2 0 2 3 A N N U A L R E P O R T
Financial Summary
(in thousands, except per share and ratio data)
2023
Fiscal Year
2022
Change
Net sales
Operating income
Net earnings (see note 1)
Stockholders' equity
Diluted earnings per share (see note 1)
Total stockholders' equity per equivalent common share (see note 2)
Total debt/equity ratio
Current ratio
$
1,509,352 $
52,936
33,138
583,464
1,385,280
70,345
51,007
583,837
4.20
75.66
0.84
5.21
5.79
69.23
0.31
3.21
9.0 %
-24.7 %
-35.0 %
-0.1 %
-27.5 %
9.3 %
Note 1: The Company uses the last-in, first out (LIFO) accounting methodology for valuing inventory as it believes this method
allows for better matching of current production costs to current revenue. The LIFO accounting methodology decreased net
earnings by $73.0 million (a reduction of $9.28 per diluted share) and by $27.6 million (a reduction of $3.16 per diluted share)
in fiscal years 2023 and 2022, respectively.
Note 2: Equivalent common shares are either common shares or, for convertible preferred shares, the number of common shares
that the preferred shares are convertible into.
Description of Business
Seneca Foods Corporation (“Seneca” or the “Company”) conducts its business almost entirely in food packaging, which
contributed about 98% of the Company's fiscal year 2023 net sales. Canned vegetables represented 83%, frozen vegetables
represented 8%, fruit products represented 6%, and snack products represented 1% of the total food packaging net sales. Non-
food packaging sales, which primarily related to the sale of cans and ends, and outside revenue from the Company's trucking and
aircraft operations, represented 2% of the Company's fiscal year 2023 net sales.
Approximately 7% of the Company’s packaged foods, excluding cherry products, were sold under its own brands, or licensed
trademarks, including Seneca®, Libby's®, Aunt Nellie's®, Green Valley® and READ®. The remaining 93% of packaged foods
were sold under other segments including private labels, food service, restaurant chains, international, contracting packaging,
industrial, snack, and cherry products (including the CherryMan® brand).
Fairport, New York
June 13, 2023
1
To Our Shareholders,
The Company recorded net earnings for Fiscal 2023 of $33.1 million or $4.20 per diluted share on net sales of $1,509.4 million versus
net earnings of $51.0 million or $5.79 per diluted share on net sales of $1,385.3 million in Fiscal 2022. As outlined in more detail below,
financially Fiscal 2023 was a very good year, despite continued inflationary and supply chain challenges.
Fiscal 2023 and the 2022 packing season saw us move past COVID related challenges and was a welcomed development with focus
returned to efficiently managing through our seasonal packs and on operational details. Our return to more normal operating parameters
was definitely welcomed. While full-time staffing remained a significant challenge for a number of locations, we were able to meet our
seasonal staffing needs as packs began. Later in what proved to be a very long season, staffing was a problem, but not to the extent that
it had been over the previous two years. Many of our seasonal employees have been with us for decades and may represent third and
even fourth generations working for the company. They are essential to our success. The investments that we have made in our housing
for a large portion of these employees has paid dividends, enabling us to attract the workforce that we need. We continue to be committed
to doing what is necessary to provide needed housing. Regarding permanent staff, as previously mentioned, it remains a challenge to
fill fulltime openings at some locations in the tight labor market that we all experience. We continue to make changes to remain
competitive in the areas where we operate and be attractive as an employer. However, most of the areas that we operate are well below
the national average for unemployment rates and hiring qualified full-time employees remains one of our greatest challenges. In fact,
in one county where one of our largest facilities is located the unemployment rate in April 2023 was 1.7%. The unemployment rate is
well below 3% for the areas around almost all of our facilities.
During the 2022 pack season, on the agricultural side, Mother Nature dealt us a pretty good hand and we had a good crop overall. Raw
product contract prices to our more than 1,400 producer partners were up more than 30% year-over-year to stay competitive with
producer alternatives to growing our vegetable crops. This was after a 25% increase in the 2021 pack season. As we are now beginning
the 2023 season, these costs have moderated from the last two years and were flat to slightly down. In any case, in order to compete
with the various commodity crops grown by our producers, the contract prices that we are paying are at, or very near, historic highs,
but are where we must be to compete with producer alternatives. The 2022 planting season had the usual variability in weather,
impacting crops across the season during short periods of time but, as previously mentioned, overall the crops were good to excellent.
Across the board our plants performed better than the previous pandemic years and combined with a favorable fall we packed near
budget on all crops with our primary crop, sweet corn, coming in well over budget. The last couple of years of dealing with out of stocks
are no longer a concern.
With a good crop, COVID behind us and inventories in line, the new challenge was inflation. Our business felt the full brunt of inflation
over the fiscal year. Producer commodity price increases for field corn, soybean and wheat, driven in part by the war in Ukraine, directly
led to needed increases in our contracts by over 50% over a two-year period, as previously mentioned. Steel tariffs and supply chain
challenges with vital imported supply, have doubled the cost of tinplated steel used in our cans since 2021 to new record levels.
Unfortunately, domestic production of tinplate has done nothing but decrease since pre-pandemic with several tinplated steel production
lines permanently idled. Pending anti-dumping duty charges filed by a domestic supplier against eight countries exporting tinplate to
the U.S., leave little expectation that tinplate will return to historic levels. Furthermore, tinplate supply challenges from existing
suppliers led us to expand our sourcing and increase our planned inventory of steel needed to supply our can manufacturing operations.
Utility costs and natural gas in particular, drove significant cost increases at our processing facilities with many other packaging and
ingredient supplies experiencing significant cost increases as well. Labor costs increased to keep pace with the market at percentage
rates not seen for many years. Fuel costs for harvesting and also over the road freight drove those costs to historic levels.
Fortunately, despite these inflationary pressures we were able to maintain margins in our business through necessary higher selling
prices. Our overall production volumes remain stable at our facilities as we sought to rebuild inventories that had been depleted during
the pandemic and a Mother Nature created short pack in 2021. Our planned production volume for the 2022 pack season was the highest
in company history, exceeding the prior year which was near the previous record. For 2023, our volumes are down slightly reflecting a
number of our customers managing inventory coming out of a very large pack season in 2022. Our retail canned business sales volumes
have returned to pre-pandemic trends. Our canned foodservice, as well as chain account segments, have shown good growth and steady
improvement over the past fiscal year and we expect increased volume as we lap the out of stocks that we had at the end of the previous
year, which affected this channel particularly hard. All that said, the foodservice and chain segments remain below pre-pandemic levels,
as work from home and simply fewer restaurants continued to have an impact during the year. Our international business has also seen
a decline in units as customers stocked up during the pandemic and now are working to get inventories in line. We also had a significant
long-term international customer exit the corn market all together. Despite these challenges in the international segment, we are back
to having face-to-face meetings with our customers and are pleased that our relationships remain strong as we work with them to manage
inventories and return contracted volumes back up to previous levels. Our frozen business continues to perform well, and volumes were
up slightly from the previous year. We continue to be pleased with the strong relationships that we have solidified in this channel as we
performed well through the pandemic. An important part of our vegetable business are the large co-packing relationships that we have
with other brand owners in the canned and frozen vegetable category. We are entering our 29th packing season with one and our fourth
year with the other. We very much value these relationships and continue to work closely with them on the production side of the
business to assure that we are meeting their volume needs. Prior to 2022 we completed a significant expansion of our pumpkin producing
facility which could not have performed much better this past year. We have never been in a better position to supply our customers’
needs for pumpkin.
2
Our Seneca Snack business was heavily impacted with inflationary cost pressures for apples, oil, sweetener, utilities, and packaging.
These increases led to needed price adjustments to try to offset cost increases, but unfortunately fell short. Our Snack business was
unprofitable this past year as the pricing steps that have been taken to address inflationary pressures lagged the increased costs. Our
Apple Chip business remains extremely strong, and in fact, continues to grow to new highs. However, co-packing relationships have
been an important factor in maintaining volume through the plant over the years and these have been slow to develop as we emerged
from the pandemic. We continue to evaluate other opportunities, including investments in the facility that will expand our capabilities
and open new doors.
Once again, inflation created significant challenges for our maraschino and candied fruit business as well. The most aggressive price
increases we delivered were in this business and still the price movement lagged increased costs. Significant plant expansion and
operational improvements at our cherry facility were completed over the past year, with our new 100,000 square foot warehouse coming
online as planned. We feel as though we are on the path to achieving sustainable performance with needed changes largely in place.
Returning to the overall performance, it is important to note that included in our current year’s earnings was a historic non-cash charge
to earnings from our inventory accounting methodology. Our Last In, First Out (LIFO) inventory accounting methodology reduced our
reported pre-tax profits by $100.0 million. The LIFO charge was expected given the fact that we have experienced significant inflation
in Fiscal 2023. The Company’s Fiscal 2023 net earnings would be $106.1 million or $13.48 per diluted share without the LIFO charge.
As we continue to take seriously the stabilization and management of our pension plan, we are pleased with the results of the changes
we made a couple of years ago in moving toward an Outsourced Chief Investment Officer arrangement. At the end of Fiscal year 2023
the plan funding status remained strong at 125.2% and no contributions have been made since Fiscal year 2021.
In an effort to leverage our cash position driven by strong performance, and in order to maximize shareholder value, we continue to
view our own stock as a value, and we continued to buy back significant shares of our own stock. During fiscal 2023 we repurchased
766,071 shares at an average price of $54.25 per share. This represents 9.2% of our outstanding shares and impacted diluted earnings
per share by $0.37 per share increasing to $4.20 per share. All that said, with the inflationary pressures as well as inventory increases,
our working capital needs have grown. As such, we have reduced focus on the buyback program and allocated capital to the Company’s
cap-ex and working capital needs in keeping with our conservative approach to balance sheet management and capital allocation. In an
effort to provide capacity on the balance sheet for previously mentioned steel inventory, the large pack and any potential acquisition
opportunities, we have taken on new term debt which was used to pay down our revolver resulting in unused capacity with that financing
instrument. In January we closed on a $175 million term loan through Farm Credit East and subsequently upsized by another $125
million in May, putting us in a very solid balance sheet and liquidity position.
In addition to our stock buyback program, we continue to use our cash in support of our longstanding philosophy, to upgrade our
facilities to improve our operations. During Fiscal 2023 we invested 208% of depreciation in capital expenditures in addition to 14.5%
financed through leases.
As illustrated by the foregoing, a fundamental objective of the Company is to continue to focus on a strong balance sheet. In that regard,
at year end the Company’s total debt to equity ratio was 0.84 and the current ratio was 5.21. In addition, as noted in the Fiscal Year
2023 financial statements, the Company has significant liquidity available to it with its Revolving Credit Facility.
With the completion of what has been a record year from an operating earnings perspective, we are reminded that we are in a commodity
business that is subject to inherent ups and downs. Additionally, uncertainty in the tinplate market and other cost pressures can create
swings in cost structure that must be closely monitored. Focused attention on the impacts of inflation is critical. As mentioned above,
we continue to believe a key is that the Company has a strong balance sheet and the financial wherewithal to ride out whatever challenges
lie ahead.
As I conclude my comments, I want to take a moment to express how fortunate we are to have an experienced and dedicated workforce
that are part of the network of facilities and people working together to produce and ship over 90 million cases of high-quality product
each year. Their hard work and commitment to our values have been integral to our success as we have navigated the challenges that
we have over the past couple of years. To our shareholders, I would like to extend our sincere appreciation for your ongoing support
and confidence in our company. As we continue forward, we remain committed to the core principles and Fundamental Beliefs that
have guided us for so long and helped us get to where we are today. As always, I hope that you are proud to be part of an organization
that recognizes that what we all do for a living makes a real difference in people’s lives.
Sincerely,
President & Chief Executive Officer
3
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
Our Business
Seneca is a leading provider of packaged fruits and vegetables, with facilities located throughout the United States. Its high
quality products are primarily sourced from approximately 1,400 American farms. The Company’s product offerings include
canned, frozen and bottled produce, and snack chips. Its products are sold under private label as well as national and regional
brands that the Company owns or licenses, including Seneca®, Libby’s®, Aunt Nellie’s®, Cherryman®, Green Valley® and
READ®. The Company’s fruits and vegetables are sold nationwide by major grocery outlets, including supermarkets, mass
merchandisers, limited assortment stores, club stores and dollar stores. The Company also sells its products to foodservice
distributors, restaurants chains, industrial markets, other food processors, export customers in approximately 60 countries and
federal, state and local governments for school and other food programs. Additionally, the Company packs canned and frozen
vegetables under contract packing agreements.
The Company’s business strategies are designed to grow its market share and enhance sales and margins. These strategies include:
1) expand the Company’s leadership in the packaged fruit and vegetable industry; 2) provide low cost, high quality vegetable
products to consumers through the elimination of costs from the Company’s supply chain and investment in state-of-the-art
production and logistical technology; 3) focus on growth opportunities to capitalize on higher expected returns; and 4) pursue
strategic acquisitions that leverage the Company’s core competencies.
All references to years are fiscal years ended March 31 unless otherwise indicated.
Fluctuations in Commodity, Production, Distribution and Labor Costs
We purchase raw materials, including raw produce, steel, ingredients and packaging materials from growers, commodity
processors, steel producers and packaging suppliers. Raw materials and other input costs, such as labor, fuel, utilities and
transportation, are subject to fluctuations in price attributable to a number of factors. Fluctuations in commodity prices can lead
to retail price volatility and can influence consumer and trade buying patterns. The cost of raw materials, fuel, labor, distribution
and other costs related to our operations can increase from time to time significantly and unexpectedly.
We continue to experience material cost inflation for many of our raw materials and other input costs attributable to a number of
factors, including but not limited to, supply chain disruptions (including raw material shortages), labor shortages, and the war in
Ukraine. While we have no direct exposure to Russia and Ukraine, we have experienced increased costs for transportation,
energy, and raw materials due in part to the negative impact of the Russia-Ukraine conflict on the global economy. We attempt
to manage cost inflation risks by locking in prices through short-term supply contracts, advance grower purchase agreements,
and by implementing cost saving measures. We also attempt to offset rising input costs by raising sales prices to our customers.
However, increases in the prices we charge our customers may lag behind rising input costs. Competitive pressures also may
limit our ability to quickly raise prices in response to rising costs. To the extent we are unable to avoid or offset any present or
future cost increases our operating results could be materially adversely affected.
Results of Operations - Fiscal Year 2023 versus Fiscal Year 2022
The following discussion is a comparison between fiscal year 2023 and fiscal year 2022 results. For a discussion of the
Company’s results of operations for the year ended March 31, 2022 compared to the year ended March 31, 2021, please refer to
the information under the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in
the Company’s 2022 Annual Report, attached as Exhibit 13 to the Company’s Annual Report on Form 10-K for the fiscal year
ended March 31, 2022, which was filed with the SEC on June 10, 2022.
