<PAGE>
Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended December 26, 1998 Commission File Number 0-1989
Seneca Foods Corporation
(Exact name of Company 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)
Company'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 Company (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Act of 1934 during the preceding
12 months (or for such shorter period that the Company 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 January 31, 1999
Common Stock Class A, $.25 Par 3,363,153
Common Stock Class B, $.25 Par 2,790,869
<PAGE>
<TABLE>
PART I FINANCIAL INFORMATION
SENECA FOODS CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(In Thousands of Dollars)
<CAPTION>
12/26/98 3/31/98
-------- -------
<S> <C> <C>
ASSETS
Current Assets:
Cash and Short-term Investments $ 18,731 $ 4,077
Accounts Receivable, Net 42,229 48,647
Inventories:
Finished Goods 177,104 118,067
Work in Process 22,005 25,440
Raw Materials 38,249 50,537
------- -------
237,358 194,044
Off-Season Reserve (Note 3) (42,549) -
Deferred Tax Asset, Net 3,870 3,870
Refundable Income Taxes 233 1,576
Other Current Assets 1,700 1,680
-------------- ---------------
Total Current Assets 261,572 253,894
Property, Plant and Equipment, Net 201,264 218,408
Other Assets 2,186 2,624
-------------- ---------------
$465,022 $474,926
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes Payable $ - $ 62,270
Accounts Payable 56,100 46,540
Accrued Expenses 20,416 21,210
Current Portion of Long-Term Debt and Capital
Lease Obligations 11,581 11,575
--------------- ---------------
Total Current Liabilities 88,097 141,595
Long-Term Debt 215,411 219,023
Capital Lease Obligations 8,394 8,835
Deferred Income Taxes 6,226 7,598
Other Long-Term Liabilities 9,472 8,750
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 50 50
Convertible, Participating Preferred Stock, $12
Stated Value 47,754 -
Common Stock 2,719 2,666
Paid in Capital 8,579 5,913
Net Unrealized Gain on Available-For-Sale Securities 815 1,026
Retained Earnings 77,485 79,450
--------------- ---------------
Stockholders' Equity 137,422 89,125
--------------- ---------------
$465,022 $474,926
======== ========
<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
------------------
12/26/98 12/27/97
-------- --------
<S> <C> <C>
Net Sales $ 246,624 $ 238,333
Other Income 650 -
------------------ -----------------
Total Revenue 247,274 238,333
Costs and Expenses:
Cost of Product Sold 237,783 227,732
Selling, General, and Administrative 5,111 4,295
Interest Expense 5,282 6,090
------------------ -----------------
Total Costs and Expenses 248,176 238,117
------------------ -----------------
(Loss) Earnings From Continuing Operations
Before Income Taxes (902) 216
Income Taxes (289) 78
------------------ -----------------
(Loss)Earnings from Continuing Operations (613) 138
Earnings (Loss) from Discontinued
Operations Net of Income Taxes 1,072 (1,378)
------------------ -----------------
Net Earnings (Loss) $ 459 $ (1,240)
================== =================
Basic:
Earnings (Loss) From Continuing Operations
Per Common Share $ (.10) $ .02
================== =================
Earnings (Loss) From Discontinued Operations
Per Common Share $ .17 $ (.23)
================== =================
Earnings (Loss) Per Common Share $ .07 $ (.21)
================== =================
Diluted:
Earnings (Loss) From Continuing Operations
Per Common Share $ (.10) $ .02
================== =================
Earnings (Loss) From Discontinued Operations
Per Common Share $ .17 $ (.23)
================== =================
Earnings (Loss) Per Common Share $ .07 $ (.21)
================== =================
<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 INCOME
(Unaudited)
(In Thousands, except Share Data)
<CAPTION>
Nine Months Ended
-----------------
12/26/98 12/27/97
-------- --------
<S> <C> <C>
Net Sales $ 490,882 $ 487,357
Other Income 650 -
------------------ -----------------
Total Revenue 491,532 487,357
Costs and Expenses:
Cost of Product Sold 462,634 454,327
Selling, General, and Administrative 13,318 13,689
Interest Expense 17,400 18,416
------------------ -----------------
Total Costs and Expenses 493,352 486,432
------------------ -----------------
(Loss) Earnings from Continuing Operations
Before Income Taxes (1,820) 925
Income Taxes (582) 333
------------------ -----------------
(Loss) Earnings from Continuing
Operations (1,238) 592
