GlobeNewswire Inc | Feb 3, 2021 04:15PM EST

February 03, 2021

MARION, N.Y., Feb. 03, 2021 (GLOBE NEWSWIRE) -- Seneca Foods Corporation (NASDAQ: SENEA, SENEB) today announced financial results for the third quarter and nine months ended December 26, 2020.

Highlights (vs. year-ago, third quarter results):

-- Net sales increased 23.3% to 484.4 million. -- Gross margin percentage increased from 13.3% to 16.0% as compared to the prior year three months due to higher selling prices and higher sales volume in the third quarter of 2021.

Our results for the quarter reflect the gain on sale of our prepared foods business as well as continued strong sales in our core business. I remain humbled by the dedication of all of our loyal employees during the pandemic as we continue to help do our part in meeting customer needs with our products, stated Paul Palmby, President and Chief Executive Officer.

Highlights (vs. year-ago, year-to-date results):

-- Net sales increased 13.1% to $1,162.9 million. -- Gross margin percentage increased from 9.3% to 15.1% as compared to the prior year year-to-date mostly due to higher selling prices and higher sales volume in the first nine months of 2021.

About Seneca Foods Corporation

Seneca Foods is one of North Americas leading providers of packaged fruits and vegetables, with facilities located throughout the United States. Its high quality products are primarily sourced from over 1,600 American farms. Seneca holds the largest share of the retail private label, food service, and export canned vegetable markets, distributing to over 90 countries. Products are also sold under the highly regarded brands of Libbys, Aunt Nellies, Green Valley, CherryMan, READ, and Seneca labels, including Seneca snack chips. Senecas common stock is traded on the Nasdaq Global Stock Market under the symbols SENEA and SENEB. SENEA is included in the S&P SmallCap 600, Russell 2000 and Russell 3000 indices.

Non-GAAP Financial MeasuresOperating Income Excluding LIFO and Plant Restructuring Impact, EBITDA and FIFO EBITDA

Operating income excluding LIFO and plant restructuring, 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 or have plant restructuring to enhance the understanding of the Companys historical 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 Operating Income excluding LIFO and plant restructuring.

Quarter Ended Nine Months Ended In millions In millions 12/26/ 12/28/ 12/26/ 12/28/ 2020 2019 2020 2019 FY 2021 FY 2020 FY 2021 FY 2020 Operating income, as reported: $ 90.6 $ 33.1 $ 148.5 $ 43.4 LIFO credit (4.7 ) (11.3 ) (4.3 ) (7.5 ) Plant restructuring (credit) (0.1 ) 0.8 0.2 6.7 charge Operating income, excluding LIFO $ 85.8 $ 22.6 $ 144.4 $ 42.6 and plant restructuring impact

Set forth below is a reconciliation of reported net earnings to EBITDA and FIFO EBITDA (earnings before interest, income taxes, depreciation, amortization, non-cash charges and credits related to the LIFO inventory valuation method). 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.

Nine Months EndedEBITDA and FIFO EBITDA: December 26, December 28, 2020 2019 (In thousands) Earnings from continuing operations $ 111,271 $ 30,166 Income tax expense 29,479 9,357 Interest expense, net of interest 4,586 9,183 incomeDepreciation and amortization 24,302 22,644 Interest amortization (206 ) (209 )LIFO EBITDA 169,432 71,141 LIFO credit (4,268 ) (7,457 )FIFO EBITDA $ 165,164 $ 63,684

Forward-Looking Information

The information contained in this release 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 release 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.

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 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; -- availability of financing; -- leverage and the Companys ability to service and reduce its debt; -- potential impact of COVID-19 related issues at our facilities; -- foreign currency exchange and interest rate fluctuations; -- effectiveness of the Companys 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, United States, 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.

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.

Contact: Timothy J. Benjamin, Chief Financial Officer315-926-8100

Seneca Foods CorporationUnaudited Selected Financial Data For the Periods Ended December 26, 2020 and December 28, 2019(In thousands of dollars, except share data) Third Quarter Year-to-Date Fiscal 2021 Fiscal 2020 Fiscal 2021 Fiscal 2020 Net sales $ 484,392 $ 392,971 $ 1,162,851 $ 1,027,898 Plantrestructuring(credit) $ (118 ) $ 793 $ 169 $ 6,745 expense (note2) Otheroperating $ 35,351 $ 1,617 $ 33,716 $ 8,618 income, net(note 3) Operatingincome (note $ 90,560 $ 33,115 $ 148,545 $ 43,443 1)Loss (income)from equity (728 ) - 752 - investmentOther (234 ) (1,656 ) 2,457 (5,263 )(income) lossInterest 1,531 2,690 4,586 9,183 expense, netEarnings fromcontinuingoperations $ 89,991 $ 32,081 $ 140,750 $ 39,523 before incometaxes Income taxexpense from 17,531 7,653 29,479 9,357 continuingoperations Earnings fromcontinuing 72,460 24,428 111,271 30,166 operationsEarnings fromdiscontinued - 955 - 955 operations(net of tax)Net earnings $ 72,460 $ 25,383 $ 111,271 $ 31,121 Basicearnings per share:Continuing $ 7.96 $ 2.65 $ 12.18 $ 3.23 operationsDiscontinued $ - $ 0.10 $ - $ 0.10 operationsNet basicearnings per $ 7.96 $ 2.75 $ 12.18 $ 3.33 common share Dilutedearnings per share:Continuing $ 7.90 $ 2.63 $ 12.09 $ 3.20 operationsDiscontinued $ - $ 0.10 $ - $ 0.10 operationsNet dilutedearnings per $ 7.90 $ 2.73 $ 12.09 $ 3.31 common share Note 1: The effect of the LIFO inventory valuation method on third quarterpre-tax results increased operating earnings by $4,656,000 for the three month period ended December 26,2020 and increased operating earnings by $11,337,000 for the three month period ended December 28, 2019. The effect of the LIFO inventory valuation method on thirdquarter pre-tax results increased operating earnings by $4,268,000 for the nine month period ended December 26,2020 and increased operating earnings by $7,457,000 for the nine month period ended December 28, 2019.Note 2: The nine month period ended December 26, 2020 included arestructuring charge of $169,000 primarily related to closed plants in the Northwest, of which $227,000 was related toseverance and $44,000 was related to lease impairments partially offset by a $102,000 credit of a former grower payment. The ninemonth period ended December 28, 2019 included a restructuring charge of $6,745,000 primarily for lease impairments (includingaccelerated amortization of $5,266,000) and equipment moves for plants in the Midwest and Northwest.Note 3: During the nine months ended December 26, 2020, the Company recordeda gain of $35,660,000 from the sale of it's prepared food business, a loss of $405,000 on the disposal of equipmentfrom a sold Northwest plant and a loss of $365,000 from the sale of unused fixed assets. The Company also recorded a charge of$1,174,000 for a supplemental early retirement plan. Other operating income for the nine months ended December 28, 2019 includes a gainon the partial sale of a plant in the Midwest and Northwest of $5,479,000 and a gain on the sale of unused fixed assets of $3,139,000.Note 4: The Company uses the "two-class" method for basic earnings per share bydividing the earnings attributable tocommon shareholders by the weighted average of commonshares outstanding during the period.