomato asset held for sale		-			814
Gain on sale of property, plant and equipment		(719	)		(165	)
Changes in operating assets and liabilities:
Trade accounts receivable		3,662			(676	)
Inventories		(13,513	)		2,867
Prepaid expenses, current assets and other assets		192			3,287
Intercompany receivable in lieu of tax benefit		258			1,297
Bank overdraft		(426	)		(192	)
Accounts payable and accrued liabilities		1,269			1,090
Accrued interest and other liabilities		(2,413	)		(12,167	)
Net cash provided by operating activities		3,495			6,423
Investing activities
Payments for purchases of property, plant and equipment		(6,221	)		(6,749	)
Proceeds from sales of property, plant and equipment		8,158			6,836
Net cash provided by investing activities		1,937			87
Financing activities
Borrowings on revolving line of credit		286,259			353,336
Repayments on revolving line of credit		(276,876	)		(330,947	)
Repayments on long-term debt		(14,448	)		(25,936	)
Redemption of redeemable preferred stock		-			(2,740	)
Net cash used in financing activities		(5,065	)		(6,287	)
Increase in cash and cash equivalents		367			223
Cash and cash equivalents at beginning of year		263			40
Cash and cash equivalents at end of year	$	630		$	263
Supplemental disclosure of cash flow information
Cash paid during the year for interest	$	14,448		$	23,816
Supplemental disclosure of noncash financing activities
Redemption of securities to bank to reduce outstanding   borrowings in lieu of cash payments	$	2,421		$	4,460
Reduction of note receivable from Class B members   against amount payable to Class B members	$	-		$	1,006
Liquidation of Class B membership interest via reduction of    amount payable to Class B members	$	-		$	309

Signature Fruit Company, LLC

Notes to Consolidated Financial Statements

December 25, 2004

1. Organization

Signature Fruit Company, LLC (“Signature Fruit”) and its wholly owned subsidiary, Signature Tomato, Inc. (“Tomato”) (collectively, the “Company”), are in the business of manufacturing and marketing processed foods, primarily processed fruit products. Signature Fruit sells its products under an assortment of labels to a variety of food retailers and food service companies. Signature Fruit is a wholly owned subsidiary of John Hancock Life Insurance Company (the “Parent”). As of December 25, 2004, Tomato had no significant remaining assets or liabilities, and for the years ended December 25, 2004 and December 27, 2003, Tomato had no manufacturing operations.

2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of Signature Fruit and its wholly owned subsidiary Tomato. All significant intercompany transactions and balances are eliminated upon consolidation.

Fiscal Year

The Company maintains a 52/53-week fiscal year cycle. Each of the fiscal years ended December 25, 2004, and December 27, 2003, consisted of 52 weeks.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Areas affected by estimates include accounts receivable reserves and allowances, inventory reserves, impairment of long-lived assets, and certain accrued liabilities including worker’s compensation reserves. Actual results could differ from those estimates.

2. Summary of Significant Accounting Policies (continued)

Cash and Cash Equivalents

Cash and cash equivalents are carried at cost, which approximates market value, and consist of deposit amounts and highly liquid investments with original maturities of three months or less. The Company places its cash in depository accounts of highly rated financial institutions in order to minimize concentrations of credit risk.

Accounts Receivable

The Company’s products are primarily sold to commercial customers throughout the United States and various foreign countries and to the United States government. Substantially all foreign sales are denominated in U.S. dollars. Accounts receivable are stated net of promotional and other allowances. The Company performs ongoing credit evaluations of its commercial customers and generally does not require collateral. The Company establishes allowances for potential credit losses. Historically, such losses have been within the expectations of management. Accounts receivable are charged against the allowance when the Company determines that payments will not be received. Any subsequent receipts are credited to the allowance.

Inventories

Inventory is stated at the lower of cost (on the first-in, first-out basis) or market. The Company provides for excess and obsolete inventories in the period when excess and obsolescence are determined to have occurred.

Property, Plant and Equipment

Property, plant and equipment are stated at cost and are depreciated over their estimated useful lives on a straight-line basis. The ranges of estimated useful lives used for depreciable assets are as follows:

Buildings and leasehold improvements	10 to 30 years
Machinery and equipment	3 to 15 years

2. Summary of Significant Accounting Policies (continued)

Impairment of Long-Lived Assets

The Company evaluates its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets held for sale are reported at the lower of their carrying amount or fair value less costs to sell.

