-----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, Frn6Oubh0pAcouHV4qBtY81hah7OQOoX7jq+QBcbNKuaI0QKhge1wcRBQqAutVrg ziKscyEq2/rTy9nL4v+ABQ== 0000088948-96-000001.txt : 19960216 0000088948-96-000001.hdr.sgml : 19960216 ACCESSION NUMBER: 0000088948-96-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19951230 FILED AS OF DATE: 19960213 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SENECA FOODS CORP /NY/ CENTRAL INDEX KEY: 0000088948 STANDARD INDUSTRIAL CLASSIFICATION: CANNED, FRUITS, VEG & PRESERVES, JAMS & JELLIES [2033] IRS NUMBER: 160733425 STATE OF INCORPORATION: NY FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-01989 FILM NUMBER: 96517160 BUSINESS ADDRESS: STREET 1: 1162 PITTSFORD VICTOR RD CITY: PITTSFORD STATE: NY ZIP: 14534 BUSINESS PHONE: 7163859500 FORMER COMPANY: FORMER CONFORMED NAME: PIERCE S S COMPANY INC DATE OF NAME CHANGE: 19861210 FORMER COMPANY: FORMER CONFORMED NAME: SENECA FOODS CORP DATE OF NAME CHANGE: 19780425 FORMER COMPANY: FORMER CONFORMED NAME: SENECA GRAPE JUICE CORP DATE OF NAME CHANGE: 19710419 10-Q 1 Form 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 QUARTERLY REPORT UNDER SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended December 30, 1995 Commission File Number 0-1989 Seneca Foods Corporation (Exact name of registrant as specified in its charter) New York 16-0733425 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 1162 Pittsford-Victor Road, Pittsford, New York 14534 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 716/385-9500 Not Applicable Former name, former address and former fiscal year, if changed since last report Check mark indicates whether registrant (1) has filed all reports required to be filed by Section 13 of 15(d) of the Securities Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ------ ------ The number of shares outstanding of each of the issuer's classes of common stock at the latest practical date are: Class Shares Outstanding at January 31, 1996 Common Stock Class A, $.25 Par 2,796,555 Common Stock Class B, $.25 Par 2,796,555 PART I FINANCIAL INFORMATION SENECA FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (In Thousands of Dollars)
12/30/95 3/31/95 ________ _______ ASSETS Current Assets: Cash and Short-term Investments $ 2,529 $ 26,538 Accounts Receivable, Net 31,624 32,601 Inventories: Finished Goods 188,507 64,613 Work in Process 29,007 19,531 Raw Materials 41,259 48,260 -------------- --------------- 258,773 132,404 Off-Season Reserve (Note 3) (38,982) - Deferred Tax (Net) 1,933 1,933 Other Current Assets 4,501 801 -------------- --------------- Total Current Assets 260,378 194,277 Property, Plant and Equipment, Net 221,158 179,718 Common Stock of Moog Inc. 13,333 7,494 Other Assets 512 237 -------------- --------------- $495,381 $381,726 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes Payable $ 120,950 $ - Accounts Payable 32,888 36,089 Accrued Expenses 16,114 19,599 Income Taxes - 125 Current Portion of Long-Term Debt and Capital Lease Obligations 618 5,594 --------------- --------------- Total Current Liabilities 170,570 61,407 Long-Term Debt 222,959 220,677 Capital Lease Obligations 9,660 803 Deferred Income Taxes 11,265 11,490 10% Preferred Stock, Series A, Voting, Cumulative, Convertible, $.025 Par Value Per Share 10 10 10% Preferred Stock, Series B, Voting, Cumulative, Convertible, $.025 Par Value Per Share 10 10 6% Preferred Stock, Voting, Cumulative, $.25 Par Value Per Share 50 50 Common Stock 2,579 1,880 Net Unrealized Gain on Available-For-Sale Securities 4,570 892 Retained Earnings 73,708 84,507 --------------- --------------- Stockholders' Equity 80,927 87,349 --------------- --------------- $495,381 $381,726 ======== ======== The accompanying notes are an integral part of these financial statements.
