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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Transition Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the transition period from August 1, 1994
to March 31, 1995 Commission File Number 0-1989
SENECA FOODS CORPORATION
(Exact name of registrant as specified in its charter)
New York 16-0733425
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1162 Pittsford-Victor Road, Pittsford, New York 14534
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (716) 385-9500
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange on
Title of Each Class Which Registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.25 Par
(Title of Class)
Check mark indicates whether registrant has (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that registrant was required to
file such reports), and (2) has been subject to the filing requirements for at
least the past 90 days.
Yes X No
----- -----
The aggregate market value of the Registrant's voting securities held by
non-affiliates based on the closing sales price per market reports by the NASDAQ
National Market System on May 1, 1995 was approximately $95,083,000.
Common shares outstanding as of May 1, 1995 were 2,796,555.
Documents Incorporated by Reference:
(1) Proxy Statement to be issued prior to June 30, 1995 in connection with the
registrant's annual meeting of stockholders (the "Proxy Statement")
applicable to Part III, Items 10-13 of Form 10-K.
(2) Portions of the Annual Report to shareholders for the transition period
ended March 31, 1995 (the "1995 Annual Report") applicable to Part II,
Items 5-8 and Part IV, Item 14 of Form 10-K.
TABLE OF CONTENTS
FORM 10-K ANNUAL REPORT - FISCAL 1995
SENECA FOODS CORPORATION
PART I. Page
Item 1. Business 1-3
Item 2. Properties 3
Item 3. Legal Proceedings 4
Item 4. Submission of Matters to a Vote of Equity Security Holders 4
PART II.
Item 5. Market for the Registrant's Common Stock and Related
Security Holder Matters 4
Item 6. Selected Financial Data 4
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 4
Item 8. Financial Statements and Supplementary Data 4
Item 9. Changes in and Disagreements on Accounting and Financial
Disclosure 4
PART III.
Item 10. Directors and Executive Officers of the Registrant 6
Item 11. Executive Compensation 6
Item 12. Security Ownership of Certain Beneficial Owners and
Management 6
Item 13. Certain Relationships and Related Transactions 6
PART IV.
Item 14. Exhibits, Financial Statements Schedules and Reports on
Form 8-K 6-9
SIGNATURES 10-11
PART I
Item 1
Business
General Development of Business
SENECA FOODS CORPORATION (herein referred to as the "Company") was organized in
1949 and incorporated under the laws of the State of New York. Seneca Foods
Corporation purchased six Green Giant(R) vegetable plants from The Pillsbury
Company effective February 1, 1995, resulting in vegetable products becoming
nearly 80% of Seneca's overall business. Consequently, Seneca has changed its
fiscal year end from July 31 to March 31 to avoid overlapping pack seasons
between fiscal years. Therefore, Fiscal 1995 was an eight-month transition
period.
Financial Information About Industry Segments
The Company's business activities are conducted in food and non-food segments.
The food segment is food processing. The non-food segment is an air charter
service. The air charter service represents about 1% of the Company's business
and therefore the financial information related to segments is not material.
Narrative Description of Business
Principal Products and Markets
Food Processing
The principal products of this segment include grape products, apple products,
and vegetables. The products are canned, bottled, and frozen and are sold to
retail and institutional markets. The Company has divided the United States into
four major marketing sections: Eastern, Southern, Northwestern, and
Southwestern. Plant locations in New York, North Carolina, and Washington
provide ready access to the domestic sources of grapes and apples necessary to
support marketing efforts in their respective sections of the country. Vegetable
operations are primarily supported by plant locations in New York, Wisconsin,
Washington, Idaho, and Minnesota. In addition, the Company operates a mushroom
canning facility in Pennsylvania.
The following summarizes net sales by major category for the four years ended
March 31, 1995, July 31, 1994, 1993, and 1992.
