UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D. C. 20549

 

Form 10-Q

 

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the Quarter Ended December 30, 2017

Commission File Number 0-01989

Seneca Foods Corporation

(Exact name of Company as specified in its charter)

New York	16-0733425
(State or other jurisdiction of	(I. R. S. Employer
incorporation or organization)	Identification No.)

 

3736 South Main Street, Marion, New York	14505
(Address of principal executive offices)	(Zip Code)

 

Company's telephone number, including area code               315/926-8100

 

Not Applicable

Former name, former address and former fiscal year,

if changed since last report

 

Indicate by check mark whether the Company (1) has 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 the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☑ No ☐

 

Indicate by check mark whether the Company is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and an emerging growth company in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer ☐           Accelerated filer ☑          Non-accelerated filer ☐          Smaller reporting company ☐

Emerging growth company ☐

 

Indicate by check mark whether the Company is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No  ☑

 

If an emerging growth company, indicate by checkmark if the Company has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act ☐

 

The number of shares outstanding of each of the issuer's classes of common stock at the latest practical date are:

 

Class	Shares Outstanding at January 19, 2018
Common Stock Class A, $.25 Par	7,854,451
Common Stock Class B, $.25 Par	1,884,439

 

 

Seneca Foods Corporation

Quarterly Report on Form 10-Q

Table of Contents

 

		Page
PART 1	FINANCIAL INFORMATION
Item 1	Financial Statements:
	Condensed Consolidated Balance Sheets-December 30, 2017, December 31, 2016 and March 31, 2017	1
	Condensed Consolidated Statements of Net Earnings-Three and Nine Months Ended December 30, 2017 and December 31, 2016	2
	Condensed Consolidated Statements of Comprehensive Income-Three and Nine Months Ended December 30, 2017 and December 31, 2016	2
	Condensed Consolidated Statements of Cash Flows-Nine Months Ended December 30, 2017 and December 31, 2016	3
	Condensed Consolidated Statement of Stockholders' Equity-Nine Months Ended December 30, 2017	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3	Quantitative and Qualitative Disclosures about Market Risk	18
Item 4	Controls and Procedures	19
PART II	OTHER INFORMATION
Item 1	Legal Proceedings	20
Item 1A	Risk Factors	20
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3	Defaults Upon Senior Securities	20
Item 4	Mine Safety Disclosures	20
Item 5	Other Information	20
Item 6	Exhibits	20
SIGNATURES		21

 

 

SENECA FOODS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Per Share Data)

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

SENECA FOODS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF NET EARNINGS

(Unaudited)

(In Thousands, Except Per Share Data)

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

SENECA FOODS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In Thousands)

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

SENECA FOODS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In Thousands)

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

SENECA FOODS CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

(Unaudited)

(In Thousands)

 

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

 

 

SENECA FOODS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

December 30, 2017

 

 

 

 

 

 

 

SENECA FOODS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

December 30, 2017

 

 

 

SENECA FOODS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

December 30, 2017

 

 

SENECA FOODS CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

December 30, 2017

 

 

ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

December 30, 2017

 

Seneca Foods Corporation (the “Company”) is a leading provider of packaged fruits and vegetables, with facilities located throughout the United States. 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®, READ® and Seneca Farms®. The Company’s canned 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, industrial markets, other food processors, export customers in over 90 countries and federal, state and local governments for school and other food programs.  The Company packs Green Giant®, Le Sueur® and other brands of canned vegetables as well as select Green Giant® frozen vegetables for B&G Foods North America (“B&G”) under a contract packing agreement.  In addition, the Seneca provides contract packing services mostly through its wholly owned subsidiary Truitt Bros., Inc.

 

The Company’s raw product is harvested mainly between June through November.

 

Results of Operations:

 

Sales:

 

Third fiscal quarter 2018 results include net sales of $392,714,000, which represents a 6.2% increase, or $23,009,000, from the third quarter of fiscal 2017.  The net increase in sales is attributable to higher selling prices/sales mix of $34,554,000 partially offset by a sales volume decrease $11,545,000. The increase in sales is primarily from the acquisition of Truitt during the current year with sales of $28,214,000, a $2,055,000 increase in Frozen sales partially offset by a $3,757,000 decrease in B&G Foods, Inc. sales, a $1,105,000 decrease in Canned Vegetable sales, a $1,241,000 decrease in Canned Fruit sales and a $1,157,000 decrease in Other sales.

