Seneca Foods Reports Earnings of $13.8 Million or $1.38 per Diluted Share for the Fourth Quarter of Fiscal Year 2016
June 08 2016 - 4:58PM
Seneca Foods Corporation (NASDAQ:SENEA) (NASDAQ:SENEB) reported
that net earnings for the fiscal fourth quarter of 2016 was $13.8
million, or $1.38 per diluted share, compared to $2.8 million, or
$0.26 per diluted share, in the fiscal fourth quarter of
2015. Net sales for the fourth quarter ended March 31,
2016, increased from the fourth quarter ended March 31, 2015, by
9.3%, to $303.7 million. The increase is attributable to
increased sales volume of $52.4 million partially offset by lower
selling prices/less favorable sales mix of $26.7 million.
Net earnings for the fiscal year ended March 31,
2016, increased to $54.5 million, or $5.42 per diluted share,
compared to $9.9 million, or $0.90 per diluted share, in the fiscal
year ended March 31, 2015. Net sales for the fiscal year
ended March 31, 2016, decreased from the fiscal year ended March
31, 2015 by 0.9%, to $1,275.4 million. The decrease is
attributable to decreased sales volume of $11.1 million partially
offset by higher selling prices/more favorable sales mix of $0.1
million.
“We are pleased that fiscal year 2016 finished on a
strong note as holiday sales drove both sales and earnings in the
fourth quarter. Our full year performance was also strong
even after excluding one-time events as a good growing season last
Summer and Fall led to a better than anticipated cost of goods
sold,” stated Kraig Kayser, President and Chief Executive
Officer.
Excluding a non-cash after-tax LIFO credit of $7.5
million, net earnings per diluted share was $0.63 during the
quarter ended March 31, 2016, versus earnings per diluted share of
$0.25 during the quarter ended March 31, 2015, which included a
non-cash after-tax LIFO credit of $0.1 million. Excluding a
non-cash after-tax LIFO credit of $16.1 million, net earnings per
diluted share were $3.82 during the year ended March 31, 2016,
versus $1.54 per diluted share during the year ended March 31,
2015, which included a non-cash after-tax LIFO charge of $6.9
million.
Other operating income in 2016 included a gain of
$24.3 million related to a contractual payment received in
conjunction with a relationship transfer agreement with General
Mills. The Company recorded a gain of $0.4 million from the
sale of other fixed assets.
Other operating income in 2015 included a gain of
$5.0 million related to a contractual payment received in
connection with the closing of a Midwest plant and a charge of $0.3
million related to environmental costs related to a Company-owned
plant in New York State. The Company also recorded a gain of
$0.1 million from the sale of other fixed assets.
About Seneca Foods
CorporationSeneca Foods is North America’s leading
provider of packaged fruits and vegetables, with facilities located
throughout the United States. Its high quality products are
primarily sourced from over 2,000 American farms. Seneca
holds the largest share of the retail private label, food service,
and export canned vegetable markets, distributing to over 90
countries. Products are also sold under the highly regarded
brands of Libby’s®, Cherryman®, Aunt Nellie’s®, READ®, Seneca
Farms® and Seneca labels, including Seneca snack chips.
Seneca’s common stock is traded on the Nasdaq Global Stock Market
under the symbols “SENEA” and “SENEB”. SENEA is included the
S&P SmallCap 600, Russell 2000 and Russell 3000 indices.
Non-GAAP Financial
Measures—Net Earnings Excluding LIFO Impact,
EBITDA and FIFO EBITDA Net Earnings excluding LIFO, EBITDA
and FIFO EBITDA are non-GAAP financial measures. The Company
believes these non-GAAP financial measures provide a basis for
comparison to companies that do not use LIFO and to periods prior
to 2008 when the company did not use LIFO and enhance the
understanding of the company’s operating performance. The
Company does not intend for this information to be considered in
isolation or as a substitute for other measures prepared in
accordance with GAAP.