Revenue Recognition

The Company recognizes revenue from sales of product when title of product passes to the buyer, which usually occurs upon shipment of the product. Sales revenues are reported net of promotional and cash discounts. Customers generally do not have the right to return a product unless it is damaged or defective. Shipping and handling revenues are includes in sales revenues.

Shipping and Handling Costs

Costs incurred related to the fulfillment of customer orders and shipment of merchandise from the Company’s distribution facilities to customers are recorded in cost of goods sold.

Income Taxes

Signature Fruit is a single-member limited liability company treated as a division of the Parent for income tax purposes. Accordingly, the Company is generally not responsible for the payment of income taxes in the United States. For financial reporting purposes, the Company has entered into a tax allocation agreement with the Parent whereby the Company is allocated taxes (benefits) based on the Parent’s determination of the impact of the inclusion of the Company’s income (loss) in the Parent’s consolidated income tax returns. Amounts determined under this intercompany tax allocation methodology are included as an “intercompany receivable in lieu of income tax benefit” in the accompanying financial statements. The Parent generally remits the intercompany receivable quarterly in connection with its utilization of the Company’s losses in the Parent’s consolidated federal income tax return.

2. Summary of Significant Accounting Policies (continued)

Income Taxes (continued)

Tomato is a C corporation. As such, Tomato uses the liability method to account for income taxes, wherein deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

Fair Value of Financial Instruments

The carrying amount of certain of the Company’s financial instruments, including accounts receivable, bank overdraft, accounts payable, and accrued liabilities, approximates fair value due to the relatively short maturity of such instruments. The majority of long-term debt and other financial instruments have variable interest rates that reset frequently; therefore, their carrying value does not differ materially from their calculated fair value.

Concentrations of Credit Risk and Labor Supply

For the years ended December 25, 2004 and December 27, 2003, one customer accounted for 17% and 21% of net sales, respectively; no other individual customers accounted for more than 10% of net sales in 2004 or 2003. Additionally, one customer accounted for 16% and 37% of gross trade accounts receivable at December 25, 2004, and December 27, 2003, respectively; no other customer accounted for more than 10% of trade accounts receivable.

Approximately 97% of the Company’s hourly and seasonal work force is employed under union collective bargaining agreements, which expire in June 2006.

Comprehensive Income (Loss)

The Company has no significant items of other comprehensive income in the periods presented. Therefore, net income (loss) as presented in the accompanying consolidated statements of operations equals comprehensive income (loss).

2. Summary of Significant Accounting Policies (continued)

Reclassifications

Reclassifications of certain prior year amounts have been made to conform to the current year presentation.

Recent Accounting Pronouncements

In November 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 151, Inventory Costs — an Amendment of ARB No. 43, Chapter 4 (“FAS 151”). FAS 151 clarifies the accounting that requires abnormal amounts of idle facility expenses, freight, handling costs, and spoilage costs to be recognized as current-period charges. It also requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. FAS 151 will be effective for inventory costs incurred on or after July 1, 2005. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

3. Inventories

Inventories consist of the following:

	December 25, 2004		December 27, 2003
Finished product	$	162,087,000	$	151,289,000
Raw materials and supplies		9,246,000		7,149,000
Other, principally packaging materials		2,009,000		1,390,000
	$	173,342,000	$	159,828,000

4. Property, Plant and Equipment

Property, plant and equipment consist of the following:

	December 25, 2004			December 27, 2003
Land	$	12,234,000		$	14,672,000
Buildings and improvements		27,135,000			36,167,000
Machinery and equipment		63,550,000			65,929,000
Capital projects in progress		1,486,000			352,000
		104,405,000			117,120,000
Accumulated depreciation		(24,450,000	)		(19,126,000	)
Total	$	79,955,000		$	97,994,000

5. Impairment of Long-Lived Assets

In 2003, an idle facility had certain equipment with a carrying value of $2,218,000 which was deemed to be unrecoverable and was written down to its estimated fair value of $400,000. Fair value was based on the expected future cash flows from the sale of the equipment, discounted at the risk-free rate of interest. The Company recorded an impairment charge of $1,818,000 related to these assets, which was charged to selling, general and administrative expenses in the accompanying consolidated statement of operations for the fiscal year ended December 27, 2003.

