SENECA FOODS CORPORATION
EMPLOYEES' SAVINGS PLAN
Financial Statements as of and for the Years Ended December 31, 1998 and 1997,
Supplemental Schedules as of and for the Year Ended December 31, 1998 and
Independent Auditors' Report
SENECA FOODS CORPORATION
EMPLOYEES' SAVINGS PLAN
TABLE OF CONTENTS
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Page
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1998 AND 1997 AND FOR THE YEARS THEN
ENDED:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-6
SUPPLEMENTAL SCHEDULES AS OF DECEMBER 31, 1998 AND FOR THE YEAR THEN ENDED:
Item 27a - Schedule of Assets Held for Investment Purposes 7
Item 27d - Schedule of Reportable Transactions 8
SUPPLEMENTAL SCHEDULES OMITTED:
The following supplemental schedules are excluded because of the absence of
conditions under which they are required:
Item 27b - Schedule of Loans or Fixed Income Obligations
Item 27c - Schedule of Leases in Default or Classified as Uncollectible
Item 27e - Schedule of Nonexempt Transactions
INDEPENDENT AUDITORS' REPORT
To Seneca Foods Corporation
Employees' Savings Plan
We have audited the accompanying statements of net assets available for benefits
of the Seneca Foods Corporation Employees' Savings Plan ("the Plan") as of
December 31, 1998 and 1997, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of December 31,
1998 and 1997, and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting principles.
Our audit was conducted for the purpose of forming an opinion on the basic 1998
financial statements taken as a whole. The supplemental schedules listed in the
Table of Contents are presented for the purpose of additional analysis and are
not a required part of the basic 1998 financial statements, but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These schedules are the responsibility of the Plan's
management. Such schedules have been subjected to the auditing procedures
applied in our audit of the basic 1998 financial statements and, in our opinion,
are fairly stated in all material respects when considered in relation to the
basic 1998 financial statements taken as a whole.
/s/Deloitte & Touche LLP
Deloitte & Touche LLP
Rochester, New York
June 7, 1999
SENECA FOODS CORPORATION
EMPLOYEES' SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1998 AND 1997
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1998 1997
ASSETS
INVESTMENTS:
At fair value:
Seneca Foods Corp. Common Stock $ 863,803 $ 269,967
Stable Value Fund 2,204,247 1,642,732
Balanced Fund 4,625,501 3,026,926
Growth and Income Fund 4,087,753 2,911,550
Value Fund 3,409,827 2,836,776
International Fund 22,505 -
----------- ------------
Total investments 15,213,636 10,687,951
----------- ------------
CONTRIBUTIONS RECEIVABLE:
Employee 306,408 295,645
Employer 808,241 791,135
------------ ------------
Total contributions receivable 1,114,649 1,086,780
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $ 16,328,285 $ 11,774,731
============ ============
<FN>
See notes to financial statements.
</FN>
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SENECA FOODS CORPORATION
EMPLOYEES' SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 1998 AND 1997
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1998 1997
ADDITIONS:
Participant contributions $ 3,609,760 $ 3,408,184
Employer contributions 805,265 806,386
Net appreciation in fair value of investments 50,974 1,174,854
Dividend income 936,650 257,579
---------- ----------
Total additions 5,402,649 5,647,003
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DEDUCTIONS:
Withdrawals by participants 792,926 409,231
Administrative expenses 56,169 65,573
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Total deductions 849,095 474,804
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NET INCREASE 4,553,554 5,172,199
NET ASSETS AVAILABLE FOR BENEFITS,
BEGINNING OF YEAR 11,774,731 6,602,532
----------- ----------
NET ASSETS AVAILABLE FOR BENEFITS,
END OF YEAR $ 16,328,285 $11,774,731
============ ============
<FN>
See notes to financial statements.
</FN>
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SENECA FOODS CORPORATION
EMPLOYEES' SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997
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1. DESCRIPTION OF PLAN
The following description of Seneca Foods Corporation Employees' Savings
Plan ("the Plan") provides only general information. Participants should
refer to the Plan Agreement for a more complete description of the Plan's
provisions.