4
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
Net Sales:
The following table presents net sales by product category (in thousands):
Canned vegetables
Frozen vegetables
Fruit products
Snack products
Other
Fiscal Year:
2023
1,253,257 $
121,211
91,495
12,661
30,728
1,509,352 $
2022
1,135,983
123,895
84,708
12,332
28,362
1,385,280
$
$
Net sales for fiscal year 2023 totaled $1,509.4 million as compared to $1,385.3 million for fiscal year 2022. The overall net sales
increase of $124.1 million, or 9.0%, was due to higher selling prices contributing favorability of $204.0 million offset by lower
sales volumes having an unfavorable impact of $79.9 million to net sales, as compared to the prior fiscal year.
Net sales of canned vegetables, fruit products, and snack products increased over the prior fiscal year due to higher pricing
necessitated by the material cost increases that the Company is experiencing. Volume in each of these product categories is down
versus the prior fiscal year partially offsetting a portion of the favorability in net sales generated by increased pricing. Net sales
in the frozen vegetable category decreased as compared to the prior fiscal year as increased pricing did not offset volume declines,
primarily in the frozen contract packing sales channel.
Operating Income:
The following table sets forth the percentages of net sales represented by selected items for fiscal year 2023 and fiscal year 2022
reflected in our consolidated statements of net earnings:
Gross margin
Selling, general, and administrative expense
Other operating (income) expense, net
Operating income
Loss from equity investment
Other non-operating income
Interest expense, net
Income taxes
Fiscal Year:
2023
2022
9.0%
5.4%
-0.1%
3.5%
0.0%
-0.4%
0.9%
0.8%
10.7 %
5.5 %
0.1 %
5.1 %
0.6 %
-0.7 %
0.4 %
1.1 %
Gross Margin – Gross margin is equal to net sales less cost of products sold. As a percentage of net sales, gross margin was
9.0% for fiscal year 2023 as compared to 10.7% for fiscal year 2022. This decrease in gross margin was due primarily to a LIFO
charge of $100.0 million in fiscal year 2023 versus a LIFO charge of $35.8 million in fiscal year 2022, a year over year negative
impact to gross margin of $64.2 million. Fiscal year 2023’s large LIFO charge was driven by cost inflation for various inputs,
including steel, commodities, labor, ingredients, packaging, fuel and transportation.
Selling, General and Administrative Expense – Selling, general and administrative expense was 5.4% of net sales in fiscal year
2023 and 5.5% of net sales in fiscal year 2022. The decrease as a percentage of net sales is primarily due to higher sales and the
fixed nature of certain expenses.
5
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
Other Operating (Income) Expense, net – The Company had net other operating income of $1.7 million in fiscal year 2023,
which was driven primarily by gains on the sale of the Company’s western trucking fleet and an aircraft, along with a favorable
true-up of the supplemental early retirement plan accrual. This other operating income was partially offset by a write down of
idle equipment to estimated selling price, less commission, as the assets met the criteria to be classified as held for sale.
The Company had net other operating expense of $1.2 million in fiscal year 2022, which was driven by charges for supplemental
early retirement plans and to maintain non-operating facilities classified as held for sale. These charges were partially offset by
a net gain on the sale of assets and a gain from debt forgiveness on an economic development loan.
Restructuring – During fiscal year 2023, the Company incurred restructuring charges of $3.6 million primarily due to ceasing
production of green beans at a plant in the Northeast. The charges mainly consisted of severance and write-downs of production
equipment that was to be scrapped or sold. The Company did not incur significant restructuring charges during fiscal year 2022.
Non-Operating Income:
Loss from Equity Investment – During fiscal year 2022, the Company incurred a pre-tax operating loss, including an impairment
charge, of $7.8 million in connection with its equity investment that experienced a decline in value deemed other-than-temporary.
The Company’s equity investment was written down to $0 as of March 31, 2022, and therefore no loss was incurred from equity
investment during fiscal year 2023.
Interest Expense, Net – Interest expense as a percentage of net sales was 0.9% for fiscal year 2023 as compared to 0.4% for
fiscal year 2022. Interest expense increased from $5.6 million in the prior fiscal year to $14.3 million for fiscal year 2023 as a
result of higher interest rates and increased borrowing levels.
Other Non-Operating Income Expense – Other non-operating income totaled $6.8 million and $9.3 million in fiscal years 2023
and 2022, respectively, and is comprised of the non-service related pension amounts that are actuarially determined. The amounts
can either be income or expense depending on the results of the actuarial calculations. For details of the calculation of these
amounts, refer to Note 10 of the Notes to Consolidated Financial Statements.
Income Taxes – As a result of the aforementioned factors, pre-tax earnings decreased from $66.2 million in fiscal year 2022 to
$45.4 million in fiscal year 2023. Income tax expense totaled $12.2 million and $15.2 million in fiscal years 2023 and 2022,
respectively. The Company’s effective tax rate was 27.0% and 23.0% in fiscal years 2023 and 2022, respectively. In fiscal year
2023, the Company added a valuation allowance against state tax credits because it was determined that it was more likely than
not that the credits will not be used prior to expiration. This change, along with other current year increases in the existing
valuation allowances, had a 3.4% increase on the fiscal year 2023 effective tax rate. The effective tax rate was further increased
by 0.6% due to state rate changes which were mostly caused by changes in the Company’s business activities that impact state
apportionment. For details of the calculation of the effective tax rate, refer to Note 9 of the Notes to Consolidated Financial
Statements.
Earnings per Share:
Basic earnings per common share
Diluted earnings per common share:
Fiscal Year:
2023
2022
$
$
4.23 $
4.20 $
5.83
5.79
For details of the calculation of these amounts, refer to Note 3 of the Notes to Consolidated Financial Statements.
Liquidity and Capital Resources:
Material Cash Requirements – The Company’s primary liquidity requirements include debt service, capital expenditures and
working capital needs. Liquidity requirements are funded primarily through cash generated from operations and external sources
of financing, including the revolving credit facility. The Company does not have any off-balance sheet financing arrangements.
6
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
Summary of Cash Flows – The following table presents a summary of the Company’s cash flows from operating, investing
and financing activities (in thousands):
Cash (used in) provided by operating activities
Cash used in investing activities
Cash provided by (used in) financing activities
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Fiscal Year:
2023
2022
$
$
(212,796) $
(64,877)
279,025
1,352
10,904
12,256 $
30,152
(45,187)
(33,898)
(48,933)
59,837
10,904
Net Cash (Used in) Provided by Operating Activities – For fiscal year 2023, cash used in operating activities was $212.8 million,
which consisted of a use of cash of $286.7 million by operating assets and liabilities partially offset by net earnings of $33.1
million, adjusted by non-cash charges of $40.8 million. The non-cash charges were largely driven by $40.9 million of
depreciation and amortization. The change in operating assets and liabilities was largely due to inventories being a use of cash
driven by the increased size of the fiscal year 2023 harvest in addition to material cost inflation to various production inputs.
For fiscal year 2022, cash provided by operating activities was $30.2 million, which consisted of net earnings of $51.0 million,
adjusted by non-cash charges of $50.4 million, partially offset by a use of cash of $71.2 million in operating assets and liabilities.
The non-cash charges were largely driven by $36.5 million of depreciation and amortization. The change in operating assets and
liabilities was largely due to inventories being a use of cash driven by a planned effort to raise inventory levels after the increased
sales demand stemming from the COVID-19 pandemic significantly reduced inventory levels in the prior year. In addition to
planning a larger seasonal pack to replenish depleted inventory, the Company began to experience material input cost inflation
during fiscal year 2022, making the seasonal pack more costly to the Company.
The cash requirements of the business fluctuate significantly throughout the year to coincide with the seasonal growing cycles
of vegetables. The majority of the inventories are produced during the packing months, from June through November, and are
then sold over the following year. Cash flow from operating activities is one of the Company’s main sources of liquidity.
Net Cash Used in Investing Activities – Net cash used in investing activities was $64.9 million for fiscal year 2023 and consisted
of cash used for capital expenditures of $70.6 million partially offset by proceeds from the sale of assets totaling $5.7 million.
Net cash used in investing activities was $45.2 million for fiscal year 2022 and consisted of cash used for capital expenditures of
$53.4 million partially offset by proceeds from the sale of assets totaling $8.2 million.
Net Cash Provided by (Used in) Financing Activities – Net cash provided by financing activities was $279.0 million for fiscal
year 2023, driven primarily by receiving proceeds from a new term loan of $175 million and an increase in net borrowings on
the Company’s revolving credit facility of $160.1 million during fiscal year 2023. Cash used to purchase treasury stock of $41.2
million and to make payments on financing leases of $8.8 million partially offset the cash provided by financing activities.
Net cash used in financing activities was $33.9 million for fiscal year 2022, driven mostly by purchasing treasury stock of $38.8
million and by making payments of $7.9 million on financing leases. The use of cash in financing was partially offset by an
increase in net borrowings on the Company’s revolving credit facility of $19.5 million.
Debt - The Company’s primary cash requirements are to make payments on the Company’s debt, finance seasonal working
capital needs and to make capital expenditures. Internally generated funds and amounts available under the revolving credit
facility are the Company’s primary sources of liquidity, although the Company believes it has the ability to raise additional
capital by issuing additional stock, if it desires.
Revolving Credit Facility – On March 24, 2021, the Company entered into a Fourth Amended and Restated Loan and Security
Agreement that provides for a senior revolving credit facility of up to $400.0 million that is seasonally adjusted (the “Revolver”).
Maximum borrowing availability under the Revolver totals $300.0 million from April through July and $400.0 million from
August through March. In order to maintain availability of funds under the facility, the Company pays a commitment fee on the
unused portion of the Revolver.
7
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
The Revolver is secured by substantially all of the Company’s accounts receivable and inventories and contains borrowing base
requirements as well as a financial covenant, if certain circumstances apply. The Company utilizes its Revolver for general
corporate purposes, including seasonal working capital needs, to pay debt principal and interest obligations, and to fund capital
expenditures and acquisitions. Seasonal working capital needs are affected by the growing cycles of the fruits and vegetables the
Company packages. The majority of vegetable inventories are produced during the months of June through November and are
then sold over the following year. Payment terms for vegetable produce are generally three months but can vary from a few days
to seven months. Accordingly, the Company’s need to draw on the Revolver may fluctuate significantly throughout the year.
As of March 31, 2023 and 2022, the Revolver balance was $180.6 million and $20.5 million, respectively, and is included in
Long-Term Debt in the accompanying Consolidated Balance Sheet due to the Revolver’s March 24, 2026 maturity.
The following table documents the quantitative data for short-term borrowings on the Revolver during fiscal years 2023 and
2022 (in thousands, except for percentages):
Outstanding borrowings
Interest rate
Maximum amount of borrowings
Average outstanding borrowings
Weighted average interest rate
As of:
March 31,
March 31,
2023
2022
$
$
$
180,598 $
6.34%
20,508
1.71 %
Fiscal Year:
2023
2022
350,828 $
159,670 $
5.03%
58,323
22,357
1.37 %
Long-Term Debt – On May 28, 2020 the Company entered into an Amended and Restated Loan and Guaranty Agreement with
Farm Credit East, ACA that provides for a $100.0 million unsecured term loan (“Term Loan”). The amended and restated
agreement has a maturity date of June 1, 2025 and converted the Term Loan to a fixed interest rate rather than a variable interest
rate in addition to requiring quarterly principal payments of $1.0 million, which commenced during fiscal year 2021. The
Company incurred financing costs totaling $0.2 million which have been classified as a discount to the debt and are amortized
over the life of the Term Loan. This agreement contains certain covenants, including maintaining a minimum EBITDA and
minimum tangible net worth.
On January 20, 2023, the Company entered into a Second Amended and Restated Loan and Guaranty Agreement with Farm
Credit East, ACA (the “Amended Agreement”). The Amended Agreement governs two term loans, summarized below:
Term Loan A-1: The Amended Agreement continues certain aspects of the $100 million term loan described above, namely Term
Loan A-1 will continue to bear interest at a fixed interest rate of 3.3012%, mature on June 1, 2025, and remain unsecured.
Term Loan A-2: The Amended Agreement adds an additional term loan in the amount of $175 million that will mature on January
20, 2028, and is secured by a portion of the Company’s property, plant and equipment. Term Loan A-2 bears interest at a variable
interest rate based upon the Secured Overnight Financing Rate (SOFR) plus an additional margin determined by the Company’s
leverage ratio.
The Amended Agreement for Term Loan A-1 and Term Loan A-2 (collectively, the “Term Loans”) contains restrictive covenants
usual and customary for loans of its type, in addition to financial covenants including minimum EBITDA and minimum tangible
net worth which apply to both term loans described above. In connection with the Amended Agreement, the Company incurred
$0.6 million of financing costs which will be deferred and amortized over the life of Term Loan A-2.
8
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
As of March 31, 2023, scheduled maturities of long-term debt in each of the five succeeding fiscal years and thereafter are
presented below. The Revolver balance is presented as being due in fiscal year 2026, based upon the Revolver’s March 24, 2026
maturity date (in thousands):
2024
2025
2026
2027
2028
Thereafter
Total
$
$
10,000
10,000
267,598
6,000
149,500
216
443,314
The Company believes that its cash flows from operations, availability under its Revolver, and cash and cash equivalents on hand
will provide adequate funds for the Company’s working capital needs, planned capital expenditures, operating and administrative
expenses, and debt service obligations for at least the next 12 months and the foreseeable future.
Restrictive Covenants – The Company’s debt agreements, including the Revolver and Term Loans, contain customary
affirmative and negative covenants that restrict, with specified exceptions, the Company’s ability to incur additional
indebtedness, incur liens, pay dividends on the Company’s capital stock, make other restricted payments, including investments,
transfer all or substantially all of the Company’s assets, enter into consolidations or mergers, and enter into transactions with
affiliates. The Company’s debt agreements also require the Company to meet certain financial covenants including a minimum
EBITDA and minimum tangible net worth. The Revolver contains borrowing base requirements related to accounts receivable
and inventories and also requires the Company to meet a financial covenant related to a minimum fixed charge coverage ratio if
(a) an event of default has occurred or (b) availability on the Revolver is less than the greater of (i) 10% of the commitments then
in effect and (ii) $25,000,000. The most restrictive financial covenant in the debt agreements is the minimum EBITDA within
the Term Loans which for fiscal year 2023 was greater than $75 million in EBITDA. The Company computes its financial
covenants as if the Company were on the first-in, first out (FIFO) method of inventory accounting. The Company has met all
such financial covenants as of March 31, 2023.
The Company's debt agreements limit the payment of dividends and other distributions. There is an annual total distribution
limitation of $50,000, less aggregate annual dividend payments totaling $23,000 that the Company presently pays on two
outstanding classes of preferred stock.
Standby Letters of Credit – The Company has standby letters of credit for certain insurance-related requirements. The majority
of the Company’s standby letters of credit are automatically renewed annually, unless the issuer gives cancellation notice in
advance. On March 31, 2023, the Company had $2.9 million in outstanding standby letters of credit. These standby letters of
credit are supported by the Company’s Revolver and reduce borrowings available under the Revolver.
