SENECA FOODS CORPORATION Seneca Foods Corporation is a leading provider of packaged fruits and vegetables, with facilities located throughoutthe United States . Our product offerings include canned, frozen and jarred produce and snack chips that are sold under private label as well as national and regional brands that the Company owns or licenses, including Seneca®, Libby's®, Aunt Nellie's®, Cherryman®, Green Valley® and READ®. Canned fruits and vegetables are sold nationwide by major grocery outlets, including supermarkets, mass merchandisers, limited assortment stores, club stores and dollar stores. We also sell products to foodservice distributors, restaurant chains, industrial markets, other food processors, export customers in over 80 countries and federal, state and local governments for school and other food programs. Additionally, the Company packs canned and frozen vegetables under contract packing agreements. Business Trends We purchase raw materials, including raw produce, steel, ingredients and packaging materials from growers, commodity processors, steel producers and packaging suppliers. Raw materials and other input costs, such as labor, fuel, utilities and transportation, are subject to fluctuations in price attributable to a number of factors. Fluctuations in commodity prices can lead to retail price volatility and can influence consumer and trade buying patterns. The cost of raw materials, fuel, labor, distribution and other costs related to our operations can increase from time to time significantly and unexpectedly. We continue to experience material cost inflation for many of our raw materials and other input costs attributable to a number of factors, including but not limited to, the COVID-19 pandemic, the war inUkraine , supply chain disruptions (including raw material shortages) and labor shortages. While we have no direct exposure toRussia andUkraine , we have experienced increased costs for transportation, energy and raw materials due in part to the negative impact of theRussia -Ukraine conflict on the global economy. We attempt to manage cost inflation risks by locking in prices through short-term supply contracts, advance grower purchase agreements, and by implementing cost saving measures. We also attempt to offset rising input costs by raising sales prices to our customers. However, increases in the prices we charge our customers may lag behind rising input costs. Competitive pressures also may limit our ability to quickly raise prices in response to rising costs. To the extent we are unable to avoid or offset any present or future cost increases our operating results could be materially adversely affected. Results of OperationsNet Sales :
The following table presents net sales by product category (in thousands):
Three Months Ended Nine Months Ended
December 31, January 1, December 31, January 1,
2022 2022 2022 2022
Canned vegetables $ 392,942 $ 373,205 $ 976,026 $ 860,737
Frozen vegetables 33,754 32,305 93,560 95,739
Fruit products 33,371 30,192 75,674 68,351
Snack products 3,360 2,550 10,035 9,647
Other 9,827 7,341 22,994 18,417
Net sales $ 473,254 $ 445,593 $ 1,178,289 $ 1,052,891 Three Months Ended
Net sales totaled$473.3 million for the three months endedDecember 31, 2022 as compared with$445.6 million for the three months endedJanuary 1, 2022 . The overall net sales increase of$27.7 million , or 6.2%, was predominantly due to higher selling prices contributing favorability of$73.7 million offset by lower sales volumes having an unfavorable impact of$46.0 million to net sales, as compared to the prior year three-month interim period. Net sales of canned vegetables, frozen vegetables and fruit products increased over the prior year quarter due to higher pricing necessitated by the material cost increases that the Company is experiencing. Volume in each of these product categories is down vs. the prior year quarter partially offsetting a portion of the favorability in net sales generated by increased pricing. Volume in the snack category was up slightly over the prior year quarter and combined with increased pricing contributed to the net sales increase of$0.8 million . 13
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ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OPERATIONS
Nine Months Ended
Net sales amounted to$1,178.3 million for the nine months endedDecember 31, 2022 as compared with$1,052.9 million for the nine months endedJanuary 1, 2022 . The overall net sales increase of$125.4 million , or 11.9%, was due to higher selling prices contributing favorability of$160.7 million offset by lower sales volumes having an unfavorable impact of$35.3 million to net sales, as compared to the prior year nine-month interim period. Net sales increased for canned vegetables, frozen vegetables, fruit products, and snack products over the prior year interim period due to higher pricing necessitated by the material cost increases that the Company is experiencing. Volume in each of these product categories is down vs. the prior year quarter partially offsetting a portion of the favorability in net sales generated by increased pricing.