SENECA FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited) (In Thousands, except Share Data)
Three Months Ended __________________ 12/30/95 12/24/94 ________ ________ Net Sales $ 201,032 $ 96,852 Other Income (See Notes) 4,279 - ------------------ ----------------- Total Revenue 205,311 96,852 Costs and Expenses: Cost of Product Sold 190,195 85,452 Selling, General, and Administrative 7,790 8,680 Interest Expense 7,669 1,736 Nonrecurring Charge (See Notes) (1,416) - ------------------ ----------------- Total Costs and Expenses 204,238 95,868 ------------------ ----------------- Earnings Before Income Taxes 1,073 984 Income Taxes 855 365 ------------------ ----------------- Earnings from Continuing Operations 218 619 Extraordinary Losses Net of Income Taxes - - ------------------ ----------------- Net Earnings $ 218 $ 619 ================== ================= Net Earnings from Continuing Operations Applicable to Common Stock $ 212 $ 613 Net Earnings Applicable to Common Stock 212 613 Weighted Average Common Shares Outstanding 5,593,110 5,593,110 Primary and Fully Diluted Earnings Per Share of Common Stock (Exhibit II): Earnings from Continuing Operations $ .04 $ .11 Extraordinary Loss - - ------------------ ------------------ Net Earnings (Loss) $ .04 $ .11 ================== ================== The accompanying notes are an integral part of these condensed financial statements.
SENECA FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited) (In Thousands, except Share Data)
Nine Months Ended _________________ 12/30/95 12/24/94 ________ ________ Net Sales $ 414,956 $ 239,938 Other Income (See Notes) 4,279 - ------------------ ----------------- Total Revenue 419,235 239,938 Costs and Expenses: Cost of Product Sold 377,048 209,324 Selling, General, and Administrative 23,758 22,389 Interest Expense 20,034 4,465 Nonrecurring Charge (See Notes) 13,662 - ------------------ ----------------- Total Costs and Expenses 434,502 236,178 ------------------ ----------------- Earnings Before Income Taxes (15,267) 3,760 Income Taxes (5,191) 1,104 ------------------ ----------------- Earnings (loss) from Continuing Operations (10,076) 2,656 Earnings from Discontinued Operations - 6 Gain on the Sale of Discontinued Operations Net of Income Taxes - 172 Extraordinary Losses Net of Income Taxes - (606) ------------------ ----------------- Net Earnings (Loss) $ (10,076) $ 2,228 ================== ================= Net Earnings from Continuing Operations Applicable to Common Stock $ (10,093) $ 2,639 Net Earnings Applicable to Common Stock (10,093) 2,211 Weighted Average Common Shares Outstanding 5,593,110 5,593,776 Primary and Fully Diluted Earnings Per Share of Common Stock (Exhibit II): Earnings from Continuing Operations $ (1.80) $ .48 Earnings from Discontinued Operations - .00 Gain on the Sales of Discontinued Operations - .03 Extraordinary Loss - (.11) ------------------ --------------- Net Earnings (Loss) $ (1.80) $ .40 ================== =============== The accompanying notes are an integral part of these condensed financial statements.
SENECA FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (In Thousands)
Three Months Ended __________________ 12/30/95 12/24/94 ________ ________ Cash Flows From Operating Activities: Net Earnings $ 218 $ 619 Adjustments to Reconcile Net Earnings to Net Cash Used by Operating Activities: Depreciation and Amortization 6,331 2,438 Deferred Income Taxes (2,350) 58 Changes in Working Capital: Accounts Receivable 9,441 (2,565) Inventories 77,886 5,168 Off-Season Reserve 2,351 61 Other Current Assets 81 770 Income Taxes 2,915 1,212 Accounts Payable and Accrued Expenses (115,235) (15,891) ------------------ ----------------- Net Cash Used in Operations (18,362) (8,130) ------------------ ----------------- Cash Flows From Investing Activities: Additions to Property, Plant, and Equipment (3,385) (7,457) Disposals of Property, Plant, and Equipment 4,631 178 ------------------ ----------------- Net Cash Provided (Used) in Investing Activities 1,246 (7,279) ------------------ ----------------- Cash Flows From Financing Activities: Notes Payable 11,850 16,650 Payments and Current Portion of Long-Term Debt and Capital Lease Obligations (2,769) (157) Other (164) 3 Dividends (12) (12) Common Stock Retirement - - ------------------ ----------------- Net Cash Provided by Financing Activities 8,905 16,484 ------------------ ----------------- Net Increase (Decrease) in Cash and Short- Term Investments (8,211) 1,075 Cash and Short-Term Investments, Beginning of Period 10,470 1,498 ------------------ ----------------- Cash and Short-Term Investments, End of Period $ 2,529 $ 2,573 ================== ================== The accompanying notes are an integral part of these condensed financial statements.
