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Previous: SECOND FIDUCIARY EXCHANGE FUND INC, NSAR-A, 1995-08-15 |
Next: SENSORMATIC ELECTRONICS CORP, 8-K/A, 1995-08-15 |
Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
QUARTERLY REPORT UNDER SECTION 13 OF 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended July 1, 1995 Commission File Number 0-1989
Seneca Foods Corporation
(Exact name of registrant as specified in its charter)
New York 16-0733425
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
1162 Pittsford-Victor Road, Pittsford, New York 14534
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 716/385-9500
Not Applicable
Former name, former address and former fiscal year,
if changed since last report
Check mark indicates whether registrant (1) has filed all reports required to be
filed by Section 13 of 15(d) of the Securities Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
The number of shares outstanding of each of the issuer's classes of common stock
at the latest practical date are:
Class Shares Outstanding at July 31, 1995
Common Stock, $.25 Par 2,796,555
<PAGE>
<TABLE>
PART I FINANCIAL INFORMATION
SENECA FOODS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands of Dollars)
<CAPTION>
7/1/95 3/31/95
______ _______
<S> <C> <C>
ASSETS
Current Assets:
Cash and Short-term Investments $ 2,331 $ 26,538
Accounts Receivable, Net 30,444 32,601
Inventories:
Finished Goods 100,066 64,613
Work in Process 17,019 19,531
Raw Materials 47,938 48,260
_______ _______
165,023 132,404
Off-Season Reserve (Note 3) 17,916 -
Deferred Tax (Net) 1,933 1,933
Other Current Assets 591 801
_______ _______
Total Current Assets 218,238 194,277
Property, Plant and Equipment, Net 212,014 179,718
Common Stock of Moog Inc. 9,860 7,494
Other Assets 261 237
_______ _______
$440,373 $381,726
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes Payable $ 48,000 $ -
Accounts Payable 40,948 36,089
Accrued Expenses 23,436 19,599
Income Taxes - 125
Current Portion of Long-Term Debt and Capital
Lease Obligations 5,571 5,594
_______ _______
Total Current Liabilities 117,955 61,407
Long-Term Debt 220,392 220,677
Capital Lease Obligations 800 803
Deferred Income Taxes 12,343 11,490
10% Preferred Stock, Series A, Voting, Cumulative,
Convertible, $.025 Par Value Per Share 10 10
10% Preferred Stock, Series B, Voting, Cumulative,
Convertible, $.025 Par Value Per Share 10 10
6% Preferred Stock, Voting, Cumulative,
$.25 Par Value Per Share 50 50
Common Stock 1,880 1,880
Net Unrealized Gain on Available-For-Sale Securities 2,383 892
Retained Earnings 84,550 84,507
_______ ________
Stockholders' Equity 88,883 87,349
_______ _______
$440,373 $381,726
======= =======
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
SENECA FOODS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(In Thousands, except Share Data)
<CAPTION>
Three Months Ended
__________________
7/1/95 6/25/94
______ _______
<S> <C> <C>
Net Sales $ 81,945 $ 70,761
Costs and Expenses:
Cost of Product Sold 68,529 59,968
Selling, General, and Administrative 7,783 7,206
Interest Expense 5,545 1,356
_______ _______
Total Costs and Expenses 81,857 68,530
_______ _______
Earnings Before Income Taxes 88 2,231
Income Taxes 33 805
_______ _______
Earnings from Continuing Operations 55 1,426
Earnings from Discontinued Operations - 1
Gain on the Sale of Discontinued Operations
Net of Income Taxes - 34
_______ _______
Net Earnings $ 55 $ 1,461
======= =======
Net Earnings from Continuing Operations
Applicable to Common Stock $ 49 $ 1,421
Net Earnings Applicable to
Common Stock 49 1,455
Weighted Average Common
Shares Outstanding 2,796,555 2,797,305
Primary and Fully Diluted Earnings Per
Share of Common Stock (Exhibit II):
Earnings from Continuing Operations $ .02 $ .51
Earnings from Discontinued Operations - -
Gain on the Sales of Discontinued
Operations - .01
_______ _______
Net Earnings $ .02 $ .52
======= =======
<FN>
The accompanying notes are an integral part of these condensed financial
statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
SENECA FOODS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
<CAPTION>
Three Months Ended
__________________
7/1/95 6/25/94
______ _______
<S> <C> <C>
Cash Flows From Operating Activities:
Net Earnings $ 55 $ 1,461
Adjustments to Reconcile Net Earnings to
Net Cash Provided by Operating Activities:
Depreciation and Amortization 4,496 2,333
Deferred Income Taxes (22) 1,558
Changes in Working Capital:
Accounts Receivable 2,157 6,905
Inventories (32,619) 8,116
Off-Season Reserve (17,916) (6,252)
Other Current Assets 238 (3,162)
Income Taxes (153) (1,820)
Accounts Payable and
Accrued Expenses 8,696 472
_______ ______
Net Cash Provided (Used)
by Operations (35,068) 9,611
Cash Flows From Investing Activities:
Additions to Property, Plant,
and Equipment (36,792) (1,638)
_______ ______
Net Cash Used in Investing
Activities (36,792) (1,638)
Cash Flows From Financing Activities:
Notes Payable 48,000 -
Payments and Current Portion of Long-Term
Debt and Capital Lease Obligations (311) (882)
Other (24) 3
Dividends (12) (12)
Common Stock Retirement - (1,878)
______ ______
Net Cash Provided (Used) in
Financing Activities 47,653 (2,769)
Net Increase (Decrease) in Cash and Short-
Term Investments (24,207) 5,204
Cash and Short-Term Investments,
Beginning of Period 26,538 22,198
_______ ______
Cash and Short-Term Investments,
End of Period $ 2,331 $ 27,402
======= ======
<FN>
The accompanying notes are an integral part of these condensed financial
statements.
