Financial Performance - Net sales for the three months ended December 27, 2025, totaled $508.3 million, an increase of $5.4 million or 1.1% compared to $502.9 million for the same period in 2024[91] - Net sales for the nine months ended December 27, 2025, were $1,265.8 million, an increase of $32.8 million or 2.7% compared to $1,233.0 million for the same period in 2024[94] - Gross margin for the three months ended December 27, 2025, was 16.4%, up from 9.8% in the prior year, primarily due to a LIFO credit and lower costs of current year seasonal pack products[97] - Gross margin for the nine months ended December 27, 2025, was 14.8%, up from 10.9% in the prior year, driven by increased net sales and a LIFO credit[102] - Adjusted net earnings for the nine months ended December 27, 2025, were $72.7 million, compared to $58.0 million for the same period in 2024[124] - EBITDA for the nine months ended December 27, 2025, was $167.2 million, an increase from $117.3 million in the same period of 2024[127] Operating Income and Expenses - Operating income as a percentage of net sales increased to 11.8% for the three months ended December 27, 2025, compared to 5.1% for the same period in 2024[96] - Selling, general, and administrative expenses as a percentage of net sales for the nine months ended December 27, 2025, were 5.0%, compared to 4.7% for the prior year[103] - Interest expense decreased from $7.8 million in the prior year quarter to $4.1 million, representing 0.8% of net sales, down from 1.6%[101] Cash Flow and Working Capital - For the nine months ended December 27, 2025, cash provided by operating activities was $114.2 million, a decrease from $243.6 million in the same period of 2024[114] - The net cash used in investing activities for the nine months ended December 27, 2025, was $26.5 million, primarily for capital expenditures of $27.0 million[117] - Net cash used in financing activities was $104.7 million for the nine months ended December 27, 2025, mainly due to payments of $94.0 million on term loans[119] - The company's working capital increased to $616.8 million as of December 27, 2025, from $579.2 million in the prior year[108] - The Company experienced an easing of working capital needs in fiscal year 2025, although adverse weather conditions impacted crop yields[111] Market Conditions and Challenges - The company faces rising costs and availability issues for raw materials, including fruits, vegetables, steel, and labor[134] - Crude oil prices are impacting distribution, packaging, and energy costs[134] - The company is experiencing an overall labor shortage, affecting recruitment and retention of employees[134] - There is a need for successful implementation of sales price increases and cost-saving measures to offset rising costs[134] - Competition and changes in consumer preferences are affecting demand for the company's products[134] - The company is at risk of losing significant customers or experiencing substantial reductions in orders[134] Strategic Initiatives - The Company believes its operations and existing liquidity sources will satisfy cash requirements for at least the next twelve months[113] - The Company utilized its Receivables Purchase Program to manage short-term liquidity and provide working capital flexibility[109] - The Company plans to seek strategic acquisitions to leverage existing capabilities and further build upon its business[109] - The ability to integrate acquisitions into operations is crucial for the company's expansion strategy[134] Regulatory and Financial Risks - The effective tax rate for the nine months ended December 27, 2025, was 23.6%, up from 23.2% in the prior year, primarily due to lower federal credits and higher earnings[107] - The company is exposed to fluctuations in interest rates related to its revolving credit facility and Amended Term Loan A-2[135] - The company utilizes both fixed and variable interest rate debt to manage interest rate risk[135] - Compliance with U.S., foreign, and local governmental regulations remains a significant concern for the company[134]

FAIRPORT, N.Y., Feb. 05, 2026 (GLOBE NEWSWIRE) -- Seneca Foods Corporation (NASDAQ: SENEA, SENEB) today announced financial results for the third quarter and nine months ended December 27, 2025. Executive Summary (vs. year-ago, year-to-date results): Net sales for the nine months ended December 27, 2025 totaled $1,265.8 million compared to $1,233.0 million for the nine months ended December 28, 2024. The year-over-year increase of $32.8 million was driven by higher sales volume and the impact of higher sell ...