SENECA FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (In Thousands)
Nine Months Ended _________________ 12/30/95 12/24/94 ________ ________ Cash Flows From Operating Activities: Net Earnings (Loss) $ (10,076) $ 2,228 Adjustments to Reconcile Net Earnings to Net Cash Used by Operating Activities: Depreciation and Amortization 16,689 7,394 Deferred Income Taxes (2,385) 1,482 Changes in Working Capital: Accounts Receivable 977 (7,155) Inventories (126,369) (50,866) Off-Season Reserve 38,982 7,766 Other Current Assets 124 34 Income Taxes (3,949) (2,953) Accounts Payable and Accrued Expenses (6,686) 11,343 ------------------ ----------------- Net Cash Used in Operations (92,693) (30,727) ------------------ ----------------- Cash Flows From Investing Activities: Additions to Property, Plant, and Equipment (62,794) (11,103) Acquisition - (3,769) Disposals of Property, Plant, and Equipment 4,664 1,037 ------------------ ----------------- Net Cash Used in Investing Activities (58,130) (13,835) ------------------ ----------------- Cash Flows From Financing Activities: Notes Payable 120,950 44,550 Long-Term Borrowing 9,258 - Payments and Current Portion of Long-Term Debt and Capital Lease Obligations (3,095) (17,718) Other (275) 9 Dividends (24) (24) Common Stock Retirement - (1,880) ------------------ ------------------ Net Cash Provided by Financing Activities 126,814 24,937 ------------------ ----------------- Net Decrease in Cash and Short- Term Investments (24,009) (19,625) Cash and Short-Term Investments, Beginning of Period 26,538 22,198 ------------------ ----------------- Cash and Short-Term Investments, End of Period $ 2,529 $ 2,573 ================== ================== The accompanying notes are an integral part of these condensed financial statements.
SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS December 30, 1995 1. Consolidated Condensed Financial Statements In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all adjustments, which are normal and recurring in nature, necessary to present fairly the financial position of the Registrant as of December 30, 1995 and March 31, 1995 and results of operations for the three and nine month periods ended December 30, 1995 and December 24, 1994. All significant intercompany transactions and accounts have been eliminated in consolidation. The March 31, 1995 balance sheet was derived from audited financial statements. The results of operations for the three and nine month periods ended December 30, 1995 and December 24, 1994 are not necessarily indicative of the results to be expected for the full year. The accounting policies followed by the Registrant are set forth in Note 1 to the Registrant's financial statements in the 1995 Seneca Foods Corporation Annual Report and 10-K. Other footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these consolidated condensed financial statements be read in conjunction with the financial statements and notes included in the Registrant's March 31, 1995 financial report. 2. Primary earnings per share are based on the weighted average number of common shares outstanding, as the effect of common stock equivalents is anti-dilutive. 3. Off-Season Reserve is the excess of absorbed expenses over incurred expenses to date. The seasonal nature of the Registrant's Food Processing business results in a timing difference between expenses (primarily overhead expenses) incurred and absorbed into product cost. All Off-Season Reserve balances are zero at fiscal year end. 4. The Registrant changed its fiscal year end from July 31 to March 31 during Fiscal 1995. These financial statements reflect the prior year as if the fiscal year ended March 31. SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued) December 30, 1995 5. A proposed amendment to the Registrant's Certificate of Incorporation which effected a recapitalization of the Registrant by creating a second class of Common Stock (which is being distributed to all common shareholders in the form of a stock dividend) was adopted at the Annual Meeting held on August 5, 1995. This recapitalization amendment (i) reclassifies the existing Common Stock as Class B Common Stock, (ii) authorizes a new class of 10,000,000 shares designated as Class A Common Stock and (iii) establishes the express terms of the Class A Common Stock and the Class B Common Stock. The Class A Common Stock and the Class B