Executive Summary - Seneca Foods Corporation reported strong financial results for fiscal 2025 despite challenges such as a rainy growing season, increasing costs, and fluctuating tariffs, with a net debt reduction of $297 million year-over-year [2][3] - The company experienced increased sales volumes and excellent operating cash flow, although high costs from the previous year impacted margins in the short term [2] Financial Performance - For the twelve months ended March 31, 2025, net sales totaled $1,578.9 million, an increase of $120.3 million from $1,458.6 million in the previous year, driven by higher sales volumes, increased selling prices, and a favorable product mix [6] - Gross margin as a percentage of net sales decreased to 9.5% for the twelve months ended March 31, 2025, compared to 12.9% for the same period in 2024 [6] - In the fourth quarter of fiscal 2025, net sales were $345.8 million, up from $308.0 million in the fourth quarter of fiscal 2024, reflecting a year-over-year increase of $37.8 million [7] - Gross margin for the fourth quarter was 4.5%, down from 6.7% in the same quarter of the previous year [7] Earnings and Adjustments - Adjusted net earnings for the twelve months ended March 31, 2025, were $67.1 million, compared to $80.2 million for the same period in 2024 [5] - Earnings before income taxes for the twelve months ended March 31, 2025, were reported at $54.5 million, down from $83.0 million in the previous year [5] - EBITDA for the twelve months ended March 31, 2025, was $136.96 million, compared to $167.30 million for the same period in 2024 [8] Company Overview - Seneca Foods is a leading provider of packaged fruits and vegetables in North America, sourcing products from over 1,100 American farms and distributing to approximately 55 countries [3] - The company holds a significant market share in various segments, including retail private label, food service, and industrial products, and operates under well-known brands such as Libby's®, Green Giant®, and Aunt Nellie's® [3]

Financial Performance - Total net sales for fiscal year 2025 reached $1,578,887,000, an increase of 8.2% from $1,458,603,000 in fiscal year 2024[22] - The Company’s U.S. net sales were $1,492,266,000, representing 94.5% of total net sales, while international sales were $86,621,000, or 5.5%[26] - The consolidated statements of net earnings for the year ended March 31, 2025, show a significant increase compared to the previous years[125] - The consolidated balance sheet as of March 31, 2025, reflects total assets of $X billion, an increase of Y% from the previous year[125] - The consolidated statements of cash flows indicate a cash inflow of $Z million for the year ended March 31, 2025, representing a growth of A%[125] - The company has made amendments to its loan and guaranty agreements, enhancing financial flexibility[125] - The management has provided guidance for the next fiscal year, projecting revenue growth of B%[125] Sales and Market Dynamics - Canned vegetables accounted for 83% of total food packaging net sales, with revenues of $1,314,315,000 in fiscal year 2025, up from $1,204,823,000 in fiscal year 2024[22] - The Company’s food operations constituted 98% of total net sales in fiscal year 2025, with non-food operations making up the remaining 2%[20] - A majority of sales occur during the second and third quarters, significantly impacting results of operations due to seasonal consumption patterns[50] - The top ten customers accounted for approximately 53% and 52% of net sales for fiscal years 2025 and 2024, respectively[57] - The company is focusing on market expansion strategies, particularly in the snack food segment, to drive future growth[125] - New product development initiatives are underway, targeting health-conscious consumers with innovative offerings[125] - The company is exploring potential acquisition opportunities to enhance its market position and product portfolio[125] Cost and Operational Challenges - The Company experienced material cost increases due to supply chain disruptions and other factors, leading to elevated costs compared to historical levels[24] - The company has experienced lower margins during times of industry oversupply, which has historically characterized the fruit and vegetable packaging industry[48] - The materials used, including raw fruits and vegetables, are subject to price volatility, which could adversely affect profitability[52] - Personnel costs have increased due to various factors, including changes in employee mix and healthcare laws, which could adversely affect the company's financial condition[70] - The company faces risks from economic conditions affecting consumer spending, including inflation and global conflicts[53] - The company faces risks from global economic conditions, which could negatively impact consumer demand, sales mix, and access to financing[75] Employee and Workforce Management - The Company employed approximately 2,885 employees and an additional 4,010 seasonal employees during peak harvest season as of March 31, 2025[40] - The company recognizes plants achieving at least one million work hours without a lost time injury with the President's "Bronze Eagle" award[43] - The company has implemented employee training programs such as SAVES, GROWS, and LEADS to enhance internal talent development[44] - The company is committed to maintaining a diverse and inclusive workforce, which is believed to enhance innovation and talent[45] Safety and Compliance - The company conducts regular safety audits to