FAIRPORT, N.Y., Nov. 09, 2022 (GLOBE NEWSWIRE) -- Seneca Foods Corporation (NASDAQ: SENEA, SENEB) today announced financial results for the second quarter and six months ended October 1, 2022.
Executive Summary (vs. year-ago, second quarter results):
“Inflation continues to have an impact on our reported earnings as a non-cash pre-tax LIFO charge of $29.2 million was incurred in the 3 months ended October 1, 2022,” said Paul Palmby, President and Chief Executive Officer of Seneca Foods. “However, through cost mitigation and needed pricing advances reflecting the reality of persistent inflationary pressure, we have been able to minimize the impact on our results. In addition, with a successful raw product pack season, inventory levels are sufficient to fully support customer needs.”
Executive Summary (vs. year-ago, year-to-date results):
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 80 countries. Seneca holds a large share of the market for 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. 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.
Three Months Ended | Six Months Ended | ||||||||||||||
October 1, 2022 | October 2, 2021 | October 1, 2022 | October 2, 2021 | ||||||||||||
Earnings before income taxes, as reported | $ | 20,993 | $ | 15,239 | $ | 27,725 | $ | 33,844 | |||||||
LIFO charge | 29,210 | 8,802 | 48,435 | 11,639 | |||||||||||
Loss on equity investment | - | 7,619 | - | 7,775 | |||||||||||
Adjusted earnings before income taxes | 50,203 | 31,660 | 76,160 | 53,258 | |||||||||||
Income taxes at effective tax rates | 11,748 | 7,535 | 17,821 | 12,675 | |||||||||||
Adjusted net earnings | $ | 38,455 | $ | 24,125 | $ | 58,339 | $ | 40,583 | |||||||
Set forth below is a reconciliation of reported net earnings to EBITDA and FIFO EBITDA (earnings before interest, income taxes, depreciation, amortization and non-cash charges 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.
Three Months Ended | Six Months Ended | |||||||||||||||
EBITDA and FIFO EBITDA: | October 1, 2022 | October 2, 2021 | October 1, 2022 | October 2, 2021 | ||||||||||||
(In thousands) | ||||||||||||||||
Net earnings | $ | 16,131 | $ | 11,654 | $ | 21,234 | $ | 25,790 | ||||||||
Income tax expense | 4,862 | 3,585 | 6,491 | 8,054 | ||||||||||||
Interest expense, net of interest income | 2,370 | 1,336 | 3,760 | 2,678 | ||||||||||||
Depreciation and amortization | 10,056 | 9,110 | 19,844 | 17,691 | ||||||||||||
Interest amortization | (61 | ) | (61 | ) | (121 | ) | (121 | ) | ||||||||
EBITDA | 33,358 | 25,624 | 51,208 | 54,092 | ||||||||||||
LIFO charge | 29,210 | 8,802 | 48,435 | 11,639 | ||||||||||||
FIFO EBITDA | $ | 62,568 | $ | 34,426 | $ | 99,643 | $ | 65,731 | ||||||||
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:
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 Officer
585-495-4100
Seneca Foods Corporation | |||||||||||||||
Unaudited Selected Financial Data | |||||||||||||||
For the Periods Ended October 1, 2022 and October 1, 2021 | |||||||||||||||
(In thousands of dollars, except share data) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
October 1, | October 2, | October 1, | October 2, | ||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Net sales | $ | 439,842 | $ | 372,256 | $ | 705,035 | $ | 607,298 | |||||||
Other operating (income) expense, net (note 2) | $ | (537 | ) | $ | 1,773 | $ | (2,532 | ) | $ | 395 | |||||
Operating income (note 1) | $ | 21,836 | $ | 21,819 | $ | 28,432 | $ | 39,546 | |||||||
Loss from equity investment | - | 7,619 | - | 7,775 | |||||||||||
Other non-operating income | (1,527 | ) | (2,375 | ) | (3,053 | ) | (4,751 | ) | |||||||
Interest expense, net | 2,370 | 1,336 | 3,760 | 2,678 | |||||||||||
Earnings before income taxes | $ | 20,993 | $ | 15,239 | $ | 27,725 | $ | 33,844 | |||||||
Income tax expense | 4,862 | 3,585 | 6,491 | 8,054 | |||||||||||
Net earnings | $ | 16,131 | $ | 11,654 | $ | 21,234 | $ | 25,790 | |||||||
Basic earnings per common share | $ | 2.05 | $ | 1.32 | $ | 2.64 | $ | 2.88 | |||||||
Diluted earnings per common share | $ | 2.03 | $ | 1.31 | $ | 2.62 | $ | 2.86 |
Note 1: | The effect of the LIFO inventory valuation method on the second quarter pre-tax results decreased operating earnings by $29.2 million the three month periods ended October 1, 2022 and October 1, 2021, respectively. The effect of the LIFO inventory valuation method on YTD six month pre-tax results decreased operating earnings by $48.4 million and $11.6 million for the six month periods ended October 1, 2022 and October 2, 2021, respectively. | ||||||||
Note 2: | The Company had net other operating income of $0.5 million during the three months ended October 1, 2022, which was driven primarily by a true-up of the supplemental early retirement plan accrual partially offset by a loss on the sale of various fixed assets. During the three months ended October 2, 2021, the Company had net other operating expense of $1.8 million, driven mostly by a charge for a supplemental retirement plan partially offset by a gain on the sale of a facility and various other fixed assets. During the six months ended October 1, 2022, the Company had net other operating income of $2.5 million, which was driven primarily by a gain on the sale of the Company’s western trucking fleet amongst other fixed assets and a true-up of the supplemental early retirement plan accrual. During the six months ended October 2, 2021, the Company had net other operating expense of $0.4 million, driven mostly by a charge for a supplemental early retirement plan offset by a gain on the sale of an aircraft. | ||||||||
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. |