Loss from Discontinued Operations Net
of Income Taxes (703) (1,453)
------------------ ------------------
Net Loss $ (1,941) $ (861)
================== ==================
Basic:
(Loss) Earnings From Continuing Operations
Per Common Share $ (.21) $ .10
================== ==================
Loss From Discontinued Operations
Per Common Share $ (.12) $ (.24)
================== ==================
Loss Per Common Share $ (.33) $ (.14)
================== ==================
Diluted:
(Loss) Earnings From Continuing Operations
Per Common Share $ (.21) $ .10
================== ==================
Loss From Discontinued Operations
Per Common Share $ (.12) $ (.24)
================== ==================
Loss Per Common Share $ (.33) $ (.14)
================== ==================
<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>
Nine Months Ended
-----------------
12/26/98 12/27/97
-------- --------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Loss $ (1,941) $ (861)
Adjustments to Reconcile Net (Loss)
Earnings to Net Cash (Used) Provided
by Operating Activities:
Depreciation and Amortization 21,348 21,561
Deferred Income Taxes (1,178) (2,206)
Contribution of Stock to Benefit Plan 761 -
Changes in Operating Assets
and Liabilities:
Accounts Receivable 6,418 (10,954)
Inventories (43,314) (47,193)
Off-Season Reserve 42,549 35,689
Other Current Assets (20) 4,163
Income Taxes 1,343 (2,848)
Accounts Payable and
Accrued Expenses 9,488 48,574
------------------ -----------------
Net Cash Provided
by Operations 35,454 45,925
------------------ -----------------
Cash Flows From Investing Activities:
Additions to Property, Plant,
and Equipment (4,774) (14,160)
Disposals 570 16
Acquisitions - (53,672)
------------------ -----------------
Net Cash Used in Investing
Activities (4,204) (67,816)
------------------ -----------------
Cash Flows From Financing Activities:
Rights Offering 49,712 -
Notes Payable (62,270) 12,740
Other 33 (18)
Payments and Current Portion of Long-Term
Debt and Capital Lease Obligations (4,047) (3,429)
Long-Term Borrowing - 15,106
Dividends (24) (58)
------------------ -----------------
Net Cash (Used in) Provided by
Financing Activities (16,596) 24,341
------------------ -----------------
Net Increase in Cash and Short-
Term Investments 14,654 2,450
Cash and Short-Term Investments,
Beginning of Period 4,077 1,584
------------------ -----------------
Cash and Short-Term Investments,
End of Period $ 18,731 $ 4,034
================== ==================
<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
December 26, 1998
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 Company as of December 26, 1998 and results of
operations for the three and nine month periods ended December 26, 1998
and December 27, 1997. All significant intercompany transactions and
accounts have been eliminated in consolidation. The March 31, 1998
balance sheet was derived from audited financial statements.
The results of operations for the three and nine month periods ended
December 26, 1998 and December 27, 1997 are not necessarily indicative
of the results to be expected for the full year. The Registrant does not
believe comparative 12-month interim date information is meaningful. The
interim information presented reflects separate pack years while the
12-month interim date information could reflect two different pack years
in the same period.
The accounting policies followed by the Company are set forth in Note 1
to the Company's financial statements in the 1998 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 Company's 1998 Annual Report and
10-K.
2. Basic earnings per share are calculated on the basis of Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings per Share"
which the Company adopted in the fourth quarter of 1998.
3. Off-Season Reserve is the excess of absorbed expenses over incurred
expenses to date. The seasonal nature of the Company'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. In the second quarter of Fiscal 1999, the Registrant consummated a $50
million equity sale previously described in the Company's Current Report
on Form 8-K filed with the Securities and Exchange Commission (the
"Commission") on July 2, 1998. The equity sale resulted from a Rights
Offering to Registrant's common shareholders as described in the
following paragraph (the "Rights Offering") and a Stock Purchase
Agreement (the "Stock Purchase Agreement") with certain investors as
described in the second following paragraph.
