SENECA FOODS CORPORATION 
By MARION, N.Y., Jan. 31, 2013 /PRNewswire/ -- Seneca Foods Corporation (NASDAQ: SENEA, SENEB) reported net earnings for the fiscal nine months ended December 29, 2012 of $37.5 million, or $3.19 per diluted share, compared to $13.4 million, or $1.10 per diluted share for the same period in the prior year. In the first nine months of fiscal 2013, net sales increased $14.0 million, or 1.4% to $1,001.4 million. The increase is attributable to higher selling prices and a more favorable sales mix of $32.0 million partially offset by a sales volume decrease of $18.0 million.
For the third quarter of 2013, net earnings were $14.8 million, or $1.32 per diluted share, compared to $18.5 million, or $1.52 per diluted share, in the fiscal third quarter of 2012. Net sales for the third quarter ended December 29, 2012 increased from the third quarter ended December 31, 2011 by 1.3%, or $5.8 million to $452.7 million. The increase is attributable to a sales volume increase of $28.1 million partially offset by a less favorable sales mix and lower selling prices of $22.3 million. Part of the sales volume increase can be attributed to stronger promotional activity than in the prior year.
Excluding a non-cash after-tax LIFO charge of $0.8 million, net earnings per diluted share were $1.39 during the quarter ended December 29, 2012 versus $2.09 during the quarter ended December 31, 2011, which included a non-cash LIFO charge of $7.0 million. Excluding a non-cash after-tax LIFO credit of $0.8 million, net earnings per diluted share were $3.13 during the nine months ended December 29, 2012, compared to $2.70 during the nine months ended December 31, 2011 which included a non-cash LIFO charge of $19.5 million.
About Seneca Foods Corporation
Seneca Foods is a processor of canned fruits and vegetables with manufacturing facilities located throughout the United States. Its products are sold under the Libby's, Blue Boy, Aunt Nellie's Farm Kitchen, Stokely's, READ, Seneca Farms and Seneca labels as well as through the private label and industrial markets. In addition, under an alliance with General Mills Operations, LLC, a successor to the Pillsbury Company and a subsidiary of General Mills, Inc., Seneca produces canned and frozen vegetables, which are sold by General Mills Operations, LLC under the Green Giant label. Seneca's common stock is traded on the Nasdaq Global Stock Market under the symbols "SENEA" and "SENEB". SENEA is included the S&P SmallCap 600, Russell 2000 and Russell 3000 indices.
Non-GAAP Financial Measures--Net Earnings Excluding LIFO Impact, EBITDA and FIFO EBITDA
Net Earnings excluding LIFO, EBITDA and FIFO EBITDA are non-GAAP financial measures. The Company believes these non-GAAP financial measures provide a basis for comparison to companies that do not use LIFO and enhance the understanding of the Company's historical 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 and reported diluted earnings per share to net earnings excluding LIFO and diluted earnings per share excluding LIFO.
Quarter Ended
-------------
December 29, 2012 December 31, 2011
----------------- -----------------
Income Diluted Income Diluted
(in millions) EPS (in millions) EPS
------------ --- ------------ ---
Net earnings, as reported: $14.8 $1.32 $18.5 $1.52
LIFO charge, after tax at statutory federal rate $0.8 $0.07 $7.0 $0.57
---- ----- ---- -----
Net earnings, excluding LIFO impact $15.6 $1.39 $25.5 $2.09
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Diluted weighted average common shares outstanding
(in thousands) 10,838 11,799
====== ======
Nine Months Ended
-----------------
December 29, 2012 December 31, 2011
----------------- -----------------
Income Diluted Income Diluted
(in millions) EPS (in millions) EPS
------------ --- ------------ ---
Net earnings, as reported: $37.5 $3.19 $13.4 $1.10
LIFO (credit) charge, after tax at statutory federal rate $(0.8) $(0.06) $19.5 $1.60
----- ------ ----- -----
Net earnings, excluding LIFO impact $36.7 $3.13 $32.9 $2.70
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Diluted weighted average common shares outstanding
(in thousands) 11,347 11,805
====== ======
Set forth below is a reconciliation of reported net earnings to EBITDA and FIFO EBITDA (earnings before interest, income taxes, depreciation, amortization, non-cash charges and credits 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.