 

Nine months ended December 30, 2017 include net sales of $1,049,209,000, which represents a 7.1% increase, or $69,643,000, from the first nine months of fiscal 2017.  The net increase in sales is attributable to a sales volume increase of $32,903,000, and higher selling prices/sales mix of $36,740,000. The increase in sales is primarily from the acquisition of Truitt during the current year with sales of $69,352,000, a $10,316,000 increase in B&G Foods, Inc. sales, a $12,181,000 increase in Canned Vegetable sales, $7,982,000 increase in Frozen sales, partially offset by a $24,035,000 decrease in Canned Fruit sales, a $3,999,000 decrease in Other sales and a $2,154,000 decrease in Snack sales.

 

The following table presents sales by product category (in millions):

 

		Three Months Ended								Nine Months Ended
		December 30, 2017				December 31, 2016				December 30, 2017				December 31, 2016
Canned Vegetables		$	226.1			$	227.2			$	564.8			$	552.6
B&G*			42.3				46.1				123.8				113.5
Frozen			27.3				25.3				78.5				70.5
Fruit Products			62.5				63.7				193.1				217.2
Chip Products			2.4				2.4				7.9				10.0
Truitt			28.2				0.0				69.4				0.0
Other			3.9				5.0				11.7				15.8
		$	392.7			$	369.7			$	1,049.2			$	979.6

 

*B&G includes frozen vegetable sales exclusively for B&G.

 

 

ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

December 30, 2017

 

Operating Income:

The following table presents components of operating income as a percentage of net sales:

 

		Three Months Ended								Nine Months Ended
		December 30, 2017				December 31, 2016				December 30, 2017				December 31, 2016
Gross Margin			8.1	%			10.1	%			6.5	%			8.9	%
Selling			2.6	%			3.0	%			2.7	%			2.9	%
Administrative			2.5	%			2.7	%			2.7	%			2.9	%
Plant Restructuring			0.0	%			0.4	%			0.0	%			0.3	%
Other Operating Expense (Income)			0.0	%			0.3	%			-0.2	%			0.1	%
Operating Income			2.9	%			3.8	%			1.3	%			2.7	%
Interest Expense, Net			1.0	%			0.7	%			1.0	%			0.7	%

 

For the three month period ended December 30, 2017, the gross margin decreased from the prior year quarter from 10.1% to 8.1% due primarily to a higher LIFO charge in the third quarter of 2018. The LIFO charge for the third quarter ended December 30, 2017 was $994,000 as compared to a credit of $3,941,000 for the third quarter ended December 31, 2016 and reflects the impact on the quarter of higher cost increases incurred in fiscal 2018, compared with smaller cost increases to fiscal 2017. On an after-tax basis, LIFO net earnings decreased by $785,000 for the quarter ended December 30, 2017 and decreased LIFO net earnings by $2,562,000 for the quarter ended December 31, 2016, based on the historical statutory federal income tax rate.

 

For the nine month period ended December 30, 2017, the gross margin decreased from the prior year period from 8.9% to 6.5% due primarily to a higher LIFO charge in the current year. The LIFO charge for the nine months ended December 30, 2017 was $18,835,000 as compared to a charge of $434,000 for the nine months ended December 31, 2016 and reflects the impact on the nine months of cost increases expected in fiscal 2018, compared to cost decreases in fiscal 2017. On an after-tax basis, LIFO decreased net earnings by $14,880,000 for the nine months ended December 30, 2017 and decreased net earnings by $282,000 for the nine months ended December 31, 2016, based on the

historical statutory federal income tax rate.

 

For the three month period ended December 30, 2017, selling costs as a percentage of sales decreased from 3.0% to 2.6% for the same period in the prior year. For the nine month period ended December 30, 2017, selling costs as a percentage of sales decreased from 2.9% to 2.7% for the same period in the prior year. The nine month decrease is primarily as a result of the Green Giant sales increase, which don't incur selling costs.

 

For the three month period ended December 30, 2017, administrative expense as a percentage of sales decreased from 2.7% to 2.5%. For the nine month period ended December 30, 2017, administrative expense as a percentage of sales decreased from 2.9% to 2.7% primarily due to lower employment costs in the current year.

 

During the nine months ended December 30, 2017, the Company sold some unused fixed assets which resulted in a gain of $1,590,000. $1,081,000 of the current year gain was related to the sale of a closed plant in the Midwest. In addition, the Company recorded a bargain purchase gain of $1,078,000 as discussed in the Acquisition footnote to the Condensed Consolidated Financial Statements. During the quarter ended December 31, 2016, the Company recorded a charge for impairment of a long-term asset of $1,052,000. During the nine months ended December 31, 2016, the Company sold some unused fixed assets which resulted in a loss of $149,000. These items are included in other operating income in the Unaudited Condensed Consolidated Statements of Net Earnings.