During 2004, Company management adopted a plan to sell the entire idle facility and in October 2004 entered into a sale agreement with a third party. The Company has determined that the plan of sale criteria in FAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets, have been met as of December 25, 2004. The Company recorded an impairment charge of $3,119,000 to reduce the carrying value of the facility to its estimated fair value less costs to sell of $7,084,000 (Note 6), which was charged to selling, general and administrative expenses in the accompanying consolidated statement of operations for the fiscal year ended December 25, 2004.

6. Assets Held for Sale

Assets held for sale of $1,980,000 at December 27, 2003, consisted of land and buildings held by Tomato that were not to be used in the ongoing operations of the Company. The assets were sold in 2004 and proceeds from the sale were used to pay down the Fruit senior secured notes and the Fruit note payable to bank (Note 9). Assets held for sale of $7,084,000 (Note 5) at December 25, 2004, consist of land, buildings, and equipment held by Fruit that will not be used in the ongoing operations of the Company. The Company expects the sale to close during the first four months of 2005.

The gain of $719,000 on Tomato assets sold during 2004 is included in selling, general and administrative expenses in the accompanying consolidated statement of operations.

7. Revolving Line of Credit

The Company has a revolving line of credit facility with a bank that provides for borrowings of up to $150,000,000. The revolving line of credit is collateralized primarily by a security interest in the Company’s accounts receivable and inventories. Interest on this revolving line of credit is based on, at the option of the Company, either the bank’s prime commercial rate or the LIBOR rate plus 2.00% (5.25% or 4.32%, respectively, at December 25, 2004). Interest is payable monthly. The revolving line of credit agreement contains certain restrictive covenants that, among other things, require the Company to meet specific fixed charge coverage ratios and tangible net worth levels. The Company is required to pay commitment fees equal to 0.25% per annum on any unused portion of the revolving line of credit.

Under the agreement with the bank, cash receipts of the Company are received by the bank and applied against the outstanding balance. The Company periodically draws on the available line to fund operations. At December 25, 2004 and December 27, 2003, outstanding borrowings on the revolving line of credit were $96,228,000 and $86,845,000, respectively. All outstanding borrowings are due and payable on March 13, 2006, the date of expiration of the revolving line of credit agreement.

8. Payable to Vendor

Payable to vendor represents a noninterest-bearing agreement with a supplier whereby the Company is permitted to defer up to $8,000,000 of payments until March 31, 2006. Under the terms of the agreement with the vendor, the purchase price paid by the Company for materials from the vendor must not be greater than the average price charged by the vendor for similar products. Accordingly, the Company believes the materials are acquired at fair value, and the carrying value of the payable has not been discounted to provide for the periodic interest expense. The payable balance of $7,360,000 and $7,480,000 at December 25, 2004 and December 27, 2003, respectively, is secured by a letter of credit with a bank, which is guaranteed by the Parent and expires July 26, 2005.

The agreement includes a provision that in the event the Company defaults on other debt agreements, this amount also becomes immediately due and payable.

9. Long-Term Debt

The Company has several long-term debt instruments, all of which are collateralized by a security interest in substantially all of the Company’s property, plant and equipment. The working capital loan and notes payable contain certain restrictive covenants that, among other things, require the Company to meet specific interest coverage ratios and tangible net worth levels.

Long-term debt consists of the following:

	December 25, 2004		December 27, 2003
Working capital loan from Parent	$	36,000,000	$	37,000,000
Signature Fruit senior secured notes		55,995,000		62,677,000
Signature Fruit note payable to bank		10,294,000		19,202,000
Note payable to TVG		8,613,000		7,644,000
Signature Fruit note payable		-		280,000
Total debt		110,902,000		126,803,000
Less current portion		11,428,000		14,701,000
Long-term debt	$	99,474,000	$	112,102,000

9. Long-Term Debt (continued)

Working Capital Loan from Parent

The Company has a working capital loan agreement with the Parent, consisting of two components, which was amended on March 13, 2003. Interest on the borrowings under the agreement is based on, at the option of the Company, either the prime rate plus 0.25% or the LIBOR rate plus 3.50% (5.50% or 5.92%, respectively, at December 25, 2004). Interest is payable monthly.