The Rights Offering consisted of a distribution payable to the holders of
the Registrant's Class A common stock, $0.25 par value per share (the
SENECA FOODS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
December 26, 1998
"Class A Common Stock") and Class B common stock, $0.25 par value per
share (the "Class B Common Stock" and together with the Class A Common
Stock, the "Common Stock"), whereby, each holder of Common Stock received
a right (the "Right") to purchase at a subscription price of $12.00 per
share (the "Subscription Price"), shares of Convertible Participating
Preferred Stock, $12.00 stated value per share (the "New Preferred
Stock"). The shares of New Preferred Stock are convertible immediately on
a share-for-share basis into shares of Class A Common Stock. The
Registrant distributed one-half of a Right for each share of Common Stock
held of record as of July 13, 1998. Each whole Right entitled the holder
thereof (a "Rights Holder") to receive upon payment of the Subscription
Price, one share of New Preferred Stock. The Rights were evidenced by
Subscription Certificates transferable by the holders thereof. Holders of
the Registrant's Common Stock acquired 1,146,639 shares of New Preferred
Stock under the Rights Offering for a total investment of $13,759,668.
Pursuant to the Stock Purchase Agreement with Carl Marks Strategic
Investments, L.P., a Delaware limited partnership, Carl Marks Strategic
Investments II, L.P., a Delaware limited partnership and Uranus Fund,
Ltd., a Cayman Islands corporation (collectively, the "New Investors"),
the New Investors agreed to (i) purchase from the Registrant 1,166,667
shares of New Preferred Stock for a total investment of $14,000,004 (or
$12.00 per share) and (ii) act as standby purchasers with respect to up
to 2,500,000 shares of New Preferred Stock not purchased by the
Registrant's shareholders in the Rights Offering. The Registrant was not
required to sell under the Stock Purchase Agreement and the Rights
Offering more than 4,166,667 shares of New Preferred Stock at a total
price of $50,000,004. The New Investors acquired a total of 3,019,895
shares of New Preferred Stock for an aggregate purchase price of
$36,238,740. The total investment received by the Company as a result of
the Rights Offering and investment by the New Investors was $49,998,408
(4,166,534 shares of New Preferred Stock).
Concurrently with the Stock Purchase Agreement, the New Investors, the
Registrant, and certain of its substantial shareholders, entered into a
Shareholders Agreement dated June 22, 1998 (the "Shareholders
Agreement"). The members of the Kayser and Wolcott families agreed to
certain restrictions on sales by them of shares of (i) Class A Common
Stock, (ii) Class B Common Stock, (iii) New Preferred Stock and (iv)
other securities of the Registrant that are entitled to vote in the
election of directors (the "Shares") including a general restriction
against sales of Shares to third persons before September 2, 2000.
The consummation of the foregoing agreements permit the New Investors to
participate significantly in the governance of the Registrant. As a
result of the equity investment transaction (and assuming conversion of
all of the shares of New Preferred Stock into Class A Common Stock) the
New Investors and certain of the Company's existing shareholders that are
related to the New Investors through family relationships and common
ownership of certain business entities collectively exercise
approximately 16% of the total voting power of the Company (in an
election of directors). The terms of the Stock Purchase Agreement and
Shareholders Agreement provide other opportunities for the New Investors
to exercise influence over the Company.
SENECA FOODS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
December 26, 1998
One such provision required that the Registrant's Board of Directors be
increased from seven to nine members. The two new positions have been
filled by designees of the New Investors, Andrew M. Boas and Arthur H.
Baer (the "Investor Designees"). The Investor Designees will continue to
be nominated for election to the Board and shareholders who executed the
Shareholders Agreement will continue to vote for the Investor Designees
until the Stock Purchase Agreement is terminated or such time as the New
Investors no longer own, in the aggregate, at least 10% of the
Registrant's Class A Common Stock (assuming conversion of all shares of
the New Preferred Stock into Class A Common Stock). As required by the
Shareholders Agreement, the Investor Designees have been nominated to the
committees of the Registrant's Board of Directors so that the Investor
Designees comprise at least 22% of any such committees. Moreover, the
Registrant has amended its Certificate of Incorporation to require
unanimous approval of the Registrant's Board of Directors (excluding
directors who abstain from voting) for certain defined "Major Corporate
Actions", including (i) any amendment or modification to the Registrant's
Certificate of Incorporation or Bylaws; (ii) any business combination;
(iii) any sale or transfer of all or substantially all of the assets of
the Registrant; (iv) certain issuances of securities; (v) any acquisition
or disposition or series of related acquisitions or dispositions of
assets involving gross consideration in excess of $15 million; (vi)
certain changes in the Registrant's line of business; (vii) any change in
the Registrant's certified public accountants; (viii) the settlement of
certain litigation; or (ix) the commencement by the Registrant of
proceedings relating to bankruptcy, insolvency, reorganization or relief
of debtors (the "Major Corporate Actions"). The requirement of unanimous
Board approval for the Major Corporate Actions (excluding directors who
abstain from voting) terminates when the New Investors no longer own, in
the aggregate, at least 15% of the Registrant's Class A Common Stock
(assuming conversion of all shares of New Preferred Stock into shares of
Class A Common Stock).