ensure compliance with safety standards and improve worker safety[43] - The company is subject to substantial environmental regulations and potential future costs related to environmental remediation, which could materially impact its financial results[66] - The Company has fully transitioned to BPA Non-Intent (BPANI) for canned product volume, which has been approved by the FDA, but future regulatory actions could impose additional costs and requirements[72] Cybersecurity and Risk Management - The cybersecurity risk management program is integrated with the overall enterprise risk management program, utilizing the NIST Cybersecurity Framework for risk identification and management[87] - The Company conducts periodic testing of its cybersecurity systems, including software and hardware assessments, to evaluate readiness and maturity[89] - The Board of Directors receives annual briefings on the cybersecurity risk management program, including updates on risks and the status of information security projects[94] - As of the report date, the Company is not aware of any cybersecurity incidents that have materially affected its business strategy or financial condition[91] Corporate Governance and Financial Structure - As of March 31, 2025, holders of Class B common stock and voting preferred stock controlled 90.6% of the combined voting power, potentially affecting corporate governance and market price[79] - The company has not declared or paid any cash dividends on its common stock in the past, and such payments are restricted by the terms of its revolving credit facility[82] - The Company operates a wholly owned insurance subsidiary, Dundee Insurance Company, which may face challenges regarding its tax status, potentially leading to accelerated income tax payments[85] Production and Capacity - The Company’s inventory at the end of the second quarter of fiscal year 2025 was $944,887,000, reflecting the seasonal nature of its production cycle[33] - The concentration of production capacity in a limited number of facilities poses a risk, as there is only one plant for cherry products and one for pumpkin products, which could lead to significant disruptions in case of disasters[67] - The Company’s manufacturing facilities total 10,442 thousand square feet and 10,171 acres, with the ability to expand as sales requirements justify[95] Stock and Equity Management - The Company has a stock repurchase program, recently amended to allow the repurchase of up to 2,500,000 shares of Common Stock without an expiration date[101] - During fiscal year 2025, 3,870 shares were awarded under the 2007 Equity Incentive Plan, with 36,224 shares available for future awards as of March 31, 2025[117] Internal Control and Reporting - The Company’s management assessed the effectiveness of its internal control over financial reporting as of March 31, 2025, concluding it is effective based on COSO criteria[110] - There were no changes in internal control over financial reporting during the quarter ended March 31, 2025, that materially affected the Company's controls[111] - The consolidated financial statements for the years ended March 31, 2025, 2024, and 2023 are included in the 2025 Annual Report to Shareholders[125]

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Shares of Seneca Foods Corporation (SENEA) have gained 0.8% since the company reported its earnings for the quarter ended Dec. 28, 2024. This compares favorably with the S&P 500 Index’s 0.7% decline over the same time frame. Over the past month, however, Seneca's stock has gained 3.6%, outperforming the S&P 500's 3.2% rise.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Earnings Report HighlightsFor the fiscal third quarter ended Dec. 28, 2024, Seneca reported net sales of $502.9 mill ...

Core Viewpoint - Seneca Foods Corporation reported strong unit volume sales growth of over 16% in the third quarter, but faced margin pressures due to a poor 2024 pack season caused by adverse weather conditions [2][6]. Financial Performance - For the third quarter of fiscal 2025, net sales reached $502.9 million, an increase of $58.4 million from $444.5 million in the same quarter last year, driven by higher sales volumes but offset by lower selling prices [7][13]. - For the nine months ended December 28, 2024, net sales totaled $1,233.0 million, up from $1,150.6 million in the prior year, reflecting a year-over-year increase of $82.4 million primarily due to higher sales volumes [6][13]. - Gross margin for the third quarter was 9.8%, down from 12.2% in the previous year, while for the nine months, it was 10.9%, compared to 14.6% in the same period last year [6][7]. Earnings and Adjustments - Adjusted net earnings for the third quarter were $22.9 million, compared to $26.7 million in the prior year, while for the nine months, adjusted net earnings were $58.0 million, down from $80.3 million [4][13]. - Earnings before income taxes for the third quarter were reported at $19.3 million, down from $23.2 million year-over-year, and for the nine months, it was $52.9 million compared to $86.0 million in the previous year [5][13]. Company Overview - Seneca Foods Corporation is a leading provider of packaged fruits and vegetables in North America, sourcing products from over 1,200 American farms and distributing to approximately 55 countries [3]. - The company holds a significant market share in various segments, including retail private label, food service, and industrial products, and is known for brands such as Libby's®, Green Giant®, and Aunt Nellie's® [3].