Obligations and Commitments:
The Company is party to many contractual obligations involving commitments to make payments to third parties. These
obligations impact the Company’s short-term and long-term liquidity and capital resource needs. Certain contractual obligations
are reflected on the Consolidated Balance Sheet as of March 31, 2023, while others are considered future obligations. Our
contractual obligations primarily consist of operating leases, purchase obligations and commitments, long-term debt and related
interest payments, and income taxes. All of these arrangements require cash payments over varying periods of time. Certain of
these arrangements are cancelable on short notice and others require additional payments as part of any early termination.
See Notes 7 and 8 of Notes to Consolidated Financial Statements for information related to the Company’s long-term debt and
operating and financing leases, respectively.
Purchase obligations and commitments consist of open purchase orders to purchase raw materials, including raw produce, steel,
ingredients and packaging materials, as well as commitments for products and services used in the normal course of business.
The Company expects that the majority of these purchase obligations and commitments will be settled within one year.
The Company’s contractual obligations related to income taxes are primarily related to unrecognized tax benefits. See Note 9 of
Notes to Consolidated Financial Statements for information related to income taxes.
9
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
The Company has no off-balance sheet debt or other unrecorded obligations other than purchase commitments noted above.
Impact of Seasonality on Financial Position and Results of Operations:
While individual vegetables have seasonal cycles of peak production and sales, the different cycles are somewhat offsetting.
Minimal food packaging occurs in the Company's last fiscal quarter ending March 31, which is the optimal time for maintenance,
repairs and equipment changes in its packaging plants. The supply of commodities, current pricing, and expected new crop
quantity and quality affect the timing and amount of the Company’s sales and earnings. When the seasonal harvesting periods of
the Company's major vegetables are newly completed, inventories for these packaged vegetables are at their highest levels. For
peas, the peak inventory time is mid-summer and for corn and green beans, the Company's highest volume vegetables, the peak
inventory is in mid-autumn. The seasonal nature of the Company’s production cycle results in inventory and accounts payable
reaching their lowest point late in the fourth quarter/early in the first quarter prior to the new seasonal pack commencing. As the
seasonal pack progresses, these components of working capital both increase until the pack is complete.
The Company’s revenues typically are highest in the second and third fiscal quarters. This is due, in part, because the Company’s
fruit and vegetable sales exhibit seasonal increases in the third fiscal quarter due to increased retail demand during the holiday
season. In addition, the Company sells canned and frozen vegetables to a co-pack customer on a bill and hold basis at the end of
each pack cycle, which typically occurs during these quarters. The following table shows quarterly information for selected
financial statements items during fiscal years 2023, and 2022 to illustrate the Company’s seasonal business (in thousands):
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Fiscal Year 2023:
Net sales
Gross margin
Net earnings (loss)
Revolver outstanding (at quarter end)
Fiscal Year 2022:
Net sales
Gross margin
Net earnings
Revolver outstanding (at quarter end)
$ 265,193 $ 439,842 $ 473,254 $ 331,063
17,485
22,843
5,103
(9,150)
78,965 229,213 313,808 180,598
41,779
16,131
53,789
21,054
$ 235,042 $ 372,256 $ 445,593 $ 332,389
26,596
6,553
20,508
33,623
14,136
1,000
42,728
11,654
51,679
44,985
18,664
33,711
Critical Accounting Policies and Estimates:
Revenue Recognition and Trade Promotion Expenses – Revenue recognition is completed for most customers at a point in time
basis when product control is transferred to the customer. In general, control transfers to the customer when the product is
shipped or delivered to the customer based upon applicable shipping terms, as the customer can direct the use and obtain
substantially all of the remaining benefits from the asset at this point in time. During fiscal years 2023 and 2022, the Company
sold certain finished goods inventory for cash on a bill and hold basis. The terms of the bill and hold agreement(s) provide that
title to the specified inventory is transferred to the customer(s) prior to shipment and the Company has the right to payment (prior
to physical delivery) which results in recorded revenue as determined under the revenue recognition standard.
Trade promotions are an important component of the sales and marketing of the Company’s branded products and are critical to
the support of the business. Trade promotion costs, which are recorded as a reduction of net sales, include amounts paid to
encourage retailers to offer temporary price reductions for the sale of the Company’s products to consumers, amounts paid to
obtain favorable display positions in retail stores, and amounts paid to retailers for shelf space in retail stores. Accruals for trade
promotions are recorded primarily at the time of sale of product to the retailer based on expected levels of performance.
Settlement of these liabilities typically occurs in subsequent periods primarily through an authorized process for deductions taken
by a retailer from amounts otherwise due to the Company. As a result, the ultimate cost of a trade promotion program is dependent
on the relative success of the events and the actions and level of deductions taken by retailers for amounts they consider due to
them. Final determination of the permissible deductions may take extended periods of time.
10
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
Inventories – The Company uses the lower of cost, determined under the LIFO (last-in, first-out) method, or market, to value
substantially all of its inventories. In a high inflation environment that the Company is experiencing, the Company believes that
the LIFO method was preferable over the FIFO (first-in, first-out) method because it better matches the cost of current production
to current revenue. An actual valuation of inventory under the LIFO method is made at the end of each fiscal year based on the
inventory levels and costs at that time. In contrast, interim LIFO calculations are based on management’s estimates of expected
year-end inventory levels, production pack yields, sales and the expected rate of inflation or deflation for the year. The interim
LIFO calculations are subject to adjustment in the final year-end LIFO inventory valuation.
Long-Lived Assets – The Company assesses its long-lived assets for impairment whenever there is an indicator of impairment.
Property, plant, and equipment are depreciated over their assigned lives. The assigned lives and the projected cash flows used to
test impairment are subjective. If actual lives are shorter than anticipated or if future cash flows are less than anticipated, a future
impairment charge or a loss on disposal of the assets could be incurred. Impairment losses are evaluated if the estimated
undiscounted value of the cash flows is less than the carrying value. If such is the case, a loss is recognized when the carrying
value of an asset exceeds its fair value.
Income Taxes – As part of the income tax provision process of preparing the consolidated financial statements, the
Company estimates income taxes. This process involves estimating current tax expenses together with assessing temporary
differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax
assets and liabilities. The Company then assesses the likelihood that any deferred tax assets will be recovered from future taxable
income and to the extent it is believed the recovery is not likely, a valuation allowance is established. Refer to Note 9 of the
Notes to Consolidated Financial Statements for the full tax reconciliation.
Pension Expense – The Company has a defined benefit plan which is subject to certain actuarial assumptions. The funded status
of the pension plan is dependent upon many factors, including returns on invested assets and the level of certain market interest
rates, employee-related demographic factors, such as turnover, retirement age and mortality, and the rate of salary increases.
Certain assumptions reflect the Company's historical experience and management’s best judgment regarding future
expectations. The pension plan’s funded status increased by $6.4 million during fiscal year 2023 reflecting the actual fair value
of plan assets and the projected benefit obligation as of March 31, 2023. This funded status increase was primarily driven by
actuarial gains on the projected benefit obligation, as described in more detail below, partially offset by a combination of growth
in the plan’s projected benefit obligation due to service cost and interest cost and a negative return on plan assets.
During fiscal year 2023, the actuarial gain in the pension plan’s projected benefit obligation was driven by an increase in discount
rates and the annual update in plan census data resulting in demographic gains, partially offset by an assumed salary increase
rate for fiscal year 2024 in excess of the long-term rate. During fiscal year 2022, the actuarial gain in the pension plan’s projected
benefit obligation was primarily driven by an increase in discount rates. The gain was partially offset by actuarial losses due to
a combination of data revisions resulting in the demographic losses, a change in near-term assumed salary increases, and an
update to the most recently released mortality projection scale by the Society of Actuaries (SOA). Plan assets decreased from
$327.9 million as of March 31, 2022 to $294.3 million as of March 31, 2023 primarily due to normal payments of benefits and a
negative return on plan assets.
The pension plan was amended to freeze accruals to new hires and rehires effective January 1, 2020. Refer to Note 10 of the
Notes to Consolidated Financial Statements for the full pension plan disclosures.
Non-GAAP Financial Measures:
Certain disclosures in this report include non-GAAP financial measures. A non-GAAP financial measure is defined as a
numerical measure of our financial performance that excludes or includes amounts so as to be different from the most directly
comparable measure calculated and presented in accordance with GAAP in our consolidated balance sheets and related
consolidated statements of net earnings, comprehensive income (loss), stockholders’ equity and cash flows.
11
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
Adjusted net earnings is calculated on a FIFO basis and excludes the impact of the Company’s loss on equity investment. The
Company believes this non-GAAP financial measure provides for a better comparison of year-over-year 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 to adjusted net earnings (in thousands):
Earnings before taxes, as reported
LIFO charge
Loss on equity investment
Adjusted earnings before taxes
Income tax at effective tax rates
Adjusted net earnings
Recently Issued Accounting Standards:
Fiscal Year:
2023
2022
45,370 $
100,034
-
145,404
39,259
106,145 $
66,231
35,821
7,775
109,827
25,251
84,576
$
$
Effective April 1, 2022, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement
of Credit Losses on Financial Instruments, which was subsequently amended in November 2018 through ASU No. 2018-19,
Codification Improvements to Topic 326, Financial Instruments – Credit Losses (“ASU 2016-13”). The amended guidance
requires entities to estimate lifetime expected credit losses for trade and other receivables, including those that are current with
respect to payment terms, along with other financial instruments which may result in earlier recognition of credit losses. The
Company evaluated its existing methodology for estimating an allowance for doubtful accounts and the risk profile of its
receivables portfolio and developed a model that includes the qualitative and forecasting aspects of the “expected loss” model
under the amended guidance. In determining the Company’s reserve for credit losses, receivables are assigned an expected loss
based on historical information adjusted for forward-looking economic factors. The adoption of ASU 2016-13 did not have a
material impact on the Company’s consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference
Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides an optional expedient and exceptions for applying
U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.
The optional guidance can be applied from March 12, 2020 through December 31, 2022. ASU 2020-04 eases the potential
accounting burden associated with the expected discontinuance of the London Interbank Offered Rate (LIBOR) and other
interbank offered rates, which are being replaced by alternative reference rates such as the Secured Overnight Financing Rate
(SOFR). The interest rates associated with the Company’s previous borrowings under its senior revolving credit facility (as
defined in Note 7, “Long-term Debt”) were tied to LIBOR. Subsequent to the amendment of the senior revolving credit facility
agreement on September 14, 2022, the Company’s borrowings are tied to SOFR plus a spread adjustment (see Note 7, “Long-
term Debt”). The adoption of ASU 2020-04 as a result of this amendment did not have a material impact on the Company’s
consolidated financial statements.
There were no other recently issued accounting pronouncements that impacted the Company’s consolidated financial statements.
In addition, the Company did not adopt any other new accounting pronouncements during fiscal year 2023.
12
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
Our exposure to market risk for changes in interest rates relates primarily to the amount of interest expense we expect to pay with
respect to our Revolver and Term Loan A-2 (collectively, “Variable Rate Debt”), which are both tied to the variable market rate
SOFR. Interest rates on the remainder of our long-term debt, including Term Loan A-1, are fixed and not subject to interest rate
volatility. The Company uses its Variable Rate Debt to finance seasonal working capital requirements, capital expenditures,
acquisitions, and to pay debt principal and interest obligations. With $193.6 million in average Variable Rate Debt during fiscal
2023, a hypothetical 1% change in interest rates would have had a $1.9 million effect on interest expense.
Commodity Risk
The materials that the Company uses, such as vegetables, fruits, steel, ingredients, and packaging materials, as well as the
electricity and natural gas used in the Company’s business are commodities that may experience price volatility caused by
external factors including market fluctuations, availability, weather, currency fluctuations, and changes in governmental
regulations and agricultural programs. These events may result in reduced supplies of these materials, higher supply costs, or
interruptions in the Company’s production schedules. If prices of these raw materials increase and the Company is not able to
effectively pass such price increases along to its customers, operating income will decrease. During fiscal year 2023, the
Company purchased $334.1 million of steel and $192.9 million of raw produce, which are the two largest raw material input
costs. A hypothetical 1% change in the cost for both steel and raw produce would have impacted product costs by $3.3 million
and $1.9 million, respectively, during fiscal year 2023.
The principal effect of inflation in both commodity and consumer prices on the Company’s operating results is to increase costs,
both for products sold and SG&A expenses. Although the Company may attempt to offset these cost increases by increasing
selling prices for its products, consumers may not have the buying power to cover these increased costs and may reduce their
volume of purchases of those products. In that event, selling price increases may not be sufficient to completely offset the
Company’s cost increases.
The Company does not currently hedge or otherwise use derivative instruments to manage interest rate or commodity risks.
13
Fiscal Year:
2022
$ 1,509,352 $ 1,385,280 $ 1,467,644
2021
2023
81,072
(1,662 )
3,550
1,373,456 1,237,348 1,235,459
79,950
(29,014)
182
1,456,416 1,314,935 1,286,577
181,067
76,343
1,174
70
52,936
70,345
14,325
-
(6,759 )
45,370
12,232
33,138 $
5,641
7,775
(9,302)
66,231
15,224
51,007 $
6,125
11,453
3,473
160,016
33,916
126,100
4.23 $
4.20 $
5.83 $
5.79 $
13.82
13.72
7,796
7,870
8,707
8,778
9,088
9,158
$
$
$
Consolidated Statements of Net Earnings
Seneca Foods Corporation and Subsidiaries
(In thousands, except per share amounts)
Net sales
Costs and expenses:
Cost of products sold
Selling, general, and administrative expense
Other operating (income) expense, net
Plant restructuring
Total costs and expenses
Operating income
Other income and expenses:
Interest expense, net of interest income of $528, $63 and $42, respectively
Loss from equity investment
Other non-operating (income) expense
Earnings before income taxes
Income taxes
Net earnings
Earnings per share:
Basic
Diluted
Weighted average common shares outstanding:
Basic
Diluted
See notes to consolidated financial statements.
14
Consolidated Statements of Comprehensive Income (Loss)
Seneca Foods Corporation and Subsidiaries
(In thousands)
Comprehensive income:
Net earnings
Change in pension and postretirement benefits, net of tax expense
$
2023
Fiscal Year:
2022
2021
33,138 $
51,007 $
126,100
(benefit) of $1,999, ($2,423) and $19,528, respectively
Total
$
5,980
39,118 $
(7,401)
43,606 $
60,153
186,253
See notes to consolidated financial statements.
15
Consolidated Balance Sheets
Seneca Foods Corporation and Subsidiaries
(In thousands)
As of:
March 31,
March 31,
2023
2022
Assets
Current assets:
$
Cash and cash equivalents
Accounts receivable, less allowance for doubtful accounts of $34 and $54, respectively
Inventories
Assets held for sale
Refundable income taxes
Other current assets
$
$
Total current assets
Property, plant, and equipment, net
Right-of-use assets operating, net
Right-of-use assets financing, net
Pension assets
Other assets
Total assets
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable
Deferred revenue
Accrued vacation
Accrued payroll
Other accrued expenses
Income taxes payable
Current portion of long-term debt and lease obligations
Total current liabilities
Long-term debt, less current portion
Operating lease obligations, less current portion
Financing lease obligations, less current portion
Deferred income tax liability, net
Other liabilities
Total liabilities
Commitments and contingencies
Stockholders’ equity:
Preferred stock
Common stock
Additional paid-in capital
Treasury stock, at cost
Accumulated other comprehensive loss
Retained earnings
Total stockholders’ equity
Total liabilities and stockholders’ equity
$
See notes to consolidated financial statements.