Pursuant to a Registration Rights Agreement dated June 22,1998, the
Registrant granted to the New Investors certain registration rights under
the Securities Act of 1933 (the "Registration Rights") with respect to
the shares purchased by the New Investors pursuant to the Stock Purchase
Agreement and the Rights Offering. The Registration Rights Agreement
gives the New Investors, subject to certain limitations, (i) demand
Registration Rights and (ii) Registration Rights to participate in other
public securities offerings initiated on behalf of the Registrant or
other holders.
To effect the foregoing matters in this Item 5, Registrant filed a
Certificate of Amendment with the New York Secretary of State, (pursuant
to shareholder approval) to amend its Certificate of Incorporation to:
(i) increase the number of authorized shares of Class A Common Stock from
10,000,000 shares to 20,000,000 shares; (ii) increase the number of
authorized shares of Preferred Stock with $.025 par value per share,
Class A from 4,000,000 shares to 8,200,000 shares; (iii) set forth the
rights, preferences and limitations of the New Preferred Stock; (iv)
require unanimous board approval (excluding directors who choose to
abstain), in accordance with Section 709 of the New York Business
Corporation Law, of the Major Corporate Actions; and (v) remove the
acquisition by the New
SENECA FOODS CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
December 26, 1998
Investors of Class A Common Stock issuable upon conversion of the New
Preferred Stock from the operation of certain provisions of the
Certificate of Incorporation with respect to the purchase of Class A
Common Stock. Registrant used the proceeds from the equity investment to
reduce its indebtedness to its revolving credit bank lenders.
5. As stated in our 1998 Annual Report, effective April 1, 1998, the Company
adopted SFAS No. 130, "Reporting Comprehensive Income." This statement
requires reporting and disclosure of comprehensive income and its
components in financial statement format. Comprehensive income is defined
as the change in equity of a business enterprise during a period from
transactions and other events and circumstances from nonowner sources.
The The Company's comprehensive earnings were as follows (In Thousands):
Nine Months Ended
December 26,
1998 1997
---- ----
Net Loss $(1,941) $(861)
Other Comprehensive (Loss) Earnings, Net of Tax:
Net Unrealized Gain Change on Moog, Inc. Stock (211) 319
------------------------
Comprehensive Loss $(2,152) $(542)
========================
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION RESULTS OF OPERATIONS
December 26, 1998
Results of Operations:
Sales:
Sales from continuing operations reflect an increase of 0.7% for the first nine
months versus 1997. The higher sales, in large part, are due to higher canned
vegetables sales under the Company's Alliance business ($5,249,000 higher sales
in 1998). Non-Alliance vegetable sales quantities were up 0.6%.
Costs and Expenses:
The following table shows costs and expenses as a percentage of sales:
Three Months Ended Nine Months Ended
12/26/98 12/27/97 12/26/98 12/27/97
-------- -------- -------- --------
Cost of Product Sold 96.4% 95.5% 94.2% 93.2%
Selling 1.8 1.5 2.2 2.2
Administrative 0.3 0.3 0.6 0.6
Interest Expense 2.1 2.6 3.5 3.8
-----------------------------------------------------
100.6% 99.9% 100.5% 99.8%
=====================================================
Higher Cost of Product Sold percentages (i.e. lower Gross Margins) reflects, in
part, lower selling prices in the vegetable business. The lower interest
percentages reflect lower interest expense incurred as a result of the $50
million Rights Offering completed in the second quarter of the current year.
Income Taxes:
The effective tax rate used in fiscal 1999 is 32% and 1998 is 36%.