Common Stock have substantially identical rights with respect to any dividends or distributions of cash or property declared on shares of common stock and rank equally as to the right to receive proceeds on liquidation or dissolution of the Registrant after payment of the Registrant's indebtedness and liquidation right to the holders of preferred shares. However, holders of Class B Common Stock retain full vote per share whereas the holders of Class A Common Stock have voting rights of 1/20th of one vote per share on all matters as to which shareholders of the Registrant are entitled to vote. 6. The second quarter results included a nonrecurring charge of $15,078,000, before income tax benefit, due to combination of start-up costs related to the Pillsbury Alliance and severe drought conditions that New York State suffered during the entire summer. The Registrant undertook an ambitious capital expenditure program related to the Pillsbury Alliance. In the relatively short time between the February 1995 closing of the Pillsbury Alliance and the beginning of the 1995 vegetable pack, 37 separate major capital projects needed to be completed. There were some unforeseen problems related to a few of these projects, mostly in the New York plants. Some of the used equipment transferred from the closed plants had operating difficulties and was not always easily repaired, causing downtime. As a result, plant throughput and yields were poor at some plants causing unfavorable manufacturing variances. The problems were magnified when drought and hot weather conditions forced the uneven timing of maturities of vegetables. The nonrecurring charge was reduced during the third quarter by $1,416,000 to $13,662,000. This change is due to some of the expenses related to the charge being estimates which, as time passes, are becoming better defined. SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued) December 30, 1995 7. During the second quarter, Pillsbury agreed to delay the first two principal payments on the $73,025,000 subordinated promissory note until October 1998 with an option to convert the payments into the Registrant's equity. Each payment was to be $3,000,000. Pillsbury has exercised its option to convert the first two payments into Class A Common Stock. The conversion price was $17.3125 per share. Consequently, Seneca will be issuing 346,570 shares to Pillsbury when the necessary registration papers have been filed and approved by the Securities and Exchange Commission. 8. During the second quarter, the Registrant entered into a Sale/Leaseback transaction where three of its wastewater facilities in New York State were sold to the Wayne County Water and Sewer Authority with net proceeds of $9,000,000. 9. During the third quarter, the Registrant sold its Peabody, Massachusetts facility for cash, resulting in a gain of $4,279,000 before income tax expense. The Registrant had leased this facility to a third party. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION RESULTS OF OPERATIONS December 30, 1995 Results of Operations: Sales: Sales reflect an increase of 108.0% for the third quarter versus 1994. The higher sales, in large part, are due to higher canned vegetables quantities sold than the previous period and acquisitions made within the last year. Costs and Expenses: The following table shows cost and expenses as a percentage of sales:
Three Months Ended Nine Months Ended __________________ _________________ 12/30/95 12/24/94 12/30/95 12/24/94 ________ ________ ________ ________ Cost of Product Sold 92.7 88.3 89.9% 87.2% Selling 2.9 6.1 4.2 6.2 Administrative 0.9 2.8 1.4 3.1 Interest Expense 3.7 1.8 4.8 1.9 Nonrecurring Charge (0.7) - 3.3 - -------------------------------------------------- 99.5% 99.0% 103.6% 98.4% ====================================================
Higher Cost of Product Sold percentages (i.e. lower Gross Margins) reflect, in part, higher costs for vegetable and apple products than in the prior year due to the relatively short packs of vegetables throughout the U. S. and a worldwide shortage of apple. The Interest Expense is higher largely due to the debt issued to finance the acquisitions and capital expenditures made over the last year. Refer to the footnotes for the discussion of the Nonrecurring Charge. Income Taxes: The effective tax rate used in fiscal 1996 is 34% and in fiscal 1995 it is 29.4%. 1995 effective tax rate reflects a year-end adjustment to arrive at a 34.5% annual rate. Financial Condition: The financial condition of the Registrant is summarized in the following table and explanatory review (In Thousands):