 

 

ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

December 30, 2017

 

Interest expense for the third quarter ended December 30, 2017, as a percentage of sales, increased to 1.0% from 0.7% in third quarter ended December 31, 2016. For the nine month period ended December 30, 2017, interest expense as a percentage of sales increased from 0.7% to 1.0% compared to nine months ended December 31, 2016. During fiscal 2018, overall borrowings and interest rates were higher than the previous year.

 

Income Taxes:

 

The effective tax rate was (77.6)% and 30.4% for the nine month periods ended December 30, 2017 and December 31, 2016, respectively. The 108.0 percentage point decrease in the effective tax rate represents the tax rate change which reduced the tax provision by $3,040,000 due to the recently passed Tax Cut and Jobs Act.  This amount reflects the effect of the rate change on beginning of the year deferred tax balances.

 

The Tax Cut and Jobs Act was signed into law on December 22, 2017 and reduced the federal corporate income tax rate from 35% to 21%.

 

Earnings per Share:

 

Basic earnings per share were $0.79 and $0.83 for the three months ended December 30, 2017 and December 31, 2016, respectively. Diluted earnings per share were $0.78 and $0.82 for the three months ended December 30, 2017 and December 31, 2016, respectively. Basic earnings per share were $0.59 and $1.44 for the nine months ended December 30, 2017 and December 31, 2016, respectively. Diluted earnings per share were $0.58 and $1.43 for the nine months ended December 30, 2017 and December 31, 2016, respectively. For details of the calculation of these amounts, refer to footnote 10 of the Notes to Condensed Consolidated Financial Statements.

 

 

Liquidity and Capital Resources:

 

The financial condition of the Company is summarized in the following table and explanatory review:

 

		December 30,				December 31,				March 31,				March 31,
		2017				2016				2017				2016
Working Capital:
Balance		$	632,087			$	571,424			$	555,993			$	274,429
Change in Quarter			22,460				(21,139	)
Long-Term Debt, Less Current Portion			411,799				343,634				329,138				35,967
Capital Lease Obligations, Less Current Portion			37,447				25,992				34,194				4,988
Total Stockholders' Equity Per Equivalent
Common Share (see Note below)			44.37				42.11				43.63				40.63
Stockholders' Equity Per Common Share			44.78				42.66				44.20				41.15
Current Ratio			4.89				4.20				5.20				1.69

 

 

Note: Equivalent common shares are either common shares or, for convertible preferred shares, the number of common shares that the preferred shares are convertible into. See Note 7 of the Notes to Consolidated Financial Statements of the Company’s 2017 Annual Report on Form 10-K for conversion details.

 

 

ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

December 30, 2017

 

 

As shown in the Condensed Consolidated Statements of Cash Flows, net cash used in operating activities was $26,748,000 in the first nine months of fiscal 2018, compared to $9,709,000 in the first nine months of fiscal 2017. The $17,039,000 increase in cash used is primarily attributable to a $95,986,000 increase in inventory in the first nine months of fiscal 2018 as compared to an $88,661,000 increase in inventory in the first nine months of fiscal 2017, decreased net earnings of $8,487,000 as previously discussed, and a $5,616,000 decrease in cash provided by income taxes, partially offset by a $3,968,000 increase in cash provided by accounts payable, accrued expenses and other liabilities, a $2,734,000 decrease in cash used by deferred income taxes and and a $2,460,000 increase in cash provided by accounts receivable.

 

As compared to December 31, 2016, inventory increased $53,750,000 to $710,118,000 at December 30, 2017 (including $16,076,000 increase from the Truitt Bros. Inc. acquisition). The components of the inventory increase reflect a $65,058,000 increase in finished goods, a $14,900,000 increase in work in process and a $26,208,000 decrease in raw materials and supplies. The finished goods increase is primarily due to the Truitt acquisition and reflects higher inventory quantities due to the magnitude and timing of the fiscal year 2018 pack versus fiscal year 2017 pack partially offset by increased sales volume as compared to the prior year. The raw materials and supplies decrease is primarily due to a decrease in cans and raw steel quantities compared to the prior year. FIFO based inventory costs exceeded LIFO based inventory costs by $152,091,000 as of the end of the third quarter of 2018 as compared to $139,709,000 as of the end of the third quarter of 2017.