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Core Viewpoint - Seneca Foods Corporation reported strong financial results for the quarter ended September 27, 2025, with significant increases in net sales, earnings, and margins, despite a challenging market environment [2][12]. Financial Performance - Net sales for Q2 FY2026 increased by 8.1% to $460 million from $425.5 million, driven by higher volumes and favorable pricing [2]. - Gross margin expanded to 13.4% from 10.1%, while operating income surged 68% to $41.5 million from $24.7 million, raising operating margin to 9% from 5.8% [2]. - Net earnings rose 123.6% to $29.7 million from $13.3 million, with diluted EPS climbing 125.8% to $4.29 from $1.90 [2]. EBITDA and Adjusted Earnings - EBITDA increased by 44.6% to $55.7 million from $38.5 million, attributed to higher earnings and lower interest expenses [3]. - On a non-GAAP basis, adjusted net earnings slightly decreased by 2.6% to $23.9 million from $24.6 million, while FIFO EBITDA fell 10.2% to $47.9 million from $53.5 million [3]. Segment Performance - Canned and frozen vegetables were the primary growth drivers, with canned vegetable sales rising 7.4% to $377.3 million and frozen vegetable sales increasing 14.8% to $44.9 million [5]. - Fruit product sales grew 2.1% to $22.8 million, snack products increased by 22.9% to $4.9 million, and the "other" category rose 15% to $10.1 million [5]. Cost Management and Profitability - Interest expenses fell significantly by 48% to $4.7 million from $9 million for the quarter, and by 47.9% for the six-month period [9]. - The company recorded a LIFO credit that reduced the cost of products sold by $7.7 million in the quarter, contrasting with a $15 million LIFO charge in the previous year [8]. Balance Sheet and Debt Management - Long-term debt decreased to $246.4 million from $406.6 million a year earlier, indicating progress in deleveraging [10]. - Total debt also declined, although inventories remained high at $786.5 million on a LIFO basis [10]. Management Commentary - Management described the quarter as a solid step towards normalizing operations after previous harvest and cost challenges, with improved crop yields contributing to better cost predictability [12]. - The company acknowledged ongoing challenges from selling through higher-cost inventory produced in 2024, which continues to impact FIFO gross margins [12]. Factors Influencing Results - The sales increase was largely attributed to higher volumes, with canned and frozen vegetables accounting for most of the gain [13]. - The LIFO credit significantly enhanced gross margin and EBITDA, although adjusted earnings and FIFO EBITDA faced pressure from high-cost inventory [13]. Guidance and Outlook - Seneca did not provide formal quantitative guidance but focused on operational drivers such as crop yields and cost normalization [14]. - Management highlighted ongoing uncertainties related to tariffs, energy costs, and changing consumer preferences [14]. Strategic Focus - During the quarter, Seneca concentrated on core operations and balance sheet management, with no significant acquisitions or restructuring initiatives [15]. - The company engaged in modest share repurchases, indicating a cautious approach to returning cash to shareholders while managing leverage [15].

Core Insights - Seneca Foods Corporation reported a strong performance in the second quarter and six months ended September 27, 2025, with unit volumes and net sales increasing by 10.2% and 8.1% respectively, attributed to a better harvest and normalized costs [3][8] Financial Performance - Net sales for the six months reached $757.5 million, up from $730.2 million in the previous year, reflecting a year-over-year increase of $27.3 million driven by higher sales volumes and product mix [8] - For the second quarter, net sales totaled $460.0 million, compared to $425.5 million in the same quarter last year, marking a $34.5 million increase [9] - Gross margin as a percentage of net sales improved to 13.7% for the six months ended September 27, 2025, compared to 11.7% for the same period last year [8] - The gross margin for the second quarter was 13.4%, up from 10.1% in the prior year [9] Earnings and Adjustments - Net earnings for the second quarter were reported at $29.7 million, significantly higher than $13.3 million in the same quarter last year [11] - Adjusted net earnings for the six months were $30.0 million, compared to $35.1 million in the previous year [11][17] - The company reported earnings before income taxes of $38.7 million for the second quarter, up from $17.1 million in the prior year [11] Market Position - 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 [5] - The company holds a significant market share in various segments, including retail private label and food service [5]