Set forth below is a reconciliation of reported net
earnings and reported diluted earnings per share to net earnings
excluding LIFO and diluted earnings per share excluding LIFO.
|
|
Quarter Ended |
|
|
March 31, 2016 |
|
March 31, 2015 |
|
|
Income |
|
Diluted |
|
Income |
|
Diluted |
|
|
(in millions) |
|
EPS |
|
(in millions) |
|
EPS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings, as reported: |
$ |
|
13.8 |
|
|
$ |
|
1.38 |
|
|
$ |
|
2.8 |
|
|
$ |
|
0.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO credit, after tax
at statutory federal rate |
|
|
(7.5 |
) |
|
|
|
(0.75 |
) |
|
|
|
(0.1 |
) |
|
|
|
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings, excluding
LIFO impact |
$ |
|
6.3 |
|
|
$ |
|
0.63 |
|
|
$ |
|
2.7 |
|
|
$ |
|
0.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
weighted average common shares outstanding (in thousands) |
|
|
|
|
|
9,910 |
|
|
|
|
|
|
|
10,525 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|
|
March 31, 2016 |
|
March 31, 2015 |
|
|
Income |
|
Diluted |
|
Income |
|
Diluted |
|
|
(in millions) |
|
EPS |
|
(in millions) |
|
EPS |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings, as reported: |
$ |
|
54.5 |
|
|
$ |
|
5.42 |
|
|
$ |
|
9.9 |
|
|
$ |
|
0.90 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIFO (credit) charge,
after tax at statutory federal rate |
|
|
(16.1 |
) |
|
|
|
(1.60 |
) |
|
|
|
6.9 |
|
|
|
|
0.64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings, excluding
LIFO impact |
$ |
|
38.4 |
|
|
$ |
|
3.82 |
|
|
$ |
|
16.8 |
|
|
$ |
|
1.54 |
|
|
|
|
|
|
|
|
|
|
Diluted
weighted average common shares outstanding (in thousands) |
|
|
|
|
|
9,948 |
|
|
|
|
|
|
|
10,762 |
|
|
Set forth below is a reconciliation of reported net
earnings to EBITDA and FIFO EBITDA (earnings before interest,
income taxes, depreciation, amortization, non-cash charges and
credits related to the LIFO inventory valuation method). The
Company does not intend for this information to be considered in
isolation or as a substitute for other measures prepared in
accordance with GAAP.
|
Year Ended |
EBITDA and FIFO
EBITDA: |
March 31, 2016 |
|
March 31, 2015 |
|
(In thousands) |
|
|
|
|
Net earnings |
$ |
54,458 |
|
|
$ |
9,899 |
|
Interest expense, net
of interest income |
|
8,044 |
|
|
|
6,862 |
|
Income tax expense |
|
25,999 |
|
|
|
4,221 |
|
Depreciation and
amortization |
|
21,737 |
|
|
|
21,834 |
|
Interest
amortization |
|
(300 |
) |
|
|
(299 |
) |
EBITDA |
|
109,938 |
|
|
|
42,517 |
|
LIFO (credit)
charge |
|
(24,792 |
) |
|
|
10,683 |
|
FIFO EBITDA |
$ |
85,146 |
|
|
$ |
53,200 |
|
|
Forward-Looking Information
The information contained in this release contains,
or may contain, forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These
statements appear in a number of places in this release and include
statements regarding the intent, belief or current expectations of
the Company or its officers (including statements preceded by,
followed by or that include the words “believes,” “expects,”
“anticipates” or similar expressions) with respect to various
matters.
Because such statements are subject to risks and
uncertainties, actual results may differ materially from those
expressed or implied by such forward-looking statements.
Investors are cautioned not to place undue reliance on such
statements, which speak only as of the date the statements were
made. Among the factors that could cause actual results to
differ materially are:
- general economic and business conditions;
- cost and availability of commodities and other raw materials
such as vegetables, steel and packaging materials;
- transportation costs;
- climate and weather affecting growing conditions and crop
yields;
- availability of financing;
- leverage and the Company’s ability to service and reduce its
debt;
- foreign currency exchange and interest rate fluctuations;
- effectiveness of the Company’s marketing and trade promotion
programs;
- changing consumer preferences;
- competition;
- product liability claims;
- the loss of significant customers or a substantial reduction in
orders from these customers;
- changes in, or the failure or inability to comply with, United
States, foreign and local governmental regulations, including
environmental and health and safety regulations; and
- other risks detailed from time to time in the reports filed by
the Company with the SEC.
Except for ongoing obligations to disclose material
information as required by the federal securities laws, the Company
does not undertake any obligation to release publicly any revisions
to any forward-looking statements to reflect events or
circumstances after the date of the filing of this report or to
reflect the occurrence of unanticipated events.
