Seneca Foods swings to fiscal Q1 loss of US$8M from earnings of US$5.3M a year ago as sales grew to US$259M from US$220M; CEO says company is in 'much more balanced inventory position' going forward

MARION, New York , August 4, 2011 () – Seneca Foods Corporation (NASDAQ:SENEA - News) reported that net sales for the first quarter ended July 2, 2011 increased from the first quarter ended July 3, 2010 by 17.8%, to $259.1 million. The increase is attributable to increased sales volume of $42.8 million partially offset by lower selling prices and a less favorable sales mix of $3.7 million. Net loss for the fiscal first quarter of 2012 was $8.0 million, or $0.66 per diluted share, compared to earnings of $5.3 million, or $0.43 per diluted share, in the fiscal first quarter of 2011.

"The strong sales can be attributed to the timing of Easter this year compared with last year, as well as customers' heavy buying ahead of announced price increases," said Kraig H. Kayser, President and CEO. "While disappointed in the quarterly loss, we now find ourselves in a much more balanced inventory position heading into this year's production season."

As announced in a recent press release Seneca Foods Corporation and Allens, Inc. have signed a Memorandum of Understanding contemplating a merger of the two companies in a stock for stock transaction. The completion of the transaction is subject to the negotiation and execution of a definitive agreement between the two parties, customary closing conditions, including regulatory, shareholder and lender approvals and satisfactory completion of due diligence.

Earnings Conference Call and Webcast

The Company will host a conference call to discuss first quarter fiscal year 2012 financial results tomorrow at 8:00 AM EDT. The conference call can be accessed live over the phone by dialing (800) 891-8257. If you are unable to listen to the live conference call, a replay will be available on Friday, August 5, 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 a processor 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, Seneca Farms 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.

Non-GAAP Financial Measures—Net Earnings Excluding LIFO Impact, EBITDA and FIFO EBITDA

Net Earnings excluding LIFO, EBITDA and FIFO EBITDA are non-GAAP financial measures. The Company believes these non-GAAP financial measures provide a basis for comparison to companies that do not use LIFO and to periods prior to 2008 when the company did not use LIFO and enhance the understanding of the company's operating performance. The Company does not intend for this information to be considered in isolation or as a substitute for other measures prepared in accordance with GAAP.

Seneca Foods Corporation

   

Unaudited Condensed Consolidated Statements of Net Earnings

   

For the Periods Ended July 2, 2011 and July 3, 2010

   

(In thousands of dollars, except share data)

   
             
   

Quarter

   
   

Fiscal 2012

 

Fiscal 2011

   
             

Net sales

$

259,083 

$

219,942 

   
             

Plant restructuring expense (note 2)

$

54 

$

   
             

Other operating income, net (note 3)

$

(151)

$

(76)

   
             

Operating (loss) income (note 1)

$

(10,151)

$

10,121 

   

Interest expense, net

 

1,786 

 

1,936 

   

(Loss) earnings before income taxes

$

(11,937)

$

8,185 

   
             

Income taxes (benefit) expense

 

(3,962)

 

2,910 

   
             

Net (loss) earnings

$

(7,975)

$

5,275 

   
             

(Loss) earnings attributable to common stock (note 4)

$

(7,708)

$

4,792 

   
             

Basic (loss) earnings per share

$

(0.66)

$

0.43 

   
             

Diluted (loss) earnings per share

$

(0.66)

$

0.43 

   
             

Weighted average shares outstanding basic

 

11,735,631 

 

11,048,931 

   
             

Weighted average shares outstanding diluted

 

11,807,714 

 

11,119,610 

 



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