16
12,256 $
97,101
708,811
4,358
-
2,450
824,976
301,212
23,235
33,571
59,304
1,360
1,243,658 $
69,232 $
9,956
11,143
16,772
23,293
2,018
25,792
158,206
432,695
16,675
17,293
31,625
3,700
660,194
10,904
119,169
410,331
5,979
3,866
5,193
555,442
268,043
34,008
34,867
52,866
1,804
947,030
87,602
7,655
11,611
16,998
23,269
-
26,020
173,155
109,624
22,533
19,942
32,944
4,995
363,193
351
3,049
99,152
(168,573)
(20,488)
669,973
583,464
1,243,658 $
644
3,041
98,641
(128,879)
(26,468)
636,858
583,837
947,030
Consolidated Statements of Cash Flows
Seneca Foods Corporation and Subsidiaries
(In thousands)
Cash flows from operating activities:
Net earnings
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization
Deferred income tax expense
Gain on the sale of assets
Provision for restructuring and impairment
Gain on debt forgiveness
Loss from equity investment
401(k) match stock contribution
Changes in operating assets and liabilities (net of acquisitions):
Accounts receivable
Inventories
Other current assets
Accounts payable, accrued expenses, and other
Income taxes
Net cash (used in) provided by operating activities
Cash flows from investing activities:
Additions to property, plant, and equipment
Proceeds from the sale of assets
Net cash (used in) provided by investing activities
Cash flows from financing activities:
Proceeds from issuance of long-term debt
Payments of long-term debt
Payments on financing leases
Change in other assets
Purchase of treasury stock
Preferred stock dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest
Income taxes
Noncash transactions:
$
$
$
Right-of-use assets obtained in exchange for lease obligations $
Right-of-use assets derecognized upon early lease termination $
Property, plant and equipment purchased on account
$
See notes to consolidated financial statements.
17
2023
Fiscal Year:
2022
2021
$
33,138 $
51,007 $
126,100
40,941
(3,171)
(2,872)
4,333
-
-
1,515
22,098
(298,480)
2,743
(18,925)
5,884
(212,796)
(70,628)
5,751
(64,877)
951,510
(622,439)
(8,814)
-
(41,209)
(23)
279,025
36,523
7,061
(1,861)
284
(500)
7,775
1,107
(26,976)
(67,187)
(1,109)
19,509
4,519
30,152
(53,367)
8,180
(45,187)
398,550
(383,011)
(7,868)
(2,758)
(38,788)
(23)
(33,898)
1,352
10,904
12,256 $
(48,933)
59,837
10,904 $
32,375
16,650
(31,938)
182
-
11,453
1,479
24,280
68,487
4,083
(65,936)
(4,035)
183,180
(71,431)
73,688
2,257
478,059
(597,055)
(6,321)
(6,604)
(4,358)
(23)
(136,302)
49,135
10,702
59,837
11,218 $
9,084 $
10,187 $
3,588 $
1,177 $
4,481 $
2,971 $
20,304 $
1,570 $
1,267 $
5,094
22,692
6,246
2,497
19
Consolidated Statements of Stockholders' Equity
Seneca Foods Corporation and Subsidiaries
(In thousands, except share amounts)
Preferred
Common
Stock
Stock
Additional
Paid-In
Capital
Treasury
Stock
Accumulated
Other
Comprehensive Retained
Earnings
Loss
Balance March 31, 2020
$
Net earnings
Cash dividends paid on preferred
stock
Equity incentive program
Contribution of 401(k) match
Purchase of treasury stock
Preferred stock conversion
Change in pension and
postretirement benefits
adjustment (net of tax $19,528)
Balance March 31, 2021
Net earnings
Cash dividends paid on preferred
stock
Equity incentive program
Contribution of 401(k) match
Purchase of treasury stock
Preferred stock conversion
Change in pension and
postretirement benefits
adjustment (net of tax $2,423)
Balance March 31, 2022
Net earnings
Cash dividends paid on preferred
stock
Equity incentive program
Stock issued for profit sharing
plan
Contribution of 401(k) match
Purchase of treasury stock
Preferred stock conversion
Change in pension and
postretirement benefits
adjustment (net of tax $1,999)
Balance March 31, 2023
$
681 $
-
3,041 $
-
98,384 $
-
(88,319) $
-
(79,220) $
-
459,797
126,100
-
-
-
-
(18)
-
663
-
-
-
-
-
(19)
-
644
-
-
-
-
-
(293)
-
-
-
-
-
-
100
-
-
18
-
-
1,479
(4,358)
-
-
-
-
-
-
(23)
-
-
-
-
-
3,041
-
-
98,502
-
-
(91,198)
-
60,153
(19,067)
-
-
585,874
51,007
-
-
-
-
-
-
120
-
-
19
-
-
1,107
(38,788)
-
-
-
-
-
-
(23)
-
-
-
-
-
3,041
-
-
98,641
-
-
(128,879)
-
(7,401)
(26,468)
-
-
636,858
33,138
-
-
-
-
8
-
150
76
-
-
285
-
-
1,515
(41,209)
-
-
-
-
-
-
(23)
-
-
-
-
-
351 $
-
3,049 $
-
99,152 $
-
(168,573) $
5,980
(20,488) $
-
669,973
Preferred Stock
Common Stock
6% Voting 10% Voting
Cumulative Cumulative Participating Participating Class A
Callable
Convertible Convertible Convertible Common
Par $0.025 Par $0.025 Par $0.025 Par $0.25
Par $0.25
2003 Series
Class B
Common
Par $0.25
200,000 1,400,000
8,292
- 20,000,000 10,000,000
200,000
200,000
200,000
50 $
807,240
807,240
807,240
202 $
33,855
32,256
8,292
99 $
$
500 7,353,545 1,709,638
500 6,627,318 1,705,930
- 5,928,424 1,707,241
495
2,554 $
- $
Shares authorized and designated:
March 31, 2023
Shares outstanding:
March 31, 2021
March 31, 2022
March 31, 2023
Stock amount
See notes to consolidated financial statements.
18
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
1. Summary of Significant Accounting Policies
Nature of Operations — Seneca Foods Corporation (the “Parent Company”) and subsidiaries (the “Company”) currently has
26 facilities in eight states in support of its main operations. The Company markets private label and branded packaged foods to
retailers and institutional food distributors.
Principles of Consolidation — The consolidated financial statements include the accounts for the Parent Company and all of
its wholly-owned subsidiaries after elimination of intercompany transactions, profits, and balances.
Use of Estimates in the Preparation of Financial Statements — The preparation of financial statements in conformity with
accounting principles generally accepted in the United States ("GAAP") requires management to make estimates and assumptions
that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the
financial statements, as well as the related revenues and expenses during the reporting period. Actual amounts could differ from
those estimates.
Subsequent Events — The Company has evaluated subsequent events for disclosure through the date of issuance of the
accompanying consolidated financial statements.
Reclassifications — Certain previously reported amounts have been reclassified to conform to the current period classification.
Cash Equivalents — The Company considers all highly liquid instruments purchased with an original maturity of three months
or less as cash equivalents.
Fair Value of Financial Instruments — The carrying values of cash and cash equivalents (Level 1), accounts receivable, short-
term debt (Level 2) and accounts payable approximate fair value because of the immediate or short-term maturity of these
financial instruments. See Note 12, Fair Value of Financial Instruments, for a discussion of the fair value of long-term debt.
The three-tier value hierarchy is utilized to prioritize the inputs used in measuring fair value. The hierarchy gives the highest
priority to quoted prices in active markets (Level 1) and the lowest priority to unobserved inputs (Level 3). The three levels are
defined as follows:
● Level 1- Quoted prices for identical instruments in active markets.
● Level 2- Quoted prices for similar instruments; quoted prices for identical or similar instruments in markets that are
not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable.
● Level 3- Model-derived valuations in which one or more inputs or value-drivers are both significant to the fair value
measurement and unobservable.
Accounts Receivable and Doubtful Accounts — Accounts receivable is stated at invoice value, which is net of any off-invoice
promotions. In determining the Company’s reserve for credit losses, receivables are assigned an expected loss based on historical
information adjusted for forward-looking economic factors. Management believes these provisions are adequate based upon the
relevant information presently available.
Inventories — Substantially all inventories are stated at the lower of cost or market with cost determined using the last-in, first-
out (“LIFO”) method. An actual valuation of inventory under the LIFO method is made at the end of each fiscal year based on
the inventory levels and costs at that time. In contrast, interim LIFO calculations are based on management’s estimates of
expected year-end inventory levels, production pack yields, sales and the expected rate of inflation or deflation for the year. The
interim LIFO calculations are subject to adjustment in the final year-end LIFO inventory valuation.
Assets Held for Sale — The Company classifies its assets as held for sale at the time management commits to a plan to sell the
asset, the asset is actively marketed and available for immediate sale, and the sale is expected to be completed within one year.
Due to market conditions, certain assets may be classified as held for sale for more than one year as the Company continues to
actively market the assets. Assets that meet the held for sale criteria are presented separately on the consolidated balance sheet
at the lower of carrying value or estimated fair value less costs to sell and depreciation is no longer recognized.
19
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
Property, Plant and Equipment — Property, plant, and equipment are stated at cost. Interest incurred during the construction
of major projects is capitalized. For financial reporting, the Company provides for depreciation on the straight-line method at
rates based upon the estimated useful lives of the various assets. The estimated useful lives are as follows:
Land improvements
Buildings and improvements
Machinery & equipment
Office furniture
Vehicles
Computer software
Years
10 - 20
30
10 - 15
3 - 5
3 - 7
3 - 5
Long-Lived Assets — The Company assesses its long-lived assets for impairment whenever there is an indicator of impairment.
Impairment losses are evaluated if the estimated undiscounted cash flows from using the assets are less than carrying value. A
loss is recognized when the carrying value of an asset exceeds its fair value.
Additionally, the Company assesses the potential for an other-than-temporary impairment of its equity method investment when
impairment indicators are identified by considering all available information, including the recoverability of the investment, the
earnings and near-term prospects of the investment, factors related to the industry, amongst others relevant information. If an
investment is considered to be impaired and the decline in value is other than temporary, an impairment charge is recorded.
During fiscal year 2022, the Company recorded an impairment charge of $6.3 million to reduce the carrying value of the equity
method investment to $0, as the value of the investment was determined to not be recoverable.
Deferred Financing Costs — Deferred financing costs incurred in obtaining debt are amortized on a straight-line basis over the
term of the debt, which is not materially different than using the effective interest rate method. As of March 31, 2023 there were
$0.6 million of unamortized financing costs included in other assets related to the Company’s revolving credit facility and $0.6
million of unamortized financing costs related to its term loans that are included as a contra to long-term debt and current portion
of long-term debt on the Consolidated Balance Sheets.
Revenue Recognition — Revenue recognition is completed for most customers at a point in time basis when product control is
transferred to the customer. In general, control transfers to the customer when the product is shipped or delivered to the customer
based upon applicable shipping terms, as the customer can direct the use and obtain substantially all of the remaining benefits
from the asset at this point in time. The Company does sell certain finished goods inventory for cash on a bill and hold basis. The
terms of the bill and hold agreement(s) provide that title to the specified inventory is transferred to the customer(s) prior to
shipment and the Company has the right to payment (prior to physical delivery) which results in recorded revenue as determined
under the revenue recognition standard. See Note 2, Revenue Recognition, for further discussion of the policy.
Trade promotions are an important component of the sales and marketing of the Company’s branded products, and are critical to
the support of the business. Trade promotion costs, which are recorded as a reduction of sales, include amounts paid to retailers
for shelf space, to obtain favorable display positions and to offer temporary price reductions for the sale of our products to
consumers. Accruals for trade promotions are recorded primarily at the time of sale to the retailer based on expected levels of
performance. Settlement of these liabilities typically occurs in subsequent periods primarily through an authorized process for
deductions taken by a retailer from amounts otherwise due to the Company. As a result, the ultimate cost of a trade promotion
program is dependent on the relative success of the events and the actions and level of deductions taken by retailers. Final
determination of the permissible deductions may take extended periods of time.
Concentration of Credit Risk — Financial instruments that potentially subject the Company to credit risk consist of trade
receivables, interest-bearing investments, and cash and cash equivalents. Wholesale and retail food distributors comprise a
significant portion of the trade receivables; collateral is generally not required. A relatively limited number of customers account
for a large percentage of the Company’s total net sales. The top ten customers represented approximately 55% and 53% of net
sales for fiscal years 2023 and 2022, respectively. The Company closely monitors the credit risk associated with its customers.
The Company places substantially all of its interest-bearing investments with financial institutions and monitors credit exposure.
Cash and short-term investments in certain accounts exceed the federal insured limit; however, the Company has not experienced
any losses in such accounts.
20
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
Advertising Costs — Advertising costs are expensed as incurred and totaled $2.2 million in each of fiscal years 2023 and 2022
and $1.8 million in fiscal year 2021.
Income Taxes — The provision for income taxes includes federal and state income taxes currently payable and those deferred
because of temporary differences between the financial statement and tax basis of assets and liabilities and tax credit
carryforwards. The Company uses the flow-through method to account for its investment tax credits.
The Company evaluates the likelihood of realization of its net deferred income tax assets by assessing its valuation allowance
and by adjusting the amount of such allowance, if necessary. The factors used to assess the likelihood of realization are the
Company’s forecast of future taxable income, the projected reversal of temporary differences and available tax planning strategies
that could be implemented to realize the net deferred income tax assets.
Current rules on the accounting for uncertainty on income taxes prescribe a minimum recognition threshold for a tax position
taken or expected to be taken in a tax return that is required to be met before being recognized in the financial statements. Those
rules also provide guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods,
disclosure and transition. The Company recognizes interest and penalties accrued on unrecognized tax benefits as well as interest
received from favorable settlements within income tax expense.
Earnings per Common Share — The Company has three series of convertible preferred stock, which are deemed to be
participating securities that are entitled to participate in any dividend on Class A common stock as if the preferred stock had been
converted into common stock immediately prior to the record date for such dividend. Basic earnings per share for common stock
is calculated using the “two-class” method by dividing the earnings attributable to common stockholders by the weighted average
of common shares outstanding during the period.
Diluted earnings per share is calculated by dividing earnings attributable to common stockholders by the sum of the weighted
average common shares outstanding plus the dilutive effect of convertible preferred stock using the “if-converted” method, which
treats the contingently-issuable shares of convertible preferred stock as common stock. Restricted stock is included in the diluted
earnings per share calculation.