 

Cash used in investing activities was $33,699,000 in the first nine months of fiscal 2018 compared to cash used in investing activities of $23,266,000 in the first nine months of fiscal 2017. Additions to property, plant and equipment were $21,120,000 in the first nine months of fiscal 2018 as compared to $23,389,000 in first nine months of fiscal 2017. The prior year purchases include $4,767,000 of fixed assets purchased from Monsanto in connection with our seed processing in August 2016. In April 2017, the Company acquired the other 50% of Truitt Bros., Inc. for $14,420,000 (net of cash acquired).

 

Cash provided by financing activities was $61,577,000 in the first nine months of fiscal 2018, which included borrowings of $438,730,000 and the repayment of $373,298,000 of long-term debt, principally consisting of borrowing and repayment on the revolving credit facility (“Revolver”). Cash provided by financing activities was $34,633,000 in the first nine months of fiscal 2017, which included borrowings of $411,483,000 and the repayment of $374,577,000 of long-term debt, principally consisting of borrowing and repayment on the Revolver. Other than borrowings under the Revolver, there was no new long-term debt during the first nine months of fiscal 2018. During the nine months ended December 31, 2016, the Company paid off $22,596,000 of Industrial Revenue Bonds. During the nine months ended December 30, 2017, the Company repurchased $3,442,000 of its Class A and Class B Common Stock as treasury stock compared to $1,841,000 in the prior period.

 

During the nine months ended December 30, 2017, the Company entered into $8,381,000 of equipment capital leases compared to $23,056,000 in the same period in the prior year.

 

The Company completed the closing of a new five-year revolving credit facility on July 5, 2016. Available borrowings on the Revolver total $400,000,000 from April through July and $500,000,000 from August through March with a maturity date of July 5, 2021.  The interest rate on the Revolver is based on LIBOR plus an applicable margin based on excess availability and the Company's fixed charge coverage ratio. As of December 30, 2017, the interest rate was approximately 2.90% on a balance of $290,196,000. We believe that cash flows from operations, availability under our Revolver and other financing sources will provide adequate funds for our working capital needs, planned capital expenditures, and debt obligations for at least the next 12 months.

 

 

ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

December 30, 2017

 

The Company’s credit facilities contain standard representations and warranties, events of default, and certain affirmative and negative covenants, including various financial covenants. At December 30, 2017, the Company was in compliance with all such financial covenants.

 

New Accounting Standards

 

Refer to footnote 9 of the Notes to Condensed Consolidated Financial Statements.

 

Seasonality

 

The Company's revenues are typically higher in the second and third fiscal quarters. This is due in part because the Company sells, on a bill and hold basis, Green Giant canned and frozen vegetables to B&G either weekly during production for specialty items, or at the end of each pack cycle, which typically occurs during these quarters. B&G buys the product from the Company at cost plus a specified fee for each equivalent case. See the Critical Accounting Policies section below for further details. The Company’s non-Green Giant sales also exhibit seasonality with the third fiscal quarter generating the highest retail sales due to holidays that occur during that quarter.

 

Forward-Looking Information

 

The information contained in this report contains, or may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this report and include statements regarding the intent, belief or current expectations of the Company or its officers (including statements preceded by, followed by or that include the words “believes,” “expects,” “anticipates” or similar expressions) with respect to various matters, including (i) the Company’s anticipated needs for, and the availability of, cash, (ii) the Company’s liquidity and financing plans, (iii) the Company’s ability to successfully integrate acquisitions into its operations, (iv) trends affecting the Company’s financial condition or results of operations, including anticipated sales price levels and anticipated expense levels, in particular higher production, fuel and transportation costs, (v) the Company’s plans for expansion of its business (including through acquisitions) and cost savings, and (vi) the impact of competition.

 

Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Investors are cautioned not to place undue reliance on such statements, which speak only to events as of the date the statements were made. Among the factors that could cause actual results to differ materially are:

 

●

general economic and business conditions;

●

cost and availability of commodities and other raw materials such as vegetables, steel and packaging materials;

●

transportation costs;

●

climate and weather affecting growing conditions and crop yields;

●

the availability of financing;

●

leverage and the Company’s ability to service and reduce its debt;

●

foreign currency exchange and interest rate fluctuations;

●

effectiveness of the Company’s marketing and trade promotion programs;

●

changing consumer preferences;

●

competition;

●

product liability claims;

●

the loss of significant customers or a substantial reduction in orders from these customers;

●

changes in, or the failure or inability to comply with, U.S., foreign and local governmental regulations, including environmental and health and safety regulations; and

●

other risks detailed from time to time in the reports filed by the Company with the SEC.