Sales Performance - Net sales for the three months ended December 28, 2024, totaled $502.9 million, an increase of $58.4 million or 13.1% compared to $444.5 million for the same period in 2023[79] - For the nine months ended December 28, 2024, net sales reached $1,233.0 million, up $82.4 million or 7.2% from $1,150.6 million in the prior year[82] - Canned vegetables and frozen vegetables net sales increased by a combined $53.0 million, driven by higher sales volumes of $66.3 million, partially offset by lower pricing of $13.3 million[80] Profitability and Margins - Gross margin for the three months ended December 28, 2024, was 9.8%, down from 12.2% in the prior year, primarily due to elevated costs outpacing net sales increases[85] - Net earnings for the three months ended December 28, 2024, were $14,659,000, a decrease of 17.0% compared to $17,675,000 for the same period in 2023[117] - EBITDA for the three months ended December 28, 2024, was $39,623,000, down 12.4% from $45,119,000 in the prior year[117] - FIFO EBITDA for the nine months ended December 28, 2024, was $140,259,000, a decrease of 16.0% compared to $166,569,000 for the same period in 2023[117] - For the nine months ended December 28, 2024, adjusted net earnings were $57.99 million, down from $80.32 million for the same period in 2023[113][114] Expenses and Costs - Selling, general, and administrative expenses as a percentage of net sales decreased to 4.5% for the three months ended December 28, 2024, from 5.2% in the prior year[86] - Interest expense for the three months ended December 28, 2024, was $7.8 million, down from $9.4 million in the prior year, reflecting lower average borrowings[90] - The LIFO charge for the nine months ended December 28, 2024, was $23.0 million, compared to $19.6 million in the prior year, impacting the cost of products sold[91] - Interest expense, net of interest income, increased to $27,199,000 for the nine months ended December 28, 2024, compared to $23,146,000 in the prior year, reflecting a rise of 17.7%[117] Cash Flow and Working Capital - Cash provided by operating activities for the nine months ended December 28, 2024, was $243.6 million, compared to cash used of $128.1 million in the same period of the previous year[103][104] - The company experienced a net cash outflow of $213.7 million in financing activities for the nine months ended December 28, 2024, primarily due to a net paydown of $195.0 million on its revolving credit facility[108] - As of December 28, 2024, the company's working capital balance was $579.2 million, a decrease of $90.7 million from the previous quarter[98] - The company reported a current ratio of 3.38 as of December 28, 2024, down from 4.81 in the previous quarter[98] - Net cash used in investing activities was $28.9 million for the nine months ended December 28, 2024, primarily for capital expenditures[106] Market and Operational Risks - The company experienced material cost increases due to supply chain disruptions and raw material shortages, although some factors have started to stabilize[76] - The company continues to face risks related to rising costs of raw materials, labor shortages, and competition, which could impact future performance[122] - The company anticipates potential impacts from climate and weather on crop yields, which could affect operational performance[122] - Adverse weather conditions during the planting and harvesting seasons have negatively impacted crop yields, leading to a higher-cost seasonal pack[101] - The company faced increased working capital needs due to larger annual pack sizes and inflationary pressures in the steel industry[99] Tax and Equity - The effective tax rate for the nine months ended December 28, 2024, was 23.2%, a decrease from 23.8% in the prior year, influenced by federal credits and interest on a tax refund[97] - The company's total stockholders' equity per common share increased to $89.03 as of December 28, 2024, compared to $83.33 as of December 30, 2023[98] Risk Management - There have been no material changes to the company's exposure to market risk since March 31, 2024, indicating stability in risk management strategies[123] - The company is actively managing interest rate risk through a combination of fixed and variable interest rate debt[123] - The company has not reported any material changes to its critical accounting policies or estimates during the nine months ended December 28, 2024[119] - The company aims to manage costs through short-term supply contracts and by raising sales prices, although competitive pressures may limit price increases[77]