Financial Performance - Net sales for the three months ended September 27, 2025, totaled $460.0 million, an increase of $34.5 million or 8.1% compared to $425.5 million for the same period in 2024[84]. - For the six months ended September 27, 2025, net sales reached $757.5 million, reflecting a $27.3 million increase or 3.7% from $730.2 million in the prior year[87]. - Gross margin improved to 13.4% for the three months ended September 27, 2025, up from 10.1% in the same quarter of 2024, primarily due to a LIFO credit[90]. - Operating income as a percentage of net sales increased to 9.0% for the three months ended September 27, 2025, compared to 5.8% for the same period in 2024[89]. - The Company reported adjusted net earnings of $23.97 million for the six months ended September 27, 2025, compared to $35.07 million for the same period in 2024[118][119]. - EBITDA for the six months ended September 27, 2025, was $92.64 million, an increase from $77.66 million in the same period of 2024[121]. Cash Flow and Working Capital - For the six months ended September 27, 2025, cash provided by operating activities was $83.0 million, down from $125.9 million in the same period of 2024[108][109]. - The net cash used in investing activities for the six months ended September 27, 2025, was $18.6 million, primarily for capital expenditures[111]. - Net cash used in financing activities was $96.7 million for the six months ended September 27, 2025, mainly due to term loan payments and treasury stock purchases[113]. - Working capital decreased to $575.9 million as of September 27, 2025, from $669.9 million a year earlier[101]. - The current ratio was 2.59 as of September 27, 2025, compared to 2.64 in the prior year[101]. - The Company experienced an easing of working capital needs in fiscal year 2025, but adverse weather conditions led to reduced crop yields and a smaller seasonal pack, resulting in higher costs per unit[105]. - The production cycle is highly seasonal, with the majority of inventories produced from June through November, impacting cash flow and working capital needs[110][115]. Costs and Expenses - Interest expense decreased significantly from $9.0 million in the prior year quarter to $4.7 million in the current quarter, representing 1.0% of net sales[94]. - The effective tax rate for the six months ended September 27, 2025, was 23.6%, up from 22.7% in the prior year, primarily due to lower federal credits[100]. - The company experienced material cost increases due to supply chain disruptions and raw material shortages, although some factors have started to stabilize[81]. - The Company has increased steel coil purchases to mitigate supply chain challenges and inflationary pressures, impacting overall costs[104]. - The company faces rising costs and availability issues for raw materials, including fruits, vegetables, steel, and packaging[127]. - Crude oil prices are impacting distribution, packaging, and energy costs[127]. Strategic Initiatives - The company is exploring strategic acquisitions to leverage existing capabilities and enhance its business operations[103]. - The Company believes its operations and existing liquidity sources will satisfy cash requirements for at least the next twelve months[107]. - The company is managing interest rate risk through a combination of fixed and variable interest rate debt[128]. Risks and Challenges - The company is experiencing an overall labor shortage, affecting recruitment and retention of employees[127]. - There are risks associated with the expansion of the business and the integration of acquisitions into operations[127]. - The company is exposed to fluctuations in interest rates related to its revolving credit facility and Amended Term Loan A-2[128]. - The effectiveness of marketing and trade promotion programs is crucial for maintaining customer demand[127]. - The company must navigate changes in consumer preferences and local economic conditions[127]. - There are potential impacts from tariffs and governmental trade restrictions on operations[127]. - Compliance with U.S., foreign, and local governmental regulations is essential to avoid disruptions in operations[127].

Company Overview - Seneca Foods Corporation has experienced a significant increase in its share price, rising by 22.9% in recent months [1] Industry Insights - The company operates in the packaged fruits and vegetables sector, providing a range of products to its customers [1]