Sale of Juice Business:
As previously reported, on August 17, 1998 the Registrant announced the Letter
of Intent agreement to sell a significant portion of its Juice Division to
Northland Cranberries, Inc. On December 30, 1998 the sale was completed for
$28,200,000 plus the assumption of certain liabilities. This transaction will
result in a pre-tax gain on the disposal of $5,000,000 which will be recognized
during the Registrant's fourth quarter ending March 31, 1999.
On January 31, 1999, the Registrant completed the sale to Tree Top, Inc. of the
Registrant's processing facility in Prosser, Washington together with the
Registrant's non-branded specialty fruit concentrate business and an exclusive
license to market and sell Seneca applesauce. Tree Top paid approximately
$29,000,000 in cash. This transaction will result in a pre-tax gain on the
disposal of between $8,500,000 and $10,500,000 which will also be recognized in
the Registrant's fourth quarter.
The Juice Business in its entirety has shown losses in the last three years. The
assets being sold from the two deals combined could represent a significant
subsidiary and therefore Pro Forma financial information is being provided under
Item 5 of this filing. A major issue has been sourcing raw produce at a price
that when converted to finished goods can be sold at a profit. In addition,
competition for retail shelf and freezer space has been intensifying. This sale
is expected to close no later than December 1998 subject to a definitive
agreement being signed.
Year 2000:
The Registrant has initiated a Year 2000 Compliance Project to ensure that
business processes, equipment and systems will operate up to, over and following
the change of the century. Software failures due to processing errors
potentially arising from calculations using the Year 2000 are a known risk. The
total cost of the Project, above and beyond normal software upgrades, is not
expected to exceed $750,000.
The Project includes the following phases: assessment of the problem,
correction/replacement of systems, testing, vendor assessment and development of
a contingency plan. The identification of all equipment with date sensitive
operating controls (including embedded systems) has been completed. An inventory
of our systems assets has also been completed. All critical systems will have
been replaced or modified to be compliant by June 30, 1999, with testing
complete by September 30, 1999. The Registrant has begun evaluating the
potential impact of Year 2000 problems in the event that our external vendors
are not adequately prepared. If necessary, the Registrant will secure an
alternate supply for the required products and/or services. The Registrant has
not yet developed a contingency plan but anticipates completion of this phase by
April 1, 1999.
Financial Condition:
The financial condition of the Company is summarized in the following table and
explanatory review (In Thousands):
<TABLE>
<CAPTION>
For the Quarter For the Year
Ended December Ended March
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Working Capital Balance $173,475 $124,389 $112,299 $132,351
Quarter Change 3,604 (4,197) - -
Notes Payable - 30,740 62,270 18,000
Long-Term Debt 223,805 235,219 227,858 224,128
Current Ratio 2.97:1 1.90:1 1.79:1 2.78:1
Inventory (Average) Turnover 2.6 2.8 3.7 3.5
</TABLE>
The change in the Working Capital for the December 1998 quarter from the
December 1997 quarter is largely due to the modest capital expenditures during
the current quarter ($670,000) as compared to the prior year quarter
($4,431,000).
See Consolidated Condensed Statements of Cash Flows for further details.
At the request of the Registrant, the $75,000,000 revolving credit facility was
terminated on January 29, 1999. There was no outstanding indebtedness under the
revolving credit facility immediately prior to termination. The Registrant
intends to arrange a bank revolving credit facility in a substantially smaller
amount at a reduced interest rate which the Registrant believes will be
sufficient for its anticipated financing needs.
<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
None.