(Eight Months)
1995 1994 1993 1992
---- ---- ---- ----
(In thousands)
Vegetable $ 117,504 $ 145,010 $ 132,459 $ 151,169
Apple 62,688 78,453 71,748 78,361
Grape 10,325 17,457 19,058 19,457
Other 40,809 45,334 30,205 26,844
------ ------ ------ ------
Total $ 231,236 $ 286,254 $ 253,470 $ 275,831
======= = ======= = ======= = =======
Other
Seneca Flight Operations provides air charter service primarily to industries in
upstate New York.
Source and Availability of Raw Material
Food Processing
The Company's food processing plants are located in major vegetable, grape, and
apple producing states. Fruits and vegetables are primarily obtained through
contracts with growers. Apple concentrate is purchased domestically and abroad
to supplement raw fruit purchased under contract. The Company believes its
sources of supply are considered equal or superior to its competition for all of
its food products.
Seasonal Business
Food Processing
While individual fruits and vegetables have seasonal cycles of peak production
and sales, the different cycles are usually offsetting to some extent. The
supply of commodities, current pricing, and expected new crop quantity and
quality affect the timing of the Company's sales and earnings. An Off Season
Allowance is established during the year to minimize the effect of seasonal
production on earnings. This is zero at fiscal year end.
Backlog
Food Processing
In the food processing business the end of year sales order backlog is not
considered meaningful. Traditionally, larger customers provide tentative
bookings for their expected purchases for the upcoming season. These bookings
are further developed as data on the expected size of the related national
harvests becomes available. In general these bookings serve as a yardstick,
rather than as a firm commitment, since actual harvest results can vary notably
from early estimates. In actual practice, the Company has substantially all of
its expected seasonal production identified to potential sales outlets before
the seasonal production is completed.
Competition and Customers
Food Processing
Competition in the food business is substantial with imaginative brand
registration, quality service, and pricing being the major determinants in the
Company's relative market position. Except for the Seneca apple and grape
products and Libby's vegetable products data mentioned below, no reliable
statistics are available to establish the exact market position of the Company's
own food products. During the past year approximately 47% of the Company's
processed foods were packed for retail customers under the Company branded
labels of Libby's(R), Nature's Favorite(R), TreeSweet(R), and Seneca(R). About
15% of the processed foods were packed for institutional food distributors and
the remaining 38% of processed foods were retail packed under the private label
of customers. The customers represent a full cross section of the retail,
institutional, distributor, and industrial markets and the Company does not
consider itself dependent on any single sales source. In 1996 and in the future,
The Pillsbury Company will represent our largest customer as a result of the
20-year supply agreement entered into during 1995.
The principal branded products are Seneca Frozen Apple Juice Concentrate, rated
the number one seller nationally, Seneca Frozen Natural Grape Juice Concentrate,
Seneca applesauce, and Libby's canned vegetable products which rate among the
top five national brands. The information under the heading Liquidity and
Capital Resources in Management's Discussion and Analysis of Financial Condition
and Results of Operations in the 1995 Annual Report is incorporated by
reference.
Environmental Protection
Environmental protection is an area that the Company has worked on diligently at
each food processing facility. In all locations the Company has cooperated with
federal, state, and local environmental protection authorities in developing and
maintaining suitable antipollution facilities. In general, the Company believes
its pollution control facilities are equal to or superior to those of its
competitors and are within environmental protection standards. The Company does
not expect any material capital expenditures to comply with environmental
regulations in the near future.
Employment
Food processing - Full time 1,909
- Seasonal 553
-----
2,462
Other 124
-----
2,586
Foreign Operations
Export sales for the Company are a relatively small portion (less than 3%) of
the food processing sales.
Item 2
Properties
The Company has nine food processing, packaging, and warehousing facilities
located in New York State that provide approximately 1,507,000 square feet of
food packaging, freezing and freezer storage, and warehouse storage space. These
facilities process and package fruit and vegetable products. The Company is a
lessee under a number of operating and capital leases for equipment and real
property used for processing and warehousing.
Five other processing, packaging, and warehousing facilities are located in the
states of North Carolina (223,000 square feet), Pennsylvania (39,000 square
feet), and in Washington (three locations totaling 292,000 square feet).
