Seneca Foods Reports Sales and Earnings for the Quarter and Nine Months Ended December 28, 2019
February 05 2020 - 4:15PM
Seneca Foods Corporation (NASDAQ: SENEA, SENEB) today announced
financial results for the third quarter and nine months ended
December 28, 2019.
Highlights (vs. year-ago, year-to-date
results):
- Net continuing sales increased $90.9 million or 9.7% as
compared to the prior year nine months. This is a result of
higher selling prices/sales mix of $58.0 million and higher sales
volume of $32.9 million. The increase in sales is primarily
from a $50.8 million increase in B&G Foods Inc. sales and an
increase in canned vegetable sales.
- Gross margin percentage from continuing operations income
increased from 2.7% to 9.3% as compared to the prior year nine
months. Higher sales volume, lower cost increases and a
decrease in the LIFO charge all contributed to the higher gross
margin percentage.
“The third quarter was much improved for the company in part due
to an $11.3 million pretax LIFO credit. The credit
resulted from reduced inventory positions as inclement weather
conditions impacted the amount of seasonal canned and frozen
vegetables we were able to pack. Selling prices have firmed
as we work to manage our inventory positions and remain a 52 week
supplier to our customer base,” stated Kraig Kayser, President and
Chief Executive Officer.
Highlights (vs. year-ago, third quarter
results):
- Net continuing sales increased $20.7 million or 5.6% as
compared to the prior year quarter. This is a result of
higher selling prices/sales mix of $23.9 million partially offset
by lower sales volume of $3.2 million. The increase in sales
is primarily from a $21.0 million increase in B&G Foods Inc.
sales.
- Gross margin percentage from continuing operations increased
from (0.6)% to 13.3% as compared to the prior third quarter.
Higher sales volume, lower cost increases and a decrease in the
LIFO charge all contributed to the higher gross margin
percentage.
About Seneca Foods
Corporation
Seneca Foods is North America’s leading provider
of packaged fruits and vegetables, with facilities located
throughout the United States. Its high quality products are
primarily sourced from over 2,000 American farms. Seneca
holds the largest share of the retail private label, food service,
and export canned vegetable markets, distributing to over 90
countries. Products are also sold under the highly
regarded brands of Libby’s®, Aunt Nellie’s®, Green Valley®,
CherryMan®, Paradise®, READ®, Seneca Farms® and Seneca labels,
including Seneca snack chips. In addition, Seneca provides
vegetable products under a contract packing agreement with B&G
Foods North America, under the Green Giant label.
Seneca’s common stock is traded on the Nasdaq Global Stock Market
under the symbols “SENEA” and “SENEB”. SENEA is included in the
S&P SmallCap 600, Russell 2000 and Russell 3000 indices.
Non-GAAP Financial Measures—Operating
Earnings From Continuing Operations Excluding LIFO and Plant
Restructuring Impact, EBITDA and FIFO EBITDA Operating
earnings excluding LIFO and plant restructuring, EBITDA and FIFO
EBITDA are non-GAAP financial measures. The Company believes these
non-GAAP financial measures provide a basis for comparison to
companies that do not use LIFO or have plant restructuring and
enhance the understanding of the Company’s historical operating
performance. The Company does not intend for this information
to be considered in isolation or as a substitute for other measures
prepared in accordance with GAAP.
Set forth below is a reconciliation of reported operating income
(loss) excluding LIFO and plant restructuring.
|
|
|
|
|
|
|
Quarter Ended |
|
Nine Months Ended |
|
|
In millions |
|
In millions |
|
|
12/28/19 |
|
12/29/18 |
|
12/28/19 |
|
12/29/18 |
|
|
FY 2020 |
|
FY 2019 |
|
FY 2020 |
|
FY 2019 |
|
|
|
|
|
|
|
|
|
Operating income (loss) from continuing operations, as
reported: |
$ |
33.1 |
|
$ |
(23.7 |
) |
$ |
43.4 |
|
$ |
(28.5 |
) |
|
|
|
|
|
|
|
|
|
LIFO
(credit) charge |
|
(11.3 |
) |
|
25.8 |
|
|
(7.5 |
) |
|
39.9 |
|
|
|
|
|
|
|
|
|
|
Plant
restructuring charge |
|
0.8 |
|
|
1.4 |
|
|
6.7 |
|
|
2.3 |
|
|
|
|
|
|
|
|
|
|
Operating
income, excluding LIFO and plant restructuring impact |
$ |
22.6 |
|
$ |
3.5 |
|
$ |
42.6 |
|
$ |
13.7 |
|
|
|
|
|
|
|
|
|
|
Set forth below is a reconciliation of reported net earnings
(loss) to EBITDA and FIFO EBITDA (earnings (loss) before interest,
income taxes, depreciation, amortization, non-cash charges and
credits related to the LIFO inventory valuation method). The
Company does not intend for this information to be considered in
isolation or as a substitute for other measures prepared in
accordance with GAAP.