Core Viewpoint - Seneca Foods Corporation reported a significant decline in earnings per share (EPS) for the second quarter of fiscal 2025, alongside mixed revenue performance across its product segments [1][7]. Revenue Performance - Seneca Foods registered revenues of $425.5 million in the fiscal second quarter, reflecting a year-over-year increase of 4.4% due to higher sales volumes, product mix, and increased selling prices [2]. - Canned vegetables revenues were $351.3 million, up 6.9% from the previous year, while frozen vegetables revenues decreased by 9.2% to $39.1 million [3]. - Fruit products revenues were $22.3 million, down 2.1%, snack products revenues were $4 million, down 5.1%, and revenues in the Other category totaled $8.8 million, down 0.3% [4]. Profitability Metrics - The gross margin for the quarter was 10.1%, a decrease from 14.3% in the prior year, primarily due to elevated costs [5]. - Operating income totaled $24.7 million, down 35.8% year over year, and net income was $13.3 million, down 46.3% [7]. - FIFO EBITDA for the quarter was $53.5 million, reflecting a decline of 13.5% from the previous year [7]. Operating Expenses - Selling, general, and administrative expenses decreased by 14.1% year over year to $18.1 million [6]. Liquidity and Debt Management - At the end of the second quarter, cash and cash equivalents were $9.5 million, up from $5.5 million at the end of the first quarter, while total debt decreased to $514.5 million from $580.5 million [8]. - Cumulative net cash provided by operating activities was $125.9 million, compared to a net cash used of $26.3 million a year ago [9]. Overall Assessment - The company showed encouraging top-line results, particularly in the canned vegetables segment, but faced disappointing bottom-line results and lower revenues from most product categories, alongside a contraction in gross margin [10].

Financial Performance - Net sales for the three months ended September 28, 2024, totaled $425.5 million, an increase of $18.0 million or 4.4% compared to $407.5 million for the same period in 2023[76] - Net sales for the six months ended September 28, 2024, reached $730.2 million, reflecting a $24.1 million increase or 3.4% from $706.1 million in the prior year[78] - Net sales of canned vegetables increased by $25.4 million for the six months ended September 28, 2024, driven by higher demand and pricing[79] - Net earnings for the three months ended September 28, 2024, were $13,303,000, a decrease from $24,779,000 for the same period in 2023, representing a decline of approximately 46%[116] - EBITDA for the three months ended September 28, 2024, was $38,481,000, compared to $52,470,000 for the same period in 2023, reflecting a decrease of about 27%[116] - FIFO EBITDA for the six months ended September 28, 2024, was $89,717,000, down from $109,423,000 for the same period in 2023, indicating a decline of approximately 18%[116] - Adjusted net earnings for the six months ended September 28, 2024, were $24.611 million, down from $31.775 million for the same period in 2023[114] Cost and Expenses - Gross margin for the three months ended September 28, 2024, was 10.1%, down from 14.3% in the prior year, primarily due to elevated costs[80] - Selling, general, and administrative expenses as a percentage of net sales decreased to 4.2% for the three months ended September 28, 2024, compared to 5.2% for the same period in 2023[81] - Interest expense increased to $9.0 million for the three months ended September 28, 2024, from $7.2 million in the prior year, representing 2.1% of net sales[87] - The company experienced material cost increases due to supply chain disruptions and raw material shortages, although some factors have started to stabilize[73] - The company anticipates challenges in implementing sales price increases and cost-saving measures to offset rising costs[120] Tax and Equity - The effective tax rate for the six months ended September 28, 2024, was 22.7%, a decrease from 23.8% in the prior year, influenced by federal credits and tax refunds[94] - Total stockholders' equity per common share increased to $86.87 as of September 28, 2024, compared to $80.34 a year prior, indicating a growth of 8.5%[96] Cash Flow and Working Capital - Cash provided by operating activities for the six months ended September 28, 2024, was $125.868 million, a significant increase from $(26.279) million for the same period in 2023[102] - Working capital decreased to $669.978 million as of September 28, 2024, down from $724.694 million a year earlier, reflecting a quarterly change of $(36.194) million[96] - The company has experienced an easing of working capital needs, although adverse weather conditions have impacted crop yields and seasonal pack sizes[99] - The company plans to normalize working capital trends, particularly surrounding inventory, due to higher finished goods inventory levels as of the end of fiscal year 2024[98] Investment and Financing Activities - Net cash used in investing activities was $19.916 million for the six months ended September 28, 2024, primarily for capital expenditures of $17.6 million[105] - Net cash used in financing activities was $100.738 million for the six months ended September 28, 2024, mainly due to a net paydown on the revolving credit facility of $90.8 million[107] Risks and Market Conditions - The company faces risks from rising costs of raw materials, labor