Operating and Non-Operating Income:
The following table presents components of operating and non-operating income as a percentage of net sales:
Three Months Ended Nine Months Ended
December 31, January 1, December 31, January 1,
2022 2022 2022 2022
Gross margin 11.4 % 10.1 % 10.0 % 11.5 %
Selling, general, and
administrative expense 4.6 % 4.7 % 5.1 % 5.5 %
Other operating expense
(income), net 0.0 % 0.1 % (0.2% ) 0.1 %
Restructuring 0.4 % 0.0 % 0.2 % 0.0 %
Loss from equity investment 0.0 % 0.0 % 0.0 % 0.7 %
Other non-operating income 0.4 % 0.5 % 0.4 % 0.7 %
Interest expense, net 0.9 % 0.3 % 0.7 % 0.4 %
Three Months Ended
Gross margin: Gross margin for the three months endedDecember 31, 2022 was 11.4% as compared with 10.1% for the three months endedJanuary 1, 2022 . The increase in gross margin for the three months endedDecember 31, 2022 was due primarily to an increase in net sales and favorable sales mix in fiscal year 2023, partially offset by a higher LIFO charge. The Company's LIFO charge for the three months endedDecember 31, 2022 was$30.9 million as compared to a charge of$19.0 million for the three months endedJanuary 1, 2022 . The increase in the LIFO reserve over the three months endedDecember 31, 2022 reflects the projected impact of expected cost increases throughout fiscal year 2023. Selling, General, and Administrative: Selling, general, and administrative costs as a percentage of net sales for the three months endedDecember 31, 2022 were 4.6% as compared with 4.7% for the prior year quarter. The decrease in selling, general, and administrative costs as a percentage of net sales was due to the increase in net sales and the fixed nature of certain expenses. Other Operating Expense (Income), net: The Company had net other operating expense of$0.2 million during the three months endedDecember 31, 2022 , which was driven primarily by a write down of idle production equipment to estimated selling price, less commission, as the assets met the criteria to be classified as held for sale atDecember 31, 2022 . The write down was partially offset by a gain on the sale of an aircraft. During the three months endedJanuary 1, 2022 , the Company had net other operating expense of$0.4 million , driven mostly by various miscellaneous expenses related to properties that were classified as held for sale during the prior year interim period. Restructuring: During the three months endedDecember 31, 2022 , the Company ceased production of green beans at one of itsNew York facilities. As a result, the Company incurred severance costs and a write down of production equipment that will be sold in the next twelve months. Other Non-Operating Income: Other non-operating income totaled$2.0 million and$2.2 million for the three months endedDecember 31, 2022 andJanuary 1, 2022 , respectively, and is comprised of the non-service related pension amounts that are actuarially determined. Interest Expense: Interest expense as a percentage of net sales was 0.9% for the three months endedDecember 31, 2022 as compared to 0.3% for the three months endedJanuary 1, 2022 . Interest expense increased from$1.5 million in the prior year quarter to$4.3 million for the current quarter as a result of higher interest rates and increased average borrowing levels. 14
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ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OPERATIONS
Nine Months Ended
Gross margin: Gross margin for the nine months endedDecember 31, 2022 was 10.0% as compared with 11.5% for the nine months endedJanuary 1, 2022 . The decrease in gross margin for the nine months endedDecember 31, 2022 was due primarily to a larger LIFO charge in fiscal year 2023. The Company's LIFO charge for the nine months endedDecember 31, 2022 was$79.3 million as compared to a charge of$30.7 million for the nine months endedJanuary 1, 2022 . The increase in the LIFO reserve over the nine months endedDecember 31, 2022 reflects the projected impact of expected cost increases throughout fiscal year 2023. Selling, General, and Administrative: Selling, general, and administrative costs as a percentage of net sales for the nine months endedDecember 31, 2022 were 5.1% as compared with 5.5% for the comparable prior year nine-month interim period. The decrease in selling, general, and administrative costs as a percentage of net sales was due to the increase in net sales and the fixed nature of certain expenses. Other Operating Expense (Income), net: During