</FN>
</TABLE>
<PAGE>
SENECA FOODS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
July 1, 1995
1. Consolidated Condensed Financial Statements
In the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments, which are normal
and recurring in nature, necessary to present fairly the financial
position of the Registrant as of July 1, 1995 and March 31, 1995 and
results of operations for the three month periods ended July 1, 1995 and
June 25, 1994. All significant intercompany transactions and accounts
have been eliminated in consolidation. The March 31, 1995 balance sheet
was derived from audited financial statements.
The results of operations for the three month periods ended July 1, 1995
and June 25, 1994 are not necessarily indicative of the results to be
expected for the full year.
The accounting policies followed by the Registrant are set forth in Note
1 to the Registrant's financial statements in the 1995 Seneca Foods
Corporation Annual Report and 10-K.
Other footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these consolidated
condensed financial statements be read in conjunction with the financial
statements and notes included in the Registrant's March 31, 1995
financial report.
2. Primary earnings per share are based on the weighted average number of
common shares outstanding, as the effect of common stock equivalents is
immaterial. The difference between primary and fully diluted earnings
per share is immaterial.
3. Off-Season Reserve is the excess of absorbed expenses over incurred
expenses to date. The seasonal nature of the Registrant's Food
Processing business results in a timing difference between expenses
(primarily overhead expenses) incurred and absorbed into product cost.
All Off-Season Reserve balances are zero at fiscal year end.
4. The Registrant changed its fiscal year end from July 31 to March 31
during Fiscal 1995. These financial statements reflect the prior year as
if the fiscal year ended March 31.
<PAGE>
SENECA FOODS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
July 1, 1995
5. A proposed amendment to the Registrant's Certificate of Incorporation
which effected a recapitalization of the Registrant by creating a second
class of Common Stock (which is being distributed to all
common shareholders in the form of a stock dividend) was adopted at the
Annual Meeting held on August 5, 1995. This recapitalization amendment
(i) reclassifies the existing Common Stock as Class B Common Stock, (ii)
authorizes a new class of 10,000,000 shares designated as Class A Common
Stock and (iii) establishes the express terms of the Class A Common
Stock and the Class B Common Stock. The Class A Common Stock and the
Class B Common Stock have substantially identical rights with respect to
any dividends or distributions of cash or property declared on shares of
common stock and rank equally as to the right to receive proceeds on
liquidation or dissolution of the Registrant after payment of the
Registrant's indebtedness and liquidation right to the holders of
preferred shares. However, holders of Class B Common Stock retain full
vote per share whereas the holders of Class A Common Stock have voting
rights of 1/20th of one vote per share on all matters as to which
shareholders of the Registrant are entitled to vote.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION RESULTS OF OPERATIONS
July 1, 1995
Results of Operations:
Sales:
Sales reflect an increase of 15.8% for the first three months versus 1994. The
higher sales, in large part, are due to higher canned vegetables quantities sold
than the previous period and acquisitions made within the last year.
Costs and Expenses:
The following table shows cost and expenses as a percentage of sales:
<TABLE>
<CAPTION>
Three Months Ended
__________________
7/1/95 6/25/94
______ _______
<S> <C> <C>
Cost of Product Sold 83.6% 84.7%
Selling 7.1 7.2
Administrative 2.4 3.0
Interest Expense 6.8 1.9
---- ---
99.9% 96.8%
===== ====
</TABLE>
Lower Cost of Product Sold percentages (i.e. higher Gross Margins) reflect, in
part, lower selling prices for vegetable products than in the prior year due to
the relatively high packs of vegetables throughout the U. S. after the previous
year which saw unprecedented floods in the Midwest. The Interest Expense is
higher largely due to the debt issued to finance the acquisitions made over the
last year.
Income Taxes:
The effective tax rate used in fiscal 1996 is 38% and in fiscal 1995 it is 36%.
