Form 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended June 30, 2001 Commission File Number 0-1989 ------------- ------ Seneca Foods Corporation ------------------------- (Exact name of Company 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) Company'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 Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during the preceding 12 months (or for such shorter period that the Company 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 July 31, 2001 Common Stock Class A, $.25 Par 3,818,967 Common Stock Class B, $.25 Par 2,764,957
<TABLE> PART I FINANCIAL INFORMATION SENECA FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (In Thousands of Dollars) <CAPTION> 6/30/01 3/31/01 ------- ------- <S> <C> <C> ASSETS Current Assets: Cash and Short-term Investments $ 2,063 $ 5,391 Accounts Receivable, Net 29,171 31,510 Inventories: Finished Goods 144,581 178,415 Work in Process 14,090 13,297 Raw Materials 51,785 37,458 ------- ------- 210,456 229,170 Off-Season Reserve (Note 3) 35,865 - Deferred Tax Asset (Net) 5,603 5,602 Refundable Income Taxes 258 - Other Current Assets 1,444 1,308 -------------- --------------- Total Current Assets 284,860 272,981 Property, Plant and Equipment, Net 165,656 167,450 Other Assets 5,323 3,802 -------------- --------------- $ 455,839 $ 444,233 ============== =============== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes Payable $ 38,045 $ 24,500 Accounts Payable 41,444 39,726 Accrued Expenses 21,174 26,423 Income Taxes - 343 Current Portion of Long-Term Debt and Capital Lease Obligations 19,253 18,622 --------------- --------------- Total Current Liabilities 119,916 109,614 Long-Term Debt 167,400 164,251 Capital Lease Obligations 7,095 7,095 Deferred Income Taxes 6,378 7,132 Other Long-Term Liabilities 6,558 6,382 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 50 50 Convertible, Participating Preferred Stock, $12 Stated Value 42,642 42,671 Common Stock 2,827 2,825 Paid in Capital 13,583 13,555 Accumulated Other Comprehensive Income 991 961 Retained Earnings 88,379 89,677 --------------- --------------- Stockholders' Equity 148,492 149,759 --------------- --------------- $455,839 $444,233 =============== =============== <FN> The accompanying notes are an integral part of these financial statements. </FN> </TABLE>
<TABLE> SENECA FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited) (In Thousands, except Share Data) <CAPTION> Three Months Ended ------------------ 6/30/01 7/1/00 ------- ------ <S> <C> <C> Net Sales $ 132,693 $ 131,159 Other Income - 1,151 ------------------ ----------------- 132,693 132,310 Costs and Expenses: Cost of Product Sold 124,720 119,691 Selling, General, and Administrative 5,067 5,936 Interest Expense 4,915 4,668 ------------------ ----------------- Total Costs and Expenses 134,702 130,295 ------------------ ----------------- (Loss) Earnings Before Income Taxes (2,009) 2,015 Income Taxes (723) 725 ------------------ ----------------- Net (Loss) Earnings $ (1,286) $ 1,290 ================= ================ Basic: (Loss) Earnings Per Common Share (.20) .20 ================= ================= Diluted: (Loss) Earnings Per Common Share (.20) .13 ================= ================= <FN> The accompanying notes are an integral part of these condensed financial statements. </FN> </TABLE>
<TABLE> SENECA FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (In Thousands) <CAPTION> Three Months Ended ------------------- 6/30/01 7/1/00 ------- ------ <S> <C> <C> Cash Flows From Operating Activities: Net (Loss) Earnings $ (1,286) $ 1,290 Adjustments to Reconcile Net (Loss) Earnings to Net Cash Used by Operating Activities: Depreciation and Amortization 6,108 5,881 Deferred Income Taxes (725) 725 Gain on Sale of Assets - (1,151) Changes in Working Capital: Accounts Receivable 2,339 (2,647) Inventories 18,714 (8,180) Off-Season Reserve (35,865) (30,998) Other Current Assets (136) (1,360) Income Taxes (601) (707) Accounts Payable, Accrued Expenses, and Other Liabilities (3,355) 19,398 ------------------ ----------------- Net Cash Used in Operations (14,807) (17,749) ------------------ ----------------- Cash Flows From Investing Activities: Additions to Property, Plant, and Equipment (4,314) (7,265) Escrow Funds (1,525) 2,292 Disposals - 57 Proceed from the Sale of Assets - 2,514 ------------------ ----------------- Net Cash Used in Investing Activities (5,839) (2,402) ------------------ ----------------- Cash Flows From Financing Activities: Net Borrowings on Notes Payable 13,545 10,470 Proceeds from the Issuance of Long-Term Debt 3,950 - Payments and Current Portion of Long-Term Debt and Capital Lease Obligations (170) (126) Other 5 4 Dividends (12) (12) ------------------ ----------------- Net Cash Provided by Financing Activities 17,318 10,336 ------------------ ----------------- Net Decrease in Cash and Short- Term Investments (3,328) (9,815) Cash and Short-Term Investments, Beginning of Period 5,391 11,348 ------------------ ----------------- Cash and Short-Term Investments, End of Period $ 2,063 $ 1,533 ================== ================== <FN> The accompanying notes are an integral part of these condensed financial statements. </FN> </TABLE>
SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS June 30, 2001 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 Company as of June 30, 2001 and results of operations for the three month periods ended June 30, 2001 and July 1, 2000. All significant intercompany transactions and accounts have been eliminated in consolidation. The March 31, 2001 balance sheet was derived from audited financial statements. The results of operations for the three month periods ended June 30, 2001 and July 1, 2000 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 2001 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 Company's 2001 Annual Report and 10-K. 2. Off-Season Reserve is the excess of absorbed expenses over incurred expenses to date. 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 are zero at fiscal year end. 3. Comprehensive income consisted solely of Net Earnings and Net Unrealized Gain Change on Moog, Inc. Stock. The following table provides the results for the periods presented: Three Months Ended June 30 and July 1, 2001 2000 ---- ---- Net (Loss) Earnings $(1,286) $1,290 Other Comprehensive Earnings, Net of Tax: Net Unrealized Gain (Loss) Change on Moog, Inc. Stock 30 (16) --------------------- Comprehensive (Loss) Earnings $(1,256) $1,274 ======================
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION RESULTS OF OPERATIONS June 30, 2001 Results of Operations: Sales: Total Sales reflect an increase of 1.2% for the first three months versus 2000. The Company's Alliance business sales dollars increased by 1.6%. Non-Alliance vegetable sales dollars increased by 1.7% and sales quantities increased 4.2%. Costs and Expenses: The following table shows costs and expenses as a percentage of sales: Three Months Ended ------------------ 6/30/01 7/1/00 ------- ------ Cost of Product Sold 94.0% 91.2% Selling 3.1 3.7 Administrative 0.7 0.8 Interest Expense 3.7 3.6 ---------------------- 101.5% 99.3% ====================== Lower selling prices as compared to the prior year, especially in the Private Label and Food Service businesses, were a major contributing factor in lower profitability. Income Taxes: The effective tax rate used in 2002 and 2001 is 36%. Financial Condition: The financial condition of the Company is summarized in the following table and explanatory review (In Thousands): <TABLE> <CAPTION> For the Quarter For the Year Ended June Ended March ---------- ----------- 2001 2000 2001 2000 ---- ---- ---- ---- <S> <C> <C> <C> <C> Working Capital Balance $164,944 $173,467 $163,367 $168,972 Quarter Change 1,577 4,495 - - Notes Payable 38,045 10,470 24,500 - Long-Term Debt 174,495 189,834 171,346 189,968 Current Ratio 2.38:1 2.56:1 2.49:1 3.05:1 </TABLE> The change in the Working Capital for the June 2001 quarter from the June 2000 quarter is largely due to lower earnings in the current year quarter than the prior year quarter ($1,286,000 loss as compared to $1,290,000 earnings last year) partially offset by lower capital expenditures, which were $4.3 million in 2001 as compared to $7.3 million in 2000. In 2000, $2.3 million of these capital expenditures were funded via a capital escrow account, which was a result of an Industrial Revenue Bond issued the prior year. During the first quarter of the current year, a $3,200,000 Industrial Development Bond was issued to finance a capital expansion of the Yakima, Washington plant related to snack chips. See Consolidated Condensed Statements of Cash Flows for further details.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS June 30, 2001 Quantitative and Qualitative Disclosures about Market Risk: The Company has not experienced any material changes in Market Risk since our March 31, 2001 report. Forward-Looking Statements Except for the historical information contained herein, the matters discussed in this report are forward-looking statements as defined in the Private Securities Litigation Reform Act (PSLRA) of 1995. The Company wishes to take advantage of the "safe harbor" provisions of the PSLRA by cautioning that numerous important factors which involve risks and uncertainties, including but not limited to economic, competitive, governmental and technological factors affecting the Company's operations, markets, products, services and prices, and other factors discussed in the Company's filings with the Securities and Exchange Commission, in the future, could affect the Company's actual results and could cause its actual consolidated results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, the Company. Recently Issued Accounting Standard In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 142, Goodwill and Other Intangible Assets. Since the Company does not have Goodwill on it's balance sheet, this statement is not expected to have a material impact on its consolidated financial statements.
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. Exhibits 11 (11) Computation of earnings per share (filed herewith) Reports on Form 8-K - None during the quarter.
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Seneca Foods Corporation ------------------------ (Company) /s/Kraig H. Kayser ------------------------ August 13, 2001 Kraig H. Kayser President and Chief Executive Officer /s/Jeffrey L. Van Riper ------------------------ August 13, 2001 Jeffrey L. Van Riper Controller and Chief Accounting Officer