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 January 29,April 30, 1994    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 February 28,May 31, 1994

Common Stock, $.25 Par                                        2,893,1702,798,055
 
 
                        PART I FINANCIAL INFORMATION
                  SENECA FOODS CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED CONDENSED BALANCE SHEETS
                          (In Thousands of Dollars)
1/29/4/30/94 7/31/93 _______ _______------- ------- ASSETS Current Assets: Cash and Short-term Investments $ 6,28027,616 $ 15,522 Accounts Receivable, Net 31,77926,857 24,398 Inventories: Finished Goods 53,95031,845 38,350 Work in Process 26,25516,561 16,366 Raw Materials 15,93822,472 27,870 96,14370,878 82,586 Off-Season Reserve (Note 3) (11,270)(4,628) - Deferred Tax (Net) (Note 6) 2,422 - Other Current Assets 476510 250 ------- ------- Total Current Assets 125,830123,655 122,756 Property, Plant and Equipment, Net 78,63379,465 74,089 Common Stock of Moog Inc. (Note 4) 6,078 6,079 Other Assets 200197 214 -------- -------- $210,741$209,395 $203,138
LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes Payable $ - $ - Accounts Payable 19,83219,315 19,742 Accrued Expenses 18,15518,732 12,980 Income Taxes 2,658704 567 Current Portion of Long-Term Debt and Capital Lease Obligations 6,7836,784 5,057 ------ ------ Total Current Liabilities 47,42845,535 38,346 Long-Term Debt 68,64067,520 71,534 Capital Lease Obligations 940899 1,022 Deferred Income Taxes 9,68411,745 10,940 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 1,9111,881 1,948 Additional Paid-in Capital 344- 3,157 Retained Earnings 81,72481,745 76,121 -------- -------- Stockholders' Equity 84,04983,696 81,296 -------- -------- $210,741$209,395 $203,138 ======== ======== The accompanying notes are an integral part of these financial statements.
SENECA FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited) (In Thousands, except Share Data)
Three Months Ended ------------------ 1/29/4/30/94 5/1/30/93 ------- ------------- Net Sales $ 83,78082,586 $ 71,51067,635 Costs and Expenses: Cost of Product Sold 71,354 62,49470,693 61,280 Selling and Administrative 8,811 7,2817,607 6,833 Interest Expense 1,643 2,0411,447 52 ------ ------ Total Costs and Expenses 81,808 71,816 ------ ------79,747 68,165 Earnings Before Income Taxes 1,972 (306)2,839 (530) Income Taxes 769 (100)1,055 (376) Earnings from Continuing Operations 1,203 (206)1,784 (154) Gain on the Sale of Discontinued Operations 34 - Earnings from Discontinued Operations - 210 ---------- ----------39 406 --------- --------- Net Earnings $ 1,2031,857 $ 4 ========== ==========252 ========= ========= Net Earnings from Continuing Operations Applicable to Common Stock $ 1,1971,778 $ (212)(160) Net Earnings Applicable to Common Stock 1,197 (2)1,851 246 Weighted Average Common Shares Outstanding 2,918,199 3,093,6662,861,465 3,085,333 Primary and Fully Diluted Earnings Per Share of Common Stock (Exhibit II): Earnings from Continuing Operations $ .41.63 $ (.06)(.04) Gain on Sale of Discontinued Operations .01 - Earnings from Discontinued Operations - .06 -----------.01 .12 ---------- --------- Net Earnings $ .41.65 $ .00 ===========.08 ========== ========= The accompanying notes are an integral part of these condensed financial statements.