Recently Issued Accounting Standards — Effective April 1, 2022, the Company adopted ASU 2016-13, Financial Instruments
- Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which was subsequently amended in
November 2018 through ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments – Credit Losses
(“ASU 2016-13”). The amended guidance requires entities to estimate lifetime expected credit losses for trade and other
receivables, including those that are current with respect to payment terms, along with other financial instruments which may
result in earlier recognition of credit losses. The Company evaluated its existing methodology for estimating an allowance for
doubtful accounts and the risk profile of its receivables portfolio and developed a model that includes the qualitative and
forecasting aspects of the “expected loss” model under the amended guidance. In determining the Company’s reserve for credit
losses, receivables are assigned an expected loss based on historical information adjusted for forward-looking economic factors.
The adoption of ASU 2016-13 did not have a material impact on the Company’s consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference
Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 provides an optional expedient and exceptions for applying
U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.
The optional guidance can be applied from March 12, 2020 through December 31, 2022. ASU 2020-04 eases the potential
accounting burden associated with the expected discontinuance of the London Interbank Offered Rate (LIBOR) and other
interbank offered rates, which are being replaced by alternative reference rates such as the Secured Overnight Financing Rate
(SOFR). The interest rates associated with the Company’s previous borrowings under its senior revolving credit facility (as
defined in Note 7, “Long-term Debt”) were tied to LIBOR. Subsequent to the amendment of the senior revolving credit facility
agreement on September 14, 2022, the Company’s borrowings are tied to SOFR plus a spread adjustment (see Note 7, “Long-
term Debt”). The adoption of ASU 2020-04 as a result of this amendment did not have a material impact on the Company’s
consolidated financial statements.
There were no other recently issued accounting pronouncements that impacted the Company’s consolidated financial statements.
In addition, the Company did not adopt any other new accounting pronouncements during fiscal year 2023.
21
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
2. Revenue Recognition
The Company applies the provisions of ASC 606-10, "Revenue from Contracts with Customers", and recognizes revenue under
the core principle to depict the transfer of products to customers in an amount reflecting the consideration the Company expects
to receive. The Company conducts its business almost entirely in food packaging, which contributed approximately 98% of the
Company's fiscal year 2023 net sales.
Nature of products — The Company manufactures and sells the following:
•
•
•
•
•
private label products to retailers, such as supermarkets, mass merchandisers, and specialty retailers, for resale under
the retailers’ own or controlled labels;
private label and branded products to the foodservice industry, including foodservice distributors and national
restaurant operators;
branded products under our own proprietary brands, primarily on a national basis to retailers;
branded products under co-pack agreements to other major branded companies for their distribution; and
products to our industrial customer base for repackaging in portion control packages and for use as ingredients by other
food manufacturers.
Disaggregation of revenue — In the following table, segment revenue is disaggregated by product category groups (in
thousands):
Canned vegetables
Frozen vegetables
Fruit products
Snack products
Prepared foods
Other
Total
2023
1,253,257 $
121,211
91,495
12,661
-
30,728
1,509,352 $
Fiscal Year:
2022
1,135,983 $
123,895
84,708
12,332
-
28,362
1,385,280 $
$
$
2021
1,172,635
102,197
88,431
10,999
71,866
21,516
1,467,644
When Performance Obligations Are Satisfied — A performance obligation is a promise in a contract to transfer a distinct
good or service to the customer and is the unit of account for revenue recognition. A contract’s transaction price is allocated to
each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. The
Company’s primary performance obligation is the production of food products and secondarily case and labeling services and
storage services for certain bill and hold sales.
Revenue recognition is completed primarily at a point in time basis when product control is transferred to the customer. In
general, control transfers to the customer when the product is shipped or delivered to the customer based upon applicable shipping
terms, as the customer can direct the use and obtain substantially all of the remaining benefits from the asset at this point in
time.
Customer contracts generally do not include more than one performance obligation. When a contract does contain more than
one performance obligation, we allocate the contract’s transaction price to each performance obligation based on its relative
standalone selling price. The standalone selling price for each distinct good is generally determined by directly observable data.
The performance obligations in our contracts are generally satisfied within one year. As such, we have not disclosed the
transaction price allocated to remaining performance obligations for labeling and storage as of March 31, 2023 which is included
in deferred revenue on the Consolidated Balance Sheet.
Significant Payment Terms — Our customer contracts identify the product, quantity, price, payment and final delivery
terms. Payment terms usually include early pay discounts. We grant payment terms consistent with industry standards. Although
some payment terms may be more extended, no terms beyond one year are granted at contract inception. As a result, we do not
adjust the promised amount of consideration for the effects of a significant financing component because the period between our
transfer of a promised good or service to a customer and the customer’s payment for that good or service will be generally 30
days or less.
22
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
Shipping — All shipping and handling costs associated with outbound freight are accounted for as fulfillment costs and are
included in the cost of sales; this includes shipping and handling costs after control over a product has transferred to a customer.
Variable Consideration — In addition to fixed contract consideration, some contracts include some form of variable
consideration. Trade promotions are an important component of the sales and marketing of the Company’s branded products,
and are critical to the support of the business. Trade promotion costs, which are recorded as a reduction of sales, include amounts
paid to retailers for shelf space, to obtain favorable display positions and to offer temporary price reductions for the sale of our
products to consumers. Accruals for trade promotions are recorded primarily at the time of sale to the retailer based on expected
levels of performance. Settlement of these liabilities typically occurs in subsequent periods primarily through an authorized
process for deductions taken by a retailer from amounts otherwise due to the Company. As a result, the ultimate cost of a trade
promotion program is dependent on the relative success of the events and the actions and level of deductions taken by retailers.
Final determination of the permissible deductions may take extended periods of time.
Contract Balances — The contract asset balances are $0.6 million and $0.9 million as of March 31, 2023 and 2022, respectively.
Refer to Note 6, Assets Held for Sale, for contract liabilities. The Company does not have significant deferred revenue or unbilled
receivable balances because of transactions with customers. The Company does have deferred revenue for prepaid case and
labeling and storage services which have been collected from bill and hold sales.
Contract Costs — We have identified certain incremental costs to obtain a contract, primarily sales commissions, requiring
capitalization under the standard. The Company continues to expense these costs as incurred because the amortization period for
the costs would have been one year or less. The Company does not incur significant fulfillment costs requiring capitalization.
3. Earnings per Share
Earnings per share for fiscal years 2023, 2022 and 2021 are as follows (in thousands, except per share amounts):
2023
Fiscal Year:
2022
2021
33,138 $
23
33,115
109
33,006 $
7,796
4.23 $
33,006 $
20
33,026 $
7,796
51,007 $
23
50,984
196
50,788 $
8,707
5.83 $
50,788 $
20
50,808 $
8,707
7
4
67
7,870
4.20 $
67
8,778
5.79 $
126,100
23
126,077
493
125,584
9,088
13.82
125,584
20
125,604
9,088
3
67
9,158
13.72
Basic
Net earnings
Deduct preferred stock dividends
Undistributed earnings
Earnings attributable to participating preferred shareholders
Earnings attributable to common shareholders
Weighted average common shares outstanding
Basic earnings per common share
Diluted
Earnings attributable to common shareholders
Add dividends on convertible preferred stock
Earnings attributable to common stock on a diluted basis
Weighted average common shares outstanding-basic
Additional shares to be issued related to the equity
compensation plan
Additional shares to be issued under full conversion of
preferred stock
Total shares for diluted
Diluted earnings per share
$
$
$
$
$
$
23
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
4. Inventories
The Company uses the LIFO method of valuing inventory as it believes this method allows for better matching of current
production cost to current revenue. As of March 31, 2023 and 2022, first-in, first-out (“FIFO”) based inventory costs exceeded
LIFO based inventory costs, resulting in a LIFO reserve of $264.5 million and $164.5 million, respectively. In order to state
inventories at LIFO, the Company recorded an increase to cost of products sold of $100.0 million and $35.8 million for fiscal
years 2023 and 2022, respectively. The inventories by category and the impact of using the LIFO method are shown in the
following table (in thousands):
Finished products
In process
Raw materials and supplies
Less excess of FIFO cost over LIFO cost
Total inventories
5. Property, Plant and Equipment
As of:
March 31,
March 31,
2023
2022
$
$
613,622 $
75,123
284,593
973,338
264,527
708,811 $
385,681
23,652
165,491
574,824
164,493
410,331
Property, plant and equipment is comprised of the following (in thousands):
Land and land improvements
Buildings and improvements
Machinery and equipment
Office furniture, vehicles and computer software
Construction in progress
Property, plant and equipment, cost
Less: accumulated depreciation
Property, plant and equipment, net
As of:
March 31,
March 31,
2023
2022
$
$
46,978 $
214,110
421,067
11,738
40,539
734,432
(433,220)
301,212 $
42,981
202,444
403,192
10,003
29,976
688,596
(420,553)
268,043
Depreciation expense totaled $33.9 million, $30.2 million, and $27.1 million for fiscal years 2023, 2022, and 2021, respectively.
6. Assets Held For Sale
As of March 31, 2023, the Company has two non-operating facilities in the Pacific Northwest with a carrying value of $3.1
million and related idle production equipment with a carrying value of $1.2 million that have met the criteria to be classified as
held for sale in our Consolidated Balance Sheets. The Company recorded charges of $2.3 million and $0.1 million in fiscal years
2023 and 2022, respectively, in order to properly reflect the carrying value of the assets held for sale as equal to the lower of
carrying value or fair value less costs to sell.
As of March 31, 2023, the Company has executed sales agreements to sell one of the facilities and the related equipment therein
to two unaffiliated buyers. A deposit of $0.6 million has been received from the buyer of the production equipment and is recorded
as a contract liability as of March 31, 2023, as the Company maintains control of the equipment until the sale is finalized. The
contract liability is included in other accrued expenses on the Consolidated Balance Sheet as the sale is expected to close and
control of the equipment transferred to the buyer within twelve months.
24
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
The following table presents information related to the major classes of assets and liabilities that were held for sale in our
Consolidated Balance Sheets (in thousands):
Property, plant and equipment (net)
Current assets held for sale
7. Long-Term Debt
As of:
March 31,
March 31,
2023
2022
$
$
4,358 $
4,358 $
5,979
5,979
Long-term debt is comprised of the following (in thousands):
Revolving credit facility
Term loans
Term Loan A-1
Outstanding principal
Unamortized debt issuance costs
Term Loan A-1, net
Term Loan A-2
Outstanding principal
Unamortized debt issuance costs
Term Loan A-2, net
Other
Total long-term debt
Less current portion
As of:
March 31,
March 31,
2023
2022
$
180,598 $
20,508
89,000
(68)
88,932
93,000
(100)
92,900
173,500
(551)
172,949
216
442,695
10,000
432,695 $
-
-
-
216
113,624
4,000
109,624
Long-term debt, less current portion
$
Revolving credit facility — On March 24, 2021, the Company entered into a Fourth Amended and Restated Loan and Security
Agreement that provides for a senior revolving credit facility of up to $400 million that is seasonally adjusted (the “Revolver”).
Maximum borrowing availability under the Revolver totals $300.0 million from April through July and $400.0 million from
August through March. The Revolver balance as of March 31, 2023 was $180.6 million and is included in Long-Term Debt in
the accompanying Consolidated Balance Sheet due to the Revolver’s March 24, 2026 maturity. In order to maintain availability
of funds under the facility, the Company pays a commitment fee on the unused portion of the Revolver. The Revolver is secured
by substantially all of the Company’s accounts receivable and inventories and contains borrowing base requirements as well as
a financial covenant, if certain circumstances apply. The Company utilizes its Revolver for general corporate purposes, including
seasonal working capital needs, to pay debt principal and interest obligations, and to fund capital expenditures and acquisitions.
Seasonal working capital needs are affected by the growing cycles of the vegetables the Company packages. The majority of
vegetable inventories are produced during the months of June through November and are then sold over the following year.
Payment terms for vegetable produce are generally three months but can vary from a few days to seven months. Accordingly,
the Company’s need to draw on the Revolver may fluctuate significantly throughout the year.
25
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
The following table documents the quantitative data for short-term borrowings on the Revolver during fiscal years 2023 and
2022 (in thousands, except for percentages):
Outstanding borrowings
Interest rate
Maximum amount of borrowings
Average outstanding borrowings
Weighted average interest rate
As of:
March 31,
March 31,
2023
2022
$
$
$
180,598 $
6.34%
20,508
1.71 %
Fiscal Year:
2023
2022
350,828 $
159,670 $
5.03%
58,323
22,357
1.37 %
Term loans — On May 28, 2020 the Company entered into an Amended and Restated Loan and Guaranty Agreement with Farm
Credit East, ACA that provides for a $100.0 million unsecured term loan (the “Term Loan”). The amended and restated agreement
has a maturity date of June 1, 2025 and converted the Term Loan to a fixed interest rate of 3.30% until maturity rather than a
variable interest rate in addition to requiring quarterly principal payments of $1.0 million, which commenced during fiscal year
2021. This agreement contains certain covenants, including maintaining a minimum EBITDA and minimum tangible net worth.
On January 20, 2023, the Company entered into a Second Amended and Restated Loan and Guaranty Agreement with Farm
Credit East, ACA (the “Amended Agreement”). The Amended Agreement governs two term loans, summarized below:
Term Loan A-1: The Amended Agreement continues certain aspects of the $100 million term loan described above, namely Term
Loan A-1 will continue to bear interest at a fixed interest rate of 3.3012%, mature on June 1, 2025, and remain unsecured.
Term Loan A-2: The Amended Agreement adds an additional term loan in the amount of $175 million that will mature on January
20, 2028, and is secured by a portion of the Company’s property, plant and equipment. Term Loan A-2 bears interest at a variable
interest rate based upon SOFR plus an additional margin determined by the Company’s leverage ratio.
The Amended Agreement for Term Loan A-1 and Term Loan A-2 (collectively, the “Term Loans”) contains restrictive covenants
usual and customary for loans of its type, in addition to financial covenants including minimum EBITDA and minimum tangible
net worth which apply to both terms loans described above. In connection with the Amended Agreement, the Company incurred
$0.6 million of financing costs which will be deferred and amortized over the life of Term Loan A-2.
Covenants & other debt matters — The Company’s debt agreements, including the Revolver and term loan, contain customary
affirmative and negative covenants that restrict, with specified exceptions, the Company’s ability to incur additional
indebtedness, incur liens, pay dividends on the Company’s capital stock, make other restricted payments, including investments,
transfer all or substantially all of the Company’s assets, enter into consolidations or mergers, and enter into transactions with
affiliates. The Company’s debt agreements also require the Company to meet certain financial covenants including a minimum
EBITDA and minimum tangible net worth. The Revolver contains borrowing base requirements related to accounts receivable
and inventories and also requires the Company to meet a financial covenant related to a minimum fixed charge coverage ratio if
(a) an event of default has occurred or (b) availability on the Revolver is less than the greater of (i) 10% of the commitments then
in effect and (ii) $25,000,000. The most restrictive financial covenant in the debt agreements is the minimum EBITDA within
the Term Loan which for fiscal year 2023 was greater than $75 million. The Company computes its financial covenants as if the
Company were on the FIFO method of inventory accounting. The Company has met all such financial covenants as of March
31, 2023.