Financial Condition:
The financial condition of the Registrant is summarized in the following table
and explanatory review (In Thousands):
<TABLE>
<CAPTION>
For the Quarter For the Year
Ended June Ended March
---------- -----------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Working Capital Balance $100,283 $79,591 $132,870 $78,180
Quarter Change (32,587) 1,411 - -
Notes Payable 48,000 - - -
Long-Term Debt 221,192 68,130 221,480 68,546
Current Ratio 1.85:1 2.77:1 3.16:1 2.67:1
Inventory (Average) Turnover 1.8 3.1 1.9 1.8
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION RESULTS OF OPERATIONS
July 1, 1995
The change in the Working Capital for the quarter from the prior year is largely
due to acquisition of Green Giant assets in the prior year and the capital
expenditure program needed for the Registrant's plants to take on some of the
canned vegetable volume added by the acquisition. When the Registrant acquired
the Green Giant assets, it did not acquire the Finished Goods. Therefore, as the
Registrant produces finished goods for Pillsbury, working capital needs increase
accordingly.
As part of the Alliance with Pillsbury (see 1995 Annual Report for details),
Pillsbury takes Green Giant inventory as it needs it or at least by the
take-or-pay date (varies by commodity). Due to the industrywide high carry-in
inventory, it is expected that Pillsbury will begin taking the Green Giant
inventory in significant quantities during the third quarter. This has and will
reduce the Registrant's sales and increase its inventories and associated
borrowing needs for the second quarter of 1996 versus it's original plan.
The Registrant was not in compliance with certain debt covenants related to
Short-Term and Long-Term Debt. However, all provisions have been met or waived.
See Consolidated Statements of Cash Flows for further details.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults on Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
The annual meeting of shareholders of the Registrant was
held on August 5, 1995 and the following were the voting
results: (1) Management's nominees for Director positions
were elected, (2) three management proposals related to
the Registrant's recapitalization plan and year-end change
were adopted, (3) a management proposal to ratify the
appointment of Deloitte & Touche L.L.P. as independent
auditors was adopted. A summary of the voting results
follows (In thousands):
<TABLE>
<CAPTION>
Proposal For Withheld Against Abstain Broker Non-Votes
-------- --- -------- ------- ------- ----------------
<S> <C> <C> <C> <C> <C>
Directors:
D. L. Call 3,409 29
S. W. Stuart 3,408 30
M. A. Schaeffer 3,408 30
Approve amendments to Certificate
of Incorporation: 3,100 183 1 154
Approve amendment to Company
By-Laws per above 3,121 162 1 154
Approve amendment to Company
By-Laws-meeting date 3,292 18 129
Appointment of Auditors 3,435 1 3
Such other business 3,438
</TABLE>
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 3 - (3) Articles of Incorporation and By-Laws
will be filed under Form 10-Q/A when available.
(b) Exhibit 4 - (4) Instruments defining rights of
security holders including indentures will be filed
under Form 10-Q/A when available.
(c) Exhibit 11 - (11) Computation of earnings per share
(d) Exhibit 27 - (27) Financial Data Schedules
(e) Reports on Form 8-K - None during the quarter.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Seneca Foods Corporation
(Registrant)
/s/Kraig H. Kayser
__________________
August 11, 1995 Kraig H. Kayser
President and
Chief Executive Officer
/s/Jeffrey L. Van Riper
_______________________
August 11, 1995 Jeffrey L. Van Riper
Controller and
Chief Accounting Officer
<PAGE>
<TABLE>
EXHIBIT 11
SENECA FOODS CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(In thousands except share data)
<CAPTION>
Three Months Ended
------------------
7/1/95 6/25/94
______ _______
<S> <C> <C>
Net Earnings Applicable to Common Stock:
Net Earnings $ 55 $ 1,461
Deduct Preferred Cash Dividends 6 6
------- -----
Net Earnings Applicable to
Common Stock $ 49 $ 1,455
= == = =====
Weighted Average Common
Shares Outstanding 2,796,555 2,797,305
Effect of Common Stock Equivalent - -
_________ _________
Weighted Average Common Shares Outstanding
for Primary Earnings per Share 2,796,555 2,797,305
========= =========
Primary and Fully Diluted
Earnings Per Share $ .02 $ .52
= === = ===
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Commercial and Industrial Companies
Article 5 of Regulation S-X
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> JUL-01-1995
<CASH> 2331
<SECURITIES> 0
<RECEIVABLES> 30684
<ALLOWANCES> 240
<INVENTORY> 165023
<CURRENT-ASSETS> 218238
<PP&E> 323420
<DEPRECIATION> 111406
<TOTAL-ASSETS> 440373
<CURRENT-LIABILITIES> 117955
<BONDS> 221192
<COMMON> 1880
0
70
<OTHER-SE> 86933
<TOTAL-LIABILITY-AND-EQUITY> 440373
<SALES> 81945
<TOTAL-REVENUES> 81945
<CGS> 68529
<TOTAL-COSTS> 68529
<OTHER-EXPENSES> 7783
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5545
<INCOME-PRETAX> 88
<INCOME-TAX> 33
<INCOME-CONTINUING> 55
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 55
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0.02
<FN>
Other-Expenses is Selling, General and Administrative Expenses.
</FN>
</TABLE>
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