Seneca(SENEA) - 2025 Q4 - Annual Report

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]