Seneca Foods Corporation |
|
|
|
Unaudited Condensed Consolidated Statements of Net
Earnings |
|
|
|
For the Years Ended March 31, 2016 and 2015 |
|
|
|
(In thousands of dollars, except share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter |
|
Year-to-Date |
|
|
|
|
Fiscal 2016 |
|
Fiscal 2015 |
|
Fiscal 2016 |
|
Fiscal 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
|
303,702 |
|
|
$ |
|
277,939 |
|
|
$ |
1,275,360 |
|
$ |
|
1,286,350 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plant restructuring
expense (note 2) |
$ |
|
744 |
|
|
$ |
|
487 |
|
|
$ |
10,302 |
|
$ |
|
1,376 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating income
net (note 3) |
$ |
|
371 |
|
|
$ |
|
(91 |
) |
|
$ |
24,971 |
|
$ |
|
4,748 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (note
1) |
$ |
|
22,108 |
|
|
$ |
|
6,176 |
|
|
$ |
88,549 |
|
$ |
|
20,354 |
|
|
|
|
Loss (earnings) from
equity investment |
|
|
(84 |
) |
|
|
|
(397 |
) |
|
|
48 |
|
|
|
(628 |
) |
|
|
|
Interest expense,
net |
|
|
2,272 |
|
|
|
|
1,920 |
|
|
|
8,044 |
|
|
|
6,862 |
|
|
|
|
Earnings before income
taxes |
$ |
|
19,920 |
|
|
$ |
|
4,653 |
|
|
$ |
80,457 |
|
$ |
|
14,120 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
expense |
|
|
6,075 |
|
|
|
|
1,888 |
|
|
|
25,999 |
|
|
|
4,221 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
$ |
|
13,845 |
|
|
$ |
|
2,765 |
|
|
$ |
54,458 |
|
$ |
|
9,899 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings attributable
to common stock (note 4) |
|
|
13,712 |
|
|
|
|
2,722 |
|
|
|
53,891 |
|
|
|
9,716 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share |
$ |
|
1.39 |
|
|
$ |
|
0.26 |
|
|
$ |
5.46 |
|
$ |
|
0.91 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share |
$ |
|
1.38 |
|
|
$ |
|
0.26 |
|
|
$ |
5.42 |
|
$ |
|
0.90 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding basic |
|
|
9,839,528 |
|
|
|
|
10,453,477 |
|
|
|
9,878,252 |
|
|
|
10,690,215 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding diluted |
|
|
9,909,710 |
|
|
|
|
10,525,256 |
|
|
|
9,948,434 |
|
|
|
10,761,994 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 1:
The effect of the LIFO inventory valuation method on fourth
quarter pre-tax results was to increase operating earnings by
$11,543,000 for |
|
the three
month period ended March 31, 2016 and increase operating earnings
by $202,000 for the three month period ended March 31 |
|
31,
2015. The effect of the LIFO inventory valuation method
on year-to-date pre-tax results was to increase operating earnings
by |
|
$24,792,000 for the twelve month period ended March 31, 2016 and
decrease operating earnings by $10,683,000 for the twelve
month |
|
period
ended March 31, 2015. |
|
Note 2:
The twelve month period ended March 31, 2016 included a
restructuring charge for plant closure costs of $10,302,000. |
|
The twelve
month period ended March 31, 2015 included a restructuring charge
for plant closure costs of $1,376,000. |
|
Note 3:
Other operating income for the twelve month period ended March 31,
2016 of $24,971,000 represents a $24,275,000 assignment credit
related to |
|
the
relationship transfer agreement among General Mills, B & G
Foods and the Company, a $200,000 credit related to a contingency
accrual for |
|
Prop 65,
net gain on the sale of unused fixed assets of $432,000 and a
credit of $64,000 related to an adjustment to an environmental
accrual. |
|
Other net
gain for the twelve month period ended March 31, 2015 of $4,748,000
represents a $5,000,000 gain related to a third party payment |
|
for the
closing of a Midwest plant, a $250,000 charge related to
environmental accrual and net loss on the sale of unused
fixed assets of $2,000. |
|
Note 4:
The Company uses the "two-class" method for basic earnings per
share by dividing the earnings attributable to common
shareholders |
|
by the
weighted average of common shares outstanding during the
period. |
|
|
|
Contact:
Timothy J. Benjamin
315-926-8100
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