Under the amended terms of the agreement, borrowings of $30,000,000 were converted to a term loan with a maturity date of April 13, 2006. At December 25, 2004 and December 27, 2003, outstanding borrowings under the term loan component of the working capital loan of $30,000,000 were classified as long-term debt in the accompanying consolidated balance sheet.

The second component is an excess liquidity loan that provides for borrowings of up to $30,000,000 through April 13, 2006, the proceeds of which shall be used for working capital purposes. At December 25, 2004 and December 27, 2003, outstanding borrowings under this component of the working capital loan of $6,000,000 and $7,000,000, respectively, were classified as short-term debt in the accompanying consolidated balance sheet.

Senior Secured Notes

The Signature Fruit senior secured notes bear interest at 10%, with the principal due in one lump sum payment on April 1, 2007. Interest is payable quarterly. At December 25, 2004 and December 27, 2003, the Company’s Parent and its affiliates held $49,463,000 and $55,364,000, respectively, of the principal amount of these notes.

9. Long-Term Debt (continued)

Notes Payable to Bank

The Signature Fruit note payable to bank bears interest at 10%, payable monthly, with principal payments of $1,250,000, payable quarterly, and any unpaid principal balance due April 1, 2006. As part of this arrangement, the bank issued nonvoting, noninterest-bearing securities to the Company that have a balance of $428,000 and $2,849,000 at December 25, 2004 and December 27, 2003, respectively. These securities, which are recorded on the cost basis, are classified as investments in the accompanying consolidated balance sheets. Quarterly through March 26, 2005, the bank will redeem a portion of the Company’s investment in the bank with an offsetting reduction to this note. The amounts redeemed are subject to an annual vote of the bank’s board of directors.

Other Financing Arrangements

In conjunction with the Company’s formation in 2001, the Company issued a $10,000,000 noninterest-bearing note payable to the former Tri Valley Growers entity (“TVG”). This note requires a lump sum payment on March 31, 2006. This note was discounted by the Company at the time of issuance using an interest rate of 12%, and the resulting discount of $4,496,000 on the note is being amortized as interest expense using the effective-interest method over the term of the debt. For the years ended December 25, 2004, and December 27, 2003, the Company recognized interest expense of $969,000 and $860,000, respectively, related to this note.

The Signature Fruit note payable bearing interest at 8.5% per annum, payable quarterly, was repaid in full on February 5, 2004.

Debt Issuance Costs

During the year ended December 27, 2003, the Company incurred debt issuance costs of $2,034,000, related to the Company’s revolving line of credit (Note 7), which are being amortized to interest expense using the effective-interest method through March 13, 2006. For the years ended December 25, 2004 and December 27, 2003, the Company recognized amortization of $678,000 and $574,000, respectively, to interest expense. As of December 25, 2004, remaining prepaid loan costs of $782,000 are included in other assets in the accompanying consolidated balance sheet.

9. Long-Term Debt (continued)

Scheduled Maturities of Long-Term Debt

At December 25, 2004, future scheduled maturities of long-term debt, excluding the payable to vendor disclosed in Note 8, were as follows:

2005	$	11,428,000
2006		43,479,000
2007		55,995,000
	$	110,902,000

10. Members’ Equity

At December 25, 2004 and December 27, 2003, the Class A Members are entitled to 100% of the Company’s earnings and distributions, subject to certain limitations. Class B Members equity interests of $309,000 were liquidated on March 31, 2003, and at December 27, 2003, the Company had a current liability of $2,033,000 to those members which was paid on March 31, 2004.

On April 2, 2001, Class C Member interests were issued to TVG for no monetary consideration. Class C Members are entitled to 2% of future distributions after the Company achieves certain performance thresholds. These thresholds include the generation of sufficient net cash flow to allow for the repayment in full of the Company’s outstanding debt and the achievement of a 15% annual return on capital by the Class A Members. As management believes that the likelihood of meeting the Class C Members performance threshold is remote, no value was assigned to these interests.

11. Related-Party Transactions

The Company has entered into various debt agreements with the Parent, or in which the Parent participates (Note 9).

On March 31, 2004, the Company repaid its remaining obligation of $2,033,000 to the former Class B members (Note 10).