26
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
The Company's debt agreements limit the payment of dividends and other distributions. There is an annual total distribution
limitation of $50,000, less aggregate annual dividend payments totaling $23,000 that the Company presently pays on two
outstanding classes of preferred stock. The carrying value of assets pledged for secured debt, including the Revolver, is $949.7
million as of March 31, 2023. Debt repayment requirements for the next five fiscal years are (in thousands):
2024
2025
2026
2027
2028
Thereafter
Total
8. Leases
$
$
10,000
10,000
267,598
6,000
149,500
216
443,314
The Company determines whether an arrangement is a lease at inception of the agreement. Presently, the Company leases land,
machinery and equipment under various operating and financing leases.
Right-of-Use, or ROU, assets represent the Company’s right to use the underlying assets for the lease term and lease obligations
represent the net present value of the Company’s obligation to make payments arising from these leases. ROU assets and lease
obligations are recognized at commencement date based on the present value of lease payments over the lease term using the
implicit lease interest rate or, when unknown, an incremental borrowing rate based on the information available at
commencement date or April 1, 2019 for leases that commenced prior to that date.
Lease terms may include options to extend or terminate the lease, and the impact of these options are included in the calculation
of the ROU asset and lease obligation only when the exercise of the option is at the Company’s sole discretion and it is reasonably
certain that the Company will exercise that option. The Company will not separate lease and non-lease components for its leases
when it is impractical to separate the two. In addition, the Company has certain leases that have variable payments based solely
on output or usage of the leased asset. These variable operating lease assets are excluded from the Company’s balance sheet
presentation and expensed as incurred. Leases with an initial term of 12 months or less, or short-term leases, are not recorded on
the accompanying Consolidated Balance Sheets.
ROU assets and lease obligations for the Company’s operating and financing leases are disclosed separately in the Company’s
Consolidated Balance Sheets.
The components of lease cost were as follows (in thousands):
Lease cost:
Amortization of right of use asset
Interest on lease liabilities
Finance lease cost
Operating lease cost
Total lease cost
2023
Fiscal Year:
2022
2021
$
$
6,715 $
959
7,674
13,506
21,180 $
5,970 $
1,048
7,018
19,250
26,268 $
4,746
1,102
5,848
23,736
29,584
27
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
Cash paid for amounts included in the measurement of
lease liabilities
Operating cash flows from finance leases
Operating cash flows from operating leases
Financing cash flows from finance leases
Total
Right-of-use assets obtained in exchange for new
finance lease liabilities
Right-of-use assets obtained in exchange for new
operating lease liabilities
Weighted-average lease term (years):
Financing leases
Operating leases
Weighted-average discount rate:
Financing leases
Operating leases
$
$
$
$
2023
Fiscal Year:
2022
2021
959 $
13,736
8,814
23,509 $
1,048 $
19,010
7,868
27,926 $
5,825 $
9,754 $
4,362 $
10,550 $
4.7
4.6
3.8%
4.4%
4.6
4.3
3.4%
4.2%
1,102
23,864
6,321
31,287
1,985
4,261
4.5
3.5
4.1%
4.4%
Undiscounted future lease payments under non-cancelable operating leases and financial leases, along with a reconciliation of
undiscounted cash flows to operating and financing lease liabilities, respectively, as of March 31, 2023 were as follows (in
thousands):
Years ending March 31:
2024
2025
2026
2027
2028
2029-2033
Total minimum payment required
Less interest
Present value of minimum lease payments
Amount due within one year
Long-term lease obligation
Operating
$
8,627 $
6,092
3,544
3,028
2,819
2,709
26,819 $
2,359
24,460
7,785
16,675 $
Financing
8,784
5,353
4,261
3,203
2,826
3,248
27,675
2,375
25,300
8,007
17,293
$
$
28
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
9. Income Taxes
The Company files a consolidated federal and various state income tax returns. The provision for income taxes is as follows (in
thousands):
Current:
Federal
State
Total
Deferred:
Federal
State
Total
Total income taxes
2023
Fiscal Year:
2022
2021
$
$
$
11,903 $
3,500
15,403
(3,725) $
554
(3,171)
12,232 $
4,780 $
3,383
8,163
7,017 $
44
7,061
15,224 $
13,121
4,145
17,266
13,486
3,164
16,650
33,916
A reconciliation of the expected U.S. statutory rate to the effective rate follows:
Computed (expected tax rate)
State income taxes (net of federal tax benefit)
Federal credits
State rate changes
State credit expiration
Change in valuation allowance
Federal return to accrual
State return to accrual
Federal net operating loss (NOL) carryback rate difference
Interest received on federal NOL carryback
Uncertain tax benefits return to accrual
Other
Effective income tax rate
2023
Fiscal Year:
2022
2021
21.0%
3.8%
-1.2%
0.8%
0.6%
2.3%
-0.1%
-0.2%
0.0%
0.0%
-0.1%
0.1%
27.0%
21.0%
3.7%
-0.8%
0.3%
0.9%
-1.1%
-0.9%
0.1%
0.0%
-0.3%
0.3%
-0.2%
23.0%
21.0%
3.1%
-0.3%
0.0%
0.0%
0.2%
0.0%
0.0%
-2.8%
-0.2%
0.0%
0.2%
21.2%
The Company’s effective tax rate was 27.0%, 23.0%, and 21.2% in fiscal years 2023, 2022, and 2021, respectively. In fiscal year
2023, the Company added a valuation allowance against state tax credits because it was determined that it was more likely than
not that the credits will not be used prior to expiration. This change, along with other current year increases in the existing
valuation allowances, had a 3.5% increase on the fiscal year 2023 effective tax rate as compared to fiscal year 2022. The fiscal
year 2023 effective tax rate was further increased by 0.6% versus fiscal year 2022 due to state rate changes which were mostly
caused by changes in the Company’s business activities that impact state apportionment.
29
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
In fiscal year 2021, the Company was able to carryback the NOL generated in the 2019 tax year at a 21% corporate tax rate to
the 2015 tax year at a 35% corporate tax rate. The NOL carryback had a 2.8% decrease on the fiscal year 2021 rate and without
this impact in fiscal year 2022, the tax rate effectively increased by 2.8% when comparing fiscal year 2022 to 2021. The year
over year increase in the effective tax rate was partially offset by a decrease off 0.5% due to the federal income tax credits having
a larger impact on the effective tax rate in fiscal year 2022, amongst other decreases noted in the table above.
The following is a summary of the significant components of the Company's deferred income tax assets and liabilities (in
thousands):
Deferred income tax assets:
Future tax credits
Inventory valuation
Employee benefits
Insurance
State depreciation basis differences
Operating leases
Intangibles
Other comprehensive loss
Interest
Prepaid revenue
Net operating loss and other tax attribute carryovers
Other
Total assets
Deferred income tax liabilities:
Property basis and depreciation difference
Inventory valuation
Intangibles
Right-of-use assets
Pension
Other
Total liabilities
Valuation allowance - noncurrent
Deferred income tax liability, net
As of:
March 31,
March 31,
2023
2022
$
$
4,995 $
8,797
2,335
471
3,218
942
1,514
7,117
8
296
630
339
30,662
26,449
2,101
-
7,045
21,528
169
57,292
4,995
(31,625) $
5,244
3,098
2,191
345
-
-
-
8,975
3
374
610
-
20,840
21,807
-
17
5,764
21,253
1,012
49,853
3,931
(32,944)
Net deferred income tax liabilities of $31.6 million and $32.9 million as of March 31, 2023 and 2022, respectively, are recognized
as noncurrent liabilities in the Consolidated Balance Sheets.
The Company has State tax credit carryforwards amounting to $1.5 million (California, net of Federal impact), $1.3 million (New
York, net of Federal impact), and $2.2 million (Wisconsin, net of Federal impact), which are available to reduce future taxes
payable in each respective state through 2028 (California), through 2035 (New York), and through 2038 (Wisconsin). The
Company has performed the required assessment regarding the realization of deferred tax assets and as of March 31, 2023, the
Company has recorded a valuation allowance amounting to $5.0 million, which relates primarily to tax credit carryforwards
which management has concluded it is more likely than not they will not be realized in the ordinary course of operations.
Although realization is not assured, management has concluded that it is more likely than not that the deferred tax assets for
which a valuation allowance was determined to be unnecessary will be realized in the ordinary course of operations. The amount
of net deferred tax assets considered realizable, however, could be reduced if actual future income or income tax rates are lower
than estimated or if there are differences in the timing or amount of future reversals of existing taxable or deductible temporary
differences.
30
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
Current rules on the accounting for uncertainty on income taxes prescribe a minimum recognition threshold for a tax position
taken or expected to be taken in a tax return that is required to be met before being recognized in the financial statements. Those
rules also provide guidance on derecognition, measurement, classification, interest and penalties, accounting in interim periods,
disclosure and transition. The Company classifies the liability for uncertain tax positions in other accrued expenses or other long-
term liabilities on the Consolidated Balance Sheets depending on their expected settlement date. The change in the liability for
fiscal years 2023 and 2022 consists of the following (in thousands):
As of:
March 31,
March 31,
2023
2022
Beginning balance
Tax positions related to current year:
Additions
Tax positions related to prior years:
Additions
Reductions
Lapses in statues of limitations
Ending balance
$
$
676 $
174
-
(38)
(9)
803 $
376
160
215
-
(75)
676
The liability balances as of March 31, 2023 and 2022 do not include tax positions that are highly certain but for which there is
uncertainty about the timing. Because of the impact of deferred tax accounting, other than interest and penalties, the disallowance
of these positions would not impact the annual effective tax rate but would accelerate the payment of cash to the tax authority to
an earlier period.
The Company recognizes interest and penalties accrued on unrecognized tax benefits as well as interest received from favorable
settlements within income tax expense. During fiscal years 2023 and 2022, the accrued interest and penalties balance and change
during the respective fiscal years was not significant associated with unrecognized tax benefits.
Although management believes that an adequate position has been made for uncertain tax positions, there is the possibility that
the ultimate resolution could have an adverse effect on the net earnings of the Company. Conversely, if resolved favorably in the
future, the related provisions would be reduced, thus having a positive impact on net earnings. During fiscal year 2023, the statute
of limitations lapsed on one uncertain tax position, which results in the position no longer being uncertain. As a result of this
lapse and in accordance with its accounting policies, the Company recorded an insignificant decrease to the liability and tax
expense.
The federal income tax returns for fiscal years after 2015 are open because the Company claimed refunds on taxable income for
fiscal years 2017 and 2016. These years will remain open until fiscal years 2018 and 2020, which were taxable loss years, are
closed however the exposure is limited to the refund amounts for each fiscal year. Fiscal years 2018, 2019, and 2020 are currently
under audit with the Internal Revenue Service.
31
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
10. Retirement Plans
The Company has a noncontributory defined benefit pension plan (the “Plan”) covering most employees who meet certain age-
entry requirements and work a stated minimum number of hours per year. The Plan was amended to freeze accruals to new hires
and rehires effective January 1, 2020. The Plan was adequately funded as of March 31, 2023 and 2022 and no contributions were
required to meet legal funding requirements.
The following tables provide a reconciliation of the changes in the Plan’s benefit obligation and fair value of plan assets over the
two-year period ended March 31, 2023 and a statement of the funded status as of March 31, 2023 and 2022 (in thousands):
Change in benefit obligation
Benefit obligation at beginning of year
Service cost
Interest cost
Actuarial gain
Benefit payments and expenses
Benefit obligation at end of year
Change in plan assets
Fair value of plan assets at beginning of year
Actual return on plan assets
Benefit payments and expenses
Fair value of plan assets at end of year
Funded status
Fiscal Year:
2023
2022
275,001 $
7,429
9,254
(47,403)
(9,243)
235,038 $
327,867 $
(23,169)
(10,356)
294,342 $
286,063
8,483
7,721
(972)
(26,294)
275,001
348,914
6,666
(27,713)
327,867
59,304 $
52,866
$
$
$
$
$
The Plan’s funded status increased by $6.4 million during fiscal year 2023 reflecting the actual fair value of plan assets and the
projected benefit obligation as of March 31, 2023. This funded status increase was primarily driven by actuarial gains on the
projected benefit obligation, as described in more detail below, partially offset by a combination of growth in the Plan’s projected
benefit obligation due to service cost and interest cost and a negative return on plan assets.
During fiscal year 2023, the actuarial gain in the pension plan’s projected benefit obligation was driven by an increase in discount
rates and the annual update in plan census data resulting in demographic gains, partially offset by an assumed salary increase
rate for fiscal year 2024 in excess of the long-term rate. During fiscal year 2022, the actuarial gain in the pension plan’s projected
benefit obligation was primarily driven by an increase in discount rates. The gain was partially offset by actuarial losses due to
a combination of data revisions resulting in the demographic losses, a change in near-term assumed salary increases, and an
update to the most recently released mortality projection scale by the Society of Actuaries (SOA). Plan assets decreased from
$327.9 million as of March 31,2022 to $294.3 million as of March 31, 2023 primarily due to normal payments of benefits and a
negative return on plan assets.
The following table provides the components of the Plan’s accumulated other comprehensive loss, pre-tax (in thousands):
Amounts Recognized in Accumulated Other
Comprehensive Pre-Tax Loss
Prior service cost
Net loss
Accumulated other comprehensive pre-tax loss
2023
Fiscal Year:
2022
2021
(75) $
(28,310)
(28,385) $
(167) $
(36,136)
(36,303) $
(258)
(26,265)
(26,523)
$
$
32
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
The following table provides the components of net periodic benefit cost for the Plan for fiscal years 2023, 2022, and 2021 (in
thousands):
Service cost including administration
Interest cost
Expected return on plan assets
Amortization of net loss
Prior service cost
Net periodic benefit cost
2023
Fiscal Year:
2022
2021
8,240 $
9,254
(16,104)
-
91
1,481 $
9,508 $
7,721
(17,114)
-
91
206 $
10,627
9,266
(15,804)
9,919
91
14,099
$
$
The Company utilizes a full yield curve approach in the estimation of net periodic benefit cost components by applying the
specific spot rates along the yield curve used in determination of the benefit obligation to their underlying projected cash flows.
Prior service costs are amortized on a straight-line basis over the average remaining service period of active participants. Gains
and losses in excess of 10% of the greater of the benefit obligation and the market-related value of assets are amortized over the
average remaining service period of active participants.
The assumptions used to measure the Company’s benefit obligation and pension expense are shown in the following table:
Weighted Average Assumptions for Balance Sheet Liability at
End of Year:
Discount rate - projected benefit obligation
Rate of compensation increase
Mortality table
Weighted Average Assumptions for Benefit Cost at Beginning
of Year:
Discount rate - benefit obligations
Discount rate - interest cost
Discount rate - service cost
Expected return on plan assets
Rate of compensation increase
Plan Assets
2023
Fiscal Year:
2022
2021
5.04%
3.00%
3.81%
3.00%
3.43%
3.00%
Pri-2012 Blue
Collar
Generational
Table
Improvement
Scale
MP-2021
Pri-2012 Blue
Collar
Generational
Table
Improvement
Scale
MP-2021
Pri-2012 Blue
Collar
Generational
Table
Improvement
Scale
MP-2020
3.81%
3.52%
3.93%
5.00%
3.00%
3.43%
2.68%
3.75%
5.00%
3.00%
3.69%
3.30%
3.87%
7.25%
3.00%
Investment Policy and Strategy - The Company maintains an investment policy that utilizes a liability-driven investments
approach to reduce the ongoing volatility of the Plan’s funded status. During fiscal year 2023, the Company updated its current
target allocation to be 20% allocated to a diversified mix of return-seeking investments including equities and alternative
investments and 80% allocated to liability-hedging fixed income investments.