For the Quarter For the Year Ended December Ended March _______________ ____________ 1995 1994 1995 1994 ____ ____ ____ ____ Working Capital Balance $89,808 $56,743 $132,870 $78,180 Quarter Change 3,187 (4,207) - - Notes Payable 120,950 44,550 - - Long-Term Debt 232,619 51,394 221,480 68,546 Current Ratio 1.53:1 1.57:1 3.16:1 2.67:1 Inventory (Average) Turnover 2.6 2.6 1.9 1.8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION RESULTS OF OPERATIONS December 30, 1995 The Working Capital Balance is higher than the prior year largely due to acquisition of Green Giant assets in the prior year. When the Registrant acquired the Green Giant assets, it did not acquire the Finished Goods. Therefore, as the Registrant produces finished goods for Pillsbury, working capital needs increase accordingly. The increase in Working Capital for the quarter is due to part to the sale of the Peabody facility (see footnotes for discussion of the sale) which more than offset the Capital Expenditures for the quarter of $3,385,000. Capital Expenditures related to the Pillsbury Alliance exceeded their original projected costs due to unforeseen issues and time constraints. Overtime and outside contractor costs were high in an effort to complete the projects by the pack season (see footnotes for discussion of Nonrecurring Charge). The Registrant was not in compliance with certain debt covenants related to Long-Term Debt at December 30, 1995. However, subsequently all provisions have been met or waived. The Registrant is in the process of renegotiating certain of its Long-Term Debt covenants. Any amendment is subject to the approval of the short-term lenders. If the Long-Term Debt is not amended by February 28, 1996, then certain Short-Term Debt covenants will also be out of compliance. The Registrant anticipates the debt coventants will be amended by February 28, 1996. See Consolidated Statements of Cash Flows for further details. PART II - OTHER INFORMATION Item 1. Legal Proceedings None. Item 2. Changes in Securities None. Item 3. Defaults on Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders None. Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K (a) Exhibit 11 - (11) Computation of earnings per share (b) Exhibit 27 - (27) Financial Data Schedules (c) Reports on Form 8-K - None during the period. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Seneca Foods Corporation (Registrant) /s/Kraig H. Kayser _______________________ February 13, 1995 Kraig H. Kayser President and Chief Executive Officer /s/Jeffrey L. Van Riper ________________________ February 13, 1995 Jeffrey L. Van Riper Controller and Chief Accounting Officer EX-11 2 EXHIBIT 11 SENECA FOODS CORPORATION AND SUBSIDIARIES COMPUTATION OF EARNINGS PER SHARE (In thousands except share data)
Three Months Ended Nine Months Ended __________________ _________________ 12/30/95 12/24/94 12/30/95 12/24/94 ________ ________ ________ ________ Net Earnings Applicable to Common Stock: Primary: Net Earnings $ 218 $ 619 $ (10,076) $ 2,228 Deduct Preferred Cash Dividends 6 6 17 17 ---------------------------------------------------------------------- Net Earnings Applicable to Common Stock $ 212 $ 613 $ (10,093) $ 2,211 ======================================================================= Weighted Average Common Shares Outstanding 5,593,110 5,593,110 5,593,110 5,593,776 Effect of Common Stock Equivalent - - - - ---------------------------------------------------------------------- Weighted Average Common Shares Out- standing for Primary 5,593,110 5,593,110 5,593,110 5,593,776 ====================================================================== Primary Earnings Per Share $ .04 $ .11 $ (1.80) $ .40 ======================================================================
EX-27 3
5 Commercial and Industrial Companies Article 5 of Regulation S-X 1000 9-MOS MAR-31-1996 DEC-30-1995 2529 0 31799 175 258773 360378 341993 120835 495381 170570 232619 0 70 2579 78278 495381 414956 419235 377049 377049 37419 0 20034 (15267) (5191) (10076) 0 0 0 (10076) (1.80) (1.80) Selling, General and Administrative Expenses 23758 and Nonrecurring charge 13661.
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