12. Employee Benefit Plans

The Company participates in several multiemployer pension plans, which provide defined benefits to certain union employees. Company contributions to multiemployer plans charged to expense for the years ended December 25, 2004 and December 27, 2003, were $2,327,000 and $2,436,000, respectively.

The Company also sponsors a 401(k) pension plan covering substantially all salaried employees. Company contributions to the plan are based on employee contributions or compensation. Company contributions to this plan charged to expense for the years ended December 25, 2004 and December 27, 2003, were $719,000 and $607,000, respectively.

13. Commitments and Contingencies

Lease Commitments

Future minimum rental payments under noncancelable operating leases having an initial term of one year or more are primarily related to manufacturing equipment and are summarized as follows:

2005	$	5,096,000
2006		5,072,000
2007		3,793,000
2008		488,000
2009 Thereafter		489,000 1,807,000
	$	16,745,000

Rental expense for all operating leases totaled $6,759,000 and $6,160,000 for the years ended December 25, 2004, and December 27, 2003, respectively.

13. Commitments and Contingencies (continued)

Grower Commitments

The Company has entered into noncancelable agreements with fruit growers and other vendors, with terms ranging from one to five years, to purchase certain fixed quantities or acreage of raw products. The purchase price of fruit acquired under these agreements is based upon a market price established from negotiations between the Company, other companies in the industry, and a bargaining association for the growers each year before the harvest. Total purchases under these agreements were $60.3 million and $53.5 million during the years ended December 25, 2004, and December 27, 2003, respectively.

At December 25, 2004, estimated aggregate future payments under such purchase commitments (priced at the December 25, 2004 estimated cost) are as follows:

2005	$	53,150,000
2006		43,194,000
2007		37,334,000
2008		23,740,000
2009		23,130,000
	$	180,548,000

Workers’ Compensation

The Company is self-insured for a substantial portion of the cost of workers’ compensation benefits for claims from its employees. The Company purchases insurance from a third party, which provides individual and aggregate stop loss protection for these costs. The Company utilizes a third-party administrator to monitor the number and the severity of such claims to develop appropriate estimates for expected costs to provide both medical care and disability benefits. The Company’s workers’ compensation reserve is developed using actuarial estimates of the expected cost and length of time an employee will be unable to work based on industry statistics for the cost of similar disabilities. This statistical information is trended to provide estimates of future expected costs based on factors developed from the Company’s experience of actual claims cost compared to original estimates. The Company had accrued workers’ compensation reserves classified within accrued liabilities of $7,742,000 and $5,808,000 in the accompanying consolidated balance sheets at December 25, 2004 and December 27, 2003, respectively.

13. Commitments and Contingencies (continued)

Legal Proceedings

From time to time, the Company may be involved in claims, assessments, litigation or other legal actions that arise in the normal course of business. At December 25, 2004, in the opinion of management, none of these claims and actions, individually or in the aggregate, will have a material effect on the financial position of the Company.

EX-99.3

Exhibit 99.3

Signature Fruit Company, LLC
Consolidated Balance Sheets
Unaudited (In Thousands)
	July 1, 2006			June 25, 2005
Assets
Current assets:
Cash and cash equivalents	$	759		$	1,136
Trade accounts receivable, net of allowances of $3,147 in 2006 and $2,084 in 2005		10,488			16,524
Inventories		87,594			118,067
Intercompany receivable in lieu of tax benefit		2,535			-
Prepaid expenses and other current assets		1,203			1,126
Total current assets		102,579			136,853
Property, plant and equipment, net		75,089			79,022
Other assets		386			844
Total assets	$	178,054		$	216,719
Liabilities and members’ equity
Current liabilities:
Bank overdraft	$	1,505		$	4,390
Accounts payable		3,282			2,957
Accrued liabilities		17,766			17,411
Accrued interest		1,653			1,862
Revolving line of credit		22,065			40,883
Current portion of long-term debt		250			7,500
Total current liabilities		46,521			75,003
Payable to vendor		7,360			7,360
Long-term debt, less current portion		92,889			90,546
Members’ equity:
Class A membership interest		53,000			53,000
Accumulated deficit		(21,716	)		(9,190	)
Total members’ equity		31,284			43,810
Total liabilities and members’ equity	$	178,054		$	216,719