the nine months endedDecember 31, 2022 , the Company had net other operating income of$2.4 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, partially offset by the aforementioned write down of production equipment. During the nine months endedJanuary 1, 2022 , the Company had net other operating expense of$0.7 million , driven mostly by a charge for a supplemental early retirement plan offset by a gain on the sale of an aircraft. Loss fromEquity Investment : The Company's equity investment was written down to$0 in fiscal year 2022 due to an other-than-temporary impairment charge as the investment was determined to not be recoverable. The impairment resulted in a$7.8 million charge during the nine months endedJanuary 1, 2022 . Other Non-Operating Income: Other non-operating income totaled$5.1 million and$7.0 million for the nine months endedDecember 31, 2022 andJanuary 1, 2022 , respectively, and is comprised of the non-service related pension amounts that are actuarially determined. Interest Expense: Interest expense as a percentage of net sales was 0.7% for the nine months endedDecember 31, 2022 as compared to 0.4% for the nine months endedJanuary 1, 2022 . Interest expense increased from$4.2 million in the prior year nine-month interim period to$8.0 million for the nine months endedDecember 31, 2022 as a result of higher interest rates and increased average borrowing levels. through the first nine months of fiscal year 2023. Income Taxes: The Company's effective tax rate was 23.5% and 23.6% for the nine months endedDecember 31, 2022 andJanuary 1, 2022 , respectively. The effective tax rate decreased in the current nine-month interim period primarily due to the impact of federal credits, which reduced the effective rate by 0.5%. The overall effective rate decrease was partially offset by a 0.1% increase in each of the following as compared to the prior year nine-month interim period: state income taxes (net of federal benefits), permanent differences, interest and penalties, and other miscellaneous items. Earnings per Share:
A summary of the Company's earnings per common share is as follows:
Three Months Ended Nine Months Ended
December 31 , January 1 ,
2022 2022 2022 2022
Basic earnings per common
share $ 2.77 $ 2.16 $ 5.36 $ 5.02
Diluted earnings per common
share: $ 2.74 $ 2.14 $ 5.31 $ 4.98 For details of the calculation of these amounts, refer to Note 3 "Earnings per Common Share."
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ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OPERATIONS
Liquidity and Capital Resources
The financial condition of the Company is summarized in the following table and explanatory review (dollar amounts in thousands, except per share data):
December 31, January 1, March 31, March 31,
2022 2022 2022 2021
Working capital:
Balance $ 646,918 $ 405,236 $ 382,287 $ 358,169
Change in quarter $ 87,494 $ (5,875 )
Current portion of long-term debt
4,000 $ 4,500
Long-term debt, less current
portion $ 399,948 $ 123,808 $ 109,624 $ 94,085
Operating lease obligations, less
current portion $ 17,219 $ 24,533 $ 22,533 $ 27,769
Financing lease obligations, less
current portion $ 17,382 $ 21,587 $ 19,942 $ 19,232
Total stockholders' equity per
equivalent common share (1) $ 76.26 $ 69.04 $ 69.23 $ 63.05
Stockholders' equity per common
share $ 77.16 $ 69.78 $ 69.98 $ 63.68
Current ratio 3.62 3.03 3.21 3.27
Note (1): Equivalent common shares are either common shares or, for convertible
preferred shares, the number of common shares that the preferred shares are
convertible into. See Note 11 of the Notes to Consolidated Financial Statements
of the Company's 2022 Annual Report on Form 10-K for conversion details.
As shown in the condensed consolidated statements of cash flows, net cash used
by operating activities was $189.5 million for the nine months ended December
31, 2022 , compared to $11.1 million used by operating activities for the same
period of the prior year, a change of $178.4 million . The increase in cash used
by operating activities is primarily comprised of an increase in cash used for
working capital purposes. Inventories increased by $231.3 million , driven by the
increased size of the current year harvest in addition to material cost
inflation to various production inputs. The increase in inventory was partially
offset by a decrease in accounts payable, accrued expenses, and other of $28.7
million , income taxes of $13.6 million and accounts receivable of $12.8 million .
