Seneca(SENEA)2025-02-06 21:10Sales 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]