Seneca Foods Reports Sales and Earnings for the Quarter and Twelve Months Ended March 31, 2022
10 Giugno 2022 - 10:10PM
Seneca Foods Corporation (NASDAQ: SENEA, SENEB) today announced
financial results for the fourth quarter and twelve months ended
March 31, 2022.
Executive Summary (vs. year-ago, year-to-date
results):
-
Net sales for the twelve months ended March 31, 2022 totaled
$1,385.3 million as compared to $1,467.6 million for the twelve
months ended March 31, 2021. Of the $82.3 million year-over-year
decrease in net sales, $71.9 million resulted from the divesture of
the prepared foods business in fiscal year 2021. Excluding this
divesture the remaining decrease was primarily due to lower sales
volume of $93.0 million partially offset by higher selling
prices/improved sales mix of $82.6 million.
-
Gross margin as a percentage of net sales for the twelve months
ended March 31, 2022 was 10.7% as compared to 15.8% for the twelve
months ended March 31, 2021.
-
Net earnings for the twelve months ended March 31, 2022 were $51.0
million or $5.79 per diluted share as compared to $126.1 million or
$13.72 per diluted share for the twelve months ended March 31,
2021.
-
Adjusted net earnings for the twelve months ended March 31, 2022
were $84.6 million or $9.60 per diluted share as compared to $95.4
million or $10.38 per diluted share for the twelve months ended
March 31, 2021.
“Despite persistent and historic inflation and
resulting higher costs leading to significant non cash LIFO impacts
on reported earnings as well as an additional non cash impairment
for our remaining investment in the hemp business, our operating
results continue to be very strong,” said Paul Palmby, President
and Chief Executive Officer of Seneca Foods. “Further, I could not
be prouder of how our employees and management team have responded
to unprecedented challenges ranging from the pandemic to supply
chain and inflation pressures.”
Executive Summary (vs. year-ago, fourth quarter
results):
-
Net sales for the fourth quarter of fiscal 2022 totaled $332.4
million as compared to $304.8 million in the fourth quarter of
fiscal 2021.
-
Gross margin as a percentage of net sales for the fourth quarter
was 8.0% in fiscal 2022 as compared to 18.7% in the fourth quarter
of fiscal 2021.
-
Net earnings for the fourth quarter of fiscal 2022 were $6.6
million or $0.77 per diluted share as compared to $14.8 million or
$1.62 per diluted share in the fourth quarter of fiscal 2021.
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 over 1,400 American farms and are
distributed to over 90 countries. Seneca holds a large share of the
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®, 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 of the Company’s loss on equity
investment and gain on the sale of its prepared foods business. 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 net earnings to adjusted net earnings.
|
|
|
|
|
|
|
Twelve Months Ended |
|
|
March 31, 2022 |
|
March 31, 2021 |
|
|
(In
thousands) |
|
|
|
|
|
Earnings before taxes, as reported |
|
$ |
66,231 |
|
$ |
160,016 |
|
LIFO charge (credit) |
|
|
35,821 |
|
|
(15,595 |
) |
Loss on equity investment |
|
|
7,775 |
|
|
11,453 |
|
Gain on sale of the prepared food business |
|
|
- |
|
|
(34,793 |
) |
Adjusted earnings before taxes |
|
|
109,827 |
|
|
121,081 |
|
Income tax at effective tax rates |
|
|
25,251 |
|
|
25,662 |
|
Adjusted net earnings |
|
$ |
84,576 |
|
$ |
95,419 |
|
|
|
|
|
|
Set forth below is a reconciliation of reported
net earnings to EBITDA and FIFO EBITDA (earnings 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.