SENECA FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited) (In Thousands, except Share Data)
SixNine Months Ended ---------------- 1/29/----------------- 4/30/94 5/1/30/93 ------- ------------- Net Sales $ 145,783228,369 $ 129,961197,596 Costs and Expenses: Cost of Product Sold 124,739 112,194195,432 173,474 Selling and Administrative 15,448 13,69423,055 20,527 Interest Expense 3,200 4,172 ------- -------4,647 4,224 Total Costs and Expenses 143,387 130,060223,134 198,225 Earnings Before Income Taxes 2,396 (99)5,235 (629) Income Taxes 934 (22)1,989 (398) ------- ------ Earnings from Continuing Operations 1,462 (77)3,246 (231) Earnings from Discontinued Operations 46 38485 790 Gain on the Sale of Discontinued Operations Net of Income Taxes 2,101(Note 6) 2,135 - Cumulative Effect of Change in Accounting Principle (Note 6) 2,006 - ---------- ------------------ -------- Net Earnings $ 5,6157,472 $ 307 ========== ==========559 ======== ======== Net Earnings from Continuing Operations Applicable to Common Stock $ 1,4503,229 $ (89)(248) Net Earnings Applicable to Common Stock 5,603 2957,455 542 Weighted Average Common Shares Outstanding 2,968,466 3,093,6662,933,021 3,090,888 Primary and Fully Diluted Earnings Per Share of Common Stock (Exhibit II): Earnings from Continuing Operations $ .491.10 $ (.02)(.08 ) Earnings from Discontinued Operations .02 .12.03 .26 Gain on the Sale of Discontinued Operations .71.73 - Cumulative Effect of Change in Accounting Principle .67.68 - ----------- ---------- --------- Net Earnings $ 1.892.54 $ .10 ===========.18 ========== ========= The accompanying notes are an integral part of these condensed financial statements.
SENECA FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (In Thousands)
Three Months Ended __________________ 1/29/------------------ 4/30/94 5/1/30/93 _______ _______------- ------ Cash Flows From Operating Activities: Net Earnings $ 1,2031,857 $ 4252 Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities: Depreciation and Amortization 2,332 2,3182,313 2,265 Deferred Income Taxes 1,180 712,061 1,583 Changes in Working Capital: Accounts Receivable (10,143) (7,745)4,888 4,807 Inventories 29,694 20,64325,292 26,410 Off-Season Reserve (3,587) (2,426)(6,642) (5,064) Other Current Assets 485 80(87) (138) Income Taxes (1,819) (517)(1,954) (3,339) Accounts Payable and Accrued Expenses (9,906) (13,619) ________ ________59 (4,923) -------- -------- Net Cash Provided (Used) by Operations 9,439 (1,191)27,787 21,853 Cash Flows From Investing Activities: Common StockProceeds from the Sale of Moog 1 - Acquisitions (11,670)Textile Segment 60 - Additions to Property, Plant, and Equipment (2,574) (51) ________ ________(3,147) (143) ------- -------- Net Cash Used in Investing Activities (14,243) (51)(3,087) (143) Cash Flows From Financing Activities: Payments and Current Portion of Long-Term Debt and Capital Lease Obligations (160) 830(1,160) (1,038) Other 2 (76)6 12 Common Stock Retirement (38) -(2,210) (384) Notes Payable - 500(20,300) Dividends Paid (12) (12) __________ __________- - -------- ------- Net Cash Provided (Used) in Financing Activities (208) 1,242 __________ __________(3,364) (21,710) Net DecreaseIncrease in Cash and Short-Term Investments (5,012)21,336 - Cash and Short-Term Investments, Beginning of Period 11,2926,280 400 __________ ___________--------- ---------- Cash and Short-Term Investments, End of Period $ 6,28027,616 $ 400 ========= ========== =========== The accompanying notes are an integral part of these condensed financial statements.