Signature Fruit Company, LLC
Consolidated Statements of Operations
Unaudited (In Thousands)
	Six Months Ended July 1, 2006			Six Months Ended June 25, 2005
Net sales	$	112,568		$	116,929
Cost of goods sold		99,345			105,031
Gross profit		13,223			11,898
Selling, general and administrative expenses		10,857			9,301
Income from operations		2,366			2,597
Other income (expense):
Interest expense, net		(6,857	)		(7,282	)
Other income (expense)		(2,110	)		552
		(6,601	)		(4,133	)
Intercompany allocation in lieu of income tax benefit		2,310			1,446
Net income (loss)	$	(4,291	)	$	(2,687	)

Signature Fruit Company, LLC
Consolidated Statements of Cash Flows
Unaudited (In Thousands)
	Six Months Ended July 1, 2006			Six Months Ended June 25, 2005
Operating activities
Net income (loss)	$	(4,291	)	$	(2,687	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		3,589			4,224
Amortization of debt issuance costs		(87	)		338
Accretion of interest expense on notes payable		-			741
(Gain) loss on sale of property, plant and equipment					(84	)
Changes in operating assets and liabilities:
Trade accounts receivable		10,088			2,663
Inventories		65,446			55,275
Prepaid expenses, current assets and other assets		(510	)		(257	)
Intercompany receivable in lieu of tax benefit		(635	)		717
Bank overdraft		409			2,548
Accounts payable and accrued liabilities		3,137			1,776
Accrued interest and other liabilities		(648	)		(111	)
Net cash provided by operating activities		76,498			65,143
Investing activities
Payments for purchases of property, plant and equipment		(4,415	)		(3,669	)
Proceeds from sales of property, plant and equipment		20			7,546
Net cash provided by investing activities		(4,395	)		3,877
Financing activities
Borrowings on revolving line of credit		84,400			72,939
Repayments on revolving line of credit		(140,208	)		(128,284	)
Borrowings on long-term debt		9,119			3,000
Repayments on long-term debt		(25,830	)		(16,169	)
Net cash used in financing activities		(72,519	)		(68,514	)
Increase in cash and cash equivalents		(416	)		506
Cash and cash equivalents, beginning of the period		1,175			630
Cash and cash equivalents, end of the period	$	759		$	1,136

Signature Fruit Company, LLC
Consolidated Statements of Cash Flows (continued)
Unaudited (In thousands)
	Six Months Ended July 1, 2006		Six Months Ended June 25, 2005
Supplemental disclosure of cash flow information
Cash paid for interest	$	7,505	$	6,654
Supplemental disclosure of noncash financing activities
Redemption of securities to bank to reduce outstanding	$	-	$	428
borrowings in lieu of cash payments

SIGNATURE FRUIT COMPANY, LLC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In Thousands)

July 1, 2006

1.Unaudited Condensed Consolidated Financial Statements

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, which are normal and recurring in nature, necessary to present fairly the financial position of Signature Fruit Company, LLC (the “Company”) as of July 1, 2006 and results of its operations and its cash flows for the interim periods presented. All significant intercompany transactions and accounts have been eliminated in consolidation.

The results of operations for the six month period ended July 1, 2006 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 2006 Signature Fruit Annual Report.

Other footnote disclosures normally included in annual financial statements prepared in accordance with U. S. generally accepted accounting principles have been condensed or omitted. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes included in the Company's 2005 Annual Report.

2.   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, which essentially represent a contra-inventory account, are zero at fiscal year end. Depending on the time of year, Off Season Reserve is either the excess of absorbed expenses over incurred expenses to date or the excess of incurred expenses over absorbed expenses to date. Other than at the end of the first and fourth quarter of each year, absorbed expenses exceed incurred expenses due to timing of production. The Off Season Reserve balance was $13,983,000 as of July 1, 2006 and $19,457,000 as of June 25, 2005.

3.   Comprehensive loss totaled $4,291,000 and $2,687,000, which equaled net loss for the six months ended July 1, 2006 and June 25, 2005, respectively.

4.   The Company participates in several multiemployer pension plans, which provide defined benefits to certain union employees. Company contributions to multiemployer plans charged to expense for the six months ended July 1, 2006 and June 25, 2005, were $730,000 and $804,000, respectively.

5.   The Company also sponsors a 401(k) pension plan covering substantially all salaried employees. Company contributions to the plan are based on employee contributions or compensation. Company contributions to this plan charged to expense for the six months ended July 1, 2006 and June 25, 2005, were $272,000 and $287,000, respectively.