|
|
Twelve Months Ended |
EBITDA and
FIFO EBITDA: |
|
March 31, 2022 |
|
March 31, 2021 |
|
|
(In
thousands) |
|
|
|
|
|
Net earnings |
|
$ |
51,007 |
|
|
$ |
126,100 |
|
Income tax expense |
|
|
15,224 |
|
|
|
33,916 |
|
Interest expense, net of interest income |
|
|
5,641 |
|
|
|
6,125 |
|
Depreciation and amortization |
|
|
36,523 |
|
|
|
32,375 |
|
Interest amortization |
|
|
(242 |
) |
|
|
(330 |
) |
EBITDA |
|
|
108,153 |
|
|
|
198,186 |
|
LIFO charge (credit) |
|
|
35,821 |
|
|
|
(15,595 |
) |
FIFO EBITDA |
|
$ |
143,974 |
|
|
$ |
182,591 |
|
|
|
|
|
|
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: Timothy J. Benjamin, Chief Financial
Officer315-926-8100
|
Seneca Foods
Corporation |
Unaudited Selected
Financial Data |
|
|
|
|
|
|
|
|
For the Periods
Ended March 31, 2022 and March 31, 2021 |
(In thousands of
dollars, except share data) |
|
|
|
|
|
|
|
|
|
|
|
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|
Three Months Ended |
|
Twelve Months Ended |
|
March 31, |
|
March 31, |
|
March 31, |
|
March 31, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
Net sales |
$ |
332,389 |
|
|
$ |
304,793 |
|
$ |
1,385,280 |
|
|
$ |
1,467,644 |
|
|
|
|
|
|
|
|
|
Other operating expense (income) , net (note 2) |
$ |
493 |
|
|
$ |
4,702 |
|
$ |
1,174 |
|
|
$ |
(29,014 |
) |
|
|
|
|
|
|
|
|
Operating income (note 1) |
$ |
7,135 |
|
|
$ |
32,522 |
|
$ |
70,345 |
|
|
$ |
181,067 |
|
Loss from equity investment |
|
- |
|
|
|
10,701 |
|
|
7,775 |
|
|
|
11,453 |
|
Other non-operating (income) expense |
|
(2,333 |
) |
|
|
1,016 |
|
|
(9,302 |
) |
|
|
3,473 |
|
Interest expense, net |
|
1,458 |
|
|
|
1,539 |
|
|
5,641 |
|
|
|
6,125 |
|
Earnings before income taxes |
$ |
8,010 |
|
|
$ |
19,266 |
|
$ |
66,231 |
|
|
$ |
160,016 |
|
|
|
|
|
|
|
|
|
Income tax expense |
|
1,457 |
|
|
|
4,437 |
|
|
15,224 |
|
|
|
33,916 |
|
|
|
|
|
|
|
|
|
Net earnings |
$ |
6,553 |
|
|
$ |
14,829 |
|
$ |
51,007 |
|
|
$ |
126,100 |
|
|
|
|
|
|
|
|
|
Basic earnings per common share |
$ |
0.78 |
|
|
$ |
1.63 |
|
$ |
5.83 |
|
|
$ |
13.82 |
|
Diluted earnings per common share |
$ |
0.77 |
|
|
$ |
1.62 |
|
$ |
5.79 |
|
|
$ |
13.72 |
|
Note 1: |
|
The effect of the LIFO inventory valuation method on fourth quarter
pre-tax results decreased operating earnings by $5.2 million and
increased operating earnings by $11.3 million for the three month
periods ended March 31, 2022 and March 31, 2021, respectively. The
effect of the LIFO inventory valuation method on YTD twelve month
pre-tax results decreased operating earnings by $35.8 million and
increased operating earnings by $15.6 million for the twelve month
periods ended March 31, 2022 and March 31, 2021, respectively. |
|
|
|
Note 2: |
|
During the twelve months ended March 31, 2022, the Company had net
other operating expense of $1.2 million, which was driven by
charges for supplemental early retirement plans of $2.5 million and
$1.1 million of charges to maintain non-operating facilities
classified as held for sale. These charges were offset by a net
gain on the sale of assets of $1.6 million, a gain from debt
forgiveness on an economic development loan of $0.5 million, and
income from land rental of $0.3 million. During the twelve months
ended March 31, 2021 the Company had net other operating income of
$29.0 million, which was primarily comprised of a net gain on the
sale of assets of $31.9 million, including the gain realized upon
the divestiture of the prepared foods business. The gain was
partially offset by charges to maintain non-operational plants
acquired in the Midwest of $1.5 million, a charge for a
supplemental early retirement plan of $1.2 million, and a charge
for severance of $0.2 million. |
|
|
|
Note 3: |
|
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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