|
|
|
|
|
Nine Months
Ended |
EBITDA and FIFO EBITDA: |
December 28, 2019 |
|
December 29, 2018 |
|
|
(In thousands) |
|
|
|
|
|
Net earnings (loss) from continuing operations |
$ |
30,166 |
|
$ |
(27,834 |
) |
Income tax expense (benefit) |
9,357 |
|
|
(9,617 |
) |
Interest
expense, net of interest income |
|
9,183 |
|
|
11,587 |
|
Depreciation and amortization |
22,644 |
|
|
22,248 |
|
Interest
amortization |
|
(209 |
) |
|
(213 |
) |
EBITDA |
|
71,141 |
|
|
(3,829 |
) |
LIFO
(credit) charge |
|
(7,457 |
) |
|
39,933 |
|
FIFO
EBITDA |
$ |
63,684 |
|
$ |
36,104 |
|
|
|
|
|
|
Forward-Looking Information
The information contained in this release contains,
or may contain, forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These
statements appear in a number of places in this release and include
statements regarding the intent, belief or current expectations of
the Company or its officers (including statements preceded by,
followed by or that include the words “believes,” “expects,”
“anticipates” or similar expressions) with respect to various
matters.
Because such statements are subject to risks and
uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements.
Investors are cautioned not to place undue reliance on such
statements, which speak only as of the date the statements were
made. Among the factors that could cause actual results to
differ materially are:
- general economic and business conditions;
- cost and availability of commodities and other raw materials
such as vegetables, steel and packaging materials;
- transportation costs;
- climate and weather affecting growing conditions and crop
yields;
- availability of financing;
- leverage and the Company’s ability to service and reduce its
debt;
- foreign currency exchange and interest rate fluctuations;
- effectiveness of the Company’s marketing and trade promotion
programs;
- changing consumer preferences;
- competition;
- product liability claims;
- the loss of significant customers or a substantial reduction in
orders from these customers;
- changes in, or the failure or inability to comply with, United
States, foreign and local governmental regulations, including
environmental and health and safety regulations; and
- other risks detailed from time to time in the reports filed by
the Company with the SEC.
Except for ongoing obligations to disclose
material information as required by the federal securities laws,
the Company does not undertake any obligation to release publicly
any revisions to any forward-looking statements to reflect events
or circumstances after the date of the filing of this report or to
reflect the occurrence of unanticipated events.