Item 5. Other Information
Pro forma financial information as required by Article 11
of Regulation S-X follows:
<TABLE>
SENECA FOODS CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEETS
March 31, 1998
(Unaudited)
(In Thousands of Dollars)
<CAPTION>
Consolidated Pro Forma Pro Forma
Historical Adjustments Balance
---------- ----------- -------
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and Short Term Investments $4,077 $4,077
Accounts Receivable, Net 48,647 48,647
Inventories 194,044 (37,066)(a) 156,978
Off Season Reserve
Other Current Assets 7,126 20 (a) 7,146
-----------------------------------------------------
Total Current Assets 253,894 (37,046) 216,848
Property, Plant and Equipment, Net 218,408 (18,624)(a) 199,784
Other Assets 2,624 2,624
-----------------------------------------------------
$474,926 ($55,670) $419,256
=====================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes Payable $62,270 ($45,883)(b) $16,387
Accounts Payable 46,540 (8,326)(a) 38,214
Accrued Expenses 21,210 (1,144)(a) 20,066
Current Portion of Long Term Debt and Capital
Lease Obligations 11,575 (23)(a) 11,552
-----------------------------------------------------
Total Current Liabilities 141,595 (55,376) 86,219
Long Term Debt 219,023 (294)(a) 218,729
Capital Lease Obligations 8,835 8,835
Deferred Gain and Other Liabilities 8,750 8,750
Deferred Income Taxes 7,598 7,598
-----------------------------------------------------
Total Liabilities 385,801 (55,670) 330,131
Stockholders' Equity:
Preferred Stock 70 70
Common Stock 2,666 2,666
Additional Paid in Capital 5,913 5,913
Net unrealized loss on available-for-sale securities 1,026 1,026
Retained Earnings 79,450 79,450
-----------------------------------------------------
Stockholders' Equity 89,125 89,125
-----------------------------------------------------
$474,926 ($55,670) $419,256
=====================================================
<FN>
The accompanying notes are an integral part of these unaudited pro forma
condensed Financial Statements.
</FN>
</TABLE>
<TABLE>
SENECA FOODS CORPORATION, AND SUBSIDIARIES
PRO FORMA CONDENSED STATEMENT OF INCOME
TWELVE MONTHS ENDED MARCH 31, 1998
(Unaudited)
(In thousands, except share data)
<CAPTION>
Consolidated Pro Forma Pro Forma
Historical Adjustments Balance
---------- ----------- -------
<S> <C> <C> <C>
Net Sales $703,220 ($140,746)(a) $562,474
Costs and Expenses:
Cost of Product Sold 649,841 (117,730)(a) 532,111
Selling and Administrative 35,056 (15,939)(a) 19,117
Interest Expense 26,780 (2,580)(a) 24,200
----------------------------------------------------
Total Costs and Expenses 711,677 (136,249) 575,428
Loss Before Income Taxes and Extraordinary Item (8,457) (4,497) (3,960)
Income Taxes (3,313) (1,762) (1,551)
----------------------------------------------------
Loss from Discontinued and Continued
Operations less Applicable Income Taxes $5,144) (2,735) (2,409)
===============
Net Loss ($2,735) ($2,409)
==================================
Net Loss Applicable to Common Stock ($5,202) ($2,735) ($2,426)
Basic Loss Per Share ($0.87) ($0.46) ($0.41)
====================================================
Diluted Loss Per Share ($0.87) ($0.46) ($0.41)
====================================================
Weighted Average Common Shares Outstanding 5,939,680 5,939,680 5,939,680
====================================================
<FN>
The accompanying notes are an integral part of these unaudited pro forma
condensed Financial Statements.
</FN>
</TABLE>
<TABLE>
SENECA FOODS CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED BALANCE SHEETS
DECEMBER 26, 1998
(Unaudited)
(In Thousands of Dollars)
<CAPTION>
Consolidated Pro Forma Pro Forma
Historical Adjustments Balance
---------- ----------- -------
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and Short Term Investments $18,731 $41,937 (b) $60,668
Accounts Receivable, Net 42,229 (a) 42,229
Inventories 237,358 (35,235)(a) 202,123
Off Season Reserve (42,549) (42,549)
Other Current Assets 5,803 (62)(a) 5,741
----------------------------------------------------
Total Current Assets 261,572 6,640 268,212
Property, Plant and Equipment, Net 201,264 (17,646) 183,618
Other Assets 2,186 2,186
----------------------------------------------------
$465,022 ($11,006) $454,016
====================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $56,100 ($9,937)(a) $46,163
Accrued Expenses 20,416 (752)(a) 19,664
Current Portion of Long Term Debt and Capital
Lease Obligations 11,581 (23)(a) 11,558
----------------------------------------------------
Total Current Liabilities 88,097 (10,712) 77,385
Long Term Debt 215,411 (294)(a) 215,117
Capital Lease Obligations 8,394 8,394
Deferred Gain and Other Liabilities 9,472 9,472
Deferred Income Taxes 6,226 6,226
----------------------------------------------------
Total Liabilities 327,600 (11,006) 316,594
Stockholders' Equity:
Preferred Stock 47,824 47,824
Common Stock 2,719 2,719
Additional Paid in Capital 8,579 8,579
Net unrealized loss on available-for-sale securities 815 815
Retained Earnings 77,485 77,485
----------------------------------------------------
Stockholders' Equity 137,422 137,422
----------------------------------------------------
$465,022 ($11,006) $454,016
====================================================
<FN>
The accompanying notes are an integral part of these unaudited pro forma
condensed Financial Statements.