6.   Inventories consist of the following:

	July 1, 2006		June 25, 2005
Finished product	$	62,931,000	$	83,333,000
Raw materials and supplies		23,021,000		32,724,000
Other, principally packaging materials		1,642,000		2,010,000
	$	87,594,000	$	118,067,000

7.   Property, plant and equipment consist of the following:

	July 1, 2006			June 25, 2005
Land	$	12,234,000		$	12,234,000
Buildings and improvements		27,934,000			27,135,000
Machinery and equipment		62,964,000			63,172,000
Capital projects in progress		5,282,000			5,155,000
		108,414,000			107,696,000
Accumulated depreciation		(33,325,000	)		(28,674,000	)
Total	$	75,089,000		$	79,022,000

EX-99.4

Exhibit 99.4

SENECA FOODS CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEETS
JULY 1, 2006 (ACQUIRER) AND APRIL 1, 2006 (ACQUIREE)
(In Thousands of Dollars)
	Acquirer
	Consolidated			Acquiree			Pro Forma					Pro Forma
	Historical			Historical			Adjustments					Balance
ASSETS
Current Assets:
Cash and Cash Equivalents	$	1,654		$	1,425							$	3,079
Accounts Receivable, Net		40,669			18,523			1,157		(a	)		60,349
Inventories		301,241			112,103			(7,231	)	(a	)		406,113
Off-Season Reserve		42,013											42,013
Assets Held For Sale		901						21,700		(a	)		22,601
Deferred Income Taxes		6,032											6,032
Other Current Assets		6,281			2,234			(214	)	(a	)		5,278
								(3,023	)	(b	)
Total Current Assets		398,791			134,285			12,389					545,465
Property, Plant and Equipment, Net		146,648			74,333			(14,331	)	(a	)		174,221
								(32,429	)	(b	)
Other Assets		1,155			194			(191	)	(a	)		1,158
	$	546,594		$	208,812			($34,562	)			$	720,844
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes Payable	$	55,483		$	50,539		$	20,000		(b	)	$	126,022
Accounts Payable		59,277			3,833			(1,651	)	(a	)		61,459
Accrued Expenses		37,446			17,163			1,901		(a	)		56,510
Income Taxes		2,853											2,853
Current Portion of Long Term Debt and Capital Lease Obligations		9,606			5,817			(5,817	)	(b	)		9,606
Total Current Liabilities		164,665			77,352			14,433					256,450
Long Term Debt, Less Current Portion		137,564			90,467			(41,827	)	(b	)		186,204
Capital Lease Obligations, Less Current Portion		3,670											3,670
Other Liabilities		12,710			7,360			640		(a	)		20,710
Deferred Income Taxes		6,608											6,608
Total Liabilities		325,217			175,179			(26,754	)				473,642
Stockholders' Equity:
Preferred Stock		54,486						25,000		(b	)		79,486
Common Stock		2,890											2,890
Additional Paid-in-Capital		17,810			53,000			(52,175	)	(b	)		19,419
								784		(c	)
Accumulated Other Comprehensive Loss		(49	)										(49	)
Retained Earnings		146,240			(19,367	)		19,367		(b	)		145,456
								(784	)	(c	)
Stockholders' Equity		221,377			33,633			(7,808	)				247,202
	$	546,594		$	208,812			($34,562	)			$	720,844
The accompanying notes are an integral part of these unaudited
Pro Forma Condensed Financial Statements.

SENECA FOODS CORPORATION, AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF NET EARNINGS
TWELVE MONTHS ENDED MARCH 31, 2006 (ACQUIRER) AND DECEMBER 31, 2005 (ACQUIREE)
(In thousands, except per share data)
	Acquirer
	Consolidated	Acquiree	Pro Forma		Pro Forma
	Historical	Historical	Adjustments		Balance
Net Sales	$883,823	$241,189			$1,125,012
Costs and Expenses:
Cost of Product Sold	796,224	223,573	(1,884)	(e)	1,017,913
Selling, General and Administrative	33,322	21,926			55,248
Plant Restructuring	1,920				1,920
Total Costs and Expenses	831,466	245,499	(1,884)		1,075,081
Operating Income (Loss)	52,357	(4,310)	1,884		49,931
Other Expense (Income), net	1,115	(944)			171
Interest Expense	15,784	15,394	(1,757)	(d)	29,421
Earnings (Loss) Before Income Taxes	35,458	(18,760)	3,641		20,339
Income Taxes	13,465	(7,838)	2,102	(f)	7,729
Earnings (Loss) from Continued Operations	$21,993	($10,922)	$1,539		$12,610
Net Earnings (Loss) Common Stock	$13,468	($10,922)	$1,539		$4,804
Diluted Earnings Per Share	$1.96				$0.52
Weighted Average Common Shares Outstanding-Diluted	6,878		1,025	(b)	7,903
The accompanying notes are an integral part of these unaudited Pro Forma Condensed Financial Statements.