SENECA FOODS CORPORATION AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) (In Thousands)
SixNine Months Ended _________________ 1/29/----------------- 4/30/94 5/1/30/93 _______ _______------- ------ Cash Flows From Operating Activities: Net Earnings $ 5,6157,472 $ 307559 Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities: Depreciation and Amortization 4,565 4,7656,878 7,030 Deferred Income Taxes (1,256) (17)805 1,566 Gain on Sale of Textile Segment (3,444) - Changes in Working Capital: Accounts Receivable (8,952) (11,190)(4,064) (6,383) Inventories (13,498) (32,157)11,794 (5,747) Off-Season Reserve 11,270 11,1224,628 6,058 Other Current Assets (228) 116(315) (22) Income Taxes (331) (404)(2,285) (3,743) Accounts Payable and Accrued Expenses 8,735 (3,903) __________ ________8,794 (8,826) --------- ------- Net Cash Provided (Used) by Operations 2,476 (31,361)30,263 (9,508) Cash Flows From Investing Activities: Common Stock of Moog 1 - Acquisitions (11,670)(11,664) - Proceeds from Sale of Textile Segment 8,2968,356 - Additions to Property, Plant, and Equipment (4,246) (548) ________ _________(7,399) (691) ------- -------- Net Cash Used in Investing Activities (7,619) (548)(10,706) (691) Cash Flows From Financing Activities: Payments and Current Portion of Long-Term Debt and Capital Lease Obligations (1,250) 192(2,410) (846) Other 14 (161)20 (149) Common Stock Retirement (2,851) -(5,061) (384) Notes Payable - 24,4004,100 Dividends Paid (12) (12) ________ ________------- ------- Net Cash Provided (Used) in Financing Activities (4,099) 24,419(7,463) 2,709 Net DecreaseIncrease (Decrease) in Cash and Short-Term Investments (9,242)12,094 (7,490) Cash and Short-Term Investments, Beginning of Period 15,522 7,890 __________ ___________--------- ---------- Cash and Short-Term Investments, End of Period $ 6,28027,616 $ 400 ========= ========== =========== The accompanying notes are an integral part of these condensed financial statements.
SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS January 29,April 30, 1994 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 January 29,April 30, 1994 and July 31, 1993 and results of operations for the three and sixnine month periods ended January 29,April 30, 1994 and January 30,May 1, 1993. All significant intercompany transactions and accounts have been eliminated in consolidation. The July 31, 1993 balance sheet was derived from audited financial statements. The results of operations for the three and sixnine month periods ended January 29,April 30, 1994 and January 30,May 1, 1993 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 1993 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 July 31, 1993 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 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's investment in the common stock of Moog Inc. is carried at the lower of aggregate cost or market. The market value of these securities was $6,964,000$6,903,000 as of January 29,April 30, 1994. There were no realized gains or losses during the periods presented. Unrealized gains were $886,000$824,000 at January 29,April 30, 1994. The Registrant has the ability and intent to hold these securities for the foreseeable future. SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued) April 30, 1994 5. As reported on a January 1994 8-K, the Registrant acquired certain assets of ERLY Juice, Inc. and WorldMark, Inc.(citrus juice business) which totalled $8,372,000; and Sanofi-Bio Industries, Inc. (industrial juice business) which totalled $3,298,000. SENECA FOODS CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued) January 29, 1994 6. The Registrant adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes," effective August 1, 1993. The Statement supersedes A.P.B. No. 11 and SFAS No. 96, "Accounting for Income Taxes," which was not adopted by the Registrant. SFAS #109 uses the liability method of accounting for income taxes where deferred liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. The cumulative effect of adopting SFAS No. 109 on the Registrant's financial statements was to increase earnings by $2,006,000 ($.66.68 per share). The primary components of temporary differences that give rise to the Registrant's net deferred tax liability, as of August 1, 1993, are as follows: Deferred Tax Assets: Accrued