Seneca Foods Reports Sales and Earnings for the Three Months Ended June 29, 2024
August 08 2024 - 3:15PM
Seneca Foods Corporation (NASDAQ: SENEA, SENEB) today announced
financial results for the three months ended June 29, 2024.
Executive Summary (vs. year-ago, year-to-date
results):
- Net sales for the first quarter of
fiscal 2025 totaled $304.7 million compared to $298.7 million for
the first quarter of fiscal 2024. The year-over-year increase of
$6.0 million was due to higher sales volumes.
- Gross margin as a percentage of net
sales is 14.0% for the three months ended June 29, 2024, as
compared to 18.5% for the three months ended July 1, 2023.
“The Company recorded a solid first quarter, as
our core vegetable business exhibited very positive volume momentum
despite category headwinds,” stated Paul Palmby, President and
Chief Executive Officer of Seneca Foods. “Contract manufacturing
volumes came in below forecast due to timing; we expect to make
those sales later in the fiscal year than initially planned. In
addition, margins remain pressured compared to last year due to
higher cost inventory and the competitive pricing environment.”
About Seneca Foods Corporation
Seneca Foods is one of North America’s leading
providers of packaged fruits and vegetables, with facilities
located throughout the United States. Its high quality products are
primarily sourced from more than 1,200 American farms and are
distributed to approximately 55 countries. Seneca holds a large
share of the market for retail private label, food service,
restaurant chains, international, contracting packaging,
industrial, chips and cherry products. Products are also sold
under the highly regarded brands of Libby’s®, Green Giant®, Aunt
Nellie’s®, Green Valley®, CherryMan®, READ®, and Seneca labels,
including Seneca snack chips. Seneca’s common stock is traded
on the Nasdaq Global Select 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
Adjusted net earnings is calculated on a FIFO
basis and excludes the impact from the application of LIFO. The
Company believes this non-GAAP financial measure provides for a
better comparison of year over year 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 earnings before income taxes to adjusted net earnings (in
thousands).
|
|
|
Three Months Ended |
|
|
|
June 29, 2024 |
|
July 1, 2023 |
Earnings before income taxes, as reported |
|
|
$ |
16,501 |
|
|
$ |
30,261 |
|
LIFO credit |
|
|
|
(2,918 |
) |
|
|
(1,700 |
) |
Adjusted earnings before income taxes |
|
|
|
13,583 |
|
|
|
28,561 |
|
Income taxes at statutory rates |
|
|
|
3,125 |
|
|
|
6,727 |
|
Adjusted net earnings |
|
|
$ |
10,458 |
|
|
$ |
21,834 |
|
|
|
|
|
|
|
Set forth below is a reconciliation of reported
net earnings to EBITDA and FIFO EBITDA (earnings before interest,
income taxes, depreciation, amortization and non-cash charges
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
(in thousands).
|
|
|
Three Months Ended |
|
EBITDA and FIFO EBITDA: |
|
|
June 29, 2024 |
|
July 1, 2023 |
|
|
|
|
|
|
|
|
Net earnings |
|
|
$ |
12,661 |
|
|
$ |
23,111 |
|
Income tax expense |
|
|
3,840 |
|
|
7,150 |
|
Interest expense, net of interest income |
|
|
10,345 |
|
|
6,573 |
|
Depreciation and amortization |
|
|
12,446 |
|
|
12,603 |
|
Interest amortization |
|
|
(115 |
) |
|
(100 |
) |
EBITDA |
|
|
39,177 |
|
|
49,337 |
|
LIFO credit |
|
|
(2,918 |
) |
|
(1,700 |
) |
FIFO EBITDA |
|
|
$ |
36,259 |
|
|
$ |
47,637 |
|
|
|
|
|
|
|
|
|
Forward-Looking Information
This release contains “forward-looking
statements” as that term is used in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements can be
identified by the fact that they address future events,
developments, and results and do not relate strictly to historical
facts. Any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements.
Forward-looking statements include, without limitation, any
statement that may predict, forecast, indicate, or imply future
results, performance, or achievements, and may contain the words
"will," "anticipate," "estimate," "expect," "project," "intend,"
"plan," "believe," "seeks," "should," "likely," "targets," "may",
"can” and variations thereof and similar expressions.
