SENEM Seneca Foods Corp (PK)

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Net sales for the first quarter of fiscal 2024 totaled $298.7 million compared to $265.2 for the first quarter of fiscal 2023. The year-over-year increase of $33.5 million was mainly due to higher selling prices partially offset by lower sales volumes.

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Gross margin as a percentage of net sales is 18.5% for the three months ended July 1, 2023 as compared to 8.6% for the three months ended July 2, 2022.

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the effects of rising costs and availability of raw fruit and vegetables, steel, ingredients, packaging, other raw materials, distribution and labor;

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crude oil prices and their impact on distribution, packaging and energy costs;

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an overall labor shortage, ability to retain a sufficient seasonal workforce, lack of skilled labor, labor inflation or increased turnover impacting our ability to recruit and retain employees;

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climate and weather affecting growing conditions and crop yields;

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our ability to successfully implement sales price increases and cost saving measures to offset cost increases;

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the loss of significant customers or a substantial reduction in orders from these customers;

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effectiveness of our marketing and trade promotion programs;

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competition, changes in consumer preferences, demand for our products and local economic and market conditions;

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the impact of a pandemic on our business, suppliers, customers, consumers and employees;

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unanticipated expenses, including, without limitation, litigation or legal settlement expenses;

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product liability claims;

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the anticipated needs for, and the availability of, cash;

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the availability of financing;

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leverage and the ability to service and reduce debt;

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foreign currency exchange and interest rate fluctuations;

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the risks associated with the expansion of our business;

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the ability to successfully integrate acquisitions into our operations;

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our ability to protect information systems against, or effectively respond to, a cybersecurity incident or other disruption;

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other factors that affect the food industry generally, including:

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recalls if products become adulterated or misbranded, liability if product consumption causes injury, ingredient disclosure and labeling laws and regulations and the possibility that consumers could lose confidence in the safety and quality of certain food products;

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competitors’ pricing practices and promotional spending levels;

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fluctuations in the level of our customers’ inventories and credit and other business risks related to our customers operating in a challenging economic and competitive environment; and

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the risks associated with third-party suppliers, including the risk that any failure by one or more of our third-party suppliers to comply with food safety or other laws and regulations may disrupt our supply of raw materials or certain finished goods products or injure our reputation; and

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changes in, or the failure or inability to comply with, U.S., foreign and local governmental regulations, including environmental and health and safety regulations.

Seneca Foods Corporation

Unaudited Selected Financial Data

For the Periods Ended July 1, 2023 and July 2, 2022

(In thousands of dollars, except share data)

Note1:

The effect of the LIFO inventory valuation method on the first quarter pre-tax results increased operating earnings by $1.7 million for the three months ended July 1, 2023, and decrease operating earnings by $19.2 million for the three months ended July 2, 2022.

Note2:

During the three months ended July 1, 2023, the Company incurred restructuring charges primarily due to equipment moves from ceasing production of green beans at a plant in the Northeast in the previous fiscal year. During the three months ended July 2, 2022, the Company incurred restructuring charges primarily related to plants that were closed in previous periods.

Note3:

The Company had net other operating income of $0.2 million during the three months ended July 1, 2023, which was driven primarily by the sale of a non-operational plant in the Midwest. During the three months ended July 2, 2022, the Company had net other operating income of $2.1 million, driven mostly by the gain on the sale of various fixed assets.

Note4:

The Company used the “two-class” method for basic earnings per share by dividing the earning attributable to common shareholders by the weighted average of common shares outstanding during the period.

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