Processing operations in North Carolina are primarily devoted to apple juice
products; in Washington, grape juice, apple juice, fruit chips, and sauce; and
in Pennsylvania, mushroom canning and warehousing.
Four facilities in Minnesota, one facility in Michigan, one facility in
Washington, one facility in Idaho, and seven facilities in Wisconsin provide
approximately 4,364,000 square feet of food packaging, freezing and freezer
storage, and warehouse storage space. These facilities process and package
various vegetable and fruit products. The facilities are owned by the Company.
The Company owns three food distribution facilities in Massachusetts and New
York totaling approximately 400,000 square feet which are leased out to another
company through 1995-97. Sublease income of $1,333,000 was received on these
facilities during the eight month period. In addition the air charter division
has a 14,000 square foot facility.
All of the properties are well maintained and equipped with modern machinery.
Although highly utilized, most locations have the ability to expand as sales
requirements justify. Because of the seasonal production cycles the exact extent
of utilization is difficult to measure. In certain circumstances the theoretical
full efficiency levels are being reached; however, expansion of the number of
production days or hours could increase the output by up to 20% for a season.
Certain of the Company's facilities are mortgaged to financial institutions to
secure long-term debt and capital leases obligations. See Notes 5 and 6 of Item
8, Financial Statements and Supplementary Data, for additional information about
the Company's lease commitments.
Item 3
Legal Proceedings
The Company is not involved in any material legal proceedings.
Item 4
Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of shareholders during the last quarter of
the fiscal period covered by this report.
PART II
Item 5
Market for the Registrant's Common Stock and Related Stockholder Matters
Each class of preferred stock receives preference as to dividend payment and
declaration over any common stock. In addition, refer to the information in the
1995 Annual Report, page 16, "Shareholder Information", which is incorporated by
reference.
Item 6
Selected Financial Data
Refer to the information in the 1995 Annual Report page 3, "Five Year Selected
Financial Data", which is incorporated by reference.
Item 7
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Refer to the information in the 1995 Annual Report page 4, "Management's
Discussion and Analysis of Financial Condition and Results of Operations", which
is incorporated by reference.
Item 8
Financial Statements and Supplementary Data
Refer to the information in the 1995 Annual Report pages 5 through 14,
"Consolidated Financial Statements and Notes thereto including Independent
Auditors' Report", which is incorporated by reference.
Item 9
Changes in and Disagreements on Accounting and Financial Disclosure
None.
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Seneca Foods Corporation
Pittsford, New York
We have audited the consolidated financial statements of Seneca Foods
Corporation and subsidiaries as of March 31, 1995, July 31, 1994 and July 31,
1993, and for the eight months ended March 31, 1995 and for each of the three
years in the period ended July 31, 1994, and have issued our report thereon
dated May 30, 1995; which report includes an explanatory paragraph as to a
change in accounting for income taxes in 1994; such consolidated financial
statements and report are included in your 1995 Annual Report to Stockholders
and are incorporated herein by reference. Our audits also included the
consolidated financial statement schedule of Seneca Foods Corporation and
subsidiaries, listed in Item 14(A)(2). This schedule is the responsibility of
the Company's management. Our responsibility is to express an opinion based on
our audits. 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.
/s/Deloitte & Touche LLP
Rochester, New York
May 30, 1995
PART III
Item 10
Directors and Executive Officers of the Registrant
Item 11
Executive Compensation
Item 12
Security Ownership of Certain Beneficial Owners and Management
Item 13
Certain Relationships and Related Transactions
Information required by Items 10 through 13 will be filed separately with the
Commission, pursuant to Regulation 14A, in a definitive proxy statement
involving the election of directors which is incorporated herein by reference.
