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Form 8-K Seneca Foods Corp For: Jun 08

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June 8, 2016 4:42 PM EDT
UNITED STATES
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

__________________________

FORM 8-K

Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (date of earliest event reported): June 8, 2016


SENECA FOODS CORPORATION
(Exact Name of Registrant as Specified in its Charter)


New York
(State or Other Jurisdiction of Incorporation)
0-01989
(Commission File Number)
16-0733425
(IRS Employer Identification No.)

3736 South Main Street, Marion, New York 14505-9751
(Address of Principal Executive Offices, including zip code)

(315) 926-8100
(Registrant's telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Item 2.02                      Results of Operations and Financial Condition

On June 8, 2016, Seneca Foods Corporation (the "Corporation") issued a press release on its financial results for the fourth quarter and year ended March 31, 2016 furnished as Exhibit 99.1, attached hereto.
 
Item 9.01       Financial Statements and Exhibits.

(d)           Exhibits

Exhibit 99.1
Press Release dated June 8, 2016 announcing Seneca Foods Corporation's results of operations for fourth quarter and year ended March 31, 2016.
 
 

 



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amended report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:                   June 8, 2016

SENECA FOODS CORPORATION


By: /s/Jeffrey L. Van Riper
Jeffrey L. Van Riper
Controller and Secretary



Seneca Foods Reports Earnings of $13.8 Million or $1.38 per Diluted Share for
  the Fourth Quarter of Fiscal Year 2016


MARION, N.Y. June 8, 2016 -- Seneca Foods Corporation (NASDAQ: SENEA, 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 Corporation
Seneca 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.


Contact:
Timothy J. Benjamin
315-926-8100
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.
  
   
#######
  


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