Seneca Foods' fiscal Q3 net earnings down 38% to US$11.5M, net sales down 0.2% to US$446.3M on continuing inventory overhang from last year's bumper crops, decreased selling prices, less favorable sales mix
MARION, New York
January 28, 2011
– Seneca Foods Corporation (Nasdaq:SENEA - News) reported that net sales for the third quarter ended January 1, 2011 decreased from the third quarter ended December 26, 2009 by 0.2%, to $446.3 million. The decrease is attributable to decreased selling prices and a less favorable sales mix of $16.7 million mostly offset by increased sales volume of $16.0 million. Net earnings for the fiscal third quarter of 2011 decreased 38% to $11.5 million, or $0.94 per diluted share, compared to $18.6 million, or $1.52 per diluted share, in the fiscal third quarter of 2010.
"The results reflect the continuing inventory overhang from last year's bumper crops which has required us to continue aggressive promotional activity," said Kraig H. Kayser, President and CEO. "While the vegetable inventory issues at Seneca have improved this year as a result of a less than budget pack, the fruit business continues to be a challenge with our second big pack in a row. This will be a drag on earnings in calendar year 2011. Periods like this occur in our business from time-to-time, and while not particularly pleasant to go through, they don't last forever."
On August 6, 2010, the Company completed its acquisition of 100% of the partnership interest of Lebanon Valley Cold Storage, LP and the assets of Unilink, LLC (collectively "Lebanon") from Pennsylvania Food Group, LLC and related entities. Pre-tax results for the third quarter include a $0.6 million gain as a result of the estimated fair market value of the assets acquired exceeding the purchase price for the Lebanon acquisition.
During the second quarter of fiscal 2011, the Company implemented workforce reductions, at its plants in Buhl, Idaho and Mayville, Wisconsin and certain other locations that resulted in a restructuring charge of $1.3 million for severance costs including a $0.1 million additional charge in the third quarter ended January 1, 2011.
Earnings Conference Call and Webcast
The Company will host a conference call to discuss third quarter fiscal year 2011 financial results tomorrow at 8:00 AM EST. The conference call can be accessed live over the phone by dialing (866) 871-4877 (conference ID 1508651). If you are unable to listen to the live conference call, a replay will be available on Monday, January 31, 2011, please visit www.senecafoods.com and click on "Company Profile" and then "Investor Information". This replay will be available for two weeks.
About Seneca Foods Corporation
Seneca Foods is one of the country's largest processors of canned fruits and vegetables with manufacturing facilities located throughout the United States. Its products are sold under the Libby's, Aunt Nellie's Farm Kitchen, Stokely's, READ, and Seneca labels as well as through the private label and industrial markets. In addition, under an alliance with General Mills Operations, LLC, a successor to the Pillsbury Company and a subsidiary of General Mills, Inc., Seneca produces canned and frozen vegetables, which are sold by General Mills Operations, LLC under the Green Giant label. Seneca's common stock is traded on the Nasdaq Global Stock Market under the symbols "SENEA" and "SENEB". SENEA was added to the S&P SmallCap 600 index on October 22, 2010 and is also included in the Russell 2000 and 3000 indices.