33
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
The Company's plan assets consist of the following:
Equity securities
Debt securities
Real estate
Cash
Other
Total
Target
Allocation for:
Percentage of Plan
Assets as of:
Fiscal Year
2024
March 31,
2023
March 31,
2022
16 %
80 %
2 %
1 %
1 %
100 %
13%
75%
8%
1%
3%
100%
21%
61%
7%
7%
4%
100%
The following tables set forth the Company’s plan assets at fair value, by level within the fair value hierarchy (as defined in Note
1), as of March 31, 2023 and 2022, (in thousands):
As of March 31, 2023
Level 1
Level 2
Level 3
$
25,045 $
- $
Equity securities
Held in common/collective
trusts
Equity securities
Real estate
Debt securities
Cash/short-term
investments (2)
Other investments
Fair value of plan assets $
Equity securities
Held in common/collective
trusts
Equity securities
Real estate
Debt securities
Cash/short-term
investments (2)
Other investments
Fair value of plan assets $
-
-
-
-
-
25,045 $
-
-
-
-
-
- $
-
-
-
-
-
29,427 $
-
-
-
-
-
- $
`
- $
-
-
-
-
-
- $
Subtotal
Measured
at NAV (1)
Total
25,045 $
- $
25,045
-
-
-
12,639
24,766
219,767
-
-
25,045 $
2,799
9,326
269,297 $
12,639
24,766
219,767
2,799
9,326
294,342
`
- $
-
-
-
-
-
- $
Subtotal
Measured
at NAV (1)
Total
29,427 $
- $
29,427
-
-
-
40,969
23,200
200,224
-
-
29,427 $
22,224
11,822
298,439 $
40,969
23,200
200,225
22,224
11,822
327,867
As of March 31, 2022
Level 1
Level 2
Level 3
$
29,427 $
- $
(1) Certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical
expedient have not been categorized in the fair value hierarchy but are included to reconcile to the amounts presented
in our Obligations and Funded Status table.
(2) The cash/short term investments consist of a money market fund that holds individual, high quality, short duration fixed
income investments, however the fund does not trade on public markets. The Company elected to consistently apply
the practical expedient to all investments within common/collective trusts, and therefore, the fair value of this fund is
measured at net asset value per share.
34
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
Expected Return on Plan Assets
For fiscal year 2023, the expected long-term rate of return on Plan assets was 5.00%. For fiscal year 2024, the Company will
increase the expected long-term rate of return on Plan assets to 6.15%. The Company expected 5.00% and 6.15% to fall within
the 35 to 65 percentile range of returns on investment portfolios with asset diversification similar to that of the Plan's target asset
allocation for fiscal years 2023 and 2024, respectively.
Cash Flows
Expected contributions for fiscal year ending March 31, 2024 (in thousands):
Expected Employer Contributions $
Expected Employee Contributions $
-
-
Estimated future benefit payments reflecting expected future service for the fiscal years ending March 31 (in thousands):
2024
2025
2026
2027
2028
2029 - 2033
401(k) Plans
$
10,706
11,446
12,210
12,975
13,648
76,496
The Company also has employees’ savings 401(k) plans covering all employees who meet certain age-entry requirements and
work a stated minimum number of hours per year. Participants may make contributions up to the legal limit. The Company’s
matching contributions are discretionary. Costs charged to operations for the Company’s matching contributions amounted to
$1.5 million, $1.1 million, and $1.6 million in fiscal years 2023, 2022, and 2021, respectively. In each of the aforementioned
fiscal years, the matching contribution was entirely treasury stock. This stock portion of the matching contribution is valued at
current market value while the treasury stock is valued at cost.
Unfunded Deferred Compensation Plan
The Company sponsors an unfunded nonqualified deferred compensation plan to permit certain eligible employees to defer
receipt of a portion of their compensation to a future date. This plan was designed to compensate the plan participants for any
loss of company contributions under the 401(k) plans. As of March 31, 2023 and 2022, the Company has accrued $1.7 million
and $0.9 million, respectively, in connection with the unfunded deferred compensation plan.
11. Stockholders’ Equity
Preferred Stock — The Company has authorized three classes of preferred stock consisting of 200,000 shares of Six Percent
(6%) Voting Cumulative Preferred Stock, par value $0.25 (“6% Preferred”); 30,000 shares of Preferred Stock Without Par Value
to be issued in series by the Board of Directors, none of which are currently designated or outstanding; and 8,200,000 shares of
Preferred Stock with $0.025 par value, Class A, to be issued in series by the Board of Directors (“Class A Preferred”). The Board
of Directors has designated four series of Class A Preferred including 10% Cumulative Convertible Voting Preferred Stock—
Series A (“Series A Preferred”); 10% Cumulative Convertible Voting Preferred Stock—Series B (“Series B Preferred”);
Convertible Participating Preferred Stock; and Convertible Participating Preferred Stock, Series 2003.
35
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
The Convertible Participating Preferred Stock and Convertible Participating Preferred Stock, Series 2003 are convertible at the
holders’ option on a one-for-one basis into shares of Class A Common Stock, subject to antidilution adjustments. These series
of preferred stock have the right to receive dividends and distributions at a rate equal to the amount of any dividends and
distributions declared or made on the Class A Common Stock. No dividends were declared or paid on this preferred stock in
fiscal year 2023 or 2022. In addition, these series of preferred stock have certain distribution rights upon liquidation. Upon
conversion, shares of these series of preferred stock become authorized but unissued shares of Class A Preferred and may be
reissued as part of another series of Class A Preferred. As of March 31, 2023, the Company has an aggregate of 6,791,708 shares
of non-designated Class A Preferred authorized for issuance.
The Convertible Participating Preferred Stock has a liquidation preference of $12 per share and a stated value of $11.931 per
share. There were 8,292 shares outstanding as of March 31, 2023 and 23,964 conversions during the fiscal year. The Convertible
Participating Preferred Stock, Series 2003 was issued as partial consideration of the purchase price in the Chiquita Processed
Foods acquisition. The 967,742 shares issued in that 2003 acquisition were valued at $16.60 per share which represented the then
market value of the Class A Common Stock into which the preferred shares were immediately convertible. This series has a
liquidation preference of $15.50 per share and has no shares outstanding as of March 31, 2023.
There are 407,240 shares of Series A Preferred outstanding as of March 31, 2023 which are convertible into one share of Class A
Common Stock and one share of Class B Common stock for every 20 shares of Series A Preferred. There are 400,000 shares of
Series B Preferred outstanding as of March 31, 2023 which are convertible into one share of Class A Common Stock and one
share of Class B Common Stock for every 30 shares of Series B preferred. There are 200,000 shares of 6% Preferred outstanding
as of March 31, 2023 which are callable at their par value at any time at the option of the Company. The Company paid dividends
of $20,000 on the Series A and Series B Preferred and $3,000 on the 6% Preferred during each of fiscal year 2023 and 2022.
Common Stock — The Class A Common Stock and the Class B Common Stock have substantially identical rights with respect
to any dividends or distributions of cash or property declared on shares of common stock, and rank equally as to the right to
receive proceeds on liquidation or dissolution of the Company after payment of the Company’s indebtedness and liquidation
right to the holders of preferred shares. However, holders of Class B Common Stock retain a full vote per share, whereas the
holders of Class A Common Stock have voting rights of 1/20th of one vote per share on all matters as to which shareholders of
the Company are entitled to vote. During fiscal year 2023, there were 1,319 shares of Class B Common Stock issued in lieu of
cash compensation under the Company's Profit Sharing Bonus Plan.
Unissued shares of common stock reserved for conversion privileges of designated non-participating preferred stock were 33,695
of both Class A and Class B as of March 31, 2023 and 2022. Additionally, there were 8,292 and 32,756 shares of Class A reserved
for conversion of the Participating Preferred Stock as of March 31, 2023 and 2022, respectively.
Treasury Stock — During fiscal year 2023 the Company repurchased $41.2 million, or 766,071 shares of its Class A Common
Stock and none of its Class B Common Stock. As of March 31, 2023, there is a total of $168.6 million, or 4,566,242 shares, of
repurchased stock. These shares are not considered outstanding. The Company contributed $1.5 million or 39,177 treasury shares
for the 401(k) match in fiscal year 2023 as described in Note 10, Retirement Plans.
12. Fair Value of Financial Instruments
The carrying amount and estimated fair values of the Company's long-term debt are summarized as follows (in thousands):
As of:
March 31,
2023
March 31,
2022
Carrying
Amount
Estimated
Carrying
Fair Value Amount
Estimated
Fair Value
Long-term debt, including current portion $
442,695 $
436,293 $
113,624 $
108,608
The estimated fair value for long-term debt is determined by the quoted market prices for similar debt (comparable to the
Company’s financial strength) or current rates offered to the Company for debt with the same maturities which is Level 2 from
36
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
the fair value hierarchy. Since quoted prices for identical instruments in active markets are not available (Level 1), the Company
makes use of observable market based inputs to calculate fair value, which is Level 2.
13. Other Operating Income and Expense
The Company had net other operating income of $1.7 million in fiscal year 2023, which was driven primarily by gains on the
sale of the Company’s western trucking fleet and an aircraft, along with a favorable true-up of the supplemental early retirement
plan accrual. This other operating income was partially offset by a write down of idle equipment to estimated selling price, less
commission, as the assets met the criteria to be classified as held for sale.
The Company had net other operating expense of $1.2 million in fiscal year 2022, which was driven by charges for supplemental
early retirement plans and to maintain non-operating facilities classified as held for sale. These charges were partially offset by
a net gain on the sale of assets and a gain from debt forgiveness on an economic development loan.
The Company had net other operating income of $29.0 million in fiscal year 2021, which was primarily comprised of a net gain
on the sale of assets, due largely to the gain realized upon the divestiture of the Company’s prepared foods business. The gain
was partially offset by charges to maintain non-operational plants acquired in the Midwest, a charge for a supplemental early
retirement plan, and a charge for severance.
14. Segment Information
The Company has historically managed its business on the basis of three reportable food packaging segments: (1) fruits and
vegetables, (2) prepared food products and (3) snack products, with non-food packaging sales comprising the other category.
The other category includes the sale of cans, ends, seed, and outside revenue from the Company's trucking and aircraft operations.
During fiscal year 2021, the Company sold its prepared foods business, leaving just two reportable segments along with the other
category. Export sales represented 6.7%, 7.2% and 7.2% of total sales in fiscal 2023, 2022 and 2021, respectively.
The following table summarizes certain financial data for the Company’s reportable segments (in thousands):
Fruit and
Vegetable
Prepared
Snack
Foods
Products
Other
Total
Fiscal Year 2023:
Net sales
Operating income
Capital expenditures
Depreciation and amortization
Fiscal Year 2022:
Net sales
Operating income
Capital expenditures
Depreciation and amortization
Fiscal Year 2021:
Net sales
Operating income
Capital expenditures
Depreciation and amortization
$
$
$
1,465,963 $
51,272
64,192
40,256
1,344,586 $
66,750
47,421
36,126
- $
-
-
-
- $
-
-
-
12,661 $
(1,241)
131
102
30,728 $ 1,509,352
52,936
71,805
40,941
2,905
7,482
583
12,332 $
75
67
121
28,362 $ 1,385,280
70,345
52,100
36,523
3,520
4,612
276
1,363,263 $
175,810
67,963
29,533
71,866 $
1,967
1,451
2,299
10,999 $
705
508
194
21,516 $ 1,467,644
181,067
2,585
71,450
1,528
32,375
349
After the sale of the prepared foods business in fiscal year 2021, over 99% of the Company’s total assets from the Consolidated
Balance Sheets belong to the fruit and vegetable segment and this information is no longer necessary.
37
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
15. Legal Proceedings and Other Contingencies
In the ordinary course of its business, the Company is made a party to certain legal proceedings seeking monetary damages,
including proceedings involving product liability claims, workers’ compensation along with other employee claims, tort and
other general liability claims, for which it carries insurance, as well as patent infringement and related litigation. The Company
is in a highly regulated industry and is also periodically involved in government actions for regulatory violations and other
matters surrounding the manufacturing of its products, including, but not limited to, environmental, employee, and product safety
issues. While it is not feasible to predict or determine the ultimate outcome of these matters, the Company does not believe that
an adverse decision in any of these legal proceedings would have a material adverse impact on its financial position, results of
operations, or cash flows.
16. Plant Restructuring
The following table summarizes the restructuring charges recorded and the accruals established during fiscal years 2023, 2022
and 2021 (in thousands):
Balance March 31, 2020
Charge to expense
Cash payments/write offs
Balance March 31, 2021
Charge to expense
Cash payments/write offs
Balance March 31, 2022
Charge to expense
Cash payments/write offs
Balance March 31, 2023
Severance
Payable
Other
Costs
Total
$
$
202 $
227
(429)
-
-
-
-
361
(244)
117 $
-
(45)
45
-
70
(70)
-
3,189
(3,189)
- $
202
182
(384)
-
70
(70)
-
3,550
(3,433)
117
During fiscal year 2023, the Company incurred restructuring charges primarily due to ceasing production of green beans at a
plant in the Northeast. The charges mainly consisted of severance and write-downs of production equipment that was to be
scrapped or sold. During fiscal years 2022 and 2021, the Company incurred restructuring charges primarily related to plants that
were closed in previous periods, including severance, health care costs, and lease impairments, amongst other minor changes.
17. Related Party Transactions
During fiscal years 2023, 2022, and 2021, less than 1% of vegetables supplied to the Company are grown by a Director of Seneca
Foods Corporation. The Company’s grower purchases from the Director were $3.1 million, $2.9 million, and $2.2 million in
fiscal years 2023, 2022, and 2021, respectively, pursuant to a raw vegetable grower contract. The Chairman of the Audit
Committee reviewed the relationship and determined that the contract was negotiated at arm's length and on no more favorable
terms than to other growers in the marketplace.
The Company made charitable contributions to the Seneca Foods Foundation, a related party, in the amount of $0.5 million, $1.0
million and $1.0 million in fiscal years 2023, 2022 and 2021, respectively. The Foundation is a nonprofit entity that supports
charitable activities by making grants to unrelated organizations or institutions and is managed by current employees of the
Company.
During fiscal year 2022, the Company recorded a liability for retirement arrangements to beneficiaries of certain former
employees of the Company that have family relationships to two of the Company’s current Directors. As of March 31, 2023 and
2022, the liability for these benefits totaled $1.0 million and $1.9 million, respectively. Payments are made monthly over the
beneficiary’s lifetime.