 

 

ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

December 30, 2017

 

Except for ongoing obligations to disclose material information as required by the federal securities laws, the Company does not undertake any obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date of the filing of this report or to reflect the occurrence of unanticipated events.

 

Critical Accounting Policies

 

During the nine months ended December 30, 2017, the Company sold $112,768,000 of Green Giant finished goods inventory to B&G Foods North America (“B&G”) for cash, on a bill and hold basis, as compared to $95,253,000 for the nine months ended December 31, 2016. Under the terms of the bill and hold agreement, title to the specified inventory transferred to B&G. The Company believes it has met the criteria required for bill and hold treatment.

 

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 our products to consumers, amounts paid to obtain favorable display positions in retailers’ 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 us. 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.

 

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 was experiencing, the Company believes that the LIFO method was preferable over the FIFO method because it better compares the cost of current production to current revenue.

 

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.

 

 

ITEM 3 Quantitative and Qualitative Disclosures About Market Risk

 

In the ordinary course of business, the Company is exposed to various market risk factors, including changes in general economic conditions, competition and raw material pricing and availability. In addition, the Company is exposed to fluctuations in interest rates, primarily related to its revolving credit facility and the $100,000,000 term loan. To manage interest rate risk, the Company uses both fixed and variable interest rate debt plus fixed interest rate capital lease obligations. There have been no material changes to the Company’s exposure to market risk since March 31, 2017.

 

 

ITEM 4 Controls and Procedures

 

The Company maintains a system of internal and disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported on a timely basis. The Company’s Board of Directors, operating through its Audit Committee, which is composed entirely of independent outside directors, provides oversight to the financial reporting process.

 

An evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities and Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that, as of December 30, 2017, our disclosure controls and procedures were effective. The Company continues to examine, refine and formalize its disclosure controls and procedures and to monitor ongoing developments in this area.

 

There have been no changes during the period covered by this report to the Company's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. However, with the acquisition of Truitt Bros., Inc. on April 3, 2017, the Company is still in the process of evaluating their internal controls.

 

 

PART II – OTHER INFORMATION

 

Item 1.	Legal Proceedings
	Refer to footnote 13 to the Consolidated Financial Statements included in Part II Item 8 of the Annual Report on Form 10-K.
Item 1A.	Risk Factors
	There have been no material changes to the risk factors disclosed in the Company’s Form 10-K for the period ended March 31, 2017 except to the extent factual information disclosed elsewhere in this Form 10-Q relates to such risk factors.
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds

 

	Total Number of			Average Price Paid			Total Number	Maximum Number
	Shares Purchased			per Share			of Shares	(or Approximate
							Purchased as	Dollar Value) or
							Part of Publicly	Shares that May
							Announced	Yet Be Purchased
	Class A	Class B	Class A			Class B	Plans or	Under the Plans or
Period	Common	Common	Common			Common	Programs	Programs
10/01/2017 –
10/31/2017	16,800 (1)	-	$	35.73	$	-
11/01/2017 –
11/30/2017	4,950	-	$	29.34	$	-	4,950
12/01/2017 –
12/31/2017	-	-	$	-	$	-
Total	21,750	-	$	34.27	$	-,	4,950	1,066,829

 

Note 1: These shares were purchased in open market transactions by the trustees under the Seneca Foods Corporation Employees' Savings Plan 401(k) Retirement Savings Plan to provide employee matching contributions under the plan.

 

 

Item 3.	Defaults Upon Senior Securities
	None.
Item 4.	Mine Safety Disclosures
	None.
Item 5.	Other Information
	None.

        

 

Item 6.

Exhibits

    

31.1	Certification of Kraig H. Kayser pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

 

31.2	Certification of Timothy J. Benjamin pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)

 

32	Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)

 

101

The following materials from Seneca Foods Corporation’s Quarterly Report on Form 10-Q for the nine months ended December 30, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of net loss, (iii) condensed consolidated statements of comprehensive loss, (iv) condensed consolidated statements of cash flows, (v) condensed consolidated statement of stockholders’ equity and (vi) the notes to condensed consolidated financial statements.

 

 

SIGNATURES

 

 

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

 

 

 

 

 

		Seneca Foods Corporation
		(Company)
		/s/ Kraig H. Kayser
January 25, 2018
		Kraig H. Kayser
		President and
		Chief Executive Officer
		/s/Timothy J. Benjamin
January 25, 2018
		Timothy J. Benjamin
		Chief Financial Officer

 

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