General - The Plan is a defined contribution plan intended to qualify as a
cash or deferred arrangement under Section 401(k) of the Internal Revenue
Code. Substantially all employees of Seneca Foods Corporation ("the
Company") are eligible to participate after completion of twelve months
employment and attainment of age twenty-one. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974
("ERISA").
Contributions - Participants may elect to contribute, on a pre-tax basis
(elective deferrals), from 1% to 15% of their compensation. Participants
may also contribute amounts representing distributions from other
qualified defined benefit or contribution plans. The Company may
contribute additional amounts at the discretion of the Company's Board of
Directors. Such amounts are allocated based on the participants pro rata
share of total participating payroll.
Vesting - Participants are immediately vested in all elective
contributions and related earnings. Matching contributions made by the
Plan sponsor fully vest after a service period of five years.
Payment of Benefits - After termination of service, the participant's
account balance is generally distributed in a lump sum if the balance is
less than $3,500.
Plan Termination - Although it has not expressed any intent to do so, the
Company has the right under the Plan to discontinue its contributions at
any time and/or to terminate the Plan subject to the provisions of ERISA.
In the event of plan termination, the Administrator shall determine the
method of distribution of the participants' accounts in accordance with
the provisions of the plan.
Participant Accounts - Each participant's account is credited with the
participant's contribution and allocations of (a) additional Company
contributions (if any), and (b) Plan earnings, and is also charged with an
administrative expense of $9 per quarter. Allocations are based on
participant earnings or account balances, as defined. The benefit to which
a participant is entitled is the benefit that can be provided from the
participant's vested account.
Trustee - On October 2, 1998 the Plan changed trustees from Investors
Fiduciary Trust (IFTC) to Scudder Trust Company (Scudder). As such, IFTC
liquidated the net assets of the Plan's portfolio and transferred them to
Scudder. The shares of the Seneca Foods Corporation Company stock were
transferred to State Street Bank and Trust Company. Scudder Kemper
Investments is the new recordkeeper for the Plan. Assets were transferred
from IFTC to Scudder as follows:
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Investors Fiduciary Trust Scudder
INVESCO Stable Value Stable Value Fund
Vanguard Wellington Fund Balanced Fund
T. Rowe Price Equity Income Fund Growth and Income Fund
Neuberger & Berman Guardian Value Fund
Seneca Foods Corp. Unitized Fund Seneca Foods Corp. Company Stock
The International Fund is a new fund in the Plan as of December 31, 1998.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The accompanying financial statements have been
prepared on the accrual basis of accounting.
Valuation of Investments - All investments are valued at fair value as
determined by quoted market prices.
Payment of Benefits - Benefits are recorded when paid. As of December 31,
1998 and 1997 net assets available for benefits included benefits of
$82,749 and $-0-, respectively, due to participants who have withdrawn
from participation in the Plan.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of additions and
deductions during the reporting period. Actual results could differ from
those estimates.
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3. INFORMATION BY FUND
The Plan's investments are held with the Plan Trustee. The following table
presents the statement of changes in net assets available for benefits, by
fund, for the years ended December 31, 1998 and 1997. For purposes of this
information, contributions receivable have been allocated to the invested
assets.