Core Viewpoint - Seneca Foods Corporation (SENEA) has been upgraded to an "Outperform" rating due to expected volume recovery from a key co-pack customer, benefits from deleveraging reducing interest expenses, and a normalization in gross margins as high-cost inventory dissipates, enhancing its earnings power and market position in packaged fruits and vegetables across North America [1] Volume Recovery - In the first quarter of fiscal 2026, Seneca's sales decreased by 2.4% year over year to $297.5 million, down from $304.7 million, primarily due to shipment disruptions from a key co-pack customer [2] - Management anticipates that these volumes will recover under the existing contractual relationship, providing a near-term boost to revenue as fiscal 2026 progresses [2] - Resilient consumer demand for shelf-stable vegetables and snacks is expected to stabilize revenue momentum [2] Interest Expense Decline - Seneca experienced a significant reduction in interest expense, which fell by 47.7% year over year to $5.4 million from $10.3 million in the first quarter of fiscal 2026, due to aggressive debt paydown and refinancing [3] - Long-term debt has been reduced to $259.5 million, with the revolver refinanced through 2029, positioning the company for continued interest savings over the next several quarters [3] - This deleveraging, along with steady operating cash flow, is expected to provide an uplift in earnings per share (EPS) and enhance balance sheet flexibility [3] Gross Margin Recovery - Gross margin improved to 14.1% in the first quarter of fiscal 2026, up from 14% a year ago, despite challenges from high-cost inventory due to unfavorable weather conditions [4] - Management noted progress in selling through high-cost inventory, with expectations for a normalized growing season in 2025 to ease input pressures and improve gross margin [4] - An $11.8 million LIFO credit was recorded in the quarter compared to $2.9 million last year, contributing to margin stability [4] Structural Positioning and Outlook - Seneca benefits from a large and resilient demand base for shelf-stable foods, which continue to see steady consumer preference across various channels [7] - The company's scale in private-label and branded categories, bolstered by the Green Giant shelf-stable vegetable line, enhances its market presence [7] - Disciplined working capital management and debt reduction have improved free cash flow visibility, allowing for reinvestment in operations while reducing financial risk [8]

Core Viewpoint - Seneca Foods Corporation reported mixed financial results for the first quarter of fiscal 2026, with a decline in net sales but an increase in net earnings, indicating a complex operational environment influenced by volume changes and pricing dynamics [2][6]. Financial Performance - Net sales for the first quarter were $297.5 million, down 2.4% from $304.7 million in the prior-year period, primarily due to lower sales volumes [2]. - Net earnings increased by 17.6% year over year to $14.9 million, or $2.14 per diluted share, compared to $12.7 million, or $1.80 per share, a year earlier [2]. - Operating income decreased by 8.8% to $23.2 million from $25.4 million in the same quarter last year, while gross margin slightly improved to 14.1% from 14% [2]. Segment Performance - Vegetable sales fell by 3.2% to $270.3 million from $279.1 million, while Fruit/Snack sales decreased by 0.5% to $21.6 million [3]. - The "Other" category saw a significant increase of 41.3% to $5.6 million from $3.9 million, driven by seed, can, and aircraft-related revenues [3]. Key Business Metrics - Interest expense dropped by 47.7% to $5.4 million from $10.3 million, benefiting from lower average borrowings and a reduced weighted-average interest rate [4]. - Adjusted net earnings, excluding LIFO inventory valuation credits, were $6 million, down 42.5% from $10.5 million in the prior-year quarter [4]. - EBITDA was $36.9 million, down 5.6% from $39.2 million, while FIFO EBITDA fell by 30.5% to $25.2 million from $36.3 million [4]. Liquidity Position - The company maintained a strong liquidity position with $12.1 million in cash and access to $389.1 million in unused credit under its revolving facility [5]. Management Commentary - The CEO acknowledged ongoing cost pressures from high-cost 2024 inventory due to unfavorable weather but expressed satisfaction with progress in selling through that inventory [6]. - Sales disruptions from a key co-pack customer affected volumes, but recovery is expected under the existing contract [6]. - The 2025 seasonal pack is underway, with expectations for improved crop yields to normalize inventory levels and costs [6]. Factors Influencing Sales - The decline in sales was primarily volume-driven, with a $13.6 million decrease in volume partially offset by $6.4 million from pricing and product mix [7]. - Lower vegetable category sales were attributed to volume losses that outweighed pricing gains, while snacks benefited from higher volumes [7]. - The increase in "Other" revenues was linked to ancillary businesses such as seed, can manufacturing, and aircraft operations [7]. Guidance - While no formal quantitative guidance was issued, management indicated expectations for volume recovery from the co-pack customer and cost normalization from improved crop yields in the 2025 pack [8]. Share Repurchase - During the quarter, Seneca repurchased 41,937 shares of Class A Common Stock at a cost of $3.8 million, with no Class B shares repurchased [9].