Cash used by investing activities was $51.5 million for the nine months ended
December 31, 2022 as compared to $31.7 million for the nine months ended January
1, 2022 , an increase of $19.8 million . Additions to property, plant and
equipment increased $20.1 million during the first nine months of fiscal 2023
compared to the same period of fiscal 2022, representing the majority of the
increase.
Cash provided by financing activities was $242.6 million for the nine months
ended December 31, 2022 , an increase of $248.7 million compared to cash used by
financing activities for the nine months ended January 1, 2022 of $6.1 million .
Entering fiscal year 2022, the Company had cash and cash equivalents of $59.8
million on hand to use for seasonal pack needs prior to borrowing on the
Revolver as compared to cash and cash equivalents of $10.9 million entering
fiscal year 2023. Additionally, cost inflation in fiscal year 2023 is higher
than the prior year driving seasonal borrowings for the pack higher as compared
to the prior year. During the nine months ended December 31, 2022 , the Company
borrowed $783.3 million and paid down $493.0 million , providing net cash of
$290.3 million , which was a change of $260.6 million compared to the comparable
prior year period. Other than borrowings under the Revolver, there was no new
long-term debt during the first nine months of fiscal year 2023. Additionally,
during the first nine months of fiscal year 2023, the Company repurchased $41.2
million of its common stock, the majority of which was done through a stock
repurchase program that was authorized in the first quarter of fiscal year 2022.
By comparison, the Company repurchased $27.8 million during the nine months
ended January 1, 2022 , an increase in cash used by financing activities of
$13.4 million over the comparable prior year period.
On March 24, 2021 , the Company entered into a Fourth Amended and Restated Loan
and Security Agreement that provides for a senior revolving credit facility of
up to $400.0 million that is seasonally adjusted (the "Revolver"). Maximum
borrowings under the Revolver total $300.0 million from April through July and
$400.0 million from August through March. The Revolver balance is included in
Long-Term Debt in the accompanying condensed consolidated balance sheet due to
the Revolver's March 24, 2026 maturity. In order to maintain availability of
funds under the facility, the Company pays a commitment fee on the unused
portion of the Revolver. The Revolver is secured by substantially all of the
Company's accounts receivable and inventories and contains borrowing base
requirements as well as a financial covenant, if certain circumstances apply.
The Company utilizes its Revolver for general corporate purposes, including
seasonal working capital needs, to pay debt principal and interest obligations,
and to fund capital expenditures and acquisitions. Seasonal working capital
needs are affected by the growing cycles of the vegetables the Company packages.
The majority of vegetable inventories are produced during the months of June
through November and are then sold over the following year. Payment terms for
vegetable produce are generally three months but can vary from a few days to
seven months. Accordingly, the Company's need to draw on the Revolver may
fluctuate significantly throughout the year.
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ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OPERATIONS
On September 14, 2022 , the Company entered into a First Amendment to the Fourth
Amended and Restated Loan and Security Agreement (the "Amendment") which amended
several provisions to replace LIBOR with SOFR plus a spread adjustment as the
interest rate benchmark on the Revolver. The transition to SOFR did not
materially impact the interest rates applied to the Company's borrowings. No
other material changes were made to the terms of the Company's Revolver as a
result of the Amendment.
The Company's credit facilities contain standard representations and warranties,
events of default, and certain affirmative and negative covenants, including
various financial covenants. At December 31, 2022 , the Company was in compliance
with all such covenants.
Subsequent to December 31, 2022 , the Company amended the Term Loan and entered
into a Second Amended and Restated Loan Agreement. Refer to Note 15 "Subsequent
Events" for additional information.