Seneca Stable Balanced Growth and Value International
Stock Value Fund Fund Income Fund Fund Fund Total
Account value,
January 1, 1997 $ 2,287 $ 1,267,521 $ 1,878,502 $ 1,597,625 $ 1,856,597 $ - $ 6,602,532
Contributions 300,699 644,484 1,119,548 1,096,467 1,053,372 - 4,214,570
Dividend income - 89,278 97,382 59,451 11,468 - 257,579
Net (depreciation)
appreciation in fair
value (7,645) - 385,098 483,957 313,444 1,174,854
-------- --------- --------- ---------- ---------- --- ----------
295,341 2,001,283 3,480,530 3,237,500 3,234,881 - 12,249,535
Less:
Benefits paid to
participants 4,110 66,214 119,570 100,272 119,065 - 409,231
Administrative
expenses 3,697 11,861 18,163 15,973 15,879 - 65,573
------ ------- ------- ------- ------- -- --------
7,807 78,075 137,733 116,245 134,944 - 474,804
Transfers 9,885 (113,438) (8,085) 86,349 25,289 - -
------ -------- ------ ------- ------- -- ----------
Account value,
December 31, 1997 297,419 1,809,770 3,334,712 3,207,604 3,125,226 - 11,774,731
Contributions 903,702 556,728 1,034,071 1,040,067 875,703 4,754 4,415,025
Dividend income - 109,344 310,623 358,364 156,385 1,934 936,650
Net (depreciation)
appreciation in fair
value (198,250) 5,709 442,473 (10,410) (187,427) (1,121) 50,974
--------- ------ -------- --------- --------- -------- ---------
705,452 671,781 1,787,167 1,388,021 844,661 5,567 5,402,649
Less:
Benefits paid to
participants 46,903 121,874 196,996 229,298 197,719 136 792,926
Administrative
expenses 3,864 10,139 15,477 14,042 12,647 - 56,169
------ ------- ------- ------- ------- -- -------
50,767 132,013 212,473 243,340 210,366 136 849,095
------- -------- -------- -------- -------- ---- --------
Account value,
December 31, 1998 $ 952,104 $ 2,349,538 $ 4,909,406 $ 4,352,285 $ 3,759,521 $ 5,431 $ 16,328,285
========= =========== =========== =========== =========== ======= ============
4. TAX STATUS
The Plan was established under a Prototype Plan, but has been amended. The
Plan has not received a determination letter on the amended plan, however,
the Plan Administrator believes that the Plan is currently designed and is
being operated in compliance with the applicable requirements of the
Internal Revenue Code.
SENECA FOODS CORPORATION
EMPLOYEES' SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1998
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c. Description of Investment
b. Identity of Issue, Including Maturity Date,
Borrower, Lessor Rate of Interest, Collateral, e. Current
or Similar Party Par or Maturity Value d. Cost Value
Seneca Foods Corp. Company Stock 70,581 shares $ 855,854 $ 863,803
Stable Value Fund 2,204,247 shares 2,204,247 2,204,247
Balanced Fund 243,961 shares 4,211,121 4,625,501
Growth and Income Fund 155,369 shares 3,962,971 4,087,753
Value Fund 143,875 shares 3,037,069 3,409,827
International Fund 462 shares 23,631 22,505
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TOTAL ASSETS HELD FOR INVESTMENT PURPOSES $14,294,893 $15,213,636
============ ===========
<FN>
Note: Column a is omitted as it is not applicable.
</FN>
SENECA FOODS CORPORATION
EMPLOYEES' SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1998
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SINGLE TRANSACTIONS INVOLVING AN AMOUNT IN EXCESS
OF 5% OF THE CURRENT VALUE OF PLAN ASSETS
h. Current
a. Identity of Party Involved Value of
b. Description of Assets Asset on i. Net
(including interest rate c. Purchase d. Selling g. Cost Transaction Gain or
and maturity in case of a loan) Price Price of Asset Date (Loss)
NONE
SERIES TRANSACTIONS, WHEN AGGREGATED, INVOLVING AN AMOUNT
IN EXCESS OF 5% OF THE CURRENT VALUE OF PLAN ASSETS
h. Current
a. Identity of Party Involved Value of
b. Description of Assets Asset on i. Net
(including interest rate c. Purchase d. Selling g. Cost Transaction Gain or
and maturity in case of a loan) Price Price of Asset Date (Loss)
Seneca Foods Corp. Common Stock $ 884,055 $ - $ 884,055 $ 884,055 $ -
Stable Value Fund $ 821,038 $ - $ 821,038 $ 821,038 $ -
Balanced Fund $ 1,902,099 $ - $ 1,902,099 $ 1,902,099 $ -
Growth and Income Fund $ 1,643,630 $ - $ 1,643,630 $ 1,643,630 $ -
Value Fund $ 1,551,459 $ - $ 1,551,459 $ 1,551,459 $ -
<FN>
Note: Columns e and f are omitted as not applicable.
</FN>