Expenses $2,373 Pension 238 Other 42 Valuation Allowance - ______----- Total Deferred Tax Assets 2,653 Deferred Tax Liabilities: Property, Plant, and Equipment (excess of book basis over tax basis) 11,356 Inventories 231 ______------ Total Deferred Liabilities 11,587 ______------ Net Deferred Tax Liability $8,934 ====== The Registrant believes that the components of the provision for income taxes and actual effective rate reconciliation will not vary significantly from that previously reported. The provision for income taxes for the three and sixnine months ended JanuaryApril 30, 1993 is included in the Consolidated Condensed Statements of Income as previously presented. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION RESULTS OF OPERATIONS January 29,April 30, 1994 Results of Operations: Sales: Sales reflect an increase of 12.2%15.5% for the first sixnine months versus 1993. The higher sales, in large part, are due to higher canned vegetables selling prices and quantities sold than the previous periods.periods and the Citrus Juice Business acquisition (see footnotes for details). Costs and Expenses: The following table shows cost and expenses as a percentage of sales: Three Months Ended SixNine Months Ended __________________ ________________ 1/29/4/30/94 5/1/30/93 1/29/4/30/94 5/1/30/93 _______ _______ _______ _______ Cost of Product Sold 85.1% 87.3%85.5% 90.5% 85.6% 86.4%87.9% Selling 6.6 7.06.7 6.7 6.8 6.9 7.0 Administrative 3.9 3.2 3.7 3.52.6 3.4 3.3 3.4 Interest Expense 1.8 0.1 2.0 2.9 2.2 3.2 ____ _____ ____ _____ 97.6% 100.4% 98.4% 100.1%2.1 ---- ----- ---- ----- 96.6% 100.7% 97.7% 100.3% Lower Cost of Product Sold percentages (i.e. higher Gross Margins) reflect, in part, higher selling prices for vegetable products than in the prior year due to the floods in the Midwest. TheAdministrative percent of sales is down mostly due to 22% higher sales in the quarter than last year. Interest Expense is lower largelylast year due to Interest Income received from an IRS settlement during the debt refinancing and lower inventories.quarter in the prior year. Income Taxes: The effective tax rate used in fiscal 1994 is 39%38% and in fiscal 1993 it is 22%63%. 1993 is lowerhigher than 1994 because of the 1993 loss from continuing operations. The Registrant adopted Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes", effective August 1, 1993. See footnotes for details. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION RESULTS OF OPERATIONS (Continued) April 30, 1994 Financial Condition: The financial condition of the Registrant is summarized in the following table and explanatory review (In Thousands): For the Quarter For the Year Ended JanuaryApril Ended July ______________ ____________ 1994 1993 1993 1992 ____ ____ ____ ____ Working Capital Balance $78,402 $79,655$78,120 $82,088 $84,410 $76,650 Quarter Change (7,052) 2,086(282) 2,433 - - Notes Payable - 24,4004,100 - - Long-Term Debt 69,580 76,285and Leases 68,419 75,133 71,534 75,967 Current Ratio 2.65:2.72:1 2.23:3.27:1 3.20:1 2.78:1 Inventory (Average) Turnover 3.3 2.23.0 1.8 2.8 2.9 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION RESULTS OF OPERATIONS (Continued) January 29, 1994 The change in the Working Capital for the quarter from the prior year is largely due to the acquisition of certain assets of ERLY Juice, Inc. and Worldmark, Inc.(see footnote for details) plus capital expenditures and common stock retirements in the current year with nothing comparablesubstantially less of these items in the prior year. Notes Payable is $24.4 million less than the prior period due to lower inventory which was caused by lower packs in the Midwest due to the wet conditions and due to the higher sales of vegetables. See Consolidated Statements of Cash Flows for further details. 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 None. Item 6. Exhibits and Reports on Form 8-K (a) Exhibit II - (11) Computation of earnings per share (b) Reports on Form 8-K - a January 1994 8-K described two acquisitions made bynone during the Registrant (see footnotes for details).quarter. 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 March 11,June 10, 1994 Kraig H. Kayser President and Chief Executive Officer /s/Jeffrey L. Van Riper March 11,June 10, 1994 Jeffrey L. Van Riper Controller and Chief Accounting Officer