Impact of Seasonality on Financial Position and Results of Operations:
While individual vegetables have seasonal cycles of peak production and sales, the different cycles are somewhat offsetting. Minimal food packaging occurs in the Company's last fiscal quarter endingMarch 31 , which is the optimal time for maintenance, repairs and equipment changes in its packaging plants. The supply of commodities, current pricing, and expected new crop quantity and quality affect the timing and amount of the Company's sales and earnings. When the seasonal harvesting periods of the Company's major vegetables are newly completed, inventories for these packaged vegetables are at their highest levels. For peas, the peak inventory time is mid-summer and for corn and green beans, the Company's highest volume vegetables, the peak inventory is in mid-autumn. The seasonal nature of the Company's production cycle results in inventory and accounts payable reaching their lowest point late in the fourth quarter/early in the first quarter prior to the new seasonal pack commencing. As the seasonal pack progresses, these components of working capital both increase until the pack is complete. Given the material cost increases incurred to date in fiscal year 2023, both inventory and accounts payable are higher than prior year levels as ofDecember 31, 2022 . The Company's fruit and vegetable sales exhibit seasonal increases in the third and fourth fiscal quarters due to increased retail demand during the holiday seasons. In addition, the Company sells canned and frozen vegetables to a co-pack customer on a bill and hold basis at the end of each pack cycle, which typically occurs during the second and third quarters. The seasonal nature of the Company's sales, particularly holiday driven retail sales, result in the accounts receivable balance reaching its highest point at the end of the third and fourth fiscal quarters, while typically being the lowest at the end of the first quarter. One of the ways we attempt to offset material cost increases incurred is to increase selling prices, which resulted in a higher accounts receivable balance as compared to the prior year as ofDecember 31, 2022 . Non-GAAP Financial Measures: Certain disclosures in this report include non-GAAP financial measures. A non-GAAP financial measure is defined as a numerical measure of our financial performance that excludes or includes amounts so as to be different from the most directly comparable measure calculated and presented in accordance with GAAP in our condensed consolidated balance sheets and related condensed consolidated statements of net earnings, comprehensive income, stockholders' equity and cash flows. 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 (in thousands): Three Months Ended Nine Months Ended December 31, January 1, December 31, January 1, 2022 2022 2022 2022
Earnings before income taxes, as reported
$ 55,282 $ 58,221 LIFO charge 30,898 19,015 79,333 30,654 Loss on equity investment - - - 7,775 Adjusted earnings before income taxes 58,455 43,392 134,615 96,650 Income taxes at effective tax rates 13,737 10,241 31,635 22,809 Adjusted net earnings$ 44,718 $ 33,151 $ 102,980 $ 73,841 17
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ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OPERATIONS
New Accounting Standards
Refer to Note 1 "Basis of Preparation and Presentation."
Critical Accounting Policies and Estimates
Revenue Recognition and Trade Promotion Expenses: Revenue recognition is completed for most customers at a point in time basis when product control is transferred to the customer. In general, control transfers to the customer when the product is shipped or delivered to the customer based upon applicable shipping terms, as the customer can direct the use and obtain substantially all of the remaining benefits from the asset at this point in time. The Company sells certain finished goods inventory for cash on a bill and hold basis. The terms of the bill and hold agreement provide that title to the specified inventory is transferred to the customer prior to shipment and the Company has the right to payment (prior to physical delivery) which results in recorded revenue as determined under the revenue recognition standard. Trade promotions are an important component of the sales and marketing of the Company's branded products and are critical to the support of the business. Trade promotion costs, which are recorded as a reduction of net sales, include amounts paid to encourage retailers to offer temporary price reductions for the sale of the Company's products to consumers, amounts paid to obtain favorable display positions in retail stores, and amounts paid to retailers for shelf space in retail stores. Accruals for trade promotions are recorded primarily at the time of sale of product to the retailer based on expected levels of performance. Settlement of these liabilities typically occurs in subsequent periods primarily through an authorized process for deductions taken by a retailer from amounts otherwise due to the Company. As a result, the ultimate cost of a trade promotion program is dependent on the relative success of the events and the actions and level of deductions taken by retailers for amounts they consider due to them. Final determination of the permissible deductions may take extended periods of time. Inventories: The Company uses the lower of cost, determined under the LIFO method, or market, to value substantially all of its inventories. In the high inflation environment that the Company is experiencing, the Company believes that the LIFO method was preferable over the FIFO method because it better matches the cost of current production to current revenue. An actual valuation of inventory under the LIFO method is made at the end of each fiscal year based on the inventory levels and costs at that time. In contrast, interim LIFO calculations are based on management's estimates of expected year-end inventory levels, production pack yields, sales and the expected rate of inflation or deflation for the year. The interim LIFO calculations are subject to adjustment in the final year-end LIFO inventory valuation. Long-Lived Assets: The Company assesses its long-lived assets for impairment whenever there is an indicator of impairment. Property, plant, and equipment are depreciated over their assigned lives. The assigned lives and the projected cash flows used to test impairment are subjective. If actual lives are shorter than anticipated or if future cash flows are less than anticipated, a future impairment charge or a loss on disposal of the assets could be incurred. Impairment losses are evaluated if the estimated undiscounted value of the cash flows is less than the carrying value. If such is the case, a loss is recognized when the carrying value of an asset exceeds its fair value.