Nine Months Ended
-----------------
EBITDA and FIFO EBITDA: December 29, 2012 December 31, 2011
----------------- -----------------
(In thousands)
Net earnings $37,502 $13,438
Income taxes expense 20,415 8,107
Interest expense, net of
interest income 5,257 5,830
Depreciation and amortization 17,182 16,874
Interest amortization (225) (288)
---- ----
EBITDA 80,131 43,961
LIFO (credit) charge (1,176) 30,055
------ ------
FIFO EBITDA $78,955 $74,016
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Forward-Looking Information
The information contained in this release contains, or may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this release and include statements regarding the intent, belief or current expectations of the Company or its officers (including statements preceded by, followed by or that include the words "believes," "expects," "anticipates" or similar expressions) with respect to various matters.
Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Investors are cautioned not to place undue reliance on such statements, which speak only as of the date the statements were made. Among the factors that could cause actual results to differ materially are:
-- general economic and business conditions;
-- cost and availability of commodities and other raw materials such as
vegetables, steel and packaging materials;
-- transportation costs;
-- climate and weather affecting growing conditions and crop yields;
-- availability of financing;
-- leverage and the Company's ability to service and reduce its debt;
-- foreign currency exchange and interest rate fluctuations;
-- effectiveness of the Company's marketing and trade promotion programs;
-- changing consumer preferences;
-- competition;
-- product liability claims;
-- the loss of significant customers or a substantial reduction in orders
from these customers;
-- changes in, or the failure or inability to comply with, United States,
foreign and local governmental regulations, including environmental and
health and safety regulations; and
-- other risks detailed from time to time in the reports filed by the
Company with the SEC.
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.
Seneca Foods Corporation
Unaudited Condensed Consolidated Statements of Net Earnings
For the Periods Ended December 29, 2012 and December 31, 2011
(In thousands of dollars, except share data)
Quarter Year-to-Date
------- ------------
Fiscal 2013 Fiscal 2012 Fiscal 2013 Fiscal 2012
----------- ----------- ----------- -----------
Net sales $452,731 $446,891 $1,001,375 $987,416
======== ======== ========== ========
Restructuring expense (note 2) $2,510 $ - $2,510 $39
====== === ====== ===
Other operating income, net (note 3) $(38) $(707) $(330) $(876)
==== ===== ===== =====
Operating income (note 1) $23,975 $31,549 $63,174 $27,375
Interest expense, net 1,943 2,164 5,257 5,830
----- ----- ----- -----
Earnings before income taxes $22,032 $29,385 $57,917 $21,545
Income taxes expense 7,242 10,855 20,415 8,107
----- ------ ------ -----
Net earnings $14,790 $18,530 $37,502 $13,438
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Earnings attributable to common stock (note 4) $14,265 $17,897 $36,188 $12,964
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Basic earnings per share $1.32 $1.53 $3.21 $1.10
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Diluted earnings per share $1.32 $1.52 $3.19 $1.10
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Weighted average shares outstanding basic 10,767,027 11,727,978 11,276,024 11,733,571
Weighted average shares outstanding diluted 10,838,890 11,799,104 11,347,887 11,804,697
Note 1: The effect of
the LIFO
inventory
valuation
method on
third
quarter pre-
tax results
was to
decrease
operating
earnings by
$1,268,000
for the
three month
period ended
December 29,
2012 and
reduce
operating
earnings by
$10,774,000
for the
three month
period ended
December 31,
2011. The
effect of
the LIFO
inventory
valuation
method on
year-to-
date pre-
tax results
was to
increase
operating
earnings by
$1,176,000
for the nine
month period
ended
December 29,
2012 and
reduce
operating
earnings by
$30,055,000
for the nine
month period
ended
December 31,
2011.
Note 2: The three and
nine month
periods
ended
December 29,
2012
included a
restructuring
charge for
product
rationalization
costs of
$2,510,000.
Note 3: Other income
for the
current year
of $330,000
represents a
net gain on
the sale of
unused fixed
assets.
Other income
for the
prior year
of $876,000
represents a
net gain on
the sale of
unused fixed
assets.
Note 4: The Company
uses the
"two-class"
method for
basic
earnings per
share by
dividing the
earnings
attributable
to common
shareholders
by the
weighted
average of
common
shares
outstanding
during the
period. The
diluted
earnings per
share
includes the
effect of
convertible
shares for
each period
presented.
Common and
participating
shares
totaled
11,158,820
as of
December 29,
2012.
########
SOURCE Seneca Foods Corporation