PART IV
Item 14
Exhibits, Financial Statement Schedules, and Reports on Form 8-K
A. Exhibits and Financial Statement Schedules
1. (i) Financial Statement Schedules - the following consolidated
financial statements of the Registrant, included in the Annual
Report for the transition period ended March 31, 1995, are
incorporated by reference in Item 8:
Consolidated Statements of Net Earnings - March 31, 1995 and July
31, 1994, 1993, and 1992
Consolidated Balance Sheets - March 31, 1995 and July 31, 1994 and
1993
Consolidated Statements of Cash Flows - March 31, 1995 and July
31, 1994, 1993, and 1992
Consolidated Statements of Stockholders' Equity - March 31, 1995
and July 31, 1994, 1993, and 1992
Notes to Consolidated Financial Statements - March 31, 1995 and
July 31, 1994, 1993, and 1992
Independent Auditors' Report
(ii) Financial Statements required by Rule 13a - 10(b):
As a result of the Company's change in fiscal year end date from
July 31 to March 31 (see Note 1 of Item 8, Financial Statements
and Supplementary Data), the following is an unaudited comparison
of eight months ended March 31, 1995 and March 26, 1994:
March 31 March 26
Eight Months Ended (1994 Unaudited) 1995 1994
----------------------------------- ---- ----
(In thousands, except share amounts)
Net sales $ 234,073 $ 195,048
- ------- - -------
Costs and expenses:
Cost of product sold 202,285 162,356
Selling, general, and administrative expense 23,620 20,231
Interest expense, net of interest income 6,296 4,178
----- -----
232,201 186,765
------- -------
Earnings from continuing operations before income
taxes, extraordinary item and cumulative effect of
accounting change 1,872 8,283
Income taxes 688 3,231
--- -----
Earnings from continuing operations $ 1,184 $ 5,052
= ===== = =====
Earnings from continuing operations per share $ .42 $ 1.71
= === = ====
Weighted average shares outstanding 2,796,555 2,949,642
========= =========
Pages
2. Supplemental Schedule:
Schedule II -- Valuation and Qualifying Accounts 8
Other schedules have not been filed because the conditions requiring the filing
do not exist or the required information is included in the consolidated
financial statements, including the notes thereto.
3. Exhibits:
No. 3 - Articles of Incorporation and By-Laws - Incorporated by
reference to an Exhibit to the Company's 10-Q filed October,
1992.
No. 4 - Articles defining the rights of security holders -
Incorporated by reference to the Company's 10-Q filed
October, 1992. Instrument defining the rights of any holder
of Long-Term Debt - Incorporated by reference to Exhibit 99
to the Company's 10-Q filed January 1995. The Company will
furnish, upon written request to the SEC, a copy of any
other instrument defining the rights of any holder of long
term debt.
No. 10 - Material Contracts - Incorporated by reference to the
Company's 8-K dated February 24, 1995 for the First Amended
and Restated Alliance Agreement and the First Amended and
Restated Asset Purchase Agreement both with The Pillsbury
Company.
No. 11 - Computation of Earnings per Share 8
No. 13 - 1995 Annual Report to Shareholders, incorporated by
reference and filed herewith.
No. 21 - List of Subsidiaries 9
B. Reports on Form 8-K
An 8-K dated February 24, 1995 was filed relating to the Green Giant
acquisition.
Schedule II
VALUATION AND QUALIFYING ACCOUNTS
(In thousands)
Balance at Charged to Deductions Balance
beginning Charged to other from at end
of period income accounts reserve of period
--------- ---------- ----------- ---------- ---------
Year ended March 31, 1995
Allowance for doubtful accounts $ 183 $ 166 $ -- $ 122 (a) $ 227
= === = === = == = === === = ===
Year ended July 31, 1994:
Allowance for doubtful accounts $ 435 $ (213) $ -- $ 39 (a) $ 183
= === = ===== = == = == === = ===
Year ended July 31, 1993:
Allowance for doubtful accounts $ 281 $ 182 $ -- $ 28 (a) $ 435
= === = === = == = == === = ===
Year ended July 31, 1992:
Allowance for doubtful accounts $ 285 $ 448 $ -- $ 452 (a) $ 281
= === = === = == = === === = ===
(a) Accounts written off, net of recoveries.