Income Taxes: As part of the income tax provision process of preparing the consolidated financial statements, the Company estimates income taxes. This process involves estimating current tax expenses together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities. The Company then assesses the likelihood that any deferred tax assets will be recovered from future taxable income and to the extent it is believed the recovery is not likely, a valuation allowance is established.
Pension Expense: The Company has a defined benefit plan which is subject to
certain actuarial assumptions. The funded status of the pension plan is
dependent upon many factors, including returns on invested assets and the level
of certain market interest rates, employee-related demographic factors, such as
turnover, retirement age and mortality, and the rate of salary increases.
Certain assumptions reflect the Company's historical experience and management's
best judgment regarding future expectations.
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ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OPERATIONS
Forward-Looking Information
This Quarterly Report on Form 10-Q 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:
? the effects of rising costs and availability of raw fruit and vegetables,
steel, ingredients, packaging, other raw materials, distribution and labor;
? crude oil prices and their impact on distribution, packaging and energy costs;
? an overall labor shortage, ability to retain a sufficient seasonal workforce,
lack of skilled labor, labor inflation or increased turnover impacting our
ability to recruit and retain employees;
? climate and weather affecting growing conditions and crop yields;
? our ability to successfully implement sales price increases and cost saving
measures to offset cost increases;
? the loss of significant customers or a substantial reduction in orders from
these customers;
? effectiveness of our marketing and trade promotion programs;
? competition, changes in consumer preferences, demand for our products and
local economic and market conditions;
? the impact of a pandemic on our business, suppliers, customers, consumers and
employees;
? unanticipated expenses, including, without limitation, litigation or legal
settlement expenses;
? product liability claims;
? the anticipated needs for, and the availability of, cash;
? the availability of financing;
? leverage and the ability to service and reduce debt;
? foreign currency exchange and interest rate fluctuations;
? the risks associated with the expansion of our business;
? the ability to successfully integrate acquisitions into our operations;? our ability to protect information systems against, or effectively respond to,
a cybersecurity incident or other disruption;
? other factors that affect the food industry generally, including:
o recalls if products become adulterated or misbranded, liability if product
consumption causes injury, ingredient disclosure and labeling laws and
regulations and the possibility that consumers could lose confidence in the
safety and quality of certain food products;
o competitors' pricing practices and promotional spending levels;
o fluctuations in the level of our customers' inventories and credit and other
business risks related to our customers operating in a challenging economic
and competitive environment; and
o the risks associated with third-party suppliers, including the risk that any
failure by one or more of our third-party suppliers to comply with food safety
or other laws and regulations may disrupt our supply of raw materials or
certain finished goods products or injure our reputation; and
? changes in, or the failure or inability to comply with,
local governmental regulations, including health, environmental, and safety
regulations.
Any of these factors, as well as such other factors as discussed in our other
periodic filings with the SEC , could cause our actual results to differ
materially from our anticipated results. The information provided in this Form
10-Q is based upon the facts and circumstances known as of the date of this
report, and any forward-looking statements made by us in this Form 10-Q speak
only as of the date on which they are made. Except as required by law, we
undertake no obligation to update these forward-looking statements after the
date of this Form 10-Q to reflect events or circumstances after such date, or to
reflect the occurrence of unanticipated events.
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