Forward-looking statements are subject to known and unknown risks,
uncertainties, and other important factors that could cause actual
results to differ materially from those expressed. We believe
important factors that could cause actual results to differ
materially from our expectations include, but are not limited to,
the following:
- the effects of rising costs and
availability of raw fruit and vegetables, steel, ingredients,
packaging, other raw materials, distribution and labor;
- crude oil prices and their impact on
distribution, packaging and energy costs;
- an overall labor shortage, ability
to retain a sufficient seasonal workforce, lack of skilled labor,
labor inflation or increased turnover impacting our ability to
recruit and retain employees;
- climate and weather affecting
growing conditions and crop yields;
- our ability to successfully
implement sales price increases and cost saving measures to offset
cost increases;
- the loss of significant customers or
a substantial reduction in orders from these customers;
- effectiveness of our marketing and
trade promotion programs;
- competition, changes in consumer
preferences, demand for our products and local economic and market
conditions;
- the impact of a pandemic on our
business, suppliers, customers, consumers and employees;
- unanticipated expenses, including,
without limitation, litigation or legal settlement expenses;
- product liability claims;
- the anticipated needs for, and the
availability of, cash;
- the availability of financing;
- leverage and the ability to service
and reduce debt;
- foreign currency exchange and
interest rate fluctuations;
- the risks associated with the
expansion of our business;
- the ability to successfully
integrate acquisitions into our operations;
- our ability to protect information
systems against, or effectively respond to, a cybersecurity
incident or other disruption;
- other factors that affect the food
industry generally, including:
- recalls if products become
adulterated or misbranded, liability if product consumption causes
injury, ingredient disclosure and labeling laws and regulations and
the possibility that consumers could lose confidence in the safety
and quality of certain food products;
- competitors’ pricing practices and
promotional spending levels;
- fluctuations in the level of our
customers’ inventories and credit and other business risks related
to our customers operating in a challenging economic and
competitive environment; and
- the risks associated with
third-party suppliers, including the risk that any failure by one
or more of our third-party suppliers to comply with food safety or
other laws and regulations may disrupt our supply of raw materials
or certain finished goods products or injure our reputation;
and
- changes in, or the failure or inability to comply with, U.S.,
foreign and local governmental regulations, including environmental
and health and safety regulations.
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: Michael Wolcott, Chief Financial
Officer585-495-4100
|
Seneca Foods Corporation |
Unaudited Selected Financial Data |
For the Periods Ended June 29, 2024 and July 1, 2023 |
(In thousands of dollars, except share data) |
|
|
|
|
|
|
|
Three Months Ended |
|
|
June 29, 2024 |
|
July 1, 2023 |
|
|
|
|
|
Net sales |
|
$ |
304,727 |
|
|
$ |
298,664 |
|
|
|
|
|
|
Operating income (note 1) |
|
|
25,443 |
|
|
|
35,497 |
|
Other non-operating income |
|
|
(1,403 |
) |
|
|
(1,337 |
) |
Interest expense, net |
|
|
10,345 |
|
|
|
6,573 |
|
Earnings before income taxes |
|
$ |
16,501 |
|
|
$ |
30,261 |
|
|
|
|
|
|
Income tax expense |
|
|
3,840 |
|
|
|
7,150 |
|
|
|
|
|
|
Net earnings |
|
$ |
12,661 |
|
|
$ |
23,111 |
|
|
|
|
|
|
Basic earnings per common share |
|
$ |
1.82 |
|
|
$ |
3.04 |
|
Diluted earnings per common share |
|
$ |
1.80 |
|
|
$ |
3.01 |
|
Note 1: |
|
The effect of the LIFO inventory valuation method on the first
quarter pre-tax results increased operating income by $2.9 million
and $1.7 million for the three months ended June 29, 2024 and July
1, 2023, respectively. |
|
|
|
Note 2: |
|
The Company used the “two-class” method for basic earnings per
share by dividing the earning attributable to common shareholders
by the weighted average of common shares outstanding during the
period. |
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