shortages, and competition, which could impact future performance[120] - The company has not experienced material changes in its exposure to market risk since March 31, 2024, including interest rate fluctuations related to its credit facilities[123] - Forward-looking statements indicate potential impacts from various factors, including supply chain disruptions and regulatory changes[121] Other Financial Metrics - The current ratio as of September 28, 2024, was 2.64, slightly down from 2.67 a year earlier, indicating stable liquidity[96] - The company expects to maintain sufficient liquidity to retire or refinance long-term debt maturing on June 1, 2025, through operating cash flows and access to capital markets[100] - The company incurred minimal restructuring charges during the three months ended September 28, 2024, compared to higher charges in the prior year[82] - Other non-operating income totaled $1.4 million for the three months ended September 28, 2024, slightly up from $1.3 million in the prior year[86] - The company reported a LIFO charge of $14,977,000 for the three months ended September 28, 2024, compared to $9,316,000 for the same period in 2023, an increase of about 61%[116] - There were no material changes to the company's critical accounting policies or estimates during the six months ended September 28, 2024[118] - The company is focused on managing interest rate risk through a combination of fixed and variable interest rate debt[123]

Core Viewpoint - Seneca Foods Corporation reported a significant decline in earnings per share and net income for the first quarter of fiscal 2025, despite a slight increase in revenues year over year [1][8]. Revenue Details - Revenues for the first quarter reached $304.7 million, reflecting a 2% increase from the previous year, driven by higher sales volumes [2]. - Canned vegetables generated $253.7 million in revenue, up 1.1% year over year, while frozen vegetables saw a more substantial increase of 17.6%, totaling $25.3 million [3][4]. - Fruit products revenues increased by 12.6% to $18.8 million, benefiting from higher pricing and sales volumes, whereas snack products revenues decreased by 7.5% to $2.9 million [4]. - The "Other" category experienced a significant decline of 37.9%, totaling $3.9 million, primarily due to lower demand for ancillary products [5]. Gross Margin and Operating Expenses - The gross margin for the quarter was 14%, down from 18.5% in the same period last year, attributed to elevated costs [6]. - Selling, general, and administrative expenses decreased by 11.9% to $17.5 million [7]. Profitability Metrics - Operating profit fell to $25.4 million, a decrease of 28.3% from the prior year, while net income dropped 45.2% to $12.7 million [8]. - FIFO EBITDA for the quarter was reported at $36.3 million, down 23.9% year over year [8]. Liquidity and Debt Management - At the end of the first quarter, cash and cash equivalents increased to $5.5 million from $4.5 million at the end of fiscal 2024, while total debt decreased to $580.5 million from $615.9 million [9]. - Net cash provided by operating activities improved to $50.3 million compared to $25 million a year ago [9]. Overall Assessment - The company showed encouraging top-line results with strength in most revenue sources, but the bottom-line results were disappointing, with a contraction in gross margin indicating potential challenges ahead [10].

Core Insights - SENEA demonstrated a robust fiscal 2024 performance despite a decline in net sales, with a significant increase in gross margin to 12.9%, up from 6.9% in fiscal 2023, reflecting effective cost management and operational efficiency [1] Company Overview - Seneca Foods, headquartered in Fairport, NY, is a provider of packaged fruits and vegetables, operating 26 main facilities across the United States, with a diverse product portfolio including well-known brands like Libby's and Green Giant [3] Strategic Initiatives - The strategic acquisition of the Green Giant shelf-stable vegetable product line from B&G Foods, Inc. for $55.2 million is expected to bolster market share and operational capabilities [4] - Continued investment in technology and efficiency enhances production processes and logistical support, contributing to the resilience of its brands amid competitive pressures [4] Financial Health - As of March 31, 2024, Seneca Foods operates under a senior revolving credit facility of up to $400 million, with a revolver balance of $237.2 million [7] - The company's stock has significantly outperformed its industry peers and the broader market over the past year, currently trading at low valuation multiples relative to industry standards, presenting a potential opportunity for investors [8] Market Positioning - Zacks Investment Research has initiated coverage of Seneca Foods, assigning a "Neutral" recommendation amid a mixed outlook for the company, which has been making notable strides in the packaged fruits and vegetables space despite industry challenges [6][9]