SENECA FOODS CORPORATION, AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF NET EARNINGS
THREE MONTHS ENDED JULY 1, 2006 (ACQUIRER) AND THREE MONTHS ENDED APRIL 1, 2006 (ACQUIREE)
(In thousands, except per share data)
	Acquirer
	Consolidated	Acquiree	Pro Forma		Pro Forma
	Historical	Historical	Adjustments		Balance
Net Sales	$148,341	$62,054			$210,395
Costs and Expenses:
Cost of Product Sold	127,482	55,046	(471)	(e)	182,057
Selling, General and Administrative	11,979	5,459			17,438
Other Operating Income	(688)				(688)
Total Costs and Expenses	138,773	60,505	(471)		198,807
Operating Income	9,568	1,549	471		11,588
Other Expense, net		731			731
Interest Expense	3,628	3,805	(439)	(d)	6,994
Earnings (Loss) Before Income Taxes	5,940	(2,987)	910		3,863
Income Taxes	2,281	(1,045)	232	(f)	1,468
Earnings (Loss) from Continued Operations	$3,659	($1,942)	$678		$2,395
Net Earnings (Loss) Common Stock	$2,244	($1,942)	$561		$863
Diluted Earnings Per Share	$0.33				$0.12
Weighted Average Common Shares Outstanding-Diluted	6,878		1,025	(b)	7,903
The accompanying notes are an integral part of these unaudited Pro Forma Condensed Financial Statements.

SENECA FOODS CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Basis of Presentation
The Acquiree Historical column reflects the
Addition of the assets and liabilities and related
income and expense accounts of the membership
interest in Signature Fruit Company, LLC purchased from
John Hancock Life Insurance Company on August 18, 2006
as described in Item 2.01 of this Form 8-K/A.
The Pro Forma adjustments in the "Purchase" column
are as a result of the purchase of Signature Fruit described
above. The adjustments in the "Sale" column are as
a result of the expected sale of some warehouse facilities
to a third party by the end of December 2006.
Purchase Price
The total purchase price for Signature Fruit of $48.1 million consists
of a $20.0 million cash payment, the issuance of $25.8 million of
Convertible Preferred Stock, and $2.3 million of direct transaction costs.
Allocation of Purchase Price
	(In millions)
Current assets	$125.2
Property, plant, and equipment	31.8
Other assets	2.3
Current liabilities	(57.7)
Long-term debt	(45.5)
Other long-term liabilities	(8.0)
Total	$48.1
Unaudited Pro Forma Condensed Combined Balance Sheet
(a) The Pro Forma adjustments referenced as (a) reflect
the estimated purchase price allocation of the
aforementioned purchase.
(b) The Pro Forma adjustments referenced as (b) reflect the
the purchase of Signature Fruit and eliminate Signature's equity
accounts and also reflect the forgiveness of certain debt
and the funding of the transaction.
The source of the funds used includes long-term debt of
$45.5 million and $20.0 million from short-term borrowings.
In addition, preferred stock of $25.8 million was used to
fund the purchase.
(c) The Pro Forma adjustments referenced as (c) reflect an
adjustment related to the beneficial conversion of
Participating Preferred stock used to partially fund the acquisition.

Unaudited Pro Forma Condensed Combined Statement of Net Earnings

(d) To reflect the net decrease in interest expense as a result

of the acquisition due to the forgiveness and assumption of certain debt.

(e) To reflect the reduction in depreciation expense as a result of

the purchase price allocations to property, plant and equipment.

(f) To reflect pro forma income taxes computed at Seneca's effective rate of 38%.