</FN>
</TABLE>
(a) The Pro Forma adjustments referenced as (a), reflect the elimination of the
assets and liabilities of the Company's Juice Division. Since the 10-Q has
already reflected this business as discontinued operations, there is no need
to show a Pro Forma statement for the nine months ended December 26, 1998.
This division was sold to Northland Cranberries, Inc. and Tree Top, Inc.
on December 29, 1998 and January 31, 1999, respectively, as described in
Management's Discussion and Analysis as part of this report.
(b) The Pro Forma adjustments referenced as (b), reflect the initial usage of
the funds provided by the aforementioned sale.
March 31, 1998 Statements (Last previous year end):
The Pro Forma adjustments reflect the elimination of the March 31, 1998 assets
and liabilities and related income and expense accounts of the Company's Juice
Division.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
11 (11) Computation of earnings per share (filed herewith)
27 (27) Financial Data Schedules (filed herewith)
Reports on Form 8-K - None during the quarter.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Seneca Foods Corporation
(Company)
/s/Kraig H. Kayser
February 9, 1999 Kraig H. Kayser
President and
Chief Executive Officer
/s/Jeffrey L. Van Riper
February 9, 1999 Jeffrey L. Van Riper
Controller and
Chief Accounting Officer
<TABLE>
EXHIBIT 11
SENECA FOODS CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(In thousands except share data)
Three Months Ended Nine Months Ended
------------------ -----------------
12/26/98 12/27/97 12/26/98 12/27/97
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Earnings Applicable to Common Stock:
Net Earnings (Loss) $ 459 $ (1,240) $(1,941) $ (861)
Deduct Preferred Cash Dividends 6 - - -
-----------------------------------------------------------
Net Earnings Applicable to
Common Stock Basic $ 453 $ (1,240) $(1,941) $ (861)
============================================================
Net Earnings Applicable to Common
Stock Basic $ 453 $ 187 $(2,400) $ 379
Add Preferred Cash Dividends 1 - - -
------------------------------------------------------------
Net Earnings Applicable to
Common Stock Diluted $ 454 $ 187 $(2,400) $ 379
============================================================
Weighted Average Common
Shares Outstanding Basic 6,144,455 5,939,680 6,027,814 5,939,680
Effect of Common Stock Equivalents 4,080,319 67,390 1,867,981 67,390
-------------------------------------------------------------
Weighted Average Common Shares Out-
standing Diluted 10,224,774 6,007,070 7,895,795 6,007,070
==============================================================
Basic Earnings Per Share $ .07 $ (.21) $ (.33) $ (.14)
==============================================================
Diluted Earnings Per Share $ .07 $ (.21) $ (.33) $ (.14)
==============================================================
<FN>
Note: Current year-to-date diluted earnings per share excludes the effect of convertible shares which would be anti-dilutive.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Commercial and Industrial Companies
Article 5 of Regulation S-X
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-END> DEC-26-1998
<CASH> 18731
<SECURITIES> 0
<RECEIVABLES> 42391
<ALLOWANCES> 162
<INVENTORY> 237358
<CURRENT-ASSETS> 261572
<PP&E> 395632
<DEPRECIATION> 194368
<TOTAL-ASSETS> 465022
<CURRENT-LIABILITIES> 88097
<BONDS> 223805
0
47824
<COMMON> 2719
<OTHER-SE> 85879
<TOTAL-LIABILITY-AND-EQUITY> 465022
<SALES> 490882
<TOTAL-REVENUES> 491532
<CGS> 462634
<TOTAL-COSTS> 206401
<OTHER-EXPENSES> 13318
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17400
<INCOME-PRETAX> (1820)
<INCOME-TAX> (582)
<INCOME-CONTINUING> (1238)
<DISCONTINUED> (703)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1941)
<EPS-PRIMARY> (0.33)
<EPS-DILUTED> (0.33)
<FN>
Other Expenses is Selling, General and Administrative Expenses
</FN>
</TABLE>