Contact: Timothy J. Benjamin, Chief Financial
Officer315-926-8100
|
|
Seneca Foods
Corporation |
Unaudited Selected
Financial Data |
|
|
|
|
|
|
|
|
For the Periods
Ended December 28, 2019 and December 29, 2018 |
(In thousands of
dollars, except share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
Year-to-Date |
|
Fiscal 2020 |
|
Fiscal 2019 |
|
|
Fiscal 2020 |
|
Fiscal 2019 |
|
|
|
|
|
|
|
|
Net sales |
$ |
392,971 |
|
|
$ |
372,238 |
|
|
$ |
1,027,898 |
|
|
$ |
936,991 |
|
|
|
|
|
|
|
|
|
Plant
restructuring expense (note 2) |
$ |
793 |
|
|
$ |
1,396 |
|
|
$ |
6,745 |
|
|
$ |
2,279 |
|
|
|
|
|
|
|
|
|
Other
operating income (loss), net (note 3) |
$ |
1,617 |
|
|
$ |
(776 |
) |
|
$ |
8,618 |
|
|
$ |
3,498 |
|
|
|
|
|
|
|
|
|
Operating
income (loss) (note 1) |
$ |
33,115 |
|
|
$ |
(23,657 |
) |
|
|
$ |
43,443 |
|
|
$ |
(28,513 |
) |
Earnings
from equity investment |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Other
income |
|
(1,656 |
) |
|
|
(607 |
) |
|
|
(5,263 |
) |
|
|
(2,649 |
) |
Interest
expense, net |
|
2,690 |
|
|
|
3,864 |
|
|
|
9,183 |
|
|
|
11,587 |
|
Earnings
(loss) from continuing operations before income taxes |
$ |
32,081 |
|
|
$ |
(26,914 |
) |
|
$ |
39,523 |
|
|
$ |
(37,451 |
) |
|
|
|
|
|
|
|
|
Income tax
expense (benefit) from continuing operations |
|
7,653 |
|
|
|
(6,874 |
) |
|
|
9,357 |
|
|
|
(9,617 |
) |
|
|
|
|
|
|
|
|
Earnings
(Loss) from continuting operations |
|
24,428 |
|
|
|
(20,040 |
) |
|
|
30,166 |
|
|
|
(27,834 |
) |
Earnings
from discontinued operations (net of tax) |
|
955 |
|
|
|
34,056 |
|
|
|
955 |
|
|
|
42,211 |
|
Net
earnings |
$ |
25,383 |
|
|
$ |
14,016 |
|
|
$ |
31,121 |
|
|
$ |
14,377 |
|
|
|
|
|
|
|
|
|
Basic
earnings (loss) per share: |
|
|
|
|
|
|
|
Continuing operations |
$ |
2.65 |
|
|
$ |
(2.07 |
) |
|
$ |
3.23 |
|
|
$ |
(2.86 |
) |
Discontinued operations |
$ |
0.10 |
|
|
$ |
3.52 |
|
|
$ |
0.10 |
|
|
$ |
4.34 |
|
Net basic
earnings per common share |
$ |
2.75 |
|
|
$ |
1.45 |
|
|
$ |
3.33 |
|
|
$ |
1.48 |
|
|
|
|
|
|
|
|
|
Diluted
earnings (loss) per share: |
|
|
|
|
|
|
|
Continuing operations |
$ |
2.63 |
|
|
$ |
(2.07 |
) |
|
$ |
3.20 |
|
|
$ |
(2.86 |
) |
Discontinued operations |
$ |
0.10 |
|
|
$ |
3.50 |
|
|
$ |
0.10 |
|
|
$ |
4.31 |
|
Net diluted
earnings per common share |
$ |
2.73 |
|
|
$ |
1.43 |
|
|
$ |
3.31 |
|
|
$ |
1.45 |
|
Note 1: |
The effect of the LIFO inventory valuation method on third
quarter pre-tax results increased continuing operating earnings by
$11,337,000 for the three month period ended December 28, 2019 and
decreased operating earnings by $25,776,000 for the
three month period ended December 29, 2018. |
|
The effect of the LIFO inventory valuation method on nine
month pre-tax results increased continuing operating earnings by
$7,457,000 for the nine month period ended December 28, 2019 and
decreased operating earnings by $39,933,000 for the nine month
period ended December 29, 2018. |
Note 2: |
The nine month period ended December 28, 2019 included a
restructuring charge of $6,745,000 related to plants in the
Midwest and Northwest. The nine month period ended December
29, 2018 included a restructuring charge primarily for
severance of $2,279,000 related to plants in the East and
Northwest. |
Note 3: |
During the nine months ended December 28, 2019, the Company sold
two plants and unused fixed assets which resulted in a gain of
$8,618,000 as compared to a gain of $3,920,000 during the nine
months ended December 29, 2018. The prior year gain was mostly
related to the sale of a closed plant in the Midwest. |
Note 4: |
The Company uses the "two-class" method for basic earnings (loss)
per share by dividing the earnings (loss) attributable
to common shareholders by the weighted average of common
shares outstanding during the period. |
|
|
Seneca Foods (NASDAQ:SENEA)
Historical Stock Chart
From Aug 2024 to Sep 2024
Seneca Foods (NASDAQ:SENEA)
Historical Stock Chart
From Sep 2023 to Sep 2024