38
Notes to Consolidated Financial Statements
Seneca Foods Corporation and Subsidiaries
18. Subsequent Event
On May 23, 2023, the Company entered into Second Amended and Restated Loan and Guaranty Agreement Amendment 1 with
Farm Credit East, ACA (“the Amendment”). The Amendment amends, restates and replaces in its entirety Term Loan A-2 (as
defined in Note 7, Long-Term Debt) and provides a single advance term facility in the principal amount of $125.0 million to be
combined with the existing $173.5 million Term Loan A-2 into one single $298.5 million term loan (“Amended Term Loan A-
2”). Amended Loan Term A-2 is secured by a portion of the Company’s property, plant and equipment and bears interest at a
variable interest rate based upon SOFR plus an additional margin determined by the Company’s leverage ratio.
39
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors of Seneca Foods Corporation.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Seneca Foods Corporation (the “Company”) as of March 31,
2023 and 2022; the related statements of consolidated net earnings, comprehensive income (loss), stockholders' equity, and cash
flows for each of the years in the three-year period ended March 31, 2023; and the related notes (collectively referred to as the
“consolidated financial statements”). In our opinion, the financial statements referred to above present fairly, in all material
respects, the financial position of the Company as of March 31, 2023 and 2022, and the results of its operations and its cash flows
for each of the years in the three-year period ended March 31, 2023, in conformity with accounting principles generally accepted
in the United States of America.
We also have audited the Company’s internal control over financial reporting as of March 31, 2023, in accordance with the
standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), based on criteria established in
Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Our report dated June 13, 2023, expresses an unqualified opinion.
Basis for Opinion
The Company's management is responsible for these consolidated financial statements. Our responsibility is to express an opinion
on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and
the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to
error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial
statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall
presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that (1) relate to accounts or
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Valuation of Inventory – Refer to Notes 1 and 4 in the consolidated financial statements
Critical Audit Matter Description
At March 31, 2023, the Company’s inventory was $708.8 million. As described in Notes 1 and 4 to the consolidated financial
statements, the Company accounts for substantially all its inventory at the lower of cost, determined using the last-in, first-out
(LIFO) method, or market. As permitted by U.S. generally accepted accounting principles, the Company maintains its inventory
costs and cost of goods sold on a first-in, first-out (FIFO) basis and adjusts total inventory and cost of goods sold from FIFO to
LIFO at the end of each year. The Company values its inventory under the LIFO method based on the inventory levels and the
prevailing inventory costs existing at that time.
40
Report of Independent Registered Public Accounting Firm
We identified valuation of inventory as a critical audit matter because of the significant assumptions, manual calculations, and
judgements in the LIFO reserve. Auditing management’s calculation was complex and required a high degree of auditor
judgement and subjectivity when performing audit procedures and evaluating the audit evidence obtained.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the Company’s LIFO reserve included the following, among others:
● We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the
Company’s calculation of the adjustments to convert FIFO inventory balances to LIFO, including controls over
management’s review of the manual calculations described above.
● We tested the completeness, accuracy, and relevance of the underlying data used in management’s calculation to adjust
the FIFO inventory balances to LIFO.
● We tested the calculations and application of management’s methodologies related to the valuation estimates of the
LIFO reserve.
● We tested the mathematical accuracy of management’s manual calculation.
We have served as the Company’s auditor since 2019.
Southfield, Michigan
June 13, 2023
41
Schedule II
VALUATION AND QUALIFYING ACCOUNTS
(In thousands)
Balance at
beginning
of period
Charged/
(credited)
to income
Charged to
Deductions
other
accounts
from
reserve
Balance
at end
of period
Year-ended March 31, 2023:
Allowance for doubtful accounts $
$
Income tax valuation allowance
Year-ended March 31, 2022:
Allowance for doubtful accounts $
$
Income tax valuation allowance
Year-ended March 31, 2021:
Allowance for doubtful accounts $
$
Income tax valuation allowance
54 $
3,931 $
(20) $
1,064 $
339 $
4,674 $
(291) $
(743) $
1,598 $
4,473 $
(1,304) $
201 $
- $
- $
- $
- $
- $
- $
- (a) $
$
-
(6) (a) $
$
-
(45) (a) $
$
-
34
4,995
54
3,931
339
4,674
(a) Accounts written off, net of recoveries.
42
Report of Independent Registered Public Accounting Firm
Board of Directors and Stockholders
Seneca Foods Corporation
Fairport, New York
The audit referred to in our report dated June 13, 2023 relating to the consolidated financial statements of Seneca Foods
Corporation, which is incorporated in Item 8 of Form 10-K by reference to the Annual Report to Shareholders for the year
ended March 31, 2023 and 2022 also included the audit of the consolidated financial statement schedule listed in the
accompanying index. This consolidated financial statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on this consolidated financial statement schedule based on our audit.
In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
We have served as the Company’s auditor since 2019.
Southfield, Michigan
June 13, 2023
43
Management’s Annual Report on Internal Control Over Financial
Reporting
Our management is responsible for establishing and maintaining adequate internal control over the Company’s financial reporting
(as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Because of its inherent limitations, internal control over
financial reporting may not prevent or detect all misstatements. Projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
Our management assessed the effectiveness of the Company’s internal control over financial reporting as of March 31, 2023. In
making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) in Internal Control-Integrated Framework (2013). Based on our assessment, management
believes that, as of March 31, 2023, our internal control over financial reporting is effective based on those criteria.
The Company’s independent registered public accountant has issued its report on the effectiveness of the Company’s internal
control over financial reporting. Their report appears on the next page.
44
Report of Independent Registered Public Accounting Firm on Internal
Control Over Financial Reporting
To the Stockholders and Board of Directors of Seneca Foods Corporation
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting as of March 31, 2023 of Seneca Foods Corporation (the
“Company”), based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (the “COSO framework”). In our opinion, the Company maintained, in
all material respects, effective internal control over financial reporting as of March 31, 2023, based on criteria established in the
COSO framework.
We also have audited the accompanying consolidated balance sheets of the Company as of March 31, 2023 and 2022, the related
consolidated statements of net earnings, comprehensive income (loss), stockholders' equity, and cash flows for each of the years
in the three-year period ended March 31, 2023; and the related notes (collectively referred to as the “consolidated financial
statements”), in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our report
dated June 13, 2023, expresses an unqualified opinion.
Basis for Opinion
The Company's management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying Item 9A, Management’s
Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's
internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions
of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation
of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
We have served as the Company’s auditor since 2019.
Southfield, Michigan
June 13, 2023
45
Shareholder Information
Seneca Foods Corporation and Subsidiaries
The Company’s common stock is traded on The NASDAQ Global Select Market. The 5.9 million Class A outstanding shares
and 1.7 million Class B outstanding shares are owned by 122 and 125 shareholders of record, as of March 31, 2023, and 2022,
respectively.
As of March 31, 2023, the most restrictive credit agreement limitation on the Company’s payment of dividends, to holders of
Class A or Class B Common Stock is an annual total limitation of $50,000, reduced by aggregate annual dividend payments
totaling $23,000 that the Company presently pays on two outstanding classes of preferred stock. Payment of dividends to common
stockholders is made at the discretion of the Company’s Board of Directors and depends, among other factors, on earnings,
capital requirements, and the operating and financial condition of the Company. The Company has not declared or paid a common
dividend in many years.
Stock Performance Graph
The graph below compares the cumulative total shareholder return on the Company’s Class A Common Stock (SENEA) for the
last five fiscal years ended March 31 with (1) the cumulative return on the S&P SmallCap 600 and (2) the cumulative return on
the S&P Packaged Foods & Meats Index for this same time period. The graph assumes the investment of $100 on March 31,
2018 and reinvestment of all dividends. The common stock price performance shown on the graph only reflects the change in
the Company’s SENEA price relative to the noted indices and is not necessarily indicative of future price performance.
Seneca Foods Corporation
S&P SmallCap 600
S&P Packaged Foods and Meats Index
For the Fiscal Year Ended March 31,
2022
2020
2019
2018
$ 100.00 $ 88.81 $ 143.61 $ 170.00 $ 186.06 $ 188.70
$ 100.00 $ 101.57 $ 75.27 $ 147.02 $ 148.83 $ 135.71
$ 100.00 $ 102.34 $ 102.55 $ 127.19 $ 140.23 $ 154.10
2021
2023
46
Corporate Information
Seneca Foods Corporation and Subsidiaries
Manufacturing Plants and Warehouses
Food Group
Nampa, Idaho
Payette, Idaho
Princeville, Illinois
Hart, Michigan
Traverse City, Michigan
Blue Earth, Minnesota
Glencoe, Minnesota
LeSueur, Minnesota
Montgomery, Minnesota
Rochester, Minnesota
Geneva, New York
Leicester, New York
Dayton, Oregon
Dayton, Washington
Yakima, Washington
Baraboo, Wisconsin
Berlin, Wisconsin
Cambria East, Wisconsin
Cambria West, Wisconsin
Clyman, Wisconsin
Cumberland, Wisconsin
Gillett, Wisconsin
Janesville, Wisconsin
Mayville, Wisconsin
Oakfield, Wisconsin
Ripon, Wisconsin
Non-Food Group (1)
Fairport, New York
Penn Yan, New York
Total
(000s)
Square
Footage
Acres
243
392
288
365
58
286
674
82
564
835
769
204
82
250
122
625
89
399
212
438
400
324
1,234
239
229
634
16
43
568
83
43
429
913
497
1,172
620
593
91
19
29
8
13
125
401
321
724
307
105
342
354
2,135
87
12
27
10,076
4
10,042
(1) The table does not include facilities in Albany, Oregon and Beverly, Washington that were idle and classified as an asset held
for sale on our consolidated balance sheet as of March 31, 2023. The table also does not include a non-operational facility in
Mendota, Illinois.
47
Paul L. Palmby
President and Chief Executive Officer
Seneca Foods Corporation
Donald J. Stuart
Managing Partner/Founder
Cadent Consulting Group
Keith A. Woodward
Former Chief Financial Officer
Tennant Company
Corporate Information
Seneca Foods Corporation and Subsidiaries
Directors
Kraig H. Kayser, Chairman
Former President and Chief Executive Officer
Seneca Foods Corporation
John P. Gaylord
President
Jacintoport Terminal Company
Kathryn J. Boor, Ph.D.
Dean of the Graduate School and Vice Provost Former Chief Financial Officer
for Graduate Education at Cornell University
Birds Eye Foods
Linda K. Nelson
Peter R. Call
President
My-T Acres, Inc.
Executive Officers
Paul L. Palmby, President
Chief Executive Officer
Michael F. Nozzolio
Counsel
Harris Beach PLLC
Timothy R. Nelson, Senior Vice President
Operations
Dean E. Erstad, Senior Vice President
Sales and Marketing
Michael S. Wolcott, Senior Vice President
Chief Financial Officer and Treasurer
Officers
Carl A. Cichetti, Senior Vice President
Technology and Planning, Chief Information
Officer
Aaron M. Girard, Senior Vice President
Logistics
John D. Exner, General Counsel
Secretary
Matt J. Henschler, Senior Vice President
Technical Services and Development
Cynthia L. Fohrd, Senior Vice President
Chief Administrative Officer
Gregory R. Ide, Vice President
Corporate Controller and Assistant Secretary
Operations
Jon A. Brekken, Vice President
Western Vegetable Operations
Leon Lindsay, Vice President
Strategic Sourcing
James Quinlan, Vice President
Can Manufacturing
Amiee Jo Castleberry, Vice President
Human Resources
Eric E. Martin, Vice President
Eastern Vegetable Operations
Mary Sagona, Vice President
Accounting
Paul Hendrickson, Vice President
Process Excellence
Beth Newell, General Manager
Seneca Snack
Benjamin M. Scherwitz, Vice President
Technical Services
Steven F. Lammers, Vice President
Technical Services
Timothy Nolan, Vice President
Information Technology
Richard L. Waldorf, Vice President
Customer Service
Richard Leppert, General Manager
Seneca Flight
Sales and Marketing Groups
Carl B. Bowling, Vice President
Branded Sales
Kevin F. Lipps, Vice President
International Sales
Beau P. Simonson, Vice President
Foodservice Dry Grocery
David Carter, Vice President
Marketing and National Accounts
Victoria A. Ninneman, Vice President
Industrial and Ingredient Sales
Courtney Schulis, Vice President
Glace Sales
George E. Hopkins, III, Vice President
Private Label Retail
Stephen J. Ott, Vice President
Frozen Sales and Chain Accounts
Aaron L. Wadell, Vice President
E-Business
48
Corporate Information
Seneca Foods Corporation and Subsidiaries
Forward Looking Statements
Except for the historical information contained herein, the matters discussed in this annual report are forward-looking statements as defined in the Private
Securities Litigation Reform Act (PSLRA) of 1995. The Company wishes to take advantage of the “safe harbor” provisions of the PSLRA by cautioning that
numerous important factors, which involve risks and uncertainties, including but not limited to economic, competitive, governmental, and technological factors
affecting the Company’s operations, markets, products, services and prices, and other factors discussed in the Company’s filings with the Securities and Exchange
Commission, in the future, could affect the Company’s actual results and could cause its actual consolidated results to differ materially from those expressed in
any forward-looking statement made by, or on behalf of, the Company.
Shareholder Information
For investor information, including comprehensive earnings releases: http://www.senecafoods.com/investors
Annual Meeting
The 2023 Annual Meeting of Shareholders will be held on Wednesday, August 9, 2023, beginning at 1:00 PM (CDT) at the Company’s offices at 600 East Conde
Street, Janesville, Wisconsin. A formal notice of the meeting, together with a proxy statement and proxy form, will be mailed to shareholders of record as of
June 14, 2023.
How To Reach Us
Seneca Foods Corporation
350 WillowBrook Office Park
Fairport, New York 14450
(585) 495-4100
www.senecafoods.com/investors
investors@senecafoods.com
Additional Information
Annual Report and Other Investor Information
A copy of the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2023, as filed with the Securities and Exchange Commission, will
be provided by the Company to any shareholder who so requests in writing to:
Gregory R. Ide
Seneca Foods Corporation
350 WillowBrook Office Park
Fairport, New York 14450
(585) 495-4100
This annual report is also available online at http://www.senecafoods.com/investors
Foundation/Contribution Requests
Seneca Foods Foundation
Cynthia L. Fohrd
350 WillowBrook Office Park
Fairport, New York 14450
(585) 495-4100
foundation@senecafoods.com
Independent Registered Public Accounting Firm
Plante & Moran, PC
Southfield, Michigan
General Counsel
Bond, Schoeneck & King, PLLC
Buffalo, New York
Transfer Agent and Registrar
Computershare
211 Quality Circle, Suite 210
College Station, TX 77845
(800) 622-6757 (US, Canada, Puerto Rico)
(781) 575-4735 (Non-US)
www.computershare.com/investor
Corporate Governance
www.senecafoods.com/investors/corporate-governance
Code of Business Ethic
www.senecafoods.com/code-ethics
Hotline (800) 213-9185
49
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SENECA FOODS CORPORATION . 350 WILLOWBROOK OFFICE PARK . FAIRPORT, NEW YORK